How to Respond to Export Difficulties Between Russia and Ukraine

KOTRA Holds Briefing with Hana Bank, Strategic Materials Management Institute, and Samsung SDS
Publishes '30 Questions and Answers' Material for Export-Import Companies Facing Difficulties

[Image source=Yonhap News]

[Asia Economy Reporter Jin-ho Kim] KOTRA announced on the 30th that it held an online briefing session to address export difficulties at its headquarters in Yeomgok-dong, Seoul, together with Hana Bank, the Strategic Materials Management Institute, and Samsung SDS.

At this briefing, information was provided on ▲foreign exchange risk management and financial support measures necessary for our SMEs ▲logistics response measures related to the Russia-Ukraine situation ▲precautions regarding export controls to Russia ▲and how to report export difficulties through Trade Investment 24.

KOTRA has assigned dedicated export specialists to assist SMEs suffering losses such as blocked local sales channels or order cancellations due to the Russia-Ukraine situation. It also helps discover promising buyers in third-country markets. Additionally, the big data platform ‘Trybig’ recommends promising markets and buyers, which are identified together with 127 overseas trade offices worldwide, supporting urgent video consultations.

Kim Yoon-tae, head of KOTRA’s SME and Mid-sized Enterprise Division, stated, “The rapidly changing trade environment, including the recent Russia-Ukraine situation, logistics crisis, and rising exchange rates and prices, makes it difficult for SMEs and mid-sized companies to respond alone. We will do our best to support by sharing risk management measures related to exports with our companies to create a stable export environment.”

Meanwhile, KOTRA released the 'Russia-Ukraine Business Difficulty Support Guide (30 Questions and Answers)' on the same day. It provides answers to the most frequently asked questions by exporting SMEs and contains information on various support programs such as emergency finance, guarantees, logistics cost support, and export marketing provided by government ministries and public institutions.

Below are key Q&As from the 'Russia-Ukraine Business Difficulty Support Guide.'

- Are finished consumer goods such as cosmetics also subject to export controls?

▲ The U.S. Department of Commerce generally applies the FDPR to technology used in consumer goods not specifically listed on the export control list, such as smartphones, finished vehicles, and cosmetics, which are generally considered general consumer goods and do not require export permits. However, if the end user is a Military End User (MEU), FDPR applies even to consumer goods exports, so caution is necessary.

- How can our company know if its export items are subject to sanctions?

▲ The Strategic Materials Management Institute has established a Russia Desk to support companies by analyzing whether export items fall under strategic materials or export control items related to Russia.

- Is it possible to send and receive remittances in Russia if the bank is not one of the seven Russian banks included in the SWIFT sanctions?

▲ Even if a bank is not included in the SWIFT sanctions, payment receipt may be impossible depending on the policies of intermediary or receiving banks. Especially recently, foreign banks in Russia not included in sanctions, such as Citibank announcing its withdrawal from Russia, have suddenly ceased business or declared withdrawal. Therefore, it is strongly recommended to confirm with both Russian and domestic banks in advance whether remittance and receipt are possible.

- We expect business deterioration due to exchange losses and uncollected export payments. What support measures are available for companies affected by the Russia-Ukraine situation?

▲ Policy funds are available to resolve management difficulties. Applications can be made for emergency financial support programs from the Financial Services Commission, emergency management funds from the Ministry of SMEs and Startups, and trade promotion funds from the Ministry of Trade, Industry and Energy.

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