SEOUL/WASHINGTON, March 4 (Korea Bizwire) — South Korea won an exemption from the United States’ expanded export restrictions on Russia over its invasion of Ukraine, Seoul’s industry ministry said Friday.
The move came as South Korea’s Trade Minister Yeo Han-koo met with senior U.S. officials in Washington on Thursday and the two sides agreed to include South Korea in the U.S.’ list of exempt countries.
Last week, the U.S. government announced the Foreign Direct Product Rule (FDPR) for “all of Russia” as part of its export controls to block Russia’s access to global high-tech products and other foreign-produced major items, such as semiconductors, over the Russian invasion of Ukraine.
The measure calls on companies to receive a license from the U.S. for tech-related items using U.S. technology before they can be shipped to Russia, which is feared to affect major South Korean exporters, as they use U.S. technology and software.
Yeo welcomed the U.S.’ decision to exempt South Korea from the FDPR, saying the countries “have once again reaffirmed their strong cooperation.”
The trade minister added the U.S. has agreed to publish Seoul’s exemption from the FDPR in its government notice on Friday (Washington time) at the earliest.
South Korea is now included on the list of 33 nations, which includes the European Union, Britain and Japan.
“The U.S. assessed that South Korea’s sanctions against Russia are well-aligned with the international standard and announced its decision to put South Korea on the list of FDPR exempt nations,” the industry ministry said in a release.
Following the U.S.’ move, the Seoul government began taking follow-up measures of toughening its own export restrictions against Russia.
It decided to ban exports to 49 Russian organizations and firms, including Russia’s defense ministry, in accordance with the U.S.’ Entity List for export controls.
Under the measure, a license is required to export or transfer major items to these entities, with limited exceptions.
Seoul’s industry ministry also began work to revise rules on export license requirements for 57 non-strategic items that come under the FDP rules.
“The revision is supposed to take around two to three months, but we will expedite related procedures to wrap it up within one to two months, given relations with the U.S.,” a ministry official said.
Earlier this week, South Korea announced its decision to halt financial transactions with seven major Russian banks and their affiliates slapped with U.S. sanctions, joining the global move to remove Russia from the SWIFT global payment network.
South Korea also decided to ban exports of strategic items to Russia while strongly recommending local public and financial institutions halt their investment in Russian government bonds issued from Wednesday.
The foreign ministry said Seoul and Washington will continue close consultations on the implementation of sanctions against Moscow.
“South Korea and the U.S. will continue to closely discuss various diplomatic and economic measures for a resolution to the Ukraine crisis, including the implementation of sanctions against Russia,” a ministry official told reporters on the customary condition of anonymity.
During Thursday’s meetings with the U.S. officials, Minister Yeo also called on the U.S. to swiftly begin talks to revise the Section 232 tariff rules on Seoul’s steel exports.
Last month, the U.S. and Japan announced their agreement to remove tariffs from Japanese steel imports starting April after Washington granted similar access for European Union steelmakers late last year.
The U.S. waived the tariffs on South Korean steel products in 2018, but it was in return for a yearly import quota of 2.63 million tons of steel, or 70 percent of Seoul’s average steel products export volume over the past three years.