Seoul weighs exposure as U.S. broadens Iran sanctions regime

The United States launched a wide-ranging sanctions regime, Operation Economic Outcast, on Monday to cut Iran off from financial networks worldwide.

Seoul is now assessing whether South Korean companies could be exposed through dealings with firms and financial institutions in third countries that conduct business with Iran.

The U.S. Treasury Department expanded the scope of potential secondary sanctions to five additional areas of Iran’s economy: digital assets, technology, gold, aviation and shipping. Secondary sanctions allow Washington to penalize foreign companies and banks for certain dealings with Iran even when no U.S. party is involved, potentially cutting them off from the U.S. financial system.

Direct exposure appears limited. Trade with Iran has fallen sharply and imports of Iranian crude have effectively stopped, but South Korean companies could still face risks if transactions with partners in China, Hong Kong or other trading hubs are used for Iranian oil sales, financing or sanctions evasion.

“We are monitoring U.S. moves following the announcement of new sanctions on Iran,” the Ministry of Foreign Affairs said Tuesday. “We will work closely with the relevant ministries to assess how the new measures, including the five newly designated sectors, could affect South Korea.”

Foreign Minister Cho Hyun and U.S. Secretary of State Marco Rubio also discussed Iran in a call late Monday. Rubio outlined developments in the Middle East and U.S. efforts to restore regional peace and stability.

Cho emphasized the government's willingness to make a substantive contribution to restoring freedom of navigation in the Strait of Hormuz. Washington made no specific request during the call for Seoul to join the new sanctions with its own.

“We are launching an economic onslaught against Iran’s financial connections around the globe,” U.S. Treasury Secretary Scott Bessent said Monday. He called the campaign an “economic D-Day” and said the goal was to cut every economic lifeline sustaining Tehran.

The new measures broaden the categories of conduct that may trigger secondary sanctions and expand Washington’s ability to penalize foreign parties operating in or providing services to those sectors of Iran’s economy.

The Treasury’s Office of Foreign Assets Control (OFAC) also sanctioned nearly 60 entities, individuals and vessels tied to nuclear and missile procurement, cyber operations and oil revenue networks. The targets included networks operating across the United Arab Emirates (UAE), Hong Kong, China, Singapore, Switzerland, Europe and other regions.

The Treasury said every country would receive a defined deadline to shut down Iran-related activity identified by U.S. officials, though it did not disclose the timelines.

Bessent did not explicitly name China, but the warning left little room.

"If they facilitate transactions and are part of the ecosystem that turns Iranian oil into money, into repression, they will be targeted," Bessent said at a news conference on Monday. "We know who they are. They know who they are."

“This measure has little direct or indirect bearing on South Korea and mainly targets networks in China, Hong Kong, Singapore and the UAE,” a ruling bloc official in Seoul said. “The relevant ministries will assess whether there are any actual links.”

“OFAC has room to interpret the scope of sanctions broadly,” Kim Jae-chun, a professor at Sogang University’s Graduate School of International Studies, said. “The government needs to tell companies which transactions could cause problems and strengthen export controls.”

OFAC also issued a guidance warning of sanctions risks for complying with Iranian demands related to shipping in Hormuz, where Cho said South Korea was willing to help restore free passage.

The Foreign Ministry’s account of the Cho-Rubio call said the allies would continue close communication and coordination “to resolve the North Korean nuclear issue,” but did not use the word “denuclearization.”

The two-sentence readout by the U.S. Department of State did not mention North Korea. It said Rubio and Cho discussed “a range of issues" related to the South Korea-U.S. alliance, and that the two countries must remain in close coordination on matters integral to the alliance.

“South Korea and the United States have consistently maintained the goals of peace and stability on the Korean Peninsula and denuclearization,” the Foreign Ministry’s spokesperson said Tuesday.

U.S. President Donald Trump said last Wednesday that North Korean leader Kim Jong-un “has 57 very powerful nuclear weapons.” His comment has fueled concern that future U.S.-North Korea talks could drift toward tacit acceptance of Pyongyang’s nuclear arsenal.

BY YOON JI-WON, SHIM SEOK-YONG [[email protected]]