SEJONG, Aug. 7 (Korea Bizwire) — Japan did not unveil additional goods on Wednesday to be subject to tougher regulations when shipped to South Korea, but made it clear that it would implement export-related regulations “strictly,” Seoul’s trade ministry said.
Seoul has been worrying that Tokyo may include more goods on the list of strictly regulated goods following its July 4 implementation of curbs on exports to South Korea of three materials — resist, etching gas and fluorinated polyimide — that are critical for the production of semiconductors and flexible displays.
Instead, Tokyo vowed to take stronger actions against South Korea-bound exports that are presumed to be sent to third parties, and urged Japanese firms to check the final destinations of their products, according to the ministry.
Earlier in the day, Japan promulgated a revised bill removing South Korea from its list of trusted trading partners, which is likely to affect some 1,100 industrial items that Seoul imports from Japan.
Tokyo also announced a new policy of categorizing trading partners into four groups, with the top-notch “A” group nations being trusted trading partners.
South Korea was included in the second group, which means Korean companies face more complicated trade procedures than the 26 countries in the upper group.
Tokyo’s Cabinet removed South Korea from the so-called whitelist of trusted trading partners last week in its second retaliatory step over a row surrounding wartime forced labor.
Japan has been allowing its trusted partners to import industrial materials under a simplified process, allowing Japanese firms selling such products to South Korea require government approval only every three years.
With South Korea being dropped from Japan’s trusted economic allies, the Japanese firms are required to win approvals for each shipment, a process that can take around 90 days.
Such delays are poised to weigh down on South Korean tech giants, including Samsung Electronics Co. and SK hynix Inc.
The new law will come into effect on Aug. 28, and the Japanese government can even ban exports of certain products to South Korea, if they are regarded as being utilized for military purposes, industry watchers said.
Japanese firms that won “compliance program” approvals, meanwhile, can still trade with South Korea under the simplified process despite Seoul’s removal from the whitelist.
The policy has been allowing China and Singapore, which are not included in Japan’s whitelist, to trade freely with selected Japanese companies.
Tokyo claims the restrictions came in response to South Korea’s loose export control of sensitive materials, making allegations that its materials could have leaked into a third country.
Despite Seoul’s repeated requests, however, Japan has not yet provided evidence for such accusations.
South Korea believes the moves were economic retaliation against South Korean court verdicts that ordered Japanese firms to pay compensation for wartime forced labor.
Japan has also hinted that the court’s ruling was behind the export restriction, as it repeatedly claimed that “trust” between the two nations have been harmed.
Japan argues that all reparation issues were settled under a 1965 treaty with which they normalized diplomatic relations. Japanese Prime Minister Shinzo Abe also recently claimed Seoul should respect the treaty.
Korea was under Japan’s brutal colonization from 1910-45. During World War II, many Koreans were forced to work at Japanese factories and mines.
The South Korean government claims that victims’ individual right to claim damages are still valid despite the 1965 treaty.