{"id":2556,"date":"2023-07-28T00:00:43","date_gmt":"2023-07-28T00:00:43","guid":{"rendered":"http:\/\/localhost:8080\/the-story-behind-sk-hynixs-aaa-rated-global-compliance-program\/"},"modified":"2026-06-10T11:05:09","modified_gmt":"2026-06-10T11:05:09","slug":"the-story-behind-sk-hynixs-aaa-rated-global-compliance-program","status":"publish","type":"post","link":"https:\/\/news.skhynix.com\/en\/the-story-behind-sk-hynixs-aaa-rated-global-compliance-program\/","title":{"rendered":"The Story Behind SK hynix\u2019s AAA-Rated Global Compliance Program"},"content":{"rendered":"

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In an era where technology has the means of creating power and leverage, the correct handling and export of technological products is not just about managing corporate risks. It is now also related to protecting a country\u2019s economic security in addition to promoting human rights and international peace.<\/p>\n

Consequently, the Global Compliance team at SK hynix has invested significantly in establishing a management system for controlling the export of strategic items*<\/span>. Although the company has been recognized for its robust export ecosystem, it is not resting on its laurels and is committed to further strengthening its capabilities in the field of export transactions.<\/p>\n

*<\/span> Strategic items: Goods that require restrictions such as export permits for the sake of maintaining national security and international peace.<\/p>\n

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Developing a AAA-Rated Export Ecosystem for Semiconductors<\/h3>\n
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To understand why semiconductors are deemed to be strategic items in this day and age, it is important to consider their potential applications. As semiconductors can be implemented in the manufacturing, development, and use of weapons of mass destruction if exported through the wrong channel, a thorough and systematic export control on these products is needed. As such, the international community has established a multilateral export control system to prevent the proliferation of nuclear and conventional weapons. Moreover, the United Nations (UN) enforces the control of strategic items for all member states through a Security Council resolution. As for members of SK hynix\u2019s Global Compliance team, they are making various efforts in this area, including establishing a company-wide system for strategic items and export control in addition to educating stakeholders.<\/p>\n

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\u25b2 Vice President Youn-wook Kim of the Corporate Sustainability Management team pictured with the ministerial award he accepted on behalf of SK hynix<\/p>\n

As a result, the team received the AAA certification<\/span><\/a>, the highest rating for a compliance program*<\/span> (CP), from South Korea\u2019s Ministry of Trade, Industry, and Energy (MOTIE) in July 2023. SK hynix also received the ministerial award from MOTIE at the Trade and Security 2023 event in recognition of its contributions to national trade security.<\/p>\n

*<\/span> Compliance Program: An independent system within a company that can evaluate and review its exports, so companies are able to conduct trade transactions with minimal administrative burden and strenuous procedures.<\/p>\n

To find out more about the work required to achieve the rating, SK hynix\u2019s Newsroom met with Global Compliance team members Juwon Hwang, Donghyeon Kim, Yangyoo Lee, and Jaewoo Cho. The interviewees provided insights into their journey to the AAA rating, including the development of the company\u2019s nationally distinguished strategic items and export control management system.<\/p>\n

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Navigating Towards the Future With a Top-Rated Strategic Items and Export Control Management System<\/h3>\n
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The Global Compliance team has become one of the busiest groups at the company as the management of semiconductors has changed greatly over the years. Widely used in various industries, semiconductors are now a key technology and a strategic commodity that need to be managed at the national level as they are closely tied with operations that can power everyday machinery to high-tech weaponry. It is the Global Compliance team that is responsible for handling and controlling the export of such important products.<\/p>\n

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\u25b2(From left) Global Compliance team members Jaewoo Cho, Donghyeon Kim, Juwon Hwang, and Yangyoo Lee<\/p>\n

The team monitors foreign countries\u2019 regulations, provides consultations, and responds to related issues. In essence, the team created a stable export ecosystem by ensuring that SK hynix\u2019s transactions comply with the various regulations of foreign governments, including domestic and international trade laws such as the U.S. Export Administration Regulations (EAR).<\/p>\n

More specifically, the Global Compliance team\u2019s work scope includes: export control of strategic items, sanctions monitoring of the Denied Persons List*<\/span>, preventing anti-trust and anti-corruption activities, personal data protection, and M&A reporting. According to team member Jaewoo Cho, controlling the export of strategic items and monitoring the Denied Persons List are two of the team\u2019s bigger tasks. These duties are also directly connected to obtaining an AAA certification for a CP.<\/p>\n

*<\/span> Denied Persons List: Individuals or entities whose transactions are restricted or require caution in the interest of international security and world peace.<\/p>\n

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\u25b2 Jaewoo Cho (right) explains the process of establishing various programs to achieve the AAA certification for its compliance program<\/p>\n

\u201cAs the importance of managing strategic items and export controls has heightened, SK hynix has been enhancing its capabilities to create a system that is compatible with these developments,\u201d Cho said. \u201cAfter being approved by the government to run the autonomous compliance program in 2005, we obtained an AA rating in 2014. Over the last two to three years, we strengthened our efforts in this area and finally received the highest CP rating of AAA in July 2023.\u201d<\/p>\n

To reach this milestone, standards for foreign trade laws such as the U.S. EAR were applied when the company classified its strategic items. In addition, SK hynix developed a network for handling strategic items and export control called the Global Compliance Management System (GCMS). As the system classifies strategic items and the Denied Persons List, it helps the company\u2019s stakeholders including its employees and partner organizations to legally conduct transactions.<\/p>\n

Global Compliance team members also undertook various measures such as running training sessions for the entire company\u2019s workforce and its partners who supply major equipment for strategic items. Through the company\u2019s internal and external efforts that included taking part in reforming the government\u2019s compliance system, SK hynix was able to meet the requirements to achieve the AAA rating.<\/p>\n

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\u25b2 Juwon Hwang (center) explains the importance of managing strategic items and export controls<\/p>\n

Team leader Juwon Hwang believes that the results achieved by the team will go a long way toward creating a robust export ecosystem during a time of increased competition in the global semiconductor market.<\/p>\n

\u201cThe status of semiconductors has changed to the point where they can be used to leverage power and keep other countries in check. As competition for superiority in the global semiconductor market is also fierce, it has become an important task to manage semiconductor technology and equipment without violating foreign regulations,\u201d Hwang said. \u201cThrough GCMS, SK hynix will manage strategic items and export control while contributing to international peace and the promotion of human rights by preventing strategic items from being exported to unethical groups or parties on the Denied Persons List.\u201d<\/p>\n

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GCMS Elevates Management of Strategic Items and Export Control<\/h3>\n
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As GCMS is an intricate system with various components and functions, its implementation was one of the most crucial and arduous tasks for the Global Compliance team on its road to achieving the AAA certification.<\/p>\n

\u201cIn addition to classifying strategic items from all assets that are bought, sold, or disposed of by the company, the system also refers to foreign regulations to identify parties on the Denied Persons List,\u201d Jaewoo Cho explained. \u201cSimply put, it is a system that monitors the risks of conducting business with another party in real time and even restrains transactions when necessary.\u201d<\/p>\n

GCMS can identify nearly 300,000 types of materials at SK hynix to determine if they are strategic items and whether these items have violated any regulations related to export control management. When GCMS rejects an export permit, SK hynix cannot proceed with the export. The system also provides financial protection as all transactions with an opposing party are blocked until it is confirmed they are not on the Denied Persons List\u2014which is automatically updated daily.<\/p>\n

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\u25b2 (From left) Donghyeon Kim and Yangyoo Lee discuss the importance of compliance operations<\/p>\n

Yangyoo Lee revealed that as GCMS incorporates the entire company\u2019s compliance work, it took two years to build\u2014highlighting the significant time and money invested in the project. In particular, a lot of effort was taken to coordinate the operations with various departments and to communicate the importance of the compliance system to all stakeholders.<\/p>\n

\u201cWe wanted to understand operations in the respective internal and external sites before integrating their operations into the system. We also visited our partners to explain the need to implement GCMS,\u201d Lee said. \u201cAlthough work practices could have felt more stringent after the introduction of GCMS strengthened regulations and procedures, most of the employees have fortunately been very accepting of the changes.\u201d<\/p>\n

Donghyeon Kim also stressed the importance of all parties coming to a consensus on the issue.<\/p>\n

\u201cWe want all employees to be vigilant against regulation violations and actively engaged in compliance operations and training,\u201d Kim stressed, \u201cIn response, our Global Compliance team will work harder to develop GCMS into a world-renowned management system for export control and strategic items.\u201d<\/p>\n

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AAA Certification to Enhance Public Trust and Competitive Edge<\/h3>\n
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SK hynix\u2019s AAA-rated CP is expected to provide the company with an edge in the semiconductor export market. Hwang stresses that this achievement means the company has been recognized by the government for its trade security credentials. In particular, he believes that this public trust will only further enhance the company\u2019s competitiveness in the future.<\/p>\n

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\u25b2 Team Leader Juwon Hwang (center) explains the process of obtaining the AAA certification and its importance to the company<\/p>\n

\u201cOverseas regulatory authorities will increasingly trust SK hynix\u2019s CP over other companies, and we will be able to export equipment to countries such as the U.S. and China more quickly through a shortened export permit process,\u201d Hwang said. \u201cAll of this will lead to improved competitiveness for the company.\u201d<\/p>\n

While the Global Compliance team is proud of taking its successful first steps, members agree that \u201cthey are just getting started.\u201d<\/p>\n

\u201cWe are proud that our management system for strategic items and export control has been recognized as one of the best in the country,\u201d Kim said. \u201cWe still have the task of spreading the system to our overseas subsidiaries, so we will be even busier in the second half of 2023.\u201d<\/p>\n

Accordingly, the next phase for the team is entering the international stage. As the current GCMS is designed with a focus on the company\u2019s headquarters and operations in South Korea, applying the system to overseas subsidiaries requires closer analysis and incorporation of foreign regulations. In the second half of 2023, the team will further refine the GCMS in its headquarters while also working to expand the system to its overseas subsidiaries starting with the Chinese headquarters in Wuxi.<\/p>\n

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\u25b2 On behalf of SK hynix, Vice President Youn-wook Kim receives the ministerial award from MOTIE at Trade and Security 2023<\/p><\/div><\/a>

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\u25b2 On behalf of SK hynix, Vice President Youn-wook Kim receives the ministerial award from MOTIE at Trade and Security 2023<\/p><\/div><\/a>

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\u201cThanks to the hard work of our members in the Global Compliance team, I received the ministerial award at Trade and Security 2023 on behalf of the company,\u201d Kim said. \u201cI believe the years of hard work in building GCMS and establishing our management system for strategic items and export control have paid off. I would like to express my gratitude to the team members for their hard work.\u201d<\/p>\n

After SK hynix received such recognition from regulators and authorities, Kim expressed his ambition to support building an advanced compliance system within a company and to become a role model for strategic item management and export control.<\/p>\n

\u201cSK hynix will continue to focus its attention on building a globally-recognized compliance system, where we will comply with domestic and international laws and regulations to safeguard the company\u2019s position in the global market,\u201d Kim said.<\/p>\n","protected":false},"excerpt":{"rendered":"

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