S. Korea set for talks with U.S. over joining sanctions on Russia

February 28, 2022

South Korea will have talks with the United States early next month over joining Washington in export sanctions on Moscow following Russia’s invasion of Ukraine, the finance ministry here said Sunday.

The ministry said it reached the decision following a meeting of its task force on the war in Ukraine, adding its upcoming discussions with the U.S. will cover the process of joining sanctions and export controls against Russia.

The ministry added it will also brief local exporters and other relevant institutions on such measures in hopes of minimizing collateral damage to South Korean firms.

Washington earlier announced restrictions on exports of U.S.-origin technology and products to 49 Russian military entities, including its defense ministry. The sanctions apply to semiconductors, computers, telecommunications, information security equipment, lasers and sensors, and cover items produced in the U.S. or foreign items produced using U.S. equipment and software.

Russia is South Korea’s 10th-largest trading partner, accounting for 1.6 percent of Seoul’s exports in 2021. In sectors such as auto parts, steel structures and synthetic resins, half of South Korean exports went to Russia.

The finance ministry is also working on measures to protect South Korean companies in light of U.S. financial sanctions targeting Russian banks.

The U.S. and its allies have decided to block some Russian banks’ access to the SWIFT international payment system, which will hamper their ability to operate globally. But it will also hurt companies and banks that deal with targeted Russian banks.

SWIFT, which stands for “Society for Worldwide Interbank Financial Telecommunication,” is a secure messaging system that connects 11,000 financial institutions in some 200 countries and territories, and alerts them on upcoming transactions.

As for materials that South Korea mainly imports from Russia, such as neon gas and krypton, the finance ministry will look to increase trading with other countries and find alternative materials.