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Executive Summary1

 
South Korea and the United States share a long history of bilateral cooperation, forming an important strategic and economic partnership in the Asia Pacific region. South Korea is a significant economic and military force in the region, which draws attention to how the South Korean government, companies, and organizations engage in U.S. Indo-Pacific initiatives, particularly on those that involve China.2 The election of Yoon Suk-yeol as the next South Korean president signals an increase in cooperation with the U.S. on issues of mutual security and economic interests, to include addressing North Korea’s nuclear weapons ambitions, Iran’s nuclear program, China’s growth ambitions and human rights policies, Russia’s invasion of Ukraine and foreign interference, and more broadly the Indo-Pacific’s security and economic stability.

South Korea’s trade relations with jurisdictions that are subject to the U.S. and international sanctions and trade restrictions, such as Russia, Iran, and China, increase the significance of U.S. and South Korean cooperation on financial crime and trade controls policies. Exposure to sanctions risk, gaps in anti-money laundering controls and trade in sensitive or restricted technologies raises the need for South Korean financial institutions and multinationals to enhance their capabilities to identify risk and implement controls.

For South Korean companies, staying current on trends and expectations — with respect to global standards, industry best practices, and the U.S. regulatory environment — can be helpful in protecting against enforcement risk and reputational harm. Working towards better alignment with the U.S. and other partners on these regulatory and enforcement matters can also better assist the newly elected Yoon administration advance South Korea’s standing as a well regulated financial and commercial center.”3

This report will provide an overview of U.N. and U.S. sanctions programs relating to China, North Korea, Iran and Russia, and highlight areas of U.S.-South Korea cooperation on sanctions implementation. The report will also discuss U.S. regulations surrounding military end users, and present case studies that highlight how South Korean companies can be exposed to commercial activity that supports military entities in China and Russia. Section four of this report discusses supply chain risk, focusing on U.S. and South Korean regulation on technologies that each country has deemed essential to their respective national security considerations, and the issue of Xinjiang forced labor. This section then introduces case studies that demonstrate possible exposure to the reexport of sensitive technology, and the risk of exposure to forced labor in the global supply chain. Section five discusses strengthening sanctions compliance risk management capabilities.

 

  • 1. This report is the result of three-month collaboration in research and writing by a team of experts from both Kharon and the Asan Institute for Policy Studies. While experts from both Kharon and Asan equally contributed to the contents in the body of the report, the case analyses were conducted exclusively by Kharon, and the policy recommendations were made exclusively by experts from the Asan Institute for Policy Studies. The policy recommendations do not necessarily reflect the Asan institute’s position.
  • 2. “U.S.-South Korea Relations,” Congressional Research Service, last updated February 24, 2022.
  • 3. “Yoon Suk Yeol’s Foreign and Security Policy: Confident Diplomacy and Strong National Security (Unofficial Draft Translation),” NK News, March 14, 2022.

About Experts

J. James Kim
J. James Kim

지역연구센터

J. James Kim 박사는 아산정책연구원의 지역연구센터 선임연구위원으로 재직 중이며 Columbia University 국제대학원 겸임 강사이다. Cornell University에서 노사관계 학사와 석사학위를 마치고 Columbia University에서 정치학 박사학위를 취득하였다. California State Polytechnic University, Pomona의 조교수(2008-12)와 랜드연구소의 Summer 연구원(2003-2004) 등을 역임한 바 있다. 주요연구 분야는 비교민주주의 제도, 무역, 방법론, 공공정책 등이다.

최현정
최현정

외교안보센터

최현정 박사는 아산정책연구원 선임연구위원이다. 청와대 녹색성장기획관실 선임행정관(2010-2013) 및 국정기획수석실 행정관(2008-2010)을 역임하였고, 제17대 대통령직인수위원회 정책연구위원(2008), IT전략연구원(現 한국미래연구원) 연구위원(2006), 일본 동경대학 사회과학연구소 연구원(2003-2004), 공군사관학교 국방학과 교수요원(1995-1998)도 역임하였다. 주요 연구분야는 기후변화, 녹색성장, 신성장동력, 동아시아 발전주의 국가 모델과 산업정책, 국가미래전략, 개발원조 등이다. 연세대학교 국제대학(UIC)에서 비전임교수로 강의를 하고 있으며, 주요 저서로는 Green Growth for a Greater Korea: White Book on Korean Green Growth Policy, 2008~2012 (Seoul: Korea Environment Institute, 2013)가 있다. 연세대학교 정치외교학 학사와 정치학 석사, 미국 Purdue University에서 정치학 박사학위를 취득하였다.