Iran bans UK and S Korea trade over atomic issue

TEHRAN - Iran is blocking imports from Britain and South Korea as an apparent punishment for their opposition to Iran's nuclear programme, diplomatic and industry sources say.

Iran said last month it could use trade to punish countries that voted for an International Atomic Energy Agency (IAEA) resolution on referring Tehran to the UN Security Council for possible sanctions over its nuclear programme.

"We have received a verbal order from the Commerce Ministry, about a trade ban imposed on South Korean and British companies," an official at a state manufacturing company said.

He said the order was due to the two countries' "hostility" towards Iran, such as over its nuclear programme which Tehran insists is purely for peaceful purposes.

Presidential chief of staff Gholamhossein Elham declined to confirm the import bans, but the semi-official ISNA students news agency quoted him as saying: "Political relations and views definitely have an impact on economic relations."

"Iran's political, economic and cultural relations with other countries are connected to one another and these relations have an impact on each other," he added.

Diplomats said Iran typically does not publicly acknowledge such moves but there was enough evidence to confirm the order had been given.

"Basically it means that goods are being held up in customs, letters of credit for imports are not being granted and so on," said a British diplomat who declined to be named.

While Iran's oil and gas exports were not affected, the order may impinge on energy operations, which often rely on imported equipment and technology.

An official at a state-run South Korean trade agency noted reports that the Iranian trade agency had been rejecting permits for South Korean products.

South Korean Foreign Minister Ban Ki-moon said at a briefing he could not confirm whether the ban had been imposed.

Inappropriate

"It would not be appropriate for Iran to take this type of action for a position we have taken at an international organisation," Ban said, referring to the IAEA vote.

In a meeting with South Korea's new ambassador to Tehran this week, Iran's President Mahmoud Ahmadinejad warned that the Islamic republic wanted to strike a balance between its economic and political ties with other countries.

South Korean products have won a large share of Iran's consumer market in recent years, particularly in electrical goods through manufacturers like Samsung and LG.

Britain, which aside from the nuclear issue is also engaged in a row with Tehran over bombing accusations, has been on the receiving end of such trade measures several times in the past three years.

"Whenever things get a bit tense, this happens," the British diplomat said. The last time British goods were banned by Iran was in 2004 when an Iranian diplomat in the UK was facing an extradition request by Argentina.

The Farhang-e Ashti newspaper on Wednesday said imports from Argentina and the Czech Republic had also been halted.

"This is Iran's first step to limit its trade relations with countries with a hostile policy towards Iran," the paper said.

But diplomatic sources said these countries' trade problems with Iran were not new and were related to separate issues.

- REUTERS