Tougher U.S. sanctions on Iran will go into effect on July 1, preventing Korean iron and steel and auto parts makers from doing business with the Middle Eastern country.
The Ministry of Trade, Industry and Energy said Tuesday that the U.S. recently issued an executive order to apply new sanctions on Iran over its suspected nuclear weapons development.
The new sanctions will ban any businesses around the world from exporting to the U.S. if they are engaged in dealings with Iran in energy, shipbuilding, iron and steel and auto parts industries.
Until recently, sanctions were imposed only on firms which transacted more than a certain amounts of oil products with Iran.
The U.S.' global lever is that the banks of any country that breaches the Iran sanctions will be banned from transacting with American banks.
The measure is expected to deal a blow to Korean exports to Iran. Of the US$6.26 billion worth of Korea's exports to Iran last year, steel products and car parts alone amounted to $1.67 billion.
But the U.S. has not yet set forth any regulations on specific items among steel products and car parts. But that still means Korea will lose at least $1 billion in export volume.
"About 530 small- and medium-sized businesses will likely suffer badly as Iran account for more than 50 percent of their total exports," said Nam Ki-man of the ministry. "We're trying to find alternative export markets and financial support for the affected companies."
