Korea to open temporary settlement lines for trade with Russia

South Korea plans to open temporary settlement lines between domestic banks and their units in Russia in order to help companies hit by multinational sanctions against the country after its invasion of Ukraine.

The government on Friday decided to take the ad hoc measure at the end of this month, in which South Korean banks settle payments for exporters if Russian importers pay for their purchases to the lenders’ units in the country that open accounts in their headquarters and deposit money in the accounts in advance, according to the Financial Services Commission (FSC).

The authority said, however, the new settlement lines will not be allowed for transactions with Russian banks or items on the list of global sanctions against the country.

The move is aimed at minimizing the use of global intermediary banks that have been trying to avoid deals with Russia because of restrictions by the West, causing delays or rejections of payments for South Korean companies.

“The method is expected to enable quick payments as it will minimize the use of intermediary banks,” the FSC said in a statement.

South Korea has joined the multinational sanctions against Russia, including export controls and the removal of Moscow from the SWIFT global payment system.

TO REMOVE TARIFFS FOR RARE GASES IN APRIL

Separately, the government plans to immediately import crude oil produced by Korea National Oil Corp. (KNOC) when the war in Ukraine results in disrupted supply, the finance ministry said.

The government is also set to lift tariffs on imports for noble gases such as neon and krypton, core materials used in semiconductor production, in April.

South Korea currently imposes a 5.5% tariff on imports for the gases. South Korea, home to the world’s top two memory chipmakers – Samsung Electronics Co. and SK Hynix Inc. has been relying on Russia and Ukraine for the rare gases.

Write to So-Hyeon Kim at alpha@hankyung.com
Jongwoo Cheon edited this article.