State-controlled media in Iran continue to defend a ban on South Korean home appliances, saying that the move was a “diplomatic message” to South Korea.

After a letter from Iran's Supreme Leader Ali Khamenei on September 6, President Ebrahim Raisi called on his ministers not to allow imports from South Korea’s LG and Samsung. Khamenei’s order was explained in the letter as defending local manufacturers against foreign competition.

But the Iranian Students News Agency (ISNA), a government-controlled website on Monday openly argued that Khamenei’s move was a diplomatic message to South Korea that hold around $7 billion in Iranian frozen funds. Korea was a buyer of Iranian oil until former US president Donald Trump in May 2019 expanded sanctions he had imposed a few months earlier on Iran to include all oil exports. Korea stopped buying Iranian oil but payments still pending were frozen by two Korean banks.

Most major news websites in Iran on Monday continued to cover the issue of the ban and justifying it on various grounds. On social media Iranians also continue to debate the issue, with many saying that instead of helping local industry it will add to their inefficiency in the absence of strong competition.

One Twitter user has argued that Khamenei’s interference in this matter is below his status and he should have left it to other government officials to issue the ban. But that is exactly the point. ISNA insists that Khamenei wanted his ban to take on a diplomatic message to Korea.

The ban followed speculation for some months that a reported agreement over using Iranian money frozen in Korean banks to buy humanitarian goods might be extended to cover Korean-made home appliances, which dropped out of the Iranian market when the United States introduced stringent banking sanctions in 2018.

ISNA in its Monday article called the idea of importing Korean home appliances as repatriation of Iran’s frozen funds “is insulting”.

ISNA also insists that Iranian officials at the time made it clear that Samsung and LG will be punished one day when they decide to return to Iran’s market. Others back Khamenei’s decision by arguing that it is not a sound business decision to accept Korean home appliances in lieu of the frozen funds. Iran prefers cash, but it is politically hard for the Biden Administration to authorize cash flowing to Tehran.

Nuclear talks between Iran and Western powers in Vienna are in suspension mode as Tehran has so far refused to return to the negotiations. It is trying to obtain cash as a price for its return, most probably to claim victory in the talks. But opposition to such a move in the United States would be strong, refreshing memories of the Obama administration sending cash dollars on pellets to Tehran in 2016 to free hostages.

A pattern emerges as Iran’s foreign minister Hossein Amir-Abdollahian said in a television interview on Saturday that he refused to have any contact with American officials during his September trip to the UN in New York, telling them that first the US should free $10 billion of Iran’s frozen funds.

"The Americans tried to contact us through different channels (at the UN General Assembly) in New York, and I told the mediators if America's intentions are serious then a serious indication was needed...by releasing at least $10 billion of blocked money," he said.