South Korea Tightens Export Controls: Impact on Global Trade

The South Korean government’s upcoming new export control regulations,aimed at strengthening economic sanctions against Russia and Belarus,announced a proposal on February 24,2023.The Ministry of Trade,Industry and Energy announced on the 20th that,according to the amended "33rd Batch of Strategic Materials,"Notice: The government has added 682 new items to the "catch-all" control list,covering a wide range of goods from heavy construction machinery to secondary batteries,as well as machine tools and aircraft components.

A key focus of this round of control measures is the restriction on automobile exports to Russia and Belarus,particularly medium and large passenger vehicles with engine displacements exceeding 2.0 liters.This new regulation will replace the previous control measures based on the "over $50,000" threshold for vehicle export value.Given that South Korea’s automobile exports to Russia primarily consist of used cars,the implementation of this new rule is expected to significantly impact South Korea’s used car exports to Russia.According to statistics from the Korea International Trade Association,South Korea’s used car exports to Russia surged by over 700% year-on-year in 2022,reaching 19,628 units.However,the new export control policy means that South Korea will,in principle,be prohibited from exporting medium-sized or larger vehicles to Russia and Belarus.

After this new addition,741 items are subject to export restrictions on Russia and Belarus,mainly in the following categories:

• Pipes,containers,pumps,electrostatic precipitators,etc.(Numbers 58 to 113)

• Jewelry,yachts,motor vehicles with a value exceeding $50,000,chassis,etc.(Numbers 114 to 176)

• Heat exchangers,industrial robots,bearings,valves,metals,textiles,semiconductor manufacturing equipment,industrial software,machine tools,engines and motors,electric motors,generators,automotive air conditioners,optical fibers,wireless telephone transmission equipment,semiconductor devices,memories,freight motor vehicles,air conditioners,etc.(Numbers 177 to 661)

• Chemicals,pumps,valves,reactors,etc.(Numbers 662 to 774)

• Quantum computers,components,parts,vacuum equipment,microscopes,etc.(Numbers 775 to 785)

• Diodes,semiconductor devices,transistors,memories,other integrated circuits,etc.(Numbers 786 to 798)

Detailed Explanation of the Regulations for the Closure and Operation of the Hengqin - Macao Deep Cooperation Zone

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