In early November, the US granted South Korea a waiver on Iranian oil imports given the re-established sanctions against Iran. The US exemption was granted for up to 180 days and can be extended to minimize the negative effect on the South Korean economy and balance oil crude prices from excessive increases. South Korea also received a waiver on Iranian imports for the 2012-2016 sanctions period.
At a recent join seminar on economic opportunities for Iran and South Korea, Hossein Tanhaie, the head of the joint chamber of the Islamic Republic of Iran and South Korea, proposed to form a joint barter fund for commodities trading between the two countries. The barter process may help both trading partners bypass sanctions. South Korea is the third economic partner of Iran after China and the UAE, and second in regards the origin of manufactured goods such as home appliances and vehicles. South Korea is also seeking to become an important source for raw materials such as ferromanganese and other steel related alloys to Iran.
Tanhaie stated that in the last 10 months of 2018, bilateral trade reached US$5.7 billion, of which Iranian exports contributed US$3.7 billion and South Korea 2.0 billion. In 2013, South Korea exported US$4 billion and the barter fund would facilitate reaching those levels again. According to Trading Economics, the South Korean economy expanded 2.0 percent year-on-year in Q3 201, slowing from 2.8 percent growth in the previous quarter and below estimates of 2.2 percent. It was the weakest growth in nine years.
Several EU countries such as France, UK and Germany agreed with Russia and China in late September to seek to establish a special purpose vehicle (SPV) as a barter method for continuing to trade with Iran. This vehicle is perceived as more cumbersome as it involves many entities that have not received sanction waivers from the US.