Government "Joins Economic Sanctions Against Russia"... Emergency Support Up to 2 Trillion Won for Export-Import Affected Companies

Ukraine Crisis Related Ministers' Meeting

[Asia Economy Sejong=Reporter Son Seon-hee] The government has decided to join the international community's export controls and economic sanctions against Russia. Accordingly, it plans to establish and implement an emergency financial support program of up to 2 trillion won for domestic export-import companies affected.

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, held an unscheduled emergency meeting of related ministers (Green Room meeting) at the Government Seoul Office around 8 a.m. on the 25th to discuss response measures related to Russia's invasion of Ukraine. This was to assess the increased volatility in the domestic financial market and the adverse economic impact following Russia's military invasion despite diplomatic efforts by the international community, and to prepare a response plan.

The government stated, "As a responsible member of the international community, we will participate in the international community's efforts, including export controls and economic sanctions, to deter military aggression and achieve a peaceful resolution of the situation," adding, "We will discuss specific levels and contents of participation and implement priority support measures for affected companies."

First, trade finance support for affected companies will be immediately initiated, including extension of export credit guarantees without reduction, rapid insurance compensation (from two months to within one month), and advance payments. Additionally, an emergency financial support program (up to 2 trillion won) will be prepared and implemented as needed for export-import companies affected by sanctions against Russia. The government also plans to assess the domestic impact of U.S. financial sanctions and support to ensure no disruption in transactions such as export payments.

Regarding the energy and supply chain sectors, the government stated, "We will cooperate with the international community's efforts to stabilize energy supply and demand, such as promoting joint releases of strategic reserves by the IEA, and thoroughly manage domestic supply by immediately activating sector-specific supply response systems."

However, considering the scale of trade with Russia and Ukraine, stockpiles and contracted volumes of raw materials and grains, the government expects the short-term and direct impact to be "limited." As of last year, the export share to Russia was 1.5%, and import share was 2.8%. For Ukraine, exports and imports each accounted for 0.1%.

Nonetheless, if the situation prolongs, there could be a direct hit to energy and grain stockpiles, so the government is taking the situation seriously and plans to monitor developments daily through an emergency task force (TF). Related measures include real-time reception and prompt action on difficulties through three major corporate support channels: ▲Emergency contact network for companies operating locally in Russia ▲Trade and Investment 24 (KOTRA) dedicated window for Russia and Ukraine export-import companies ▲Russia desk.

Meanwhile, regarding the Indo-Pacific Economic Framework (IPEF) proposed by the U.S., the Ministry of Economy and Finance stated that "from the perspective of maximizing national interests, we have broadly discussed economic cooperation effects, diplomatic and security considerations, impacts on our companies, and positions of major countries."

The meeting was attended by Deputy Prime Minister Hong, Minister of Trade, Industry and Energy Moon Seung-wook, Chief Negotiator for Trade Ye Han-gu, Second Vice Minister of Foreign Affairs Choi Jong-moon, Vice Chairman of the Financial Services Commission Do Kyu-sang, and government officials, along with Park Won-joo, Senior Secretary for Economic Affairs, and Kim Hyung-jin, Second Deputy Director of the National Security Office from the Blue House.

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