South Korean Companies May Have Loophole to Import Restricted Japanese Goods, Report Says
South Korean companies can still import Japanese goods despite Japan’s export restrictions by making use of a Japanese approval process called the Compliance Program, according to an Aug. 3 report from the Korea JoongAng Daily. The program allows certain registered companies a shortened timeline for exporting dual-use items and allows them to trade freely for three years with “no additional paperwork,” the report said. The report said 632 Japanese companies are registered with the program, including “major material manufacturers and chemical companies” such as Toray Industries, JSR, Sumitomo Chemical and Showa Denko.
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The Korea Strategic Trade Institute “believes that Korean companies may be able to maintain their import volumes from Japan if their Japanese suppliers are registered with” the program, according to the report. But even with the loophole, importing from Japan could still be difficult for South Korea companies, the report said. Japan has tightened the approval process for exports of polyimides, hydrogen fluoride and photoresists to South Korea.
The dispute between the two countries began July 1 when Japan announced export restrictions on technological products, such as smartphones and chips, to South Korea (see 1907010020). South Korea responded by raising a dispute with the World Trade Organization (see 1907150074).