A South Korean court has convicted two contractors involved in Taiwan's submarine program for leaking designs of torpedo-launching systems, describing the case as a potential “diplomatic burden” for Seoul, according to a ruling seen by Reuters. The Masan Branch of the Changwon District Court sentenced the CEO of one South Korean contractor to two and a half years in prison and gave two employees of another firm prison terms of one and a half years each. The ruling did not disclose the names of the defendants or the companies, though it listed their lawyers, who declined to comment.

The contractors, hired to construct torpedo-launching tubes and storage for Taiwan's submarine project, were accused of leaking highly classified design information. The court noted that the case could become a “major diplomatic burden” for South Korea. “This crime could pose a significant threat to South Korea’s security, as strategic technology was exported without approval from the Defence Acquisition Programme Administration (DAPA), and the recipient is Taiwan, which has tense relations with neighboring countries in East Asia,” the ruling stated. DAPA is South Korea’s national regulator for arms sales.

South Korea maintains formal diplomatic ties only with Beijing, not Taipei, as China considers Taiwan its territory—a claim Taiwan rejects. The defendants denied wrongdoing, arguing that the information shared with Taiwan did not involve trade secrets or sensitive technology that required export permits. Taiwan’s defense ministry referred inquiries to CSBC, the Taiwanese shipbuilder leading the submarine construction, which did not immediately respond.

Taiwan aims to build eight submarines, though the program has faced delays; the prototype conducted its maiden sea trial in June. Military modernization is a central policy for Taiwan, which has pledged increased defense spending in response to the growing threat from China, including the development of domestic submarines. The government plans to raise defense expenditure by 20% next year, exceeding three percent of GDP, to invest in new equipment and signal to the US its commitment to military strengthening. In 2023, Reuters reported that South Korean authorities had charged a third contractor involved in Taiwan’s submarine program for violating trade laws, citing the risk of Chinese economic retaliation. That contractor’s conviction has since been overturned.