Establishment of Trade Security Policy Officer... "Contributing to Supply Chain Stabilization as well as Countermeasures against Japan"

Regular Organization of 30 Members in Trade and Investment Office
Unified Management of Power Material Permits and Technology Leakage Prevention
Expanded Discretion in Japan Regulation Response 'Amendment to the Foreign Trade Act'

Sung Yoon-mo, Minister of Trade, Industry and Energy. / Photo by Moon Ho-nam munonam@

[Asia Economy Reporter Moon Chaeseok] The Ministry of Trade, Industry and Energy will establish a new bureau-level organization dedicated to trade security policy and strategic materials management on the 6th of next month. The plan is to develop this organization not only to actively respond to domestic and international trade security issues such as Japan's export restrictions but also to contribute to stabilizing the global supply chain.

The Ministry of Trade, Industry and Energy and the Ministry of the Interior and Safety announced that the 'Partial Amendment to the Organization of the Ministry of Trade, Industry and Energy and Its Affiliated Agencies,' which includes the establishment of the Trade Security Policy Officer, was approved at the Cabinet meeting on the 28th of last month.

The Trade Security Policy Officer will be a regular organization within the Trade and Investment Office with about 30 personnel. Under it, new departments will be established: the Trade Security Policy Division, the Trade Security Review Division, and the Technology Security Division. This represents an increase of about 14 personnel compared to the existing Trade Security Division.

The Trade Security Policy Division will serve as the government's trade security control tower. It will oversee and formulate trade security policies and respond to domestic and international trade security issues such as Japan's export restrictions. It will also handle tasks supporting strategic material export companies, including illegal export crackdowns and the operation and education of the Authorized Trade Operator system.

The Trade Security Review Division will be responsible for export control tasks, including strategic material export permits and situational permits. It will also handle the evaluation of strategic materials, issuance of import purpose certificates, and management of entities of concern.

The Technology Security Division will manage existing national core technologies and export approvals, as well as technology protection tasks such as mergers and acquisitions (M&A) of companies holding core technologies and foreign investment reviews related to security-sensitive companies.

The primary reason for establishing the Trade Security Policy Officer is to respond to Japan's export restrictions. Last year, Japan unilaterally tightened export controls on three major materials, including photoresists, to South Korea, claiming that "South Korea's export control personnel and organization are weak."

The discretionary authority related to the Foreign Trade Act of the newly established Trade Security Policy Officer is expected to be greater than that of the previous Trade Security Division. The amendment to this law, which is scheduled to take effect on the 19th of next month, includes provisions to legalize the 'catch-all system.'

Previously, Japan had imposed export restrictions, citing South Korea's insufficient 'catch-all' regulations that limit exports of materials that could be diverted to conventional weapons.

The new organization will also play a role in preparing for rapidly changing international trade variables due to the COVID-19 pandemic.

As countries impose export and labor movement restrictions to protect their citizens and strengthen protectionism to support domestic companies, there is growing demand for the South Korean government to actively encourage the return (reshoring) of overseas companies.

An official from the Ministry of Trade, Industry and Energy stated, "The bureau was not established solely to respond to trade disputes with other countries such as Japan's export restrictions but also with the supply chain stabilization agenda, which has become more important due to COVID-19, in mind."

Minister Sung Yun-mo of the Ministry of Trade, Industry and Energy said, "Trade security functions are becoming increasingly important to quickly respond to the rapidly changing global trade security environment, which is shifting toward protectionism and advanced technology security, and to protect domestic industries. Through the expansion of dedicated trade security organizations and personnel, South Korea's trade security capabilities and expertise will be further strengthened."

This content was produced with the assistance of AI translation services.