Iran’s Mellat bank to reopen Seoul branch next month

Iran’s Mellat bank to reopen Seoul branch next month

Iran’s Mellat Bank plans to reopen its Seoul branch as early as next month following the lifting of sanctions on the Middle East country, a bank official said Wednesday.

In January, the U.S. and the European Union removed decades-long economic curbs on Tehran following a landmark deal on nuclear armaments with Washington.

Since opening its Seoul branch in June 2001, Mellat Bank had supported bilateral trade and foreign exchange transactions, as well as the transfer of wages for Iranians working in South Korea.

Operations, however, were restricted in 2010 due to the international economic and financial sanctions against Tehran over its nuclear pursuit. The bank was reduced to carrying out limited won-based transactions.

The restoration of the Society for Worldwide Interbank Financial Telecommunication system, a key platform for international transactions, will be completed within next week, which means it will be allowed to issue letters of credit and engage in trade business, according to the official.

Discussions are also underway with the U.S. to establish the substitute settlement system using euro, as the bank cannot accept U.S. dollars when trading with Iran due to separate sanctions by Washington. Bank officials said they are expecting a positive conclusion to be reached within next month.

Following the lifting of sanctions, Iran’s Persia International Bank has also been pushing to set up a branch in Seoul. If given the nod, it will be the second Iranian bank operating in South Korea.

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