September 18, 2019
Seoul has threatened the move for weeks.
South Korea excluded Japan from its export controls whitelist Wednesday in retaliation for Tokyo’s earlier decision to remove Seoul from its list of favored trade partners, as bilateral relations have slumped to the lowest levels since normalizing diplomatic ties in 1965.
“The Ministry of Trade, Industry and Energy has published the revision of the nation’s trade controls on strategic items in an official gazette and it took effect from Wednesday,” said the ministry spokesperson through a statement.
Since the Aug. 12 announcement by Industry Minister Sung Yun-mo that Korea would drop Japan as a preferred trading partner, the ministry has completed the necessary administrative steps, such as soliciting opinions from the public and submitting the revised rules to the Office of Legislation for review.
“We have received opinions from the public through government websites and emails from Aug. 14 to Sept. 3. Ninety-one percent of the opinions were in favor of the revision,” the ministry said. The number of opinions collected was not disclosed.
As the revision took effect from Wednesday, Japan’s status under Korea’s export controls system has changed.
Up until Tuesday, Korea divided countries into two groups under its export controls system: group A and group B. From Wednesday, Japan falls into the newly established group A-2.
“Nations in group A-2 will basically be treated the same as countries in group B with respect to the level of export controls, with some exceptions,” the ministry said.
Korean exporters that are part of the government’s compliance program for strategic goods have blanket permission to export those goods to countries in group A-1. But for countries in groups A-2 and B, strategic goods can only be exported under certain conditions — for instance, if the Korean exporters deal with the same importers more than three times within two years or if they have long-term export contracts spanning more than two years.
For countries in group A-2, importers of strategic items from Korea can resell those goods to other nations under certain conditions. Korean exporters seeking to export strategic items to countries in group A-2 will have to submit an increased number of documents compared to those in A-1, and those documents will have a shorter period of validity.
The government will make efforts to minimize possible damage to Korean companies caused by the revision.
“The ministry plans to support Korean companies to minimize impacts by the revision and make sure companies doing standard transactions are not affected. We will do our best to support Korean exporters through diverse systems and closely monitor any possible risk factors,” the ministry said.