Export controls

General controls

What general controls are imposed on exports?

All goods intended for export must undergo export clearance procedures. These clearance procedures include declaring the goods intended for export to the KCS and obtaining acceptance of the export declaration by the KCS, as well as loading the goods for transportation between Korea and the importing foreign country. Any person who intends to export goods must file an export declaration with and receive acceptance from the head of the customs office having jurisdiction over the location of the relevant goods before loading the goods for transportation.

Separately, exports of ‘strategic items’ and ‘strategic technology’ (collectively ‘strategic items’) require approval from the relevant authorities for purposes of maintaining international peace and security in accordance with multinational strategic materials export control regimes.

Also, the Korean government controls exports of ‘national core technologies’ under the Act on Prevention of Divulgence and Protection of Industrial Technology.

Government authorities

Which authorities handle the controls?

MOTIE has authority over exports of strategic items under the Foreign Trade Act. Also, MOTIE has authority over exports of national core technologies under the Act on Prevention of Divulgence and Protection of Industrial Technology.

The Defence Acquisition Program Administration (www.dapa.go.kr) is responsible for controlling exports of certain defence materials and major defence industry materials designated as strategic items under the Defence Acquisition Program Act.

The Nuclear Safety and Security Commission (NSASC, www.nssc.go.kr) is responsible for controlling exports of certain atomic-related materials designated as strategic items under the Nuclear Safety Act.

The KCS (www.customs.go.kr) has authority over export clearance procedures under the Customs Act.

Special controls

Are separate controls imposed on specific products? Is a licence required to export such products? Give details.

As mentioned above, the Korean government requires a licence prior to the export of strategic items, which include dual-use equipment, military equipment and satellites. The Dual-use Control List has 10 categories of goods and is regularly updated to incorporate resolutions made by the relevant multinational treaties. These 10 categories are as follows:

  • category 1: Special materials and related equipment;
  • category 2: Materials processing;
  • category 3: Electronics;
  • category 4: Computers;
  • category 5: Telecommunications and information security;
  • category 6: Sensors and lasers;
  • category 7: Navigation and avionics;
  • category 8: Marine;
  • category 9: Aerospace and propulsion; and
  • category 0: Nuclear materials, facilities and equipment.

Categories 1 to 9 are controlled by MOTIE, while category 0 (nuclear materials, facilities and equipment) is controlled by the NSASC.

A licence may also be required under end-use controls, which apply to otherwise non-controlled goods to be supplied to an end user where there are concerns about possible end use as weapons of mass destruction.

Among the strategic items, defence materials and major defence industry materials included in the Military Goods Control List are controlled by the Defence Acquisition Program Administration. Lastly, certain products shipped to North Korea require approval from the Ministry of Unification.

Supply chain security

Has your jurisdiction implemented the WCO’s SAFE Framework of Standards? Does it have an AEO programme or similar?

Yes. Korea implemented the WCO’s SAFE Framework of Standards (which was established in June 2005) and amended provisions of the Customs Act in January 2008 to introduce the AEO programme. The KCS’s AEO programme was first implemented in April 2009. So far, Korea has executed AEO Mutual Recognition Arrangements (MRAs) with 14 countries, including, among others, the US, Japan and China, allowing participants of the KCS’s AEO programme to take advantage of the benefits accorded under the similar programmes implemented by MRA countries. In total, nine parties (exporters, importers, customs brokers, warehouse operators, transporters, freight forwarders, sea carriers, air carriers and terminal operators) have been designated under the AEO programme.

Applicable countries

Where is information on countries subject to export controls listed?

The Korean government’s export controls on strategic items apply equally to all countries.

The Foreign Trade Act merely makes a distinction between exports to Zone A and Zone B countries. Zone A countries include countries that are signatories to the major multinational regimes. Currently, 29 countries are classified as Zone A countries. All other countries are classified as Zone B countries. Since 2007, a licence is required to export strategic items from Korea to any country (including both Zone A and B countries). Approval for Zone A countries, however, is rather routinely granted, while approval for Zone B countries typically involves substantial and lengthy review by MOTIE and is not readily granted.

Named persons and institutions

Does your jurisdiction have a scheme restricting or banning exports to named persons and institutions abroad? Give details.

The Korean government publishes and updates a Denial List (www.yestrade.go.kr) to restrict or ban exports of strategic items to certain named persons and institutions designated by the UN Security Council or other multinational export control regimes. Exports to those individuals and institutes are subject to scrutinised review by the relevant authority.

Exports of non-strategic items to certain persons and institutions in countries sanctioned by the UN Security Council (the list of which can also be found at www.yestrade.go.kr) require a catch-all licence.

Penalties

What are the possible penalties for violation of export controls?

In the event that strategic items are exported without an export licence, an exporter may be subject to certain criminal sanctions, the severity of which may depend on specific purposes under which the illegal exports were made. For example, if illegal exports were made for purposes of international proliferation, the applicable criminal sanctions are imprisonment for up to seven years or a criminal fine of up to five times the transaction value or both. If the illegal exports were made for other purposes, the applicable sanctions are imprisonment for up to five years or a criminal fine of up to three times the transaction value.

In addition to the foregoing, exporters who violate export control regulations may be prohibited from exporting strategic items for a period of up to three years.

In the case of unauthorised illegal export, or false or fraudulent acquisition, an exporter must receive educational sanctions for a maximum of eight hours. If an exporter violates the duty to keep documents or fails to comply with educational sanctions, an administrative fine of 10 million won or less may be imposed.

For a violation of the Act on Prevention of Divulgence and Protection of Industrial Technology requirements relating to ‘national core technologies’, certain aggravated criminal sanctions will apply (eg, imprisonment for up to 15 years or criminal fine of up to 1.5 billion won if the violation was for purposes of using the industrial technology in a foreign country, or imprisonment for seven years or a criminal fine of up to 0.7 billion won if the illegal export was made for other purposes).