Loopholes help South Korean firms continue exports to Russia despite sanctions



Analysis Loopholes help South Korean firms continue exports to Russia despite sanctions Sending goods via Chinese subsidiaries risks straining ties with US and NATO and exposes companies to investigation John LeeOctober 14, 2024 SHARE COPY LINK FACEBOOK X LINKEDIN MASTODON Different ways of transporting cargo \| Image: Korea South Korean companies continue to export goods to Russia via subsidiaries in China, bypassing export restrictions imposed after Moscow’s invasion of Ukraine, according to a report by the Royal United Services Institute (RUSI). While these companies benefit economically, the potential geopolitical risks for South Korea of not complying with Western-led sanctions are significant. In particular, ROK companies’ exploitation of legal loopholes to export goods could expose them to investigation and could strain Seoul’s relations with key partners such as the U.S. and NATO, particularly as tensions over Russia’s growing military ties with North Korea escalate. EXPORT RESTRICTIONS South Korea aligned © Korea Risk Group. All rights reserved. No part of this content may be reproduced, distributed, or used for commercial purposes without prior written permission from Korea Risk Group. LATEST ANALYSIS 01Lee Jae Myung’s ‘pacemaker’ strategy tests South Korea’s leverage with Trump 02Trump’s Korea investment victory lap masks safeguards Seoul still controls 03North Korean POW dispute tests Seoul-Kyiv trust and future Ukraine policy 04South Korea’s CPTPP push exposes the cost of turning trade gains into consensus 05AI storage boom gives South Korea battery makers an EV overcapacity lifeline 06South Korea’s Mexico strategy runs into the hard limits of USMCA politics 07Preschool test ban forces South Korea’s English hagwons to rethink placement 08Lee Jae Myung’s Wall Street pitch tests South Korea’s capital market credibility

Analysis

Loopholes help South Korean firms continue exports to Russia despite sanctions

Sending goods via Chinese subsidiaries risks straining ties with US and NATO and exposes companies to investigation

John LeeOctober 14, 2024

Loopholes help South Korean firms continue exports to Russia despite sanctions

Different ways of transporting cargo | Image: Korea

South Korean companies continue to export goods to Russia via subsidiaries in China, bypassing export restrictions imposed after Moscow’s invasion of Ukraine, according to a report by the Royal United Services Institute (RUSI).

While these companies benefit economically, the potential geopolitical risks for South Korea of not complying with Western-led sanctions are significant.

In particular, ROK companies’ exploitation of legal loopholes to export goods could expose them to investigation and could strain Seoul’s relations with key partners such as the U.S. and NATO, particularly as tensions over Russia’s growing military ties with North Korea escalate.

EXPORT RESTRICTIONS

South Korea aligned

Loopholes help South Korean firms continue exports to Russia despite sanctions

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John Lee