Invest KOREA

According to Yonhap News,

FTA excluded Koreathe country from its Risk Countries List

(SEOUL = Yonhap News) Korea has finally been removed from the Risk Countries List.

The board of directors of the Foreign Trade Association (FTA) met last month in Brussels and decided to exclude Korea from the Business Social Compliance Initiative (BSCI) Risk Countries List, according to the Korea International Trade Association (KITA).

The exclusion from the list means that Korean companies exporting to Europe will no longer have to be audited by the BSCI in the fields of labor and working environment.

The FTA is the largest trade association and brings together 1,198 giant retailers and global brand companies, including Carrefour and Adidas.

The classification as a risk country is based on the Human Development Index of the United Nations, the Corruption Perceptions Index of Transparency International and the level of implementation of the International Labour Organization conventions.

A company on the list can be subject to BSCI audits at the request of buyers and may be forced to cease a deal if it rejects an inspection or fails to comply with BSCI standards.

BSCI audits include an examination of company records, site inspections and interviews of workers and managers.

The inspection is mainly focused on labor laws (guarantee of wages and union activity) and industrial safety (safety equipment, lighting, ventilating system and hygienic conditions).

Korea has been classified as a risk country for the last 10 years and received inspections by the BSCI. Eleven domestic companies were subject to the BSCI audits as of September.

This classification has contributed to the “Korea Discount” phenomenon and contributed to negative perceptions of Korean companies and products among buyers worldwide.

The Non-tariff barrier Council Secretariat of KITA has worked with the Ministry of Trade, Industry & Energy and the Ministry of Foreign Affairs to resolve this matter soon after receiving a complaint from a domestic export company in October regarding the BSCI.

KITA Chairman Han Duk-soo, who was a part of the economic delegation of Korean President Park Geun-hye’s European tour last month, visited FTA to explain the outcomes of labor reforms and firmly request that Korea be excluded from the list.