South Korea’s Foreign Ministry said on Tuesday that Iranian assets worth an estimated $7 billion will be released following consultations with the United States, i24NEWS reported.
The clarification after Tehran announced Monday that it had reached a deal with Seoul over how to transfer the funds.
The agreement was reportedly reached during a meeting between Iran's Central Bank Governor Abdolnaser Hemmati and South Korean Ambassador to Iran, Ryu Jeong-hyun.
Tehran has been reportedly pressuring Seoul for months to unblock the assets held in two South Korean banks due to US sanctions.
Seoul has been in talks with Washington on ways to release the money without violating the sanctions, including expanding humanitarian trade with the Middle Eastern country, the Korea Times reported.
"Our government has been in talks with Iran about ways to use the frozen assets, and the Iran side has expressed its consent to the proposals we have made," the foreign ministry said without providing further details of the proposals.
"The actual unfreezing of the assets will be carried out through consultations with related countries, including the United States," it added.
Former US President Donald Trump increased the sanctions pressure on Iran after he withdrew from the 2015 nuclear deal between Iran and world powers.
President Joe Biden, in contrast, has expressed a desire to return to the 2015 agreement and could ease the pressure on Iran.
His administration has already rescinded a Trump administration assertion that all UN sanctions had been reimposed on Iran in September.
This past August, then-Secretary of State Mike Pompeo announced he had triggered a 30-day process at the Security Council that led to the return of UN sanctions on Iran and stopped an arms embargo on Tehran from expiring on October 18.
The Trump administration’s move to activate the so-called “snapback” came after the UN Security Council rejected the US resolution to extend the arms embargo on Iran.