International Finance

Japan’s new rules to regulate smartphone material exports to South Korea

The move follows a growing dispute over South Koreans forced to work for Japanese firms during WW2

Japan will tighten its regulations when it comes to exports of high-tech material used in smartphones to South Korea amid a growing row with Seoul over wartime labour, Reuters reported.

The new regulations, when official, will slow the export process which will impact the business of South Korean companies such as Samsung Electronics. It doesn’t amount to a complete ban on exports to South Korea.

According to the report, Japan’s move to regulate exports comes after Tokyo became frustrated by Seoul’s lack of action over its top court ruling last October that ordered Nippon Steel to compensate the Korean labourers forced to work during world war two.

The new restrictions affect fluorinated polyimide, and hydrogen fluoride, as well as the transfer of manufacturing technologies. According to the new guidelines, exporters will now have to seek approval for each batch they wish to export to South Korea. According to local media, the process could take as long as 90 days each time.

“We will firmly respond to this unfair measure by Japan that violates international law,” Park Tae-sung, South Korea’s deputy minister for trade told Reuters.

Park Tae-sung noted that Japan has violated World Trade Organisation rules.

According to the Japanese government, the issue of forced labor was fully settled in 1965 when the two countries restored diplomatic ties. They have denounced the rulings and urged the launch of an arbitration panel.

Responding to that, South Korea suggested the creation of a voluntary compensation fund by local and Japanese firms.

Japan contributes to about 90% of fluorinated polyimides, and about 70% of etching gas produced globally. With the new export regulations by Japan, buyers in South Korea will struggle to find alternatives, according to Sankei, a Japanese newspaper.

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