Fresh indications show a main barrier for trade between Iran and South Korea will be removed soon.
South Korea announced on Thursday that it will start a euro-based settlement system for trade with Iran next week.
The move follows the removal of sanctions against Iran in January and is expected to help the two countries further expand economic relations.
“The euro-based settlement system for South Korea-Iran trade will start on August 29,” South Korea’s Finance Minister Yoo Il-ho told reporters after a policy meeting held in Seoul. “The opening of the system will help further promote bilateral trade and investment,” Yonhap News Agency quoted him as saying.
Iran and South Korea have been using a won-based settlement system since September 2010 to bypass trade sanctions and allow the two sides to conduct trade.
Under the current system, two local banks — Woori Bank and the Industrial Bank of Korea — have their own accounts at the Central Bank of Iran (CBI), and trade payments are made through the accounts.
The South Korean government has made efforts to set up a new settlement system as an alternative method that can possible expand trade and investment with the oil-rich country, Yonhap added.
The finance minister said KEB Hana Bank, Shinhan Bank and Woori Bank will handle the euro-based payment system, which uses the euro as a medium of trade, which is widely preferred by Iranian companies.
Industry data showed that the trade volume between Korea and Iran stood at $6.1 billion in 2015, down sharply from $17.4 billion in 2011 in what appears to have been a result of sanctions against the Islamic Republic.