Business information

South Korea Bans Exports of Strategic Items to Russia, Joins SWIFT Sanctions

A truck moves a shipping container at Pyeongtaek Port in Pyeongtaek, South Korea, July 9, 2020. REUTERS/Kim Hong-Ji/Files

Join now for FREE unlimited access to Reuters.com

Register

SEOUL, Feb 28 (Reuters) – South Korea will tighten export controls on Russia by banning shipments of strategic items and join moves by Western countries to block some Russian banks from the international payments system SWIFT, the Seoul Foreign Ministry announced on Monday.

“The Korean government has condemned Russia’s armed invasion of Ukraine and, as a responsible member of the international community, has decided to actively participate in the efforts of the international community, including economic sanctions, for a resolution peaceful situation,” the ministry said in a statement. .

Among the strategic items that will be checked are supplies of electronics, semiconductors, computers, information and communications, sensors and lasers, navigation and avionics, and marine and aerospace equipment. .

Join now for FREE unlimited access to Reuters.com

Register

Two major South Korean banks confirmed on Monday that, although they have not yet received specific guidelines from SWIFT, or the member-owned cooperative for the interbank payment system, they have halted trade funding with at least seven Russian banks.

South Korea’s Shinhan Bank and another top lender said they had stopped issuing letters of credit and other commercial funding to PSB, VEB, VTB, Bank Otkritie, Novikombank, Sovcombank and Sberbank (SBER.MM ). The second Korean bank declined to be identified due to the sensitivity of the matter.

“The SWIFT blockage will negatively affect trade finance although South Korea’s overall natural gas and oil imports from Russia are not that huge, at around 5-10%” of the total, Jeong said. Min-hyeon, an economist specializing in Russia and Europe at the Korea Institute for International Economic Policy.

“Difficulties faced by South Korean buyers of Russian commodities and other exporters with payment difficulties could lead to supply disruptions and price increases.”

In its statement, the ministry also said that the Korean government has decided to promote the additional release of strategic oil reserves for the stabilization of the international energy market, and to further consider other measures such as resale. of liquefied natural gas (LNG) to Europe.

South Korea will step up humanitarian aid to Ukraine, the ministry added, saying its decisions had been officially notified to the US government through diplomatic channels.

He also plans to seek an exemption from Washington’s sanctions on Russia, as measures to block Russia’s access to high-tech products could affect South Korean exporters, including Samsung Electronics (005930.KS) and SK Hynix, local news agency Yonhap reported, citing the Ministry of Commerce.

The US government said following Moscow’s invasion of Ukraine last week that it would implement export controls designed to cut off Russia from semiconductors and other crucial advanced technologies. for its weapons development and biotechnology, moves that could harm chipmakers including Samsung.

Russia calls its actions in Ukraine a “special operation”.

Join now for FREE unlimited access to Reuters.com

Register

Reporting by Hyonhee Shin, Yena Park and Joyce Lee; Editing by Michael Perry and Kenneth Maxwell

Our standards: The Thomson Reuters Trust Principles.