Japan allows chemical's 1st export to S. Korea under new controls

09, Aug. 2019

(Trade minister Hiroshige Seko)
(Trade minister Hiroshige Seko)

TOKYO, Kyodo - Japan has issued its first permit for exporting to South Korea a chemical needed in producing semiconductors since tightening controls last month, trade minister Hiroshige Seko said Thursday.

After reviewing the application for the export of photoresist, a light-sensitive material used to coat semiconductor circuit boards, the Japanese government deemed the transaction was legitimate and would not be diverted to military use, according to the South Korean government and sources close to the matter.

South Korea's Yonhap news agency said the material receiving export permission was bound for Samsung Electronics Co.

“(The tightening of controls) are not an export ban, and we have demonstrated that we will not arbitrarily use the rule to prevent the issuing of permits for legitimate transactions,” Chief Cabinet Secretary Yoshihide Suga said at a press conference Thursday.

It took Japan a little over one month to issue the permit since the export controls were tightened on July 4 for three South Korea-bound materials due to security reasons, a much shorter period than the normal timespan of around 90 days for exports of controlled materials. Seoul had previously enjoyed simplified procedures.

Seko denied that the quick turnaround was an attempt to sidestep South Korea's claims that the controls will hold up the global supply chain, telling a press conference that his ministry has been quietly reviewing applications and that “there is no particular reason” for the time taken.

Japan made filing applications for each transaction a requirement for exporting photoresist, as well as hydrogen fluoride, a chemical used to clean semiconductors, and fluorinated polyimide, a material used in organic electro-luminescence display panels on smartphones, to South Korea on July 4.

(Trade minister Hiroshige Seko)

Previously, three-year permits were issued to manufacturers in Japan exporting to South Korea, removing the need for case-by-case approval.

Tokyo has indicated that permits for exports of the three materials will be granted if management of the exports is deemed appropriate.

The Japanese minister, however, warned that Tokyo could expand the scope of materials subject to tighter export controls if there are “inappropriate cases” in Seoul's security management for the exports.

Seoul believes the measures are in retaliation for its handling of South Korean court decisions ordering Japanese companies to compensate victims of forced labor during Japan's 1910-1945 colonial rule.

Tokyo, which says the export controls have been implemented due to national security concerns, maintains that the issue of compensation has been settled under a 1965 bilateral agreement.

Japan's decision earlier this month to also remove South Korea from a “white list” of countries with preferential trade status, based on similar security concerns claimed by Tokyo, will come into effect on Aug. 28. (Kyodo)