Iran Denies Holding Seized Korean Ship and Crew as Hostages

Iran denied on Tuesday it was using a South Korean ship and its crew as hostages, a day after it seized the tanker in the Gulf while pressing a demand for Seoul to release $7 billion in funds frozen under U.S. sanctions.

The seizure of the MT Hankuk Chemi and its 20-member crew near the strategic Strait of Hormuz has been seen as an attempt by Tehran to assert its demands, just two weeks before President-elect Joe Biden takes office in the United States.

Iran wants Biden to lift sanctions imposed by outgoing President Donald Trump. Tehran’s critics have long accused it of capturing ships and foreign prisoners as a method of gaining leverage in negotiations.

“We’ve become used to such allegations,” Iranian government spokesman Ali Rabiei told a news conference. “But if there is any hostage-taking, it is Korea’s government that is holding $7 billion, which belongs to us, hostage on baseless grounds.”

Iran’s ability to challenge shipping in the Gulf is one of its main points of leverage in what is expected to be a difficult negotiation when the Biden administration takes office on Jan. 20. In 2019 Iran held a British tanker for two months.

South Korea, like other countries, is required to limit Iran’s access to its financial system under the U.S. sanctions, which were imposed by Trump after he abandoned a nuclear agreement reached with Iran under his predecessor Barack Obama.

Iran says the sanctions are illegal and have hurt its economy, including its ability to respond to the worst outbreak of COVID-19 in the Middle East.

Biden aims to revive the nuclear agreement, but any thaw is likely to pose a diplomatic challenge. Since Trump abandoned the deal, Iran has taken steps that violate it; Biden says Iran must be fully compliant before the deal can be restored, while Iran says Washington must first lift the sanctions.