Iran on Friday released a South Korean ship and its captain detained since January after South Korea promised to try to secure the release of Iranian funds frozen in South Korean banks under US sanctions, a South Korean official said. Iran seized the chemical tanker in the Strait of Hormuz and accused it of polluting the waters with chemicals. The <em>Hankuk Chemi</em> was travelling from a petrochemicals complex in Jubail, Saudi Arabia, to Fujairah in the United Arab Emirates when armed Islamic Revolutionary Guard Corps troops stormed the vessel in January and forced the ship to change course and travel to Iran. The issue triggered a diplomatic dispute after Iran demanded that South Korea release $7 billion in funds frozen in South Korean banks under US sanctions. Iran in February agreed to free all the ship's 20 crew members except for the captain, after a South Korean vice foreign minister visited Tehran. A South Korean foreign ministry official said both sides had agreed that the ship and the funds were not related issues and that South Korea promised to help to get the money released. "We have expressed our firm willingness to resolve the fund issue," the official said. <br/> The South Korean ministry said the ship left Iran after completing administrative procedures. It made no mention of the demand for the release of funds. "The captain and sailors are in good health," the ministry said. South Korea said the vessel did not cause any pollution. The ministry official said Iran dropped a plan to pursue criminal charges against the shipping company. Iran denied allegations that the seizure of the tanker and its crew constituted hostage-taking, saying it was South Korea that was holding Iranian funds hostage. The freezing of the funds is linked to US sanctions that Washington reimposed on Tehran in 2018 after president Donald Trump withdrew from Iran's 2015 nuclear deal with world powers. Under the Joe Biden administration, the US and Iran have begun indirect talks over a return to the accord. The US recently agreed to allow Iran to use the funds for non-military purposes and it has spent some on coronavirus vaccines secured via the global Covax initiative, the ministry official said, without giving a precise amount. The <em>Hankuk Chemi</em> incident was the first seizure of a major vessel by Iran's naval forces in more than a year. In July 2019, the IRGC seized the British-flagged oil tanker <em>Stena Impero</em> in the Strait of Hormuz for allegedly ramming a fishing boat. They released it two months later. At the time it was widely seen as a retaliatory move after authorities in the British overseas territory of Gibraltar detained an Iranian tanker and later released it, despite US objections. Tehran denied the two cases were related. The Guards seized at least six other ships in 2019 over alleged fuel smuggling.