U.S. Approval Required to Export 57 Products to Russia

U.S. President Joe Biden announces sanctions against Russia on Feb. 22.

The South Korean government announced on Feb. 28 that it would join sanctions against Russia. At present, South Korean companies must be approved in advance by the U.S. Department of Commerce in exporting products subject to the Foreign Direct Product Rule (FDPR) to Russia.

The FDPR is to prevent U.S. technology- and software-based products from being exported without the department’s approval. The department applied the rule on Feb. 24 to 57 items in the seven industries including semiconductor, information and communications technology (ICT), sensor and laser, and aviation and aerospace.

The United States is not applying the rule to 32 states, including EU members, Australia, Canada, Japan, New Zealand and the United Kingdom. These are implementing their own sanctions against Russia. South Korea, China, India and Taiwan, which are not implementing individual sanctions, are subject to the rule. The South Korean government is planning to have talks with the United States this week so that it can be exempted from the application.

South Korean companies’ exports in the semiconductor and ICT sectors are likely to be affected by the application of the rule that resulted from the South Korean government’s slow response. Many are criticizing the government, saying that it should have joined the sanctions earlier.

As mentioned above, the South Korean government is going to discuss the matter in order to minimize damage to enterprises. “We also announced an export ban on strategic items and the United States is expected to reclassify,” it said, adding, “Despite the rule, semiconductor-based consumer goods such as consumer electronics, smartphones and automobiles can be exported to Russia normally.”

According to experts, however, the government’s measure was too late and the impact on exports can be much more serious. “The application is supposed to be tighter in the case of strategic items and the United States may regard those products as strategic items in view of the possibility of use for military purposes,” one of them explained.

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