While disputing the Japanese claim that those “dual-use” materials could make their way into North Korea despite international sanctions, the government has urged local businesses to minimize economic fallout by trading with “less strict” companies in Japan.

Under the Japanese government’s Internal Compliance Program, some Japanese firms are allowed to exercise autonomy over strategic goods management. The Korean government suggested they could be exempt from the Abe Cabinet’s strict export curbs.

“As long as (Korean companies) trade with the Japanese companies subject to the Compliance Program, they can continue their business as usual,” said the institute. “While leveraging the system, we should come up with our own measures.”

Under the Japanese export restrictions on chemicals used in the production of advanced semiconductors and digital flat screens, Japanese firms selling those products to South Korea will be required to obtain approval for each export contract, a process that could take up to 90 days.

(jasonyeo@heraldcorp.com)