October 1, 2021
After a letter from Iran’s Supreme Leader Ali Khamenei, President Ebrahim Raisi has insisted Iran will not take imports from South Korea’s LG and Samsung.
This follows speculation for some months that a reported agreement over using Iranian money frozen in Korean banks to buy humanitarian goods might be extended to cover Korean-made home appliances, which dropped out of the Iranian market when the United States introduced stringent banking sanctions in 2018.
The letter, signed by Khamenei office chief Mohammad Mohammadi Golpaygani September 6, cited a call from Iranian manufacturers that Korean home appliances be kept out.
Khamenei’s ban could also be a means to pressure South Korea to address the issue of Iran’s frozen funds. On Thursday, two days after the ban was made public, Iran’s foreign minister Hossein Amir-Abdollahian held a phone talk with his Korean counterpart Chung Eui-yong and urged him to redouble efforts to address the issue.
Raisi conveyed the leader’s office instruction to the relevant ministers − for the economy, and for industries, mines and trade − September 8. Official news agencies Tuesday published the two communications.
The value of Iran’s home appliances market has been estimated at between 4.5 to 6 billion dollars. Aside from problems with US sanctions, Iran has for several years not issued import permits for home-appliances if comparable items are made at home.
Khamenei’s letter referred only to “two South Korean companies” but meant LG and Samsung, who ceased trade with Iran after the US introduced in 2018 financial sanctions threatening third parties in 2018, despite Iran’s warning it would be difficult for them to return once US sanctions ended. The Korean firms had previously established an important market, including the assembly in Iran by Iranian companies of a variety of goods including air conditioners, and TV and audio sets.
In February media reported the US Treasury was in talks with South Korea to allow the transfer of some of Iran’s funds frozen by Korean banks to Switzerland for humanitarian purchases. In July the South Korean Finance Ministry said an agreement had been reached.
Some Iranian media claimed the agreement also allowed frozen funds to be used to buy products from LG and Samsung to send to Iran. This was denied by an official of Iran’s Home Appliances Industries Association, Abbas Hashemi, on September 6 in an interview with the Iranian Students News Agency (ISNA), when he insisted Tehran rather than Washington should decide how to use the frozen money.
“The matter is not too complicated,” Mohammad-Reza Bagheri, a hardliner activist tweeted Thursday. “South Korea wanted to pay its debt with home appliances, conquer our markets and paralyze our industries…the Supreme Leader has opposed it.”
Others on social media took a different view, posting in support of importing Korean products by claiming they were better than others on the market, or that not importing South Korean products benefits Chinese companies. Goldiran and Sam Service, the two Iranian companies that assembled LG and Samsung products for over two decades, now work with Chinese producers.
“Khamenei’s ban on South Korean home appliances is more backing Chinese than Iranian domestic production because currently [Iranian companies] only assemble Chinese parts in Iran. Nothing is being produced,” one of the many tweets against the ban said.