Woori Bank

According to its form 20-F filed with the SEC for fiscal year 2021: "We [Woori Bank] operate certain accounts for the Central Bank of Iran, or the CBI, which were opened by the CBI pursuant to a service agreement entered into by us and the CBI in September 2010, as amended from time to time, to facilitate trade between Korea and Iran.

In the past, we also provided fund transfer and financing services to Korean exporters and importers in connection with their trade transactions with Iranian parties that were permitted under the relevant Korean sanctions regime. We have discontinued all trade financing activities relating to export and import trades involving the CBI accounts since November 5, 2018.

We also maintain a limited number of deposit accounts in Korea for an Iranian financial institution subject to OFAC sanctions that were opened prior to it becoming subject to OFAC sanctions. The relevant accounts have since been restricted, and no transactions are currently allowed through these accounts."

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"A subsidiary of the company has been identified as potentially providing import/export financing services to facilitate trade with Iran. In 2019 CalPERS designated the company as under review. In 2020 CalPERS changed the designation to “being monitored” because CalPERS’ initial screening has not identified the company as having involvement in the regions and/or activities targeted by the Act. CalPERS continues to monitor the company for possible changes in status relevant to the Act."

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"Woori Finance Holdings Co. was identified as providing import-export financing services to facilitate trade with Iran. In late 2014, Woori Finance Holdings Co. merged with its subsidiary Woori Bank and changed its name to Woori Bank. In 2014, CalSTRS designated Woori Finance Holdings Co. as “Under Review” for potentially having ties to Iran. In 2015, CalSTRS designated the company as “Being Monitored.” In 2020, CalSTRS removed Woori Bank as it no longer held any of the company’s securities."

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According to its Annual Report filed with the SEC for fiscal year 2019: "In 2019, we engaged in the following activities relating to Iran:         

• We have operated certain accounts for the CBI, which were opened by the CBI pursuant to a service agreement entered into by us and the CBI in September 2010, as amended from time to time, to facilitate trade between Korea and Iran. The accounts opened by the CBI consist of Won-denominated accounts that are used for the settlement of exports of goods produced or substantially transformed in Korea to Iran by Korean exporters and Won, U.S. dollar, euro and Japanese Yen-denominated accounts (of which only the Won accounts are in use) that are used for the settlement of imports of crude oil and nauralgas from Iran by Korean importers. By the terms of the service agreement between us and the CBI, settlement of export and import transaction payments due from Iranian entities to Korean exporters or from Korean importers of oil and gas to Iranian entities through such accounts opened by the CBI was effected by crediting or debiting the relevant amount to or from the applicable accounts while a corresponding payment of funds was made to or from an Iranian commercial bank by the CBI. Any funds deposited for the account of Iranian entities as a result of Korean imports of crude oil and natural gas was only to be used by transferring them to the Won-denominated account and then making payment to accounts of Korean persons and entities opened at financial institutions in Korea in respect of Korean exports to Iran. No transfers of funds were to be made from these accounts to Iran, to Iranian accounts in any third country, or for any use other than those described above. In light of the discontinuation of the SRE, from July 8, 2019 to September 20, 2019, we limited activity in the existing CBI accounts to processing payments for exports of humanitarian goods to Iran, and since the imposition of additional secondary sanctions against the CBI on September 20, 2019, we ceased all activity in the existing CBI accounts. In 2019, the total fee revenue from maintaining the CBI accounts amounted to approximately ￦1.8 million. As there were no expenses directly applicable to such activities under our internal management accounts, we estimate that our net income before tax from maintaining the CBI accounts also amounted to approximately ￦1.8 million.

• We have also provided fund transfer and financing services to Korean exporters and importers in connection with their trade transactions with Iranian parties which were permitted under the relevant Korean sanctions regime and not subject to U.S. secondary sanctions. We have discontinued all trade financing activities relating to export and import trades involving the CBI accounts since November 5, 2018. In 2019, all such exports and imports were settled through telegraphic transfer and did not involve our financing services. In addition, we continued to honor our obligations on a limited basis under previously-issued bank guarantees to the extent that such activities did not violate OFAC sanctions or applicable U.S. secondary sanctions. In 2019, our total fee revenue from the relevant telegraphic transfer services amounted to approximately ￦0.64 million. As there were no expenses directly applicable to such activities under our internal management accounts, we estimate that our net income before tax from such activities also amounted to approximately ￦0.64 million.

• We also maintain a limited number of deposit accounts in Korea for an Iranian financial institution that were opened prior to its designation for U.S. sanctions. The relevant accounts have since been restricted, and no transactions are currently allowed through these accounts. Accordingly, there were no fee revenues from maintaining such deposit accounts, and there were no expenses directly applicable to such activities under our internal management accounts."

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In May 2016, we established a representative office in Tehran, Iran, which had engaged in the collection of local market information without generating any revenue. Following the re-imposition of sanctions, the representative office is no longer operational and does not have any employees or office space. (2019)

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In 2014, Woori Finance Holdings Co. was identified as providing import-export financing services to facilitate trade with Iran. In late 2014, Woori Finance Holdings Co. merged with its subsidiary Woori Bank and changed its name to Woori Bank. In 2014, CalSTRS designated Woori Finance Holdings Co. as “Under Review” for potentially having ties to Iran. In 2015, CalSTRS determined to classify Woori Bank as “Being Monitored” and maintained that designation in 2018.--

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Woori Bank and IBK partially suspend financial transactions with Iran,” Pulse (South Korea), June 19, 2018.) 

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In 2016, we engaged in the following activities relating to Iran:
 
We operate certain accounts for CBI, which were opened by CBI pursuant to a service agreement entered into by us and CBI in September 2010 to facilitate trade between Korea and Iran. The accounts opened by CBI consist of Won-denominated accounts that are used for the settlement of exports of goods produced or substantially transformed in Korea to Iran by Korean exporters and Won, U.S. dollar, euro and Japanese Yen-denominated accounts (of which only the Won accounts are in use) that are used for the settlement of imports of crude oil and natural gas from Iran by Korean importers. By the terms of the service agreement between us and CBI, settlement of export and import transaction payments due
 
from Iranian entities to Korean exporters or from Korean importers to Iranian entities through such accounts opened by CBI are effected by crediting or debiting the relevant amount to or from the applicable accounts while a corresponding payment of funds is made to or from an Iranian bank by CBI. Any funds deposited for the account of Iranian entities as a result of Korean imports of crude oil and natural gas may only be used by transferring them to the Won-denominated account and then making payment to accounts of Korean persons and entities opened at financial institutions in Korea in respect of Korean exports to Iran. No transfers of funds may be made from these accounts to Iran, to Iranian accounts in any third country, or for any use other than those described above. In 2016, the total fee revenue from maintaining the CBI accounts amounted to approximately ￦192 million (which represented approximately 0.002% of our total revenue). As there were no expenses directly applicable to such activities under our internal management accounts, we estimate that our net income before tax from maintaining the CBI accounts also amounted to approximately ￦192 million (which represented approximately 0.012% of our total net income before tax). We intend to continue maintaining the accounts opened by CBI, and in light of the lifting of certain sanctions against Iran, including U.S. secondary sanctions, the scope of our services provided to CBI may be adjusted to reflect such change in circumstances.

We also provide limited export-import financing services to Korean exporters and importers in connection with their trade transactions with Iran that were permitted under the relevant Korean sanctions and were not subject to U.S. secondary sanctions, primarily by discounting, advising on or issuing letters of credit, and to a lesser extent, issuing performance bonds on behalf of Korean contractors with respect to Iranian construction projects permitted under the relevant Korean sanctions and not subject to U.S. secondary sanctions. All such transactions are settled through the accounts opened by CBI with us as described above. In 2016, our total fee revenue from such export-import financing services amounted to approximately ￦11.5 billion (which represented approximately 0.11% of our total revenue), while our net income before tax from such activities (net of expenses directly applicable to such activities based on our internal management accounts) amounted to approximately ￦4.2 billion (which represented approximately 0.27% of our total net income before tax). We intend to continue providing the export-import financing services with its current scope, to the extent U.S. secondary sanctions or other applicable sanctions remain lifted.

We also maintain a limited number of deposit accounts in Korea for an Iranian financial institution that the U.S. government has historically viewed as controlled by the government of Iran. These accounts were opened with us before the institution was designated for U.S. sanctions. Under Korean customer protection requirements, we are unable to provide specific information identifying this Iranian financial institution or the volume of its deposits. In 2016, there were no fee revenues from maintaining such deposit accounts, and there were no expenses directly applicable to such activities under our internal management accounts.
 
In May 2016, we established a new representative office in Tehran, Iran, which only engages in the collection of local market information and did not generate any revenue in 2016.

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"Three foreign banks are opening up representative offices in Iran as the country seeks to boost investment after reaching an international sanctions deal last year, a central bank official said. Oman’s Bank Muscat SAOG, Woori Bank of South Korea and India’s UCO Bank Ltd. are all in the process of establishing a presence in Tehran, Central Bank Vice Governor Peyman Ghorbani said Tuesday in an interview." (Bloomberg News, "Three Foreign Banks to Open in Iran, Central Bank Official Says," 11/1/2016).

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According to its Annual Report filed with the SEC in 2014: 

• In 2013, we and our affiliates engaged in the following activities relating to Iran:
  • Woori Bank operates certain accounts for CBI, which were opened by CBI pursuant to a service agreement entered into by Woori Bank and CBI in September 2010 to facilitate trade between Korea and Iran. The accounts opened by CBI consist of Won-denominated accounts that are used for the settlement of exports of goods produced or substantially transformed in Korea to Iran by Korean exporters and Won, U.S. dollar, euro and Japanese Yen-denominated accounts (of which only the Won accounts are currently in use) that are used for the settlement of imports of oil and natural gas from Iran by Korean importers. By the terms of the service agreement (as amended) between Woori Bank and CBI, settlement of export and import transaction payments due from Iranian entities to Korean exporters or from Korean importers to Iranian entities through such accounts opened by CBI are effected by crediting or debiting the relevant amount to or from the applicable accounts while a corresponding payment of funds is made to or from an Iranian bank by CBI. Any funds deposited for the account of Iranian entities as a result of Korean imports of oil and gas may only be used by transferring them to the Won-denominated account and then making payment to accounts of Korean persons and entities opened at financial institutions in Korea in respect of Korean-origin exports to Iran. No transfers of funds may be made from these accounts to Iran, to Iranian accounts in any third country, or for any other use. Furthermore, the applicable laws and regulations and banking guidelines of Korea require that trade transactions between Korean and Iranian parties be subject to prior certification and clearance by relevant Korean governmental authorities (or organizations designated thereby) to ensure compliance with Korean economic sanctions and export controls against Iran, and the settlement of payments through the accounts opened by CBI at Woori Bank are not permitted without such prior certification and clearance. In 2013, the total fee revenue from maintaining the CBI accounts amounted to approximately ￦128 million (which represented approximately 0.001% of our total revenue). As there were no expenses directly applicable to such activities under our internal management accounts, we estimate that our net income before tax from maintaining the CBI accounts also amounted to approximately ￦128 million (which represented approximately 0.04% of our total net income before tax). Woori Bank intends to continue maintaining the accounts opened by CBI within the current scope of services, to the extent such activity is permitted under, or otherwise exempted from, the indirect U.S. sanctions or other applicable sanctions.
  • Woori Bank also provides limited export-import financing services to Korean exporters and importers in connection with their trade transactions with Iran that are permitted under the relevant Korean sanctions and not subject to the indirect U.S. sanctions, primarily by discounting, advising on or issuing letters of credit, and to a lesser extent, issuing performance bonds on behalf of Korean contractors with respect to Iranian construction projects permitted under the relevant Korean sanctions and not subject to the indirect U.S. sanctions. All such transactions are settled through the accounts opened by CBI at Woori Bank as described above. In 2013, our total fee revenue from such export-import financing services amounted to approximately ￦3 billion (which represented approximately 0.03% of our total revenue), while our net income before tax from such activities (net of expenses directly applicable to such activities based on our internal management accounts) amounted to approximately ￦2 billion (which represented approximately 0.66% of our total net income before tax). Woori Bank intends to continue providing the export-import financing services with its current scope, to the extent such activity is permitted under, or otherwise exempted from, the indirect U.S. sanctions or other applicable sanctions.       
  • Woori Bank also maintains a limited number of deposit accounts in Korea for a certain Iranian financial institution which is currently on the list of specially designated nationals maintained by OFAC (with an “IFSR” designation). Under Korean customer protection requirements, we are unable to provide specific information identifying this Iranian financial institution or the volume of its deposits, which constitute less than 0.05% of the Woori Bank’s total deposit base. These accounts were opened at Woori Bank before such Iranian financial institution was added to OFAC’s list of specially designated nationals, and under Korean law, these financial institutions are generally unable to repatriate the amounts in these accounts from Korea without specific authorization of the Korean authorities. As a Korean bank is generally prohibited under Korean law from unilaterally terminating a deposit account without the consent of the depositor, Woori Bank does not currently have plans to terminate these deposit accounts. In 2013, there were no fee revenues from maintaining such deposit accounts, and there were no expenses directly applicable to such activities under our internal management accounts."

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“South Korea is set to become the second Asian nation to make a payment to Iran for crude oil imports under an interim nuclear deal…Japan became the first of Iran's oil buyers to make a payment to Iran under the eased sanctions earlier this month. It was not clear the amount to be transferred but the Iranian central bank was holding up to $5.6 billion in two won-denominated accounts, one at Woori Bank and the other at Industrial Bank of Korea as of late 2013, according to one of the sources. A second source who confirmed the money transfer added the payment would be made by the two Korean banks next month - one part on early March and the other later in the month…State-owned Woori Bank and Industrial Bank of Korea declined to comment on the money transfer…Bank of Korea and South Korean finance ministry officials contacted by Reuters said no decision had been made about money transfers to Iran.” (Reuters, “South Korea set to make oil payment to Iran - sources,” 2/12/14)

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“Under penalty of expulsion from the U.S. banking system, Iranian crude customers such as China, Japan and India will be restricted to using their own currencies for the purchases, starting today. Importers will be compelled to keep the payments in escrow accounts that Iran can use only for locally sourced goods and services, in what will amount to barter arrangements…The new blockage on remittances will add to financial restrictions the U.S. imposed last year that curtail Iran’s access to dollars, euros and other hard currencies. Sanctions have already forced it into barter arrangements with China, its largest oil customer…South Korean buyers have been paying for Iranian crude in local won, through two accounts that Iran’s central bank opened in 2010 at the Industrial Bank of Korea and Woori Bank…South Korea’s exports to Iran of goods such as iron, steel and petrochemicals increased 3.2 percent to $6.3 billion last year, while imports dropped 25 percent, to $8.5 billion, according to customs data. Oil made up 99 percent of the goods that Japan and South Korea imported from Iran.” (Bloomberg, “Iran Faces Oil-Cash Squeeze as U.S. Bolsters Sanctions,” 2/6/14)

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“Iran will receive $4.2 billion from its oil sales to be transferred in instalments if it fulfils its commitments in a landmark nuclear deal struck between world powers and Tehran in Geneva. Here is a look at where Iranian oil payments are held in the countries in Asia that are still importing crude from the OPEC producer…

COUNTRY: South Korea

BANK: Woori Bank and Industrial Bank of Korea

ESTIMATED AMOUNT: Iran has about 5.9 trillion won ($5.56 billion) in won deposits, a foreign exchange authority source said.” (Reuters, “FACTBOX-Iran's oil fund stash in Asia,” 11/25/13)

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According to its Annual Report filed with the SEC in 2013: 

• In 2012, we and our affiliates engaged in the following activities relating to Iran:    
  • Woori Bank operates certain accounts for CBI, which were opened by CBI pursuant to a service agreement entered into by Woori Bank and CBI in September 2010 to facilitate trade between Korea and Iran. The accounts opened by CBI consist of Won-denominated accounts that are used for the settlement of exports of goods produced or substantially transformed in Korea to Iran by Korean exporters and Won, U.S. dollar, euro and Japanese Yen-denominated accounts (of which only the Won accounts are currently in use) that are used for the settlement of imports of oil and natural gas from Iran by Korean importers. By the terms of the service agreement (as amended) between Woori Bank and CBI, settlement of export and import transaction payments due from Iranian entities to Korean exporters or from Korean importers to Iranian entities through such accounts opened by CBI are effected by crediting or debiting the relevant amount to or from the applicable accounts while a corresponding payment of funds is made to or from an Iranian bank by CBI. Any funds deposited for the account of Iranian entities as a result of Korean imports of oil and gas may only be used by transferring them to the Won-denominated account and then making payment to accounts of Korean persons and entities opened at financial institutions in Korea in respect of Korean-origin exports to Iran. No transfers of funds may be made from these accounts to Iran, to Iranian accounts in any third country, or for any other use. Furthermore, the applicable laws and regulations and banking guidelines of Korea require that trade transactions between Korean and Iranian parties be subject to prior certification and clearance by relevant Korean governmental authorities (or organizations designated thereby) to ensure compliance with Korean economic sanctions and export controls against Iran, and the settlement of payments through the accounts opened by CBI at Woori Bank are not permitted without such prior certification and clearance. In 2012, total fee revenue from maintaining the CBI accounts amounted to approximately Won 55 million (which represented less than 0.001% of our total revenue). As there were no expenses direct applicable to such activities under our internal management accounts, we estimate that our net income before tax from maintaining the CBI accounts also amounted to approximately Won 55 million (which represented less than 0.01% of our total net income before tax). Woori Bank intends to continue maintaining the accounts opened by CBI within the current scope of services, to the extent such activity is permitted under, or otherwise exempted from, the indirect U.S. sanctions or other applicable sanctions.
  • Woori Bank also provides limited export-import financing services to Korean exporters and importers in connection with their trade transactions with Iran that are permitted under the relevant Korean sanctions and not subject to the indirect U.S. sanctions, primarily by discounting, advising on or issuing letters of credit, and to a lesser extent, issuing performance bonds on behalf of Korean contractors with respect to Iranian construction projects permitted under the relevant Korean sanctions and not subject to the indirect U.S. sanctions. All such transactions are settled through the accounts opened by CBI at Woori Bank as described above. In 2012, our total fee revenue from such export-import financing services amounted to approximately Won 21 billion (which represented approximately 0.12% of our total revenue), while our net income before tax from such activities (net of expenses directly applicable to such activities based on our internal management accounts) amounted to approximately Won 8 billion (which represented approximately 0.3% of our total net income before tax). Woori Bank intends to continue providing the export-import financing services with its current scope, to the extent such activity is permitted under, or otherwise exempted from, the indirect U.S. sanctions or other applicable sanctions.
  • Woori Bank also maintains a limited number of deposit accounts in Korea for a certain Iranian financial institution which is currently on the list of specially designated nationals maintained by OFAC (with an “IFSR” designation). Under Korean customer protection requirements, we are unable to provide specific information identifying this Iranian financial institution or the volume of their deposits, which constitute less than 0.05% of the Woori Bank’s total deposit base. These accounts were opened at Woori Bank before such Iranian financial institution was added to OFAC’s list of specially designated nationals, and under Korean law, these financial institutions are generally unable to repatriate the amounts in these accounts from Korea without specific authorization of the Korean authorities. As a Korean bank is generally prohibited under Korean law from unilaterally terminating a deposit account without the consent of the depositor, Woori Bank does not currently have plans to terminate these deposit accounts. In 2012, total fee revenue from maintaining such deposit accounts amounted to approximately ￦1 million (which represented less than 0.00001% of our total revenue). As there were no expenses direct applicable to such activities under our internal management accounts, we estimate that our net income before tax from maintaining the CBI accounts also amounted to approximately ￦1 million (which represented less than 0.0001% of our total net income before tax)."

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"In response, Rabobank and Société Générale say they have stopped servicing Iran deals or curbed their trade finance. According to Iranian trade professionals, Korea's Woori Bank and Industrial Bank of Korea have done the same. The Korean banks could not be reached for comment." (The Wall Street Journal, "Willing Banks Find Profits in Legal Trade With Iran," 4/8/2012) 

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Woori Bank is the lending unit of South Korea's third-largest financial company, the state-owned Woori Finance Holdings Co. The firm is currently undergoing privatization negotiations and came under investigation for fraud during the summer of 2010. (Businessweek).

In October 2010, Woori Bank, along with Industrial Bank of Korea, have been appointed by the South Korean government to "finance legitimate trade with Iran in sectors unaffected by sanctions, channelled through Iran's central bank." The deal will allow Iran's central bank to deposit oil proceeds in Woori Bank, which will then use the funds to pay South Korean firms exporting to Iran. South Korean trade to Iran amounts to $10 billion annually. A Woori Bank spokesman explained that "Iran's central bank is not the target of sanctions, so transactions through the bank are legal. We do not worry about any possibly sanctinons by the US against us" (Financial Times).