Ministry of Foreign Affairs and Trade Republic of Korea Experiences including National Experiences including Challenges Faced July 2, 2009 ARF ISM on Non-Proliferation and Disarmament

Ministry of Foreign Affairs and Trade Republic of Korea Experiences including National Experiences including Challenges Faced July 2, 2009 ARF ISM on Non-Proliferation and Disarmament

Overview ■ Legal Framework and Institutional Structure ■ Challenges (1) Government-Industry Relations (2) Inter-agency Relations (3) Other Elements ■ Absorption Chillers Case ( )

Legal Framework & Institutional Structure ■ Multilateral Export Control Regimes NSG, AG, MTCR, WA ■ National Legal Framework and Authorities in Charge Foreign Trade Act: Dual use items  Commerce (MKE) Act on Defense Acquisition Program: Major defense items  Defense (DAPA) Atomic Energy Act: Exclusively nuclear-related items  Science & Technology (MEST)

Legal Framework & Institutional Structure /Continued/ Act on the Production, Import, Export of Specific Chemical or Biological agent Act: Specific chemical and biological items  Commerce (MKE) Act on the Inter-Korean Trade and Cooperation: Inter-Korean trade regardless of the types of goods and technologies  Unification (MOU) ■ Coordination Mechanism Inter-agency consultations Inter-agency meetings ※ Other Relevant Agencies: MOFAT, NIS

Challenges ■ Government-Industry Relations Perception towards export control Ignorance Over-regulation ■ Inter-agency Relations Different policy orientation ■ Other Elements Complexity of regulating certain activities

(1) Government-Industry Relations ■ Problems Perception towards export control Ignorance Overregulation ■ Possible Solutions : In-reach Activities YesTrade (on-line strategic trade information system) Started in Feb 2005 On-line Licensing / Consulting Service Since Feb ’05

(1) Government-Industry Relations /Continued/ Internal Compliance Program (ICP) Started in late 2005 Incentive Program for the Companies with Effective Internal Control Mechanism Promotion and Education promotion / Workshop / Road show

(2) Inter-Agency Relations ■ Problems Different policy orientation The Foreign Affairs – The Commerce ※ Export control less highlighted in economic downturn ■ Possible Solutions Enhanced Coordination Mechanism ※ Optimal level of control necessary for sustainability Involvement of the 3 rd party for the balanced and neutral review

(3) Other Elements: Complexity of regulating certain activities ■ Post-shipment Verification On-site inspection on the territories of other sovereignty Insufficient human resources and expertise of overseas missions to identify risk of diversion Complaint by importers in a recipient country ■ Transit/Trans-shipment Control Confirmation of information

Absorption Chillers Case( ) ■ The Commerce added absorption chillers to “catch-all list ” Export Licensing and on-site verification ※ All absorption chillers were used for air-conditioning in hospitals, schools, and other buildings ■ Complaint from exporters and disputes between government agencies ■ The Commerce deleted this item from the list On-site verification only when there is sufficient and concrete information or other reasonable ground

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