South Korea Shippers Join Overseas Rivals In Shunning Iran Business

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June 11, 2013

reuters logoBy Meeyoung Cho

SEOUL, June 11 (Reuters) – South Korean container shippers are joining a wave of their international peers in giving up on Iranian business ahead of new U.S. sanctions in July, adding to pressure on Tehran’s vital seaborne trade.

South Korea’s government said the country’s top two shippers, Hanjin Shipping Co Ltd and Hyundai Merchant Marine Co Ltd, had ended direct shipments to Iran in May, with the Middle Eastern nation’s economy already reeling from measures imposed by the West to curb its nuclear programme.

Hyundai Merchant will also cease so-called trans-shipments of freight ultimately destined for or originating in Iran from June 15, while Hanjin halted such business on June 8, the marine, energy, finance and foreign affairs ministries said in a joint statement on Tuesday.

Hanjin and Hyundai Marine, the only two South Korean shippers that had been dealing with Iran, both confirmed the government statement, saying they were cooperating in efforts against Iran’s nuclear programme.

Tehran denies its atomic programme is aimed at building a bomb, but sceptical Western nations have become increasingly frustrated.

The U.S. National Defense Authorization Act (NDAA), which comes into effect on July 1, blacklists Iran’s shipping, shipbuilding, energy and port management sectors.

While it has an explicit exemption for food, medicine and other humanitarian goods, foreign shipping firms are pulling out to avoid falling foul of its provisions.

The Korean ministries said exports to Iran, which mainly come from small- and medium-sized firms, would drop sharply from July as it gets harder to find ships.

The ministries did not give details on the size of the expected fall, but said that South Korea exported $6.26 billion of goods to Iran last year – mainly steel products, car parts and electronic goods.

Asia’s fourth-largest economy, a major buyer of Iranian crude oil, last week received a six-month extended waiver on Iran sanctions from the U.S. State Department in exchange for agreeing to reduce purchases of oil from Tehran.

South Korean refiners have been importing Iranian crude via ships provided by Iran.

(c) 2013 Thomson Reuters, Click For Restrictions

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