South Korea Officially Removes Japan From Trading List

South Korea officially removed Japan from its list of trusted trading partners, according to a report from The Hankyoreh. The report cited comments from Lee Ho-hyeon, South Korea’s director general of the Ministry of Trade, Industry and Energy Trade Policy Bureau, who said the move took effect Sept. 18.

The move dropped Japan down from South Korea’s list of 29 "Region A" countries -- those that benefit from preferential trading terms -- to South Korea’s Region A-2 list, the report said. Japan was the only one of the 29 countries to be moved to the A-2 list, according to the report. The change introduced new requirements for individual permits when exporting dual-use goods to Japan, the report said. Among the changes is an increase in the number of required documents from three to five and an extension of the license review period from five to 15 days, the report said.

In some cases, export licenses may be granted for two or three years if the exporter is certified by South Korea with a “compliance program ‘AA’ rating or higher,” according to the report. South Korea also increased restrictions on its “catch-all provisions on exports” of items that are “not classified as strategic but are seen as having the potential” for weapon production, the report said.

The ministry said it will ensure the restrictions have “no impact on companies engaged in normal transactions.” It will also assign dedicated license reviewers for exports to Japan to “support timely permit issuance” and to “ensure there are no problems for [small to medium enterprises] SMEs going forward,” the ministry said, according to the report.

The announcement was in response to similar restrictions announced by Japan in August, when it removed South Korea from its so-called “white list” of trusted trading partners (see 1908020023). South Korea recently requested consultations with Japan at the World Trade Organization (see 1909180015).