Ship Seizure Drags South Korea Deeper Into Tensions Over Iran

South Korea is sending officials to Tehran and a warship to the Persian Gulf after Iran seized one of its commercial vessels, sparking a new standoff in the potentially perilous last two weeks of the Trump administration.

Iran’s Islamic Revolutionary Guard Corps said on Monday it had detained the South Korean-flagged Hankuk Chemi for repeatedly violating environmental laws, something its operator denied.

South Korea ordered its naval destroyer ROKS Choi Young to waters near the Strait of Hormuz on Tuesday, and announced the high-level delegation.

The ship’s captivity adds to regional tensions already heightened by new Iranian breaches of its 2015 nuclear deal with world powers, and speculation that President Donald Trump might act against Tehran before leaving office to complicate his successor’s plans to revive the pact abandoned by the U.S.

Iran’s government spokesman on Tuesday linked the detention of the vessel to an ongoing dispute with Seoul over $7 billion of Iranian funds trapped in South Korea as a consequence of Trump’s sanctions on the Islamic Republic.

“If someone is a hostage taker, it’s the South Korean government that’s taken hostage over $7 billion of our money under hollow pretexts,” Ali Rabiei told reporters.

Seoul’s Vice Minister of Foreign Affairs will go ahead with an already scheduled visit to Tehran to discuss the funds, the Foreign Ministry said Tuesday.

Iran claims officials in Seoul have said the money can’t be easily released because international banks won’t handle transactions linked to Iran for fear of being penalized by the U.S. Treasury Department.

The ship was headed to the United Arab Emirates after loading petrochemicals in Saudi Arabia. It was sailing through the Strait of Hormuz when it was intercepted with 20 crew from South Korea, Myanmar, Indonesia and Vietnam on board.

Managed Escalation

The incident is “another illustration that the IRGC gives the government time to test diplomacy, but when it goes too slow or hits a wall, they decide to up the ante to show Iran isn’t going to sit on its hands while other countries abuse their position,” said Ellie Geranmayeh, senior policy fellow at the European Council on Foreign Relations.

The hardliners’ most potent recent broadside aimed at the government of President Hassan Rouhani was last month’s law compelling Iran to escalate nuclear enrichment following the assassination of a prominent atomic scientist.

The decision to enrich uranium to 20%, a step toward weapons-grade, was meant to pressure President-elect Joe Biden into rapidly lifting sanctions once he’s in office. But it also risks fueling the confrontation with Washington to a point where it’s harder for him to engage diplomatically with Tehran.

Iranian officials have downplayed Monday’s developments. The Foreign Ministry said the Korean vessel was taken for “technical matters,” while the Atomic Energy Organization of Iran said enriching uranium to 20% was “easily reversible.”

©2021 Bloomberg L.P.

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