Emergency TF for Ukraine convened over the weekend... "Discussing export control details with the US in early March"

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Kim Hyewon] Our government plans to begin consultations with the United States in early March to discuss the details related to participation in the US-led export control measures against Russia. Additionally, due to concerns over supply disruptions of raw materials for key industries such as semiconductors in the event of a prolonged crisis, possibilities such as imports from third countries, inventory expansion, and securing substitutes have been kept open. The government also anticipates difficulties in securing new orders in the overseas construction sector if additional sanctions against Russia, including financial sanctions, follow.

On the 27th, the government held the 7th Emergency Response Task Force (TF) meeting on the Ukraine crisis at the Government Seoul Office, chaired by Han Hoon, Deputy Minister of Planning and Finance. The meeting reviewed the status of sectoral responses following Russia's armed invasion and the initiation of major Western sanctions, and discussed future action plans. In particular, this meeting broadly reviewed not only the existing inspection areas such as export, finance, and supply chains but also overseas construction and science and technology sectors, which could be affected by sanctions.

Following the US government's announcement on the 24th to strengthen export controls against Russia, our government plans to promptly consult with the US early next month on the details of participation in export controls to minimize the impact on domestic companies. In addition, in response to the US government's implementation of financial sanctions against Russia through an executive order, measures have been prepared to ensure there are no disruptions in payment settlements for transactions by our companies. Currently, the government is identifying the transaction status between domestic financial institutions and companies and Russian banks and institutions targeted by major countries' financial sanctions. In case of payment difficulties with Russia, the government will actively cooperate with relevant diplomatic authorities to open alternative accounts for our companies and ensure smooth trade payment settlements.

Regarding key items used in main industrial processes (such as neon, krypton, xenon), the industry has voluntarily expanded inventory holdings, so there are no short-term supply issues. However, the government assesses that concerns over supply may persist if imports are suspended for a long period due to a prolonged crisis. Accordingly, the government plans to immediately establish a hotline with companies to closely monitor supply status and promote supply stabilization through imports from third countries, inventory expansion, and securing substitutes.

In the overseas construction sector, the joint public-private emergency response team confirmed that all workers at the Ukraine site have been evacuated, and the Russian site (108 people) is operating safely without issues. However, the government views that uncertainties remain regarding the suspension of existing projects and difficulties in securing new orders depending on financial sanctions and any additional sanctions in the future. The next emergency response team meeting on the 2nd of next month will review the details of sanctions, assess impacts on companies, listen to corporate difficulties, and specify response plans.

Deputy Minister Han said, "With the armed invasion situation and the possibility of additional Western sanctions, the uncertainty of future developments is increasing, making it difficult to predict the impact, pathways, and scope on our economy. We will take necessary measures proactively and strengthen response measures assuming the crisis prolongs and the confrontation phase between the West and Russia becomes entrenched."

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