The U.S. is likely to exempt Korea from Iran sanctions with regards to non-petroleum products.

According to reports citing unnamed government sources, U.S. officials agreed with the Korean delegation that Korea-Iran trade in non-petroleum products should be exempted from the sanctions.

Under the U.S. National Defense Authorization Act for Fiscal Year 2012, which includes the so-called Kirk-Menendez amendment, economic entities that have transactions with the Iranian central bank are unable to deal with U.S.-based financial institutions.

The two sides are reported to have agreed that trade conducted through banks owned or controlled by the government should be exempted from the U.S.-led sanctions.

As such, Korean entities that trade with Iran are likely to avoid a direct impact from the measures as both Woori Bank and Industrial Bank of Korea are more than 50 percent owned by the government.

The two banks are the only local financial institutions that deal with Iran’s central bank.

The Korean delegation, led by Lee Baek-soon, director-general of the foreign ministry’s North America bureau, also reportedly have discussed reducing Korea’s crude oil imports from Iran.

According to reports, the delegation conveyed Korea’s plans to gradually reduce Iranian oil imports, and related negotiations were conducted “amicably.”

Mark Kirk and Robert Menendez have put forward the guidelines that economic entities should cut Iranian oil imports by 18 percent if they are to maintain dealings with U.S.-based institutions.

By Choi He-suk (cheesuk@heraldcorp.com)