Tag Archives: South Korea

North Korea dismisses postponement of joint drills

 The United States must end its joint exercises with Seoul “once and for all” to facilitate dialogue with Pyongyang, North Korea said on Tuesday (Nov 19), just days after the allies postponed planned drills.

The US and South Korea said on Sunday they would delay annual joint aerial exercises slated for this month in an act of “goodwill” after months of deadlocked nuclear talks.

Pyongyang has long protested the joint drills, which it condemns as preparations for invasion, and Seoul and Washington last year cancelled several training sessions in the wake of the Singapore summit between President Donald Trump and the North’s leader Kim Jong Un.

But Kim Yong Chol, a senior North Korean official who formerly led talks with the US, said the weekend postponement was irrelevant.

“We demand that the US quit the drill or stop it once and for all,” Kim said in a statement carried by the KCNA news agency.

“The suspension of the drill does not mean ensuring peace and security on the Korean peninsula and is not helpful to the diplomatic efforts,” he added.

The North had “no intention” to sit down with the “tricky US” and would not return to talks “before the complete and irrevocable withdrawal of its hostile policy”.

“From now on, the DPRK will get due compensation for every administrative achievement the US president has talked too much about for over a year,” Kim added, referring to the North by its official name.

Trump has repeatedly pointed to North Korea’s moratorium on nuclear tests and intercontinental ballistic missile launches as foreign policy successes for him.

But negotiations have been gridlocked since the Hanoi summit in February broke up in disagreement over sanctions relief, while October’s working-level talks rapidly broke down in Sweden.

Tuesday’s statement was the latest in a series of increasingly assertive comments from the North as its end-of-year deadline for the US to come up with a fresh offer approaches, and it has also carried out multiple weapons tests in recent weeks.

Trump hinted at the prospect of a fourth meeting with Kim in a tweet at the weekend, only to be dismissed by the North, which said it had no interest in summits “that bring nothing to us”.


Korean Investors Lose 98.1% in German-Rate Bets Gone Very Wrong

South Korean investors in a derivative product tied to German sovereign bonds lost 98.1% of their principal, highlighting the danger of super-risky assets sold to individuals that regulators are now probing.

The product, whose value was linked to the German 10-year government note yield, caused such big losses because the yield on the benchmark fell sharply to around minus 0.6%, according to Woori Bank, which sold it. About 8 billion won ($6.7 million) of the four-month securities matured on Thursday. There was 127 billion won of such securities tied to German rates that were outstanding as of Aug. 7, according to the Financial Supervisory Service.

Read more: Products Only a ‘Madman’ Would Buy Plague Koreans Seeking Yield

A Woori Bank spokesperson contacted by Bloomberg referred to a Sept. 23 statement, saying the firm will actively seek ways to protect their customers in dispute reconciliation.

The FSS is investigating whether enough information was provided to investors when such products tied to overseas rates were sold, and whether they had design flaws. Individual investors seeking higher returns as interest rates fell in Korea were the predominant buyers of those securities: they made up 89.1% of the about 822 billion won of overseas rate-linked products outstanding as of Aug. 7, the financial regulator said last month.

While the products have different terms, a typical one tied to German rates offer a return of 2% on six-month securities if the 10-year yield is minus 0.25% or higher, but if it falls below that level, investors lose 2.5% of their principal every time the yield drops one basis point, according to the FSS.


Thousands of South Koreans ‘die’ in protest against climate change

Thousands of South Koreans, led by activists, laid on the ground signifying their deaths in a demonstration to demand action on climate change ahead of next week’s climate summit at the United Nations.

Police estimated that about 3,000 people gathered in central Seoul while holding banners carrying messages such as ‘save earth save us’ and ‘It’s time to act’.

Activists from environmental organizations, schools and religious groups took part and urged a government and people to take action for climate change and reducing carbon dioxide emissions.

The United Nations have called climate change the “defining issue of our time” and are planned to host a climate summit on next week. 16-year-old Swedish activist Greta Thunberg will speak at the summit on Monday, September 23, during the annual gathering of world leaders for the UN General Assembly.


North Korean leader Kim Jong Un invited Trump to visit Pyongyang: South Korean media

North Korean leader Kim Jong Un invited US President Donald Trump to visit Pyongyang, Joongang Ilbo reported, citing multiple people familiar with the matter.

The offer to hold another summit was made in a letter delivered on the third week of August, the report said.

It came shortly after a separate letter from Mr Kim that Mr Trump made public in the first week of August.

Mr Trump said in early August that Mr Kim had sent him a “very beautiful letter” that mostly complained “about the ridiculous and expensive” joint military drills between the US and South Korea, adding that Mr Kim had apologised for the short range missile tests.

It’s not clear whether Mr Trump has responded to either letter, according to the report.

Working-level talks on denuclearisation have stalled since Mr Trump and Mr Kim’s last official summit in Hanoi ended without a deal.

While the pair agreed to restart talks in June at an impromptu meeting in which Mr Trump made history by stepping across the border into North Korea, little progress has been made since then.

North Korea last week agreed to return to talks at a “time and place to be agreed late in September”, state media Korean Central News Agency said, citing vice foreign minister Choe Son Hui.

Ms Choe, however, threatened to walk away from future talks if the US returns with the same “worn-out scenario,” KCNA reported, without elaborating further.


South Korea to file WTO complaint over Japan’s exports curbs

South Korea said Wednesday it will file a complaint with the World Trade Organization (WTO) over Japan’s “politically-motivated” export restrictions, upping the ante in an intensifying dispute with the neighbor.

Seoul and Tokyo have been embroiled in the trade and diplomatic spat since Tokyo tightened export controls in early July on three chemicals essential to making memory chips and high-spec displays, key products of South Korean companies such as Samsung and LG.

The restrictions follow a series of South Korean court rulings ordering Japanese firms to pay for forced labor during World War II.

The ongoing dispute has also seen the two neighbors remove each other from their “white lists” of trusted trading partners and prompted South Korea not to renew a military intelligence sharing pact.

“Japan’s export curbs on three items are driven by political motivations linked to a Supreme Court ruling over the issue of forced labor,” said South Korean Trade Minister Yoo Myung-hee at a press conference.

“Targeting South Korea is… in violation of WTO’s principles banning discriminatory practice.”


South Korea to file WTO complaint over Japan’s exports curbs

South Korea said Wednesday it will file a complaint with the World Trade Organization (WTO) over Japan’s “politically-motivated” export restrictions, upping the ante in an intensifying dispute with the neighbor.

Seoul and Tokyo have been embroiled in the trade and diplomatic spat since Tokyo tightened export controls in early July on three chemicals essential to making memory chips and high-spec displays, key products of South Korean companies such as Samsung and LG.

The restrictions follow a series of South Korean court rulings ordering Japanese firms to pay for forced labor during World War II.

The ongoing dispute has also seen the two neighbors remove each other from their “white lists” of trusted trading partners and prompted South Korea not to renew a military intelligence sharing pact.

“Japan’s export curbs on three items are driven by political motivations linked to a Supreme Court ruling over the issue of forced labor,” said South Korean Trade Minister Yoo Myung-hee at a press conference.

“Targeting South Korea is… in violation of WTO’s principles banning discriminatory practice.”

With South Korea’s role as a main supplier for memory chips and displays, she said, the curbs have caused “significant uncertainty” in the global economy.

Yoo said South Korea will request bilateral consultation at the WTO as a first step to resolve the issue.

Tokyo says the move was made necessary by a “loss of trust” in relations with Seoul, but also accuses South Korea of improperly handling exports of sensitive materials from Japan.

But Seoul maintains it is a retaliatory move in response to historical disputes.


Japan’s curbs on hi-tech exports to South Korea could backfire

Japan‘s curbs on exports of hi-tech materials to South Korea could backfire in the long run, eroding its dominance over a key link in the global chip supply chain, suppliers and experts tell the Reuters news agency.

Japan tightened restrictions last month on exports of three chipmaking materials to South Korea, home to memory chip titans Samsung and SK Hynix, threatening to disrupt the global tech supply chain as it provides about 70 percent or more of the restricted products to the world.

While the move highlights Japan Inc’s firm place in the industry even after its once-mighty giants like Sony lost out to nimble Chinese and Korean rivals, it has fuelled concerns that its grip on the niche market for fluorinated polyimides, photoresists and hydrogen fluoride could loosen.

“South Korean companies cite quality and stable supply as reasons for choosing Japanese materials. But this has made them aware of the need for change and they are already taking action,” a source at a Japanese materials supplier said.

“This will hit us like a body blow.”

Samsung, for instance, has stepped up testing of non-Japanese photoresists and hydrogen fluoride, several sources familiar with the chip supply chain said.

Soulbrain, a South Korean supplier of hydrogen fluoride to Samsung and Hynix – the world’s number one and number three chip vendors – is aiming to match the purity of Japanese hydrogen fluoride at a plant that is still under construction.

Industry experts, however, note it would take time for South Korean firms to move up the value chain as the three hi-tech materials are not easy to replicate.

Japanese suppliers “have built up their capabilities through decades-long experience of developing products,” Atsushi Ikeda, Citigroup analyst, said.

“The accumulation is just too big for new players.”

Top photoresist supplier Tokyo Ohka Kogyo says it takes up to two years to develop new resists.

‘Rare earth shock’

From South Korea, the curbs are likely to elicit a response similar to Japan’s during the “rare earth shock” nearly 10 years ago, when China’s restriction on exports of rare-earth minerals used in electronic devices forced Japan Inc to find alternate supplies, industry participants said.

“Under the circumstances, anyone would do that,” said the source at the Japanese supplier that has been hit by the curbs.

Seoul has already pledged one trillion won ($850m) a year to subsidise the domestic chip supply chain to accelerate the buildup of knowledge needed for firms to catch up in more advanced fields.

A senior executive at Soulbrain said the government had expedited paperwork so its new plant could be completed faster.

Soulbrain is looking to complete construction by end-September and run tests to see if it can mass-produce high-purity hydrogen fluoride, the executive said.

In photoresists, Samsung is trying to curb its reliance on Japan for the advanced materials, although sources say it faces big hurdles. The company, however, uses materials from local supplier Dongjin Semichem for photoresists used in chips with less fine circuit patterns, Japanese supply chain sources said.

Only three Japanese firms, Tokyo Ohka, JSR and Shin-Etsu Chemical, currently supply high-quality materials used in advanced chip production technology, known as extreme ultraviolet lithography, globally.


Tokyo Ohka and other materials makers grew hand in hand with electronics conglomerates NEC, Toshiba and Hitachi, the world’s top chipmakers in the late 1980s.

Even after Japanese chipmakers lost ground to South Korea, the suppliers continued to thrive, thanks to early inroads in overseas markets and the strength of their local supply chains.

But in the wake of the latest curbs, prompted by a decades-old dispute between the Asian nations over compensation for forced South Korean labourers at Japanese firms during World War II, suppliers in Japan are having to deal with repercussions beyond the three restricted materials, industry sources said.

Korean chipmakers are now asking Japanese suppliers to speed up shipments of materials that Japan has large market shares of, from silicon wafers to polishing slurries, for fear of further restrictions, the sources said.

Japanese suppliers have so far refrained from directly commenting on how the curbs will affect their business, claiming they had no inkling of the government’s decisions beforehand.

“We have very good relations with our Korean clients,” said Hideo Ohhashi, a spokesman for Tokyo Ohka.

“But this is up to politics.”


South Korean Court Orders to Reconsider Samsung Heir’s Bribery Case – Reports

MOSCOW (Sputnik) – According to the Yonhap News Agency, a scenario in which a jail sentence is imposed may strike a new blow to the country’s largest conglomerate, which is suffering the consequences of Japan’s ban on selling high-tech materials used in electronic equipment to Seoul.

The South Korean Supreme Court on Thursday ordered a lower court to reconsider the case of Samsung heir Lee Jae-yong, who had previously received a suspended jail sentence after a bribery and corruption scandal that had led to the ouster and imprisonment of the country’s former president, Park Geun-hye, media reported.

The scandal involving Park and her longtime friend, Choi Soon-sil, broke out in October 2016. Park was charged with forcing major corporations, including Samsung, to donate to foundations controlled by Choi, taking bribes, and forcing companies to sign contracts beneficial for Choi and her associates. Last year, Park was sentenced to 25 years in prison, while her friend received a 20-year term.

Lee was arrested on February 17, 2017, over several accusations, including giving a $6.38-million bribe for the equestrian training of Choi’s daughter. In August 2017, the South Korean court found Lee guilty of embezzlement, bribery and perjury, and sentenced him to five years in jail. Lee did not plead guilty to the charges brought against him and appealed the court’s decision.

In February 2018, Lee was released from prison after an appeals court in Seoul suspended his bribery sentence. His sentence was reduced to two and a half years, and Lee was released on four-year probation.

The media outlet notes that the Supreme Court is seeking this verdict to be reviewed, as several expensive “gifts” and donations given by Samsung to Choi’s family in exchange for some preferences can be considered to be bribes.


S. Korea lodges formal complaint as Japan’s trade curbs take effect

South Korea summoned Japan’s ambassador to protest against a decision to remove Seoul’s fast-track export status, which took effect yesterday amid a deepening political and economic feud.

Japan dropped South Korea from a so-called white list of favoured trade partners this month, which could mean more paperwork and on-site inspections for some Japanese exporters and potentially slow supplies of a range of goods.

The decision prompted South Korea to drop Japan from its favoured trading list and scrap an intelligence-sharing agreement.

South Korean deputy national security adviser Kim Hyun-chong said it was deeply regrettable that Japan’s decision to scrap fast-track export status for South Korea had taken effect.

Seoul would be willing to reconsider its decision to end the intelligence-sharing pact if Tokyo corrected its “unjust measures”, Mr Kim told a news conference.

“I want to stress, the ball is in Japan’s court,” he said.

Ties between the two countries worsened late last year after South Korea’s Supreme Court ordered compensation for some Koreans forced to work at Japanese firms during Japan’s 1910-45 occupation of the country.

South Korea’s Vice-Foreign Minister Cho Se-young called in Japan’s ambassador Yasumasa Nagamine to lodge a formal complaint, and demand that the “white list” decision be reversed, South Korea’s Foreign Ministry said in a statement.

“Cho pointed out that the measure was clear retaliation for the court ruling and posed a grave challenge that shook the foundation of the two countries’ cooperative relations,” the ministry said.

Mr Nagamine declined to comment on the complaint. But Japanese Chief Cabinet Secretary Yoshihide Suga repeated that Tokyo’s stance was appropriate and blamed South Korea for its action on the issue of forced labourers for the strained ties. “Relations between Japan and South Korea are in an extremely difficult state due to the repeated negative and irrational actions from the South Korean side,” Mr Suga told a regular news conference, without elaborating.

At a separate meeting, the South Korean government pledged to invest 5 trillion won (S$5.7 billion) from 2020 to 2022 to stabilise supply chains in affected sectors of the economy. “We once again urge Japan to refrain from further worsening the situation and sincerely respond to our offer of dialogue to restore relations,” Prime Minister Lee Nak-yon told the meeting.

Mr Kenji Kanasugi , director-general of the Japanese Foreign Ministry’s Asian and Oceanian Affairs Bureau, will arrive in Seoul today for talks, according to South Korea’s Foreign Ministry. Mr Kanasugi, who also serves as Japan’s nuclear envoy, is scheduled to meet his South Korean counterpart Lee Do-hoon to discuss resuming talks between North Korea and the U S.

The escalating row between Japan and South Korea has raised US concerns about three-way security cooperation with its top two regional allies in the face of North Korea’s growing nuclear and missile programmes.

A senior State Department official said on Tuesday that Washington hoped the dispute had hit “rock bottom” and the neighbours would start to rebuild their relationship.

Mr Cho also met US ambassador Harry Harris in Seoul yesterday and emphasised South Korea’s decision to end the intelligence-sharing arrangement with Japan was unrelated to the alliance with the US and that it would continue to maintain trilateral cooperation, the Foreign Ministry said in a statement.


South Korea stops security pact with Japan

South Korea announced Thursday it would not renew a pact with Japan to share military intelligence. Signed in 2006 the pact allowed the two US allies to directly share classified military information.

The General Security of Military Information Agreement (Gsomia), signed between Japan and South Korea in 2016, was aimed to share information about North Korea’s nuclear and missile capacity.

Seoul said it was no longer in its national interest to continue sharing confidential information with its neighbor during a sharp deterioration in ties.

“It is a pro-forma agreement that South Korea has with some 20 countries. It provides the protocol to share sensitive, classified information,” says Daniel Pinkston, a lecturer on international relations with Troy University in Seoul.

“If there is some sensitive data, for instance radar tracking data from a North Korean missile launch, that under this agreement can be shared directly.

This is now impossible. “If there is a situation in the future that needs sharing of intelligence, this is now problematic because they can’t do it. There is a workaround with the US as an intermediary, but it is cumbersome and can be inefficient and time consuming.

Tokyo said it would “strongly” protest the move and urged South Korea to reconsider.

According to Pinkston, Seoul’s latest step is part of deteriorating relations between Seoul and Tokyo,” says, “a symptom of rough bilateral relations.”

Never friendly

Relations between Japan and Korea were never very friendly. Between 1910 and 1945, the peninsula was a Japanese colony. During the Second World War, the Japanese army used thousands of South Korean women as sex slaves, euphemistically called “comfort women,” but, in the eyes of Seoul, never properly apologized for it.

Apart from bad memories over an unresolved past, relations keep on being hampered by a territorial dispute over the Dokdo or Tekeshima islets group in the Japan sea, claimed by both countries.

In 2015, Japan and South Korea set up the “Reconciliation and Healing Foundation” to “finally and irreversibly” settle the issue over Korean women who were forced into sexual slavery under the 1910-45 Japanese occupation of the Korean Peninsula.

But in July, the South-Korean government dissolved the foundation after criticism by victims and civic groups who said that Japan had failed to sincerely apologize and take legal responsibility for the wartime atrocities.

Japan reacted angrily and imposed tighter regulations of exports to South Korea of certain materials used in semiconductors and displays, claiming that the reason for the move was for national security.

“It affects the supply chain of big firms like Samsung,” says Pinkston. “The Japanese government says it is because of lack of security measures by South Korea,” making South Korea a “national security risk” for Japan. On August 2, to revoke South Korea’s preferential trade status, citing “security concerns,” to take effect on August 28. “This issue was not resolved diplomatically, so (the decision to not renew the Gsomia) was the answer of the Moon administration,” he says.


Meanwhile North Korea is likely to welcome the move. Over the last year, there was a significant thaw between Pyongyang and Seoul, facilitated by two top-level meetings between US president Donald Trump and North Korean leader Kim Jung-Un, and three meetings between Kim and South Korean president Moon Jae-In.

“It is a kind of win for them,” says Pinkston, pointing out that it won’t change much in the overall relationship between the two Korea’s.

“I don’t think we will see real results” in reconciliation negotiations, because it would require a “fundamental change” in North Korea’s ideology. The overall position did not change and I expect the tensions to come back at some point,” he says.