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"The Korean government condemned Russia's armed invasion of
Ukraine and, as a responsible member of the international
community, decided to actively participate in the international
community's efforts, including economic sanctions, for a
peaceful resolution of the situation," the ministry said in a
statement.
Among the strategic items that could be controlled are supplies
of electronics, semiconductors, computers, information and
communications, sensors and lasers, navigation and avionics, and
marine and aerospace equipment.
Shortly after the announcement, Russia's Ambassador to South
Korea Andrey Kulik expressed regret, blaming "strong outside
pressure" on Seoul from the United States its western partners
to join them in applying sanctions.
He called Moscow's actions in Ukraine a "special operation"
aimed at defending Russia from those western forces trying to
use Ukraine "as a tool" to mount military threats.
Two leading banks in South Korea confirmed on Monday that while
they haven't yet received specific guidelines from SWIFT, or the
member-owned cooperative for interbank payment system, they
stopped trade financing with at least seven Russian banks.
South Korea's Shinhan Bank and one other leading lender said
that they stopped issuing letters of credit and other trade
financing to PSB, VEB, VTB, Bank Otkritie, Novikombank,
Sovcombank, and Sberbank. The second Korean bank declined to be
identified due to the sensitivity of the matter.
"Blocking SWIFT will adversely affect trade financing although
South Korea's overall imports of natural gas and oil from Russia
isn't that huge, at about 5-10%" of the total, said Jeong Min-hyeon,
an economist with expertise in Russia and Europe at the Korea
Institute for International Economic Policy.
"The difficulties South Korean buyers of Russian commodities and
other exporters go through with payment difficulties could lead
to supply disruption and price increases."
In its statement, the foreign ministry also said the Korean
government has decided to promote the additional release of
strategic oil reserves for stabilisation of the international
energy market, and to further review other measures such as the
resale of liquefied natural gas (LNG) to Europe.
South Korea will boost humanitarian aid to Ukraine, the ministry
added, saying its decisions have been officially notified to the
U.S. government through diplomatic channels.
It also plans to seek exemption from Washington's sanctions
against Russia as measures to block Russia's access to high-tech
products could affect South Korean exporters including Samsung
Electronics and SK Hynix, local news agency Yonhap reported,
citing the trade ministry.
The U.S. government said in the wake of Moscow's invasion of
Ukraine last week it will implement export controls designed to
cut Russia off from semiconductors and other advanced technology
crucial to its weapons development and biotechnology, measures
that could hurt chipmakers including Samsung.
(Reporting by Hyonhee Shin, Yena Park, Cynthia Kim, Josh Smith
and Joyce Lee; Editing by Michael Perry and Kenneth Maxwell)
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