374 Corporate Difficulties Reported Due to Ukraine Crisis... Government Supports SMEs and Investigates Supply Chain Risks

Government Holds 9th Emergency Response Task Force (TF) Meeting on Ukraine Crisis

[Asia Economy Sejong=Reporter Kwon Haeyoung] The government is strengthening support for small and medium-sized enterprises (SMEs) to minimize damage to Korean companies caused by Russia's invasion of Ukraine. It will also operate a system for investigating risk factors in the supply chain of the information and communication technology (ICT) sector, including semiconductors and smartphones, and conduct continuous monitoring.

On the morning of the 2nd, the government held the 9th Emergency Response Task Force (TF) meeting on the Ukraine situation at the Government Seoul Office, where it reviewed the current status of responses by sector and discussed future action plans containing these measures.

As of the 28th of last month, the difficulties reported so far include 147 cases related to export controls, 200 cases related to trade and investment, and 27 cases related to financial sanctions. In this meeting, the government conducted a broad inspection of SMEs and the ICT sector in addition to the existing inspection areas such as the real economy, financial markets, supply chains, and construction.

First, after reviewing the damage status and financial difficulties of domestic companies, the Ministry of SMEs and Startups and related organizations jointly launched an emergency response system to provide customized support for SMEs’ difficulties in exports, finance, and supply chains. Specifically, they will operate an SME damage reporting center and conduct a survey targeting small export companies, as well as provide emergency management stabilization funds and special guarantees for companies facing financial difficulties such as non-collection of payment for supplies.

Since ICT production and exports may be affected by export restrictions to Russia, a supply chain risk factor investigation will be conducted within this month, and a continuous monitoring system centered on the Supply Chain Difficulty Resolution Center will also be operated.

Exports have not yet been hit. Exports to Russia until February increased by 49.8% compared to the same period last year, and exports to Ukraine increased by 21.2%, maintaining an upward trend, but as difficulties related to export controls and payment settlements have increased, damage is expected to materialize soon. Accordingly, the government plans to promote support for damage through consultations with major countries regarding sanctions and provision of corporate information, trade finance, and emergency finance, and has decided to participate in financial sanctions against Russia in consultation with the U.S. Treasury Department and others.

Although the supply of Russian energy is being imported without disruption, the government explained that the domestic import of 180,000 tons of Ukrainian edible corn has become uncertain, and through alternative bidding, an additional 165,000 tons of Eastern European corn has been secured.

A government official said, "As the Ukraine situation unfolds rapidly, we will continue to enhance the joint monitoring system of related ministries to more closely inspect the potential impacts across the macroeconomy as well as by industry and sector. In addition to the response plans already established for the real economy, financial markets, and supply chains, we will further specify response measures for each industry and sector and take immediate action."

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