South Korean banks suspended Thursday money transactions with the blacklisted Iranian entities a day after the government released sweeping sanctions over Teheran's nuclear activities, a bank association said.
The Korea Federation of Banks (KFB) held a board meeting a day earlier and issued a guideline on financial transactions with Iran, the federation said. The measure goes into effect on Thursday.
According to the guideline, local lenders cannot handle the payment and receipt of foreign currencies for Iranian entities and products blacklisted by the South Korean government as related with weapons of mass destruction, terrorism or Iranian oil production and development.
For Iranian firms or nationals not banned officially, banks have to receive approval from the Bank of Korea governor to allow foreign exchange transactions, the KFB said.
The decision came after Seoul penalized on Wednesday the local branch of Bank Mellat, an Iranian lender, and put nearly all financial transactions with Iran under government supervision as part of its package of sanctions to join a U.S.-led campaign to censure Tehran over its suspected nuclear program.
The government is also set to blacklist 102 Iranian entities and 24 individuals, ban unauthorized foreign exchange dealings, strengthen inspections of suspicious cargo to and from Iran, and restrict investments in Iran's gas and oil refinery industries.