Iran’s Trade Retaliation?

Iran is showing signs of suspending Korean imports, raising concern over possible losses for Korean companies.

The Korea Trade Investment Promotion Agency’s headquarters in Tehran said on Wednesday, “The Iranian Ministry of Commerce has been rejecting pro forma invoices (PI) for Korean imports since Monday.”

A PI is a contract document in which the exporter and the importer record their prices and purchasing conditions. Exporting to Iran is impossible without an approved PI.

The Tehran headquarters also said, “The Ministry of Commerce is also returning documents submitted for approval by Korean companies operating in Iran. Approval has been suspended on new imports, but it is understood that there would be no problem for clearance of imports that have already been approved.”

Korea exported $2.134 billion in products last year to Iran, a 20 percent increase year-on-year. Major exports include steel products, petrochemicals, home appliances, and ships.

According to analyses, Iran’s step towards the PI rejection is retaliation against Korea for voting for the International Atomic Energy Agency resolution requiring Iran to be referred to the United Nations Security Council.

A source in the Ministry of Foreign Affairs and Trade explained, “Iran has expressed its frustration on many occasions. This could be related to the rejection of the PIs.”

On September 24, the 35 member nations of the IAEA board, including South Korea, agreed to the resolution that pointed out Iran as having violated the international nuclear safeguard.

Ban Ki-moon, minister of MOFAT, said in the regular briefing on Wednesday, “We are confirming the facts with the Iranian government at the moment. [If true,] it would be inappropriate for the Iranian government to take such measures because of [the South Korean government’s] stance in an international organization.”

However, Iran is in effect denying having banned Korean imports, which has made it difficult for the Korean government and the industrial sector to find out what is really happening.

An official at the Korean Embassy in Iran said, “We’ve contacted the Iranian Ministry of Foreign Affairs and found that the import ban is not true. To my understanding, Iran does not have an import ban in place on any other nation, including Korea.”