South Korea is set to exclude Japan from its export control whitelist this week in response to Tokyo’s earlier decision to remove Seoul as a preferred trading partner and impose tighter controls on exports of high-tech materials that Korean tech firms need, officials said Sunday.

Since the Aug. 12 announcement by Industry Minister Sung Yun-mo that Korea would drop Japan as a preferred trading partner, the ministry has completed the necessary administrative steps, such as soliciting opinions from the public and submitting the revised rules to the Office of Legislation for review. It is set to publish an official gazette as early as this week, officially excluding Japan from the whitelist, officials said. 

At present, Korea divides countries into two groups under its export control system: group A and group B. When the change takes effect, Japan will fall into the newly established group A-2.

Nations in group A-2 will be treated the same as countries in group B with respect to the level of export controls, with some exceptions.

To ship strategic goods to countries in groups A-2 and B, Korean exporters will need to meet certain conditions, whereas they have blanket permission to export those goods to countries in group A-1. Importers based in countries in group A-2 cannot resell those goods to other nations. Also, Korean exporters seeking to export strategic items to countries in group A-2 will have to submit an increased number of documents, and those documents will have a shorter period of validity.

At the time of the announcement, Industry Minister Sung said the Korean government was “ready to respond anytime and anywhere if the Japanese government asks for consultations during this period to (offer its) opinion.” But Korea has received no response, according to officials.

Separately, on Wednesday last week Korea brought its concerns about Japan’s export restrictions to the World Trade Organization’s dispute settlement body, accusing Tokyo of politically motivated retaliatory measures.

The WTO complaint concerned Japan’s restrictions on exports to Korea of three high-tech materials crucial to the production of chips and display panels. Japan took the action July 4, after Korea’s Supreme Court decided to hold Japanese companies liable for having taken advantage of forced labor during World War II.

During a press briefing last week, Trade Minister Yoo Myung-hee said the Japanese government’s export controls targeting Korea violate WTO rules by impeding trade for political purposes.

“As the Japanese Cabinet-level officials have mentioned multiple times, Japan’s export control is a politically motivated step related to our court’s ruling on forced labor and aimed at our country directly,” said Yoo. 

By Shin Ji-hye (shinjh@heraldcorp.com)