Strengthened US-China Export Controls... Domestic SMEs Must Be Cautious

Korea Federation of SMEs Holds Seminar on Latest Trends in Strategic Goods Export Controls and Commercial Arbitration System

[Asia Economy Reporter Kim Jong-hwa] As export controls by the United States and China are being strengthened recently, caution is required for exporting small and medium-sized enterprises (SMEs).

The United States has recently tightened controls on the re-export of U.S.-origin items to Chinese companies. In the case of Huawei, previously only products "developed or produced by Huawei, etc." required authorization, but with the recent strengthening of export controls, all transactions involving Huawei must now obtain approval.

Not only semiconductor companies like Huawei but also construction companies have been added to the sanctions list. Due to reasons such as the construction of military bases in the South China Sea, 24 state-owned enterprises including China Communications Construction Company have been included in the sanctions. When exporting U.S.-origin items to these companies, approval from the U.S. Department of Commerce is required. Therefore, Korean companies handling U.S.-origin items or technology must carefully examine any connections with these related companies.

China has enacted the Export Control Law, which will be enforced starting next month. The law stipulates prohibitions on transferring controlled goods, technology, and services to foreign organizations or individuals within China; allows control over goods, technology, and services not on the control list; requires the creation of lists of concerning importers or end-users; and imposes indefinite export bans on controlled items in case of criminal penalties, punishing foreign individuals and organizations violating these provisions.

To inform domestic SMEs of these changes in the international situation and help them prepare countermeasures in advance, the Korea Federation of SMEs and the Strategic Materials Management Institute will hold the "Latest Trends in Export Control Strategic Materials and Commercial Arbitration System Briefing."

At this briefing, export SMEs will be introduced to ▲ Korea’s and international strategic materials management systems ▲ U.S. and China export control systems ▲ commercial arbitration system and support projects, to help them pay attention to and respond to the globally strengthening export control regimes. The events will be held in Daejeon (November 30), Busan (December 1), and Seoul (December 2).

Kim Tae-hwan, head of the International Trade Department at the Korea Federation of SMEs, said, "Export SMEs, which have suffered many difficulties due to the prolonged COVID-19 pandemic, must not be sanctioned for violating U.S.-China export controls amid the recent global strengthening of export control trends." He added, "We will continue to collaborate with the Strategic Materials Management Institute to provide information to SMEs."

Companies wishing to participate in the briefing can apply through the "Korea Federation of SMEs website → Information Plaza → Events," and inquiries can be made to the International Trade Department of the Korea Federation of SMEs.

Meanwhile, the Korea Federation of SMEs is actively supporting affected companies by providing costs when SMEs appoint experts as representatives to resolve disputes through the Korea Commercial Arbitration Board’s arbitration system due to disputes arising from COVID-19.

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