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The trade friction between South Korea and Japan has attracted considerable attention and led many (click here[1] and here[2]) in the Korean media to question MoE’s chemical regulations including K-REACH[3]and CCA[4]. In response to Korean media’s criticism of K-REACH and CCA, the MoE has issued several official explanations reiterating its stance and urging the public not to blame chemical regulation for material localization issues (CL news, click here[6] and here[7]). However, to appease concerns, MoE will amend the implementation of some regulations to minimize industry losses during this difficult time.
In July, the Deputy Prime Minister of South Korea Hong Nam-ki offered details on proposed reforms during the 3rd Ministerial Meeting on Japan’s Trade Curbs, stating that the government will ease new chemical registration for R&D purposes. (CL news[5]). So far the MoE hasn’t issued any practical implementation guidance.
In the latest official explanation[8], MoE stated that special measures will be taken to facilitate the localization of materials and promote R&D. Under the revised K-REACH (effective on Jan 1st 2019), new chemical substances in annual volumes of 100kg or above require registration and those below 100kg/y only require simple notification. In addition, before 2020, new substances with annual volumes below 1 tonne only require data derived from a single experimental test i.e. the acute oral toxicity test, other hazard data can be exempted. In MoE’s opinion, the current regulation significantly eases the compliance burden of R&D activities. To support companies affected by the export curbs suffering from a shortage of key materials, MoE will further reduce the amount of test data required to be submitted during a registration application.
Other accusations leveled at the revised K-REACH relate to the substantial financial and time investment necessary to complete registration of more than 7,000 existing substances, which could be better spent revitalizing Korea’s raw material sector. The MoE has responded to these issues and pointed out that the revised K-REACH requires phased-in registration of existing chemicals based on hazards and tonnage band by 2030, and does not impose an overly burdensome deadline on industry. K-REACH’s guiding principle is that the higher the tonnage of chemicals manufactured/imported, the more the data is required to substantiate safety, environmental impact and overall risk (see data requirements here[9]). Financial and time investments can be greatly reduced as pre-existing data is available abroad and non-testing methods can be accepted.
MoE also stated that it will shorten time stipulated in CCA required to obtain a license to construct facilities producing key semi-conductor materials. The off-site consequence analysis will be conducted by the National Institute of Chemical Safety (NICS) and the facilities inspection will be conducted by the Korea Environment Corporation (KECO) at the same time to maximize the allocation of available manpower.
In addition to easing regulations, on Aug 5th, the Deputy Prime Minister of South Korea Hong Nam-ki announced on the 4th Ministerial Meeting on Japan’s Trade Curbs the most-recent measures to reduce the impact of the trade war (MoEF news[10]). The 2019 supplementary budget was passed at the National Assembly on Aug 2nd, the same date when the Japanese Cabinet approved the removal of South Korea from its whitelist of preferential export partners (to be effective on Aug 28th, 2019). A total of 273.2 billion won will be used to support companies affected by the export curbs in the second half of this year. The government has committed to take short-term measures to reduce uncertainties about supply shortage in key industrial materials and find alternative suppliers, as well as long-term measures to promote self-sufficiency and diversify supplies of key materials to reduce heavy reliance on Japan. As planned, the government will invest in 100 key strategic items in the areas of semiconductors, displays, automobiles, electronics, machinery and chemicals to create a stable supply in the next 5 years.
Latest update: On Aug 12th, South Korea announced that from September it will remove Japan from its whitelist of countries subject to fast-track trade.
