Korea removes Japan from whitelist in tit-for-tat move

Minister of Trade, Industry and Energy Sung Yun-mo speaks at the ministry in Sejong, Monday, during a press conference on Korea's revision to its export control scheme for strategic items. Courtesy of Ministry of Trade, Industry and Energy

By Nam Hyun-woo

Korea has decided to remove Japan from its "whitelist" of preferred trade partner countries, in retaliation to Tokyo's export restrictions on high-tech materials exports to Seoul, the government said Monday.

This came after Japan's continued refusal for talks with Korea over its export restrictions on three materials needed for making semiconductors implemented July 4. On Aug. 7, Tokyo also removed Korea from its own whitelist of nations that enjoy preferential trading status.

The government however said it is open to any kind of talks with Tokyo, which analysts said is a tactic to encourage negotiations with Japan.

The Ministry of Trade, Industry and Energy announced a revision on Korea's export control scheme on strategic items, which contains detail on removing Japan from its 29-country whitelist.

"The export control scheme for strategic items should run in accordance with the international export control scheme," Trade Minister Sung Yun-mo said.

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"Korea cannot have close international cooperation with a country that does not follow international principles or continues to report inappropriate cases in running its export control system."

Currently, Korea controls exports of strategic items by dividing destination countries into two categories. Category A includes 29 countries which joined all of the four major international export control regimes and category B is comprised of other countries. Japan is currently in category A.

For countries in category A, called Korea's whitelist countries, the government gives such preferential trade status as minimal customs documents and shorter period of examinations, and this affects 1,735 strategic items.

With the revision, however, Korea will make subcategories of A-1 and A-2, and place Japan alone into A-2.

A-2 countries are subject to export control measures tantamount to category B countries "in principle," thus Korean exporters will not be allowed to get blanket permissions for certain strategic items' export to Japan and have to get permission for individual items.

However, exporters will be given exemptions in documentation for several cases of individual exports and exempted from examination in case they are in relay trade.

"Countries running export control schemes that do not match international principles will be placed into the new category of A-2," the minister said. "If the Japanese government requests a consultation during the opinion hearing period, the Korean government is ready to respond to the call."

The minister said the revision will take effect next month, after 20 days of gathering opinions through outside and legal processes.

The Korean government had delayed its decision last week as to whether to remove Japan from its whitelist, as Japan but did not specify which items would require individual permission after Korea's exclusion from Japan's whitelist.

Korea is also expected to be take the same approach, by not controlling actual exports immediately, given Sung stressed that Korea is open to negotiation with Japan.

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