Government: "Suspending Transactions with Russian Central Bank... Up to 1 Billion Support for SMEs"

An apartment building in Irpin, Kyiv (Kiyev), the capital of Ukraine, suffered significant damage due to shelling by Russian forces on the 2nd (local time).
[Image source=Yonhap News]

The government has decided to suspend transactions with the Central Bank of Russia, which invaded Ukraine.

On the 7th, the government held the "13th Emergency Response Task Force (TF) Meeting on the Ukraine Situation" at the Government Seoul Office, chaired by Han Hoon, Deputy Minister of Planning and Finance, and announced, "Considering the international community's financial sanctions against Russia, we have decided to join additional sanctions, including suspending transactions with the Central Bank of Russia."

Specific details will be announced promptly after consultations with relevant ministries. Earlier, the United States announced a ban on transactions with the Central Bank of Russia, the sovereign wealth fund, and the Ministry of Finance on the 28th of last month, and the European Union (EU) also implemented measures such as banning transactions with the Central Bank of Russia and prohibiting participation in projects related to the sovereign wealth fund.

On the same day, the government also prepared measures to support small and medium-sized enterprises (SMEs) affected by the Ukraine situation with up to 1 billion KRW. The Ministry of Economy and Finance explained, "As international cooperation for export controls and financial sanctions against Russia is strengthening, we discussed specific response measures focusing on SMEs and the marine and fisheries sectors expected to be affected by the Ukraine situation."

First, the government will provide emergency management stabilization funds of up to 1 billion KRW to export companies with more than 30% export share to Russia and Ukraine. Based on last year’s data, out of a total of 6,021 export companies to Russia and Ukraine, 1,824 companies qualify for support. For affected companies, special guarantees will be newly established, and preferential treatment will be applied to guarantee limits and guarantee ratios.

Since exports to Russia and Ukraine are expected to decline, alternative trading partners will be introduced and discovered, and package support will be provided for design, promotion, and exhibitions. Consulting will be provided to companies facing increased cost burdens due to rising raw material prices to utilize the delivery price adjustment system.

Additionally, an emergency contact network will be established for about 1,000 high-risk SMEs highly dependent on exports to Russia and Ukraine. For 316 companies with 100% dependency, dedicated officers will be assigned for priority management. Support measures for customs administration will be prepared and immediately implemented for companies that may suffer direct or indirect damage due to the Ukraine situation. Payment deadlines for taxes payable at import declaration will be extended up to one year, and up to six installment payments will be allowed.

To secure the supply of pollock, of which 67% of domestic consumption is imported from Russia, the government will check the impact of various scenarios depending on sanctions and other developments and discuss supply stabilization measures. From today, a public-private joint monitoring system for pollock wholesale and retail prices will be fully launched, and early purchase of government stockpiles and discount events will also be considered.

Regarding the financial sector, as volatility is increasing due to export controls and strengthened sanctions, continuous close monitoring will be maintained. The Ministry of Economy and Finance stated, "As uncertainty continues and unpredictable impacts may occur across various fields, thorough inspection, analysis, and preparation of response measures are required," and "we will review actual difficulties and promote specific solutions."

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