On January 4, 2021, Iranian Revolutionary Guard Corps (IRGC) boats detained a South Korean-flagged vessel in the Strait of Hormuz.
According to Iranian agencies Tasnim and Fars, the South Korean tanker MT Hankuk Chemi, which was going from Saudi Arabia to the United Arab Emirates, is now in the port of Bandar Abbas on the southern coast of Iran. There were 20 crew members on board — five Koreans, 11 Burmese, two Indonesians and two Vietnamese.
As reported by the Iranian authorities, “The tanker Hankuk Chemi, carrying 7,200 tons of petrochemicals (which later turned out to be ethanol), has repeatedly violated environmental protocols since it left the Saudi port of Al-Jobail.” DM Shipping, the ship’s operator, denied the claim. According to them, there was no pollution, and an IRGC representative came aboard and demanded that the ship be inspected in Iranian waters without explanation. Seoul officials demanded that Iran immediately release the oil tanker. According to South Korean Foreign Minister Kang Kyung-hwa, Seoul is making diplomatic efforts for the speedy release of the ship and its crew. President Moon Jae-in also instructed the National Security Administration to release the tanker as soon as possible.
On January 5, the South Korean anti-piracy unit Cheonghae arrived in the Strait of Hormuz: 300 South Korean soldiers on the latest version of the destroyer are engaged in the multinational naval force fighting piracy in the Gulf of Aden and the Strait of Hormuz. On the same day, Iranian Ambassador Said Badamchi Shabestari was summoned to the Republic of Korea Foreign Ministry, where Ko Kyung-seok, director of the Africa and Middle East Department, expressed the government’s regret over the hijacking and urged Iranian authorities to help free the ship and its crew as soon as possible. The ambassador said in his turn that the sailors were safe, but did not give any details.
South Korean analysts immediately seized on the theory that “Iran’s sudden seizure of a South Korean-flagged oil tanker this week appears to be aimed at putting pressure on Seoul to unlock its financial assets frozen under US sanctions amid worsening economic problems and the COVID-19 disaster“.
In this context, it is worth mentioning the background and outline of relations between the ROK and Iran last year. Since 2010, the ROK has paid for oil supplies through accounts that the Central Bank of Iran opened with South Korean banks. However, these accounts were frozen in September 2019, when the US tightened sanctions against Iran and banned settlements in dollars.
There is a lot of money involved. According to Hosein Tankhi, head of the Iran-South Korea joint chamber of commerce and industry, the amount of Iran’s frozen funds in South Korea ranges from $6.5 billion to $9.2 billion. Of these, about $2.8 billion is held by the state Bank of Korea (deposited by the Seoul branch of Mellat of Iran) and the rest by the private Industrial Bank of Korea and Woori Bank.
The beginning of 2020 was marked by Seoul’s desire to send troops to the Strait of Hormuz as part of the international campaign for maritime security, de facto starting a campaign against Iran. Iran has expressed its concern over this because Tehran has always opposed the deployment of foreign troops and ships in the region, and formally, Seoul’s decision was a compromise. The operational area of the Cheonghae military contingent, which is fighting pirates in the Gulf of Aden, has expanded to the Strait of Hormuz. South Korean troops will not take part in the US-led international coalition, but will be involved only in ensuring the safety of South Korean citizens and ships in the region. Moreover, ROK Minister of National Defense Jeong Kyeong-doo has said that if the conflict between the United States and Iran were to turn into an armed confrontation, the ROKN Cheonghae unit, sent to the Strait of Hormuz, would not take sides in it.
In mid-March 2020, when Iran had the largest number of COVID-19 infections in the Middle East, Iran increased calls for South Korea to unlock the frozen assets: Iranian President Hassan Rouhani sent a letter to Moon Jae-in asking for help with equipment for anti-epidemic measures, which included 3,200,000 coronavirus test kits. However, as the ROK media wrote, “US sanctions on Tehran make it impossible to sell the test systems to Iran.” The fact is that since 2018, due to US sanctions, South Korean banks cannot conduct settlements between the two countries. The ROK Foreign Ministry allegedly discussed with the US the issue of permission to send humanitarian cargo to Iran, but the negotiations yielded no results.
An anonymous Foreign Ministry official then stated that US Government General License No. 8 (a special US Treasury Department mechanism created in February 2020 that allows “certain humanitarian trade transactions involving the Central Bank of Iran”) authorizes trade in medicine, medical equipment and other humanitarian items with Iran, and the humanitarian aid export process began on April 6. However, “companies that engage in trade with Iran should conduct intense due diligence,” however, there was no confirmation that the humanitarian aid has been received.
On July 19, 2020, Iranian Foreign Ministry spokesman said that Iran may file a lawsuit in the International Court of Justice against the ROK if the oil debt is not repaid, explaining that the South Korean side blocked the payments under pressure from the US According to the Iranian Foreign Ministry spokesman, the relationship between Washington and Seoul resembles “a relationship between a master and a servant,” so the ROK must follow the “illegal” US sanctions.
In response, Ko Kyung-seok, director of the Department of Africa and the Middle East at the ROK Foreign Ministry, summoned Iranian Ambassador to Seoul Said Badamchi Shabestari on Tuesday, July 21, and expressed regret over Tehran’s “inappropriate threats.”
On July 29, 2020, Iranian Foreign Ministry spokesman Abbas Mousavi called on the ROK to take real and tangible measures to repay its oil debt. In his words, the ROK exported $500,000 worth of medicines to Iran using frozen funds in South Korean bank accounts belonging to the Central Bank of Iran. Later, after consulting with the US, using funds from frozen accounts, the South Korean government sent $2 million worth of medical products to Iran. Still, these figures are negligible compared to what Seoul has to pay Tehran for oil.
On August 2, 2020, according to an anonymous source from the ROK Foreign Ministry, South Korea and Iran agreed to establish a working group to expand humanitarian trade as part of an effort to maintain a bilateral partnership as part of a US-approved sanctions waiver. However, Iran was not as interested in being able to pay out of the frozen assets as it was in the chance of getting them back.
On August 18, South Korea and Iran were supposed to hold the first meeting of the working group by video link, but in the end the matter was drowned by bureaucratic delays and there was no news on how the work of the group ended either.
In this context, the seizure of the tanker came as a surprise, as South Korea was about to send First Deputy Foreign Minister Choi Jong Kun to Tehran to help resolve the frozen assets issue. His trip was scheduled for January 10 and was supposed to include an offer to spend Iranian money on vaccine purchases.
But let’s go back to the event timeline. On January 5, it was reported that “as part of efforts to resolve this matter through bilateral negotiations with the Iranian side,” South Korea will send a delegation to Iran led by Ko Kyung-seok, which flew out on January 7. On the same day, January 5, Ali Rabiei of the Iranian government said, “We are not hostage-takers. But if there is any hostage-taking, it is Korea’s government that is holding $7 billion, which belongs to us, hostage on baseless grounds“.
On January 6, the state news agency of the Islamic Republic, citing Said Khatibzadeh of the Iranian Foreign Ministry, reported that the visit of Choi Jong Kun had nothing to do with the seizure of the tanker. Moreover, the detention of the tanker and its crew will be dealt with by the appropriate judicial authorities and does not require diplomatic measures.
In response, the ROK government said on January 6 that there was no evidence to support what Iran said about the South Korean tanker polluting the ocean. “If it is marine contamination to a degree that it was visible to the naked eye, we should be able to confirm that from a helicopter”. However, in the author’s opinion, if the tanker was transporting ethanol rather than petroleum products, there might not have been a visible oil slick.
On the same day, January 6, the ministry sent an official from its embassy in Iran to Bendar Abbas with the hope of meeting with the sailors.
On January 7, the Blue House said it would make a multilateral effort to free the tanker. But while negotiations are underway, let’s have a look at the domestic political reaction.
The position of the South Korean Foreign Ministry can be described as cautious: “As long as there is no demonstration of ‘an act of deliberate and grave contamination’, … we find that no violation of international law has occurred“.
Articles with titles like “Tehran must immediately release the ship and crew” or “Bring them back” have appeared in the conservative media. On the one hand, Seoul needs to take a flexible approach to Iran, the largest oil producer in the Middle East. And on the other – it is also necessary to strengthen cooperation with the international community to resolve the situation as soon as possible: almost a third of the world’s oil shipments pass through the Strait of Hormuz. If absolutely necessary, the government expects to seek US help to resolve the issue.
If the Iranian military’s explanation is correct, then the government should demand a speedy investigation into the case in order to discover the truth and take appropriate action based on humanitarian grounds. But in general public opinion is confident that “our people are innocent”: if there really was marine pollution, the Coast Guard should have approached the ship first. Instead, the tanker was detained by the IRGC. And even if one considers that the tanker seizure is related to the demand for asset recovery, Seoul is still not to blame because it happened as a result of the US policy of increasing sanctions on Iran in 2018.
The Korea Times reported that the government had received intelligence about the possibility of Iran seizing the Korean ship a month before the tanker was hijacked and the Foreign Ministry even distributed the information to the relevant missions in the five major Middle Eastern countries close to Iran.
This raised a number of questions, in particular, why wasn’t the Cheonghae detachment sent to protect Korean ships in the Strait of Hormuz ordered to guard the tanker, especially since it was officially supposed to do just that? The Iranian military might not have attempted to seize the ROK-flagged ship if there had been a destroyer nearby.
Some experts believe the seizure may be to some extent intended as a warning against US allies, reminding them that Iran still has significant control over the Strait of Hormuz. Not coincidentally, the seizure coincided with rising anti-American sentiment in Iran amid the anniversary of the US drone assassination of General Suleimani and talk that Iran had begun producing weapons-grade uranium. However, if by this action Tehran sends a message to the new Biden administration, urging the US to participate sincerely in the negotiations for a return to the nuclear dea, the situation is not favorable to the soon release of the tanker before the inauguration of the new US president.
On the other hand, if the Iranian government really wanted to give Korea a serious warning, it could detain the crew on charges of espionage.
In the end, we see that the situation is not yet clear. None of the South Korean versions of why the tanker was hijacked has been fully confirmed, and the author will follow developments closely. But some conspiracy theorists have already pointed out that such a seizure of a ship belonging to a US ally outside of Iranian territorial waters, with some spin on the matter and further provocations of this kind, opens the door to potentially harsh action against Tehran.
Konstantin Asmolov, PhD in History, a leading research fellow at the Center for Korean Studies of the Institute of the Far East at the Russian Academy of Sciences, exclusively for the online magazine “New Eastern Outlook”.