US official says South Korea's watchlist status due to mishandling of lab data

By Hyunjoo Jin and Josh Smith

SEOUL (Reuters) - South Korea was placed on a U.S. Department of Energy watchlist because visitors to its labs mishandled sensitive information, Joseph Yun, acting U.S. ambassador to South Korea, said on Tuesday.

The U.S. Department of Energy confirmed this week that it had designated South Korea a "sensitive" country in January, but did not explain why.

South Korea's acting President Choi Sang-mok was to be briefed on Tuesday by vice ministers on their response to being listed, and Industry Minister Ahn Duk-geun is expected to ask the U.S. Energy Secretary to remove South Korea from the list of sensitive countries during his visit to the U.S. this week, according to government sources.

Speaking to the American Chamber of Commerce in Korea, Yun said the designation was limited to the department's facilities, and does not have wider implications for cooperation between the two allies.

"South Korea was put on this list because there was some mishandling of sensitive information," he said.

He did not elaborate on the issue, but said last year there were more than 2,000 South Korean students, researchers, and government officials who visited U.S. labs.

"It is not a big deal," he said. "There were some incidents because there were so many South Koreans going there."

The Department of Energy said in a report last year that it had fired a contractor who tried to board a flight to South Korea with "proprietary nuclear reactor design software" owned by the Idaho National Laboratory.

That individual, who was being investigated by U.S. law enforcement, had been in contact with an unnamed foreign government, the report said, without identifying the country.

It was not immediately clear if that case contributed to the designation, and the DOE and State Department were not immediately available for comment.

The U.S. decision to add South Korea to the list was taken by the previous administration of then-President Joe Biden, a DOE spokesperson has said.

The designation, which placed U.S.-allied South Korea on the lowest tier of a list that also includes China, Taiwan, Israel, Russia, Iran and North Korea, sparked controversy and debate in Seoul, which said it had not been notified by Washington.

It came as South Korean officials increasingly raised the prospects of some day pursuing their own nuclear weapons, and in the aftermath of a shock martial law in December that threw the country's leadership into crisis.

Seoul's foreign ministry said on Monday, however, that the DOE decision was understood to have been due to "security-related matters" linked to a research centre, and not South Korea's foreign policy.

The DOE spokesperson said the designation, which is due to go into effect in April, placed no new restrictions but mandates internal reviews before cooperation or visits to the listed countries.

(Reporting by Josh Smith and Hyunjoo Jin; Additional reporting by Hyunsu Yim and Cynthia Kim in Seoul, and David Brunnstrom and Timothy Gardner in Washington; Editing by Ed Davies)