JAPAN — The government approved at a Cabinet meeting Friday an ordinance revision to remove South Korea from the so-called white list of trading partners qualified for simplified export procedures. At the same time, it decided to rename the aforementioned list of nations as “Group A.”
The revised ordinance will be officially announced Wednesday and will be enforced from Aug. 28. The action is likely to worsen the already deteriorated relationship between Japan and South Korea.
Economy, Trade and Industry Minister Hiroshige Seko said after the Cabinet meeting Friday, “It is a necessary review, to operate the export control system for national security.”
He also said that the government would strive to conduct rigorous inspections in its role as an export control authority.
In addition to South Korea, 26 countries, including the United States and Britain, have been designated on the list to receive preferential treatment. The government has deemed that a trade control system is in place and operating properly in those countries. It is the first time that a country will be removed from the list.
The economy ministry used to call countries eligible for preferential treatment “white countries,” but the government announced Friday that it would change the name to Group A to further clarify the list of countries with preferential treatment.
When trading with those countries, Japanese companies in principle are exempted from going through individual licensing procedures for three years under the “comprehensive license” system, even when exporting restricted items that could be converted to military use. If South Korea is excluded from the list, such comprehensive permits will not be available, and individual permits will be required for each export contract, in principle, with the country.
In addition, even unregulated items will be subject to the “catch-all control,” under which the ministry can request applications for a license if those items are deemed to possibly be of use for military purposes. For example, if a screw used in a car is likely to be used in a military vehicle, the ministry can ask companies to submit applications for permission, although the countries eligible for preferential treatment are not covered by this system.
However, even if South Korea is excluded from the list of such trading partners, Japanese companies can still utilize simplified procedures that have been applied to countries not eligible for preferential treatment, as long as they meet certain requirements, such as developing strict export controls on their own. As a result, Seko said the recent export restriction “would not have an impact on Japanese companies in essence.” /jpv
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