The Japanese government officially announced export restrictions that obligate Japanese companies to obtain government permission when they export to South Korea three items that are essential in manufacturing memory chips, televisions, and smartphones. Furthermore, it has decided to remove South Korea from its “white country list” that exempts companies from having to obtain permission in order to export cutting-edge materials that could be redirected to military use.
Japan’s move is practically an “economic retaliation” against the South Korean Supreme Court’s ruling issued in October last year over compensation for wartime forced labor.
Japan’s Ministry of Economy, Trade, and Industry on Monday released data on revised rules on export to South Korea and said that it is tightening regulations on the export of materials used in TV, smartphone, and chip production. As a result, three materials including photoresist and etching gas that are crucial in manufacturing semiconductors, flexible organic light-emitting diode (OLED) used in latest smartphones, and fluorine polyimide used in manufacturing display panels will be excluded from Japan’s “Comprehensive Export Permission System” starting from July 4.
If this rule takes effect, Japanese companies will have to obtain government permission and undergo a deliberation every time they export those three materials to South Korea. The deliberation process takes 90 days and the three materials might be completely banned from exporting the materials to South Korea if they do not pass the deliberation. “The Japanese government is practically imposing an embargo on South Korea as the revised rule basically bans export (of the three items) to South Korea,” the Yomiuri Shimbun of Japan reported on Monday.
The Japanese ministry has also decided to remove South Korea from its white country list starting from August 1. Japan designates its national security allies as white countries and exempts its companies exporting items to them from the hassle of applying export license.
There are currently 27 countries on the list and South Korea was included in the list in 2004. Once South Korea is removed from the list, Japanese companies will have to obtain government permission every time they export their products to South Korea. The Japanese government will collect opinions for a month and will implement the decision from August 1.