S. Korea to suspend Iranian bank as part of sanctions

South Korea will suspend the operations of an Iranian bank for two months, financial regulators said yesterday, as part of international sanctions over Tehran’s suspected nuclear weapons programme.

The Seoul branch of Bank Mellat will be suspended from Monday for violating laws on foreign exchange transactions, the Financial Services Commission said.

“Its operations in Seoul will remain virtually paralysed as most of its business is related to foreign exchange transactions,” a commission official said.

Bank Mellat is one of Iran’s biggest lenders and its Seoul branch is its only operation outside the Middle East and Europe.

A suspension of its business would likely affect more than 2,000 South Korean companies involved in trade with Iran, most of which is settled through the local branch office.

Iran says its nuclear programme is aimed at the peaceful generation of electricity. But the European Union, Canada, Australia and Japan have joined the United States in announcing punitive measures.

The suspension came a month after South Korea announced a package of sanctions against Iran in line with US-backed United Nations action.