South Korea tightens export controls to Russia, Belarus

South Korea will stop shipping nearly 700 additional items, including rechargeable batteries, heavy equipment and cars with 2,000 and larger-liter engines, to Russia and Belarus in response to the two countries’ protracted wars against Ukraine later this week.

Korea’s Ministry of Trade, Industry and Energy on Tuesday announced that the revision to the country’s regulations on trading strategic items will be enacted as of Feb. 24.

In December, Korea amended the regulations to add 682 items to the list of items banned from shipping to Russia and Belarus.

Following the revision, the total number of items subject to export restrictions has jumped to 1,159.

The newly regulated items include heavy construction equipment, rechargeable batteries, aircraft components, machinery and over 2,000-liter cars that could be used for military purposes, the ministry explained.

They are prohibited from export in principle but exporters of those restricted items can ask for approval from the ministry if they wish to export any of those items, and the ministry will review their requests to determine "exceptional cases", the ministry said.

USED CAR EXPORTS TO RUSSIA SURGE  

South Korea has been restricting exports of some strategic items such as electronics, semiconductors, computers, information and communications, sensors and lasers, navigation and avionics, and marine and aerospace equipment, to Russia and Belarus since Russia’s attacks on Ukraine in 2022.

But the stricter export control is expected to curb the country’s used car shipments to Russia and Belarus more effectively amid growing concerns that the previous sanction has failed to restrict Korean car shipments to the countries.

Earlier, Korea banned exports of cars worth more than $50,000 per each to Russia but it has decided to forbid outbound shipments of cars based on engine sizes, designing more cars that are mostly mid and large-sized as off-limits to the country.  

According to the Korea International Trade Association, Korea shipped 19,628 units of used cars to Russia in 2022, up a whopping 700% from the previous year despite the country’s export restrictions.

Automotive industry observers suspected that South Korean used cars are being funneled into Russia via neighboring countries that are not subject to Korea’s export restrictions, such as Kazakhstan and Kyrgyzstan.

Seoul has joined Western counterparts, including Washington, to sanction Moscow for its attack on Ukraine since early 2022.

Without any sign of ending the war, Korea’s No. 1 carmaker Hyundai Motor Co. in December sold its car plants in Russia at only about $100 to a local company but on an option that it could buy back the assets at the sale price in two years, leaving the door open to its possible return later.

Write to Sul-Gi Lee at surugi@hankyung.com
Sookyung Seo edited this article.