S. Korea’s export regulations more strict than Japan’s

Posted on : 2019-07-15 17:38 KST Modified on : 2019-07-15 17:38 KST
A look into both countries export regulations reveals absurdity of Abe’s justifications
Comparing catch-all systems of S. Korea and Japan
Comparing catch-all systems of S. Korea and Japan

As Japan proceeds with steps to remove South Korea from the white list of countries that enjoy fast processing of or partial exemption from export restrictions on products that could potentially be used to develop or manufacture weapons, the Hankyoreh has learned that South Korea’s “catch-all” system, which Japan has cited as the reason for its removal from the white list, is actually stricter than Japan’s. South Korean exporters are obliged to determine the end use and user of their exports and to report that information to the government, but Japan’s system is laxer. For example, Japanese companies aren’t obliged to report exports related to conventional weaponry. Critics say that Japan is quibbling in order to justify its export controls on South Korea while also avoiding the appearance of violating World Trade Organization (WTO) rules.

A comparison of South Korea’s Foreign Trade Act and strategic materials export notification system and Japan’s Foreign Exchange and Foreign Trade Act and export trade management rules carried out by the Hankyoreh on July 14 found that Japan’s catch-all system is laxer than South Korea’s. But during working-level negotiations between South Korea and Japan that were held in Tokyo on July 12, Japan argued that South Korea should be removed from the white list because South Korea doesn’t maintain catch-all controls on conventional weaponry.

A review of the related legislation shows that absolutely no regulations apply to Japanese companies that send exports to the 27 countries that are part of the catch-all system (the white list), provided that those countries are also members of the Wassenaar Arrangement and the three other international export control regimes and the Treaty on the Non-Proliferation of Nuclear Weapons and two other related treaties. This allows strategic materials to be exported regardless of the end user. In the case of countries that aren’t on the white list, companies are obliged to report the end use and user for exports of products related to weapons of mass destruction (nuclear, chemical, and biological weapons) and missiles, but no such requirements apply when importing products related to conventional weapons.

In South Korea, by contrast, companies that export to the 29 countries that are members of the four international export control regimes (called “Region A,” comparable to the white list) are required to report those exports when they recognize that the products are being used in weaponry. Companies exporting products to countries that aren’t in Region A are required to report their end use and user to the government when even one of 13 conditions apply. Those conditions include when the exported products are capable of being used in the manufacture of weaponry, when the purchaser doesn’t provide information about their end use, when there’s an abnormal supply deadline, when there are abnormal pricing or payment conditions, and when there’s a major technological gap with the importing country.

The procedures mentioned above represent “know controls,” which are a component of both South Korea and Japan’s catch-all regimes, along with what are called “inform controls.” Inform controls refer to the process by which a government ascertains the potential of given materials being put to military use and informs companies of that potential, while know controls are the process by which companies, having been made aware of that potential, determine those materials’ end use and user and report them to the government for review. While the two countries’ inform controls are comparable, Japan’s know controls are much weaker than South Korea’s.

The catch-all system is one that seeks to “catch,” which is to say control, “all” products that can be used in the development or manufacture of weaponry. These are supplementary controls that apply to materials in addition to those already regulated by the four international export control regimes that are designed to prevent the proliferation of weaponry. Since the catch-all system determines whether controls are imposed not according to the product but according to how and by whom it will be used, it’s also called “situational approval.” Such systems were introduced by the US and the EU in 1994 and 2000, respectively, and by Japan (2002) and South Korea (2003) shortly after the September 11 terrorist attacks.

“We explained [to the Japanese] that the South Korean catch-all controls apply not only to weapons of mass destruction but also to conventional weaponry, in contrast to Japan’s claims, and that our controls are being applied more strictly, in a certain sense, than Japan’s. We proposed holding deliberations at the bureau chief-level to continue the discussion, but we didn’t receive a clear response,” said Lee Ho-hyeon, trade policy chief at the South Korean Ministry of Trade, Industry, and Energy, on July 12.

By Choi Ha-yan, staff reporter

Please direct comments or questions to [english@hani.co.kr]

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