KDIA / INT L PROJECT TEAM DR. KIM JONG CHAN

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1 KOREA EXPORT CONTROL KDIA / INT L PROJECT TEAM DR. KIM JONG CHAN

2 OUTLINE I. GOALS OF KOREA EXPORT CONTROL POLICY II. CONTROL AUTHORITIES BY EXPORT MATERIAL III. CONFIRMING STRATEGIC MATERIAL IV. BLACK LISTS FOR EXPORT CONTROL V. PROCEDURE FOR EXPORT LICENSE VI. CASE REVIEW VII. DISCUSSION -2 -

3 GOALS OF KOREA EXPORT CONTROL POLICY Defense Material Export Control Maintaining world peace and preventing diplomatic conflict Prohibiting exporting to sanctioned country Monitoring possibility of core-technology transfer Reviewing content of foreign components Government considering Characteristics of Arms Export -3 -

sanctioned country Monitoring possibility of core-technology transfer Reviewing

4 CONTROL AUTHORITIES BY EXPORT MATERIAL Major Defense Materiel Designated Defense Materiel General Defense Materiel Non-Designated Defense Materiel (Strategic) General Logistics Criteria -Military gun, powder, knife -Materiel designated by DAPA - Materiel designated by DAPA Designated on Notice of Strategic Goods Export/Import -Non-lethal - Weaponry Major Items -Gun - Ammunition - Comm. Equip. - Guided Weapons - Tank, Armored Vehicle - Destroyer - Mil. Std. Vehicle -Gas mask - Parachute - Chemical Detectors, etc. - WA Items (Defense Materiel) -MTCR, AG, CWC Items (Mil. Purpose) - Clothing - Mil. Shoes -Gear -Tent - Barbed Wire - Field Line, - etc. Approv. Authority DAPA MOCIE DAPA No Control -4 -

Weaponry Major Items -Gun - Ammunition - Comm. Equip. - Guided Weapons - Tank, Armored Vehicle - Destroyer - Mil. Std. Vehicle -Gas mask - Parachute - Chemical Detectors, etc.

5 CONTROL AUTHORITIES BY EXPORT MATERIAL Designated Arms Export control list by DAPA Designated major defense materials [Article 57, DAPA] - Total 752 Criteria and its components Export Control [Notice of Strategic goods Export/Import] - Munition list from Wassenaar Items - Military purpose among dual use items **DAPA : Defense Acquisition Program Act -5 -

components Export Control [Notice of Strategic goods Export/Import] - Munition list from

6 CONFIRMING STRATEGIC MATERIAL Abstract - Classify goods whether it is export control or not Legal Ground - Article 21, Foreign Trade Law / Article 40, Foreign Trade Act - Article 7~12, Export Control Notice Government Authorities - KOSTI: Strategic Material (dual use items) - KOITA: Strategic technology - DAPA: Strategic defense material -6 -

Article 7~12, Export Control Notice Government Authorities - KOSTI: Strategic

7 BLACK LISTS FOR EXPORT CONTROL Allegedly assist North Korea Potential nations for causing diplomatic conflicts Domestically unstable countries Countries in insurgency UN listed countries WMD Countries -7 -

8 PROCEDURE FOR EXPORT LICENSE Arms Export/Brokering Control System in Korea - Preliminary approval for export : When discussing export of defense material - Approval of participation in International Bid : When applying for a bid to foreign government - Approval for testing items : When temporarily transferring samples overseas -8 -

Approval of participation in International Bid : When applying for a bid to foreign

9 PROCEDURE FOR EXPORT LICENSE Application process for export license Examine legal document Examine RFP and EUC Check certificate of supply Oversee test material of lethal & major weapon systems -9 -

RFP and EUC Check certificate of supply Oversee

10 PROCEDURE FOR EXPORT LICENSE Cases with particular attention Domestically unstable countries Countries with no defense export precedent Weapons capable of terrorizing Engagement in Multiple weapon brokers Passing by a country before end user

export precedent Weapons capable of terrorizing Engagement in

11 PROCEDURE FOR EXPORT LICENSE Monitor a country in diplomatic conflicts UN black listed countries NGO exporters Foreign Ministry s black listed countries Items requiring export license WMD and other illegal trading Military equipment requiring security

Ministry s black listed countries Items requiring export license

12 CASE REVIEW 1. IMU(Inertial Measurement Unit) - Delay of TAA approval due to Company s Renaming * US State of Department delayed the approval - Without TAA approval, company can t apply for E/L Results : 3~5 months period were delayed to obtain E/L 2. X-Band R/F Controller - Rejected 1 st apply but accepted 2 nd apply when a company replaced the applicant with other US company. Results : 1 year was delayed to obtain E/L

delayed the approval - Without TAA approval, company can t apply for E/L Results : 3~5 months period were

13 CASE REVIEW 3. Claymore Mine M18A1-10 months took to obtain the E/L approval to export the product s to legal end-user Results : Compensation for arrearage 4. Surface Trip Flare - Due to the change of responsible person in E/L post, 5 months took to obtain the E/L approval. Results : Loss of Business opportunity

product s to legal end-user Results : Compensation for arrearage 4.

14 DISCUSSION Why does a company need to apply for TAA when the terms of contract do not include any of the exchange of Tech data and FAT? What procedures should a company take in order to check its E/L process? (Most of domestic companies have experienced of being fined with the compensation for arrearage due to delayed E/L approval. Since a company relies the most of the E/L approval on US Exporter, a company would like to convince itself by checking its process via any means.)

(Most of domestic companies have experienced of being fined with the compensation for arrearage due to delayed E/L

15 DISCUSSION Q & A

Defense Acquisition Program Administration. Export Control in DAPA, Korea

Defense Acquisition Program Administration Export Control in DAPA, Korea Table of Contents Ⅰ Who We Are Ⅱ What We Do Ⅲ How We Do The Republic of Korea Population: 48.61million (2008) GDP: US$928.7 billion