Government to Expedite Distribution of Detailed List for 'Permitted Russia Export-Import Items'

19th Emergency Response TF Meeting on the Ukraine Situation
Local Korean Residents' Remittance Limit from Korea to Russia Increased from $3,000 to $8,000

Lee Eok-won, Vice Minister of Strategy and Finance, is presiding over the "19th Emergency Response TF Meeting on the Ukraine Situation" held at the Government Seoul Office Building on the 18th. 2022.3.18 [Photo by Yonhap News]

[Asia Economy Sejong=Reporter Son Seon-hee] The government plans to promptly distribute a detailed list of items in sectors such as 'energy, agriculture, fisheries, and medical' where export-import transactions are exceptionally permitted under the U.S. economic sanctions against Russia. Although financial transactions are allowed with sanctioned banks for these permitted items, confusion has arisen at the frontline, prompting this measure.

On the morning of the 18th, Lee Eok-won, First Vice Minister of the Ministry of Economy and Finance, chaired the 19th Emergency Response Task Force (TF) meeting on the Ukraine situation at the Government Seoul Office, discussing follow-up measures to resolve difficulties in financial transactions, various payments, and remittances related to export-import trade with Russia.

In sectors such as energy, agriculture, fisheries, and medical, the U.S. government has exceptionally allowed financial transactions with sanctioned banks through a General License. Accordingly, the government plans to prepare a detailed list of items corresponding to the U.S. General License and promptly distribute it to Korean companies and financial institutions to ensure smooth financial transactions in trade between Korea and Russia.

Additionally, even when there is no connection with sanctioned banks or sanctioned items, some global intermediary remittance banks have delayed or avoided payments and remittances related to Russia, causing ongoing financial difficulties for Korean companies. In response, a temporary measure will be implemented to enable rapid settlement of global remittance trade payments by utilizing accounts opened by local branches of domestic banks in Russia.

Financial transaction support measures have also been introduced for Korean residents, students, and expatriates in Russia. Remittances from Korea to Russia are currently possible through domestic banks' local branches in Russia or non-sanctioned banks. The government has decided to increase the remittance limit from the existing $3,000 to $8,000.

However, remittances from Russia to Korea are currently impossible due to measures taken by the Russian side. Consequently, expatriates working for companies operating in Russia cannot send their locally received salaries to their families in Korea. The government plans to support emergency living expense loans from domestic banks for expatriates' families in Korea and will provide guidance through KOTRA and others on paying expatriates' salaries into domestic accounts instead of local accounts in Russia.

Furthermore, for companies directly or indirectly affected by the Ukraine situation, the government will promptly support the previously announced 2 trillion won scale 'Emergency Financial Support Program,' 200 billion won in small and medium enterprise management stabilization funds, 50 billion won in trade promotion funds, and special guarantees. The scale and scope of support will be expanded if necessary.

To prepare for energy supply disruptions, the government will immediately pursue securing volumes such as crude oil imports from overseas production by the Korea National Oil Corporation. Additionally, next month, a zero tariff (0%) will be applied to neon, xenon, and krypton, which have high import dependence from Russia and Ukraine.

If the Russian government fails to pay principal and interest on sovereign bonds maturing soon, it is expected to face a default crisis. The government, after reviewing the impact on domestic real and financial sectors, expects the direct impact to be limited. However, if high-intensity sanctions by Western countries continue, negative effects on global commodity prices, supply and demand, and inflation may increase.

The Ministry of Economy and Finance stated, "As uncertainties related to the Ukraine situation and concerns about Russian default persist, we will continuously monitor related trends and domestic impacts through a daily inspection system. We will provide prompt and sufficient information to the public and companies regarding the situation's progress and will review actual difficulties to implement specific measures in a timely manner."

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