On June 27, 2023, Japan’s Cabinet determined amendment to Export Trade Control Order, an supplemental regulations of Foreign Exchange and Foreign Trade Act, to add South Korea into the List No.3. Japan designates preferred trade countries (Group A Countries, formerly known as “White Countries”) in the List No.3 and provides preferential treatment for export of items from Japan to the listed countries, including granting general export license and exemption from catch-all controls. New Export Trade Control Order will come into effect as of July 21, 2023.
In August 2019, Japan changed the category that South Korea belongs from Group A to Group B due to concerns about potential risk of exported items being converted to military use. As general export license is generally unavailable to export to Group B Countries, change of group category caused additional times and costs for export of items from Japan to South Korea.
Although Japan Government then disagreed, it is generally recognized that heightened diplomatic tensions between Japan and South Korea encouraged change of the group category in 2019. In responses to improvement of relations, both Japan and South Korea have gradually lifted regulatory trade barriers between the two countries and the regulatory environment for trade between Japan and South Korea now comes back to normal.
