Key takeaways:

• The U.S. Energy Department has placed South Korea on a watchlist, sparking controversy and worry over bilateral relations.
• The status stems from mishandling of sensitive information by visitors to U.S. labs, according to U.S. envoy Joseph Yun.
• South Korean officials are seeking explanations and potential reversal of this designation, viewing it as a significant diplomatic setback.

SEOUL—Tensions have erupted between the United States and South Korea following the recent designation of South Korea as a “sensitive country” by the U.S. Department of Energy. This classification groups South Korea alongside nations like China, North Korea, and Iran, prompting significant concern among South Korean officials regarding its impact on diplomatic and cooperative relations.

Joseph Yun, the acting U.S. ambassador, attributed the watchlist status to issues related to the mishandling of sensitive information at U.S. laboratories by visitors from South Korea. "South Korea was put on this list because there was some mishandling of sensitive information," Yun remarked at a meeting of the American Chamber of Commerce in Korea, indicating that more than 2,000 South Koreans had visited these labs last year. While South Korean officials expressed surprise at this designation, having learned of it through media rather than formal channels, Yun downplayed its severity, stating, "It is not a big deal." Despite this assertion, the fallout from the designation is being taken seriously in Seoul, where Vice Ministers prepared to brief acting President Choi Sang-mok on a plan of action.

On March 11, when questioned in Parliament, Foreign Minister Cho Tae-yul conveyed the government's shock at the news, which was initially reported by the Channel News Asia. He suggested that the classification stemmed from a security problem related to a Department of Energy research lab. This issue reportedly involved the firing of a contractor who attempted to smuggle proprietary nuclear reactor design software while returning to South Korea.

The United States clarified that this move had taken place under the previous Biden administration and stressed that the designation does not imply an adversarial relationship. It merely places South Korea in the lowest tier on the Sensitive Country List, which also includes states like India and Russia. A spokesperson from the Los Angeles Times reported that inclusion does not bar cooperation but mandates additional internal reviews for engagements with designated countries.

However, the political ramifications have stirred anxiety among South Korean legislators who see this as unprecedented within the context of the long-standing U.S.-South Korea alliance. Lawmakers note this move occurs during a time when discussions about South Korea developing its own nuclear capabilities have become more pronounced, particularly amidst U.S. uncertainties about military commitments to the region. Observers have opined that the political shift—largely prompted by historical mistrust stemming from remarks by former President Trump—may have fueled Washington's decision to place South Korea in this category.

In a recent statement, the South Korean Foreign Ministry indicated that the designation relates mainly to "security-related matters" and not foreign policy shifts. Yet, concerns remain that this status might limit technological cooperation in critical sectors like nuclear energy and artificial intelligence, potentially affecting research projects crucial to South Korea's development. This apprehension is echoed by experts such as Moon Joo-hyun from Dankook University, who warned that the new controls could hamper the atmosphere for collaborative research.

The U.S. Department of Energy’s designation, which is set to formally take effect by April 15, underscores a pivotal moment in U.S.-South Korea relations. Lawmakers and officials in South Korea are now intensifying efforts to engage with U.S. counterparts to alleviate fears and clarify the future of diplomatic ties, as the fallout from this designation continues to unfold.

Find more details on this development in the original reports from Reuters and Channel News Asia.