By Hyonhee Shin
SEOUL (Reuters) – Iran released on Friday a South Korean ship and its captain detained since January after South Korea promised to try to secure the release of Iranian funds frozen in South Korean banks under U.S. sanctions, a South Korean official said.
Iranian authorities seized the chemical tanker in the Strait of Hormuz off Oman. They accused it of polluting the waters with chemicals.
The issue triggered a diplomatic dispute after Iran demanded that South Korea release $7 billion in funds frozen in South Korean banks under U.S. sanctions.
Iran agreed to free all of the ship’s 20 crew members except for the captain in February, after a South Korean vice foreign minister visited Tehran.
A South Korean foreign ministry official told reporters that both sides had agreed the ship and the funds were not related issues and South Korea promised to help get the money released.
“We have expressed our firm willingness to resolve the fund issue,” said the official, who declined to be identified.
The South Korean ministry said in a statement the ship had left Iran after completing administrative procedures. It made no mention of the demand for the release of funds.
“The captain and sailors are in good health,” the ministry said.
South Korea said the vessel did not cause any pollution. The ministry official said Iran dropped a plan to pursue seek criminal charges against the shipping company.
Iran has denied allegations that the seizure of the tanker and its crew constituted hostage-taking, saying it was South Korea that was holding Iranian funds hostage.
The freezing of the funds is linked to U.S. sanctions that Washington reimposed on Tehran in 2018 after then-President Donald Trump withdrew from Iran’s 2015 nuclear deal with world powers.
Under the Joe Biden administration, the United States and Iran have begun indirect talks over a return to the accord.
The United States has recently agreed to allow Iran to use the funds for non-military purposes and it has spent some on coronavirus vaccines secured via the global COVAX initiative, the ministry official said, without giving a precise amount.
(Reporting by Hyonhee Shin; Editing by Edwina Gibbs, Robert Birsel)
