US nonprofit ranks S. Korea 17th for strategic material management; Japan ranks 36th

Posted on : 2019-07-18 16:30 KST Modified on : 2019-10-19 20:29 KST
Evidence continues contradict Tokyo’s claims that Seoul is lax on managing exports

Evidence continues to emerge contradicting the arguments of the Japanese government, which is tightening controls on exports to South Korea because of alleged weaknesses in its management of exports, including the “catch-all” system. A comparison of the two countries’ catch-all regulations and operational methods shows that South Korea’s system of preventive controls, which are designed to block the export of materials that could be used in the development or manufacture of weaponry, is more thorough than Japan’s. In a study by a US nonprofit organization, South Korea’s system for managing trade in strategic materials ranked 17th, while Japan’s system came in at 36th. The South Korean government has presented Japan with a written request to quickly arrange deliberations at the bureau-director level.

Park Tae-sung, director general of the international trade and investment office at the South Korean Ministry of Trade, Industry, and Energy provided an explanation of Japan’s catch-all system during a briefing with reporters at the government complex in Sejong City on July 17. The catch-all refers to supplementary systems operated by various countries to control the export of non-strategic materials, which is to say materials that can be used to develop or manufacture weapons or commit acts of terrorism, despite not being one of the 1,735 items whose exports are controlled under the Wassenaar Arrangement, which is one of four major multilateral export control regimes. Before South Korean and Japanese companies can export items that can be turned into weaponry, they must pass an export screening and receive a permit from their respective governments.

A careful examination of the requirements for receiving a government permit shows that Japan’s are laxer than South Korea’s. When exporting items that are known to have applications in conventional weaponry, South Korean companies are required to first ascertain the buyer, the end receiver, the end user, and the end use; to report that information to the government; and to receive a permit, even when exporting to one of the 29 allies who are on South Korea’s white list. But Japanese companies that are exporting to the 27 countries on Japan’s white list are completely exempted from the catch-all regulations. When exporting to countries not on the white list, South Korean companies are required to report the end use and user for products not only when there are known applications in weaponry but even when there are concerns about such applications, based on 13 additional factors, including qualifications, payment conditions, and delivery date. In contrast, Japanese companies are not obligated to provide the government with prior notification when exporting to countries not on the white list aside from nine countries under an arms embargo from the UN, including Afghanistan and North Korea, or unless the Japanese government has explicitly instructed them to get a permit.

South Korea’s legal regime in this area is also more rigorous than Japan’s. While South Korea’s catch-all system is specifically outlined in Article 19 of its Foreign Trade Act, no mention of this system, appears in Japan’s Foreign Exchange and Foreign Trade Act. That law only states that export permits can be issued in the process of maintaining international peace, and the catch-all system is entirely left up to the corresponding enforcement order (called the “Export Trade Management Rules”). When items subject to export controls under the catch-all system are listed according to their tariff commodity category (HS codes), South Korea’s export controls have a wider scope than Japan’s.

The fact that South Korea’s export controls occupy a higher level than Japan’s is also evident in the research of the Institute for Science and International Security (ISIS), a US-based nonprofit organization. On May 23, ISIS director and nuclear expert David Albright published the Peddling Peril Index for 2019, along with research assessing 200 countries’ systems for managing trade in strategic materials. On that index, South Korea ranked 17th, and Japan 36th. The US came in 1st place, followed by the UK, Sweden, and Germany.

By Choi Ha-yan and Park Min-hee, staff reporters

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