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Iran's investment pledge for Korean biotech city makes no progress

All News 16:23 September 07, 2016

CHEONGJU, South Korea, Sept. 7 (Yonhap) -- Iran's plan to invest a total of US$2 billion in a major biotech complex in South Korea has made almost no progress despite eased foreign currency transaction rules, industry observers said Wednesday.

Earlier this year, a consortium led by the Iranian government signed a memorandum of understanding (MOU) with the government of North Chungcheong Province.

The Iranian side first agreed to provide $2 million for its initial investment into Osong Biovalley inside the province's free economic zone between July and August.

Iran's investment pledge for Korean biotech city makes no progress - 1

It marked the first foreign direct investment pledge Chungbuk Free Economic Zone has attracted, with the consortium agreeing to make the investment for the next decade.

The long-term plan called for building a joint research center, drug production lines and a clinical trial hospital in Osong, a city located some 130 kilometers south of Seoul. The city aims to become a global biotech and medical industry hub.

After eight months, however, no Iranian funds have been deposited into the project, the observers said.

Money transactions between South Korea and Iran have become available with the adoption of the revised foreign exchange transaction regulations in May after the international community lifted blanket sanctions imposed on Tehran.

The new rules, effective on May 2, allow South Korean and Iranian companies to carry out capital transactions through won-dominated accounts. Previously only currency transactions stemming from exports or imports were permitted.

The provincial government has failed to grasp why the investment has been postponed, they said.

"It is true that not much progress has been made as it is difficult to contact the Iranian side," said an official of the North Chungcheong provincial government. Gov. Lee Si-jong even visited Iran and Turkey in May as part of efforts to draw investment and help companies based in the province to launch businesses there.

On a landmark visit to the Middle Eastern country earlier this year, President Park Geun-hye also produced a set of summit deals to promote economic cooperation between the two sides.


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