Exception for the ROK to US Sanctions on Iran under the 2012 NDAA Extended

The Republic of Korea has qualified for an extended exception to US sanctions on Iran outlined in section 1245 of the US National Defense Authorization Act (NDAA) for Fiscal Year 2012 for a period of 180 days. US Secretary of State John Kerry issued a press statement on the extension of exception on November 29.

Section 1245 of the NDAA for Fiscal Year 2012 stipulates that financial institutions of a third country engaged in significant transactions with the Central Bank of Iran and other Iranian financial institutions will be subject to sanctions. 

However, countries that meet such conditions as significant reductions in imports of Iranian crude oil over the last 180 days qualify for an exception to such sanctions, exempting their financial institutions from relevant sanctions. 

The latest exception for the ROK marks its fourth, following its first granted on June 11, 2012, the second on December 7, 2012, and the third on June 5, 2013.

The latest exceptions were also extended for China, Singapore, India, Turkey, the Republic of South Africa, Malaysia, Sri Lanka and Taiwan. 

As a result of the extended exception, US sanctions pursuant to the NDAA for Fiscal Year 2012 will remain unapplicable to the ROK’s financial institutions that are involved in trade between the ROK and Iran.

Under the agreement reached between the P5+1 (the US, the UK, France, Russia, China and Germany) and Iran in Geneva on November 24 on initial steps toward the resolution of the Iranian nuclear issue, on the condition that Iran complies with its commitments, part of international sanctions against the country could be eased for next six months. 

○ Details regarding eased sanctions, including those involving the reduction of Iranian crude oil imports, will be mapped out as the relevant developments unfold. The ROK government will hold consultations with related countries in the process. 

However, despite the Geneva agreement, the Iran sanctions pursuant to other relevant US acts, including the Iran Freedom and Counterproliferation Act (IFCA) in the 2013 NADD and the 2010 Comprehensive Iran Sanctions, Accountability and Divestment Act (CISADA), will remain applicable.

The ROK government, as a responsible member of the international community, will take an active part in international efforts to resolve the Iranian nuclear issue in a peaceful manner. Furthermore, it will make its utmost efforts to help Korean companies avoid any unnecessary damage in the course.

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