SEOUL - The US Department of Energy put South Korea on a watchlist because visitors to its laboratories mishandled sensitive information, Joseph Yun, the acting US ambassador, said on Tuesday.

The designation, which relegated the US ally to the lowest tier of the list of sensitive countries, sparked controversy and debate in Seoul, which said it had not been notified by Washington.

"South Korea was put on this list because there was some mishandling of sensitive information," Yun said in remarks to the American Chamber of Commerce in Korea.

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

The designation was limited to the department's facilities, Yun added, and did not have wider implications for cooperation between the allies.

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

This week the Department of Energy confirmed it had designated South Korea a "sensitive" country in January, but did not explain why.

Vice-ministers in Seoul were set on Tuesday to brief Acting President Choi Sang-mok on their response, while Industry Minister Ahn Duk-geun is expected to ask for South Korea to be dropped from the list when he visits the United States this week, government sources have said.

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In a report last year, the department said 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 US 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. Officials in the department and state department were not immediately available for comment.

The US decision to add South Korea to the list was taken by the previous Biden administration, a spokesperson for the US Department of Energy has said.

It came as South Korean officials increasingly raised the prospect 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.

On Monday, however, Seoul's Foreign Ministry said the DOE decision was understood to have stemmed from "security-related matters" linked to a research center, and not South Korea's foreign policy.

The DOE spokesperson said the designation, due to take effect in April, set no new restrictions but mandates internal reviews before cooperation or visits to listed countries.

Meanwhile, Yun called on South Korea to help reduce the US trade deficit with Seoul, which has more than doubled since the first Trump administration. "To the new administration in Washington, that is troubling," he said.

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South Korea needs to scrap barriers in the agriculture, digital and service sectors, he added.