법무부 영문잡지 / magazine / 2016. 4.

Recent Trends of Law & Regulation in Korea Vol.22

spring 2016

Expert Column

- The Paris Climate Agreement and Its Legal Implications Introduction to the Korean Legal System

- A Brief Overview of Korean Regulatory Regimes on Climate Change Interview

- Green Climate Fund,“Our Action Must Happen Now, Not Tomorrow.”

ISSN 2288-4041

Recent Trends of Law & Regulation in Korea Vol.22

spring 2016

Expert Column 04 The Paris Climate Agreement and Its Legal Implications

Introduction to the Korean Legal System 08 A Brief Overview of Korean Regulatory Regimes on Climate Change

Law and Regulation 12 Enactments and Amendments of Law 30 Court Decisions Cover Story The 2015 United Nations Climate Change Conference, COP 21 or CMP 11 was held in Paris, France, from 30 November to 12 December 2015. It was the 21st yearly session of the Conference of the Parties (COP) to the 1992 United Nations Framework Convention on Climate Change (UNFCCC) and the 11th session of the Meeting of the Parties to the 1997 Kyoto Protocol. The conference negotiated the Paris Agreement, a global agreement on the reduction of climate change, the text of which represented a consensus of the representatives of the 196 parties attending it. The agreement will become legally binding if joined by at least 55 countries which together represent at least 55 percent of global greenhouse emissions.

The picture on the cover page of the RTLR Vol. 22 is the Eiffel Tower in Paris. The tower was built in 1889 and has become a landmark tourist site of Paris.

Interview 34 “Our Action Must Happen Now, Not Tomorrow.�

Recent Events 40 Entry Threshold Lowered for Chinese Tourists 40 The 2016 International Conference on Improving the Business Environment

Policies of the Ministry of Justice 42 Expansion of Supporting Living Expenses to Guarantee Basic Livelihood for Refugee Status Applicants 43 Korea Embraces Resettling Refugees from Myanmar

Law in Your Daily Life 44 Housing Lease Protection Act for Foreigners

Ministry of Justice at a Glance 46 Need a Free Legal Aid?

Living in Korea 48 A Guide for Purchasing or Renting a Home in Korea

List of Useful Organizations 50 Government Departments 53 Readers Survey

Publisher Kim, Hyun Woong / Minister of Justice Editor Kim, Hochul / Deputy Minister for Legal Affairs Office Director KOO Sang-Yeop / ksy0320@spo.go.kr Vice Director Jeongsoo Soh / jssoh99@spo.go.kr Translator Kim, Hye In / kimbba85@naver.com Choi Bori / contact.bori@gmail.com Special Thanks to Jae Hyun Lee Youn Jiho Jae Min Park Yoon, Hye Jung Jin Sil Byeon Sunghee Jung Kim Dol Ly An, Hang Rin Joo Young Park Choi Seung Won Edited in International Legal Affairs Division Designed by AandF communication Published by Ministry of Justice

Ministry of Justice, Government Complex Gwacheon, 47 Gwanmoonro, Gwacheon-si, Gyeonggi-do, 427-720, Republic of Korea TEL: 82-2-2110-3661, FAX: 82-2-2110-0327/ ildhd@moj.go.kr, www.moj.go.kr

Feature contributors Expert Column - Jai-chul CHOI Since May 2014, Ambassador CHOI is working as chief negotiator the post- 2020 climate change negotiation on behalf the Korean government. He is a career diplomat and environmentalist by training. He worked at several Korean overseas missions, inter alia, three times at the Korean embassy in Paris and two times as the Korean delegation to the OECD in Paris. He served as Director-General for International Economic Affairs, MOFA (2007.2-2009.2) and as Ambassador to the Kingdom of Morocco (2009.3-2012.3).

Ambassador CHOI is also serving as president of the executive commission of the Bureau of International Exposition (BIE) since November 2013(reelected in November 2015).

Introduction to the Korean Legal System - Hong Sik, Cho Mr. Hong Sik, CHO is a professor at the School of Law at Seoul National University. He achieved J.S.D. at U.C. Berkeley School of Law and LL.B. at the College of Law, Seoul National University. Mr. Cho was a Judge in Busan District Courts, Korea. He was once the Chief Director at the Center for Energy & Environmental Law and Policy of Seoul National University. He is the President of Korean Environmental Law Association.

Gina Jeehyun Choi Gina Jeehyun Choi is an attorney at Environment Practice Group, Anti-Corruption & Corporate Compliance Practice Group and Antitrust & Competition Practice Group of Kim & Chang. Ms. Choi represents major multinational and domestic corporate clients before the administrative agencies and courts in regulatory matters. She has extensive experience in advising clients on complicated multi-jurisdictional regulatory and compliance issues. Ms. Choi received her LL.M. from New York University School of Law in 2010 and LL.B. from Seoul National University College of Law in 1999.

Interview - Ms. Héla Cheikhrouhou Ms. Héla Cheikhrouhou is the Green Climate Fund’s first Executive Director. Ms. Cheikhrouhou, a Tunisian national, was previously Director of the Energy, Environment and Climate Change Department at the African Development Bank, where she took a lead role in scaling up green growth and climate resilient investments, with innovative blending of public, private, and climate finance. Educated in Tunisia and Canada, she started her career in the private sector as an investment banker with Citibank for seven years, lastly responsible for market risk management in North Africa. She has further spent ten years working in multilateral development banks, first in the Latin America and Caribbean region of the World Bank, and then for the African Development Bank, initially with the responsibility for growing the Bank’s infrastructure project finance activities across Africa.

Emblem

This emblem symbolizes that the Ministry of Justice is the leading state authority which promotes liberty, democracy, equality, justice and respect for humanity and achieves prosperity for the nation through fair and transparent enforcement of law. The emblem is made up of a person holding a scale, three pillars that support the scale and a flower with five petals.

This emblem symbolizes that the Ministry of Justice is the cornerstone for the safeguard of law and order, the protection of human rights and the prosperity of the nation.

This emblem stands for fair and equal enforcement of law and the body of law.

One flower with five petals: The flower as a whole symbolizes prosperity, growth and vitality of the nation and each petal symbolizes liberty, democracy, equality, justice and respect for humanity.

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Recent Trends of Law & Regulation in Korea |

Expert Column

The Paris Climate Agreement and Its Legal Implications Jai-chul CHOI, Ambassador for Climate Change Ministry of Foreign Affairs, Republic of Korea

The draft decision of the Paris Agreement was finally proposed for adoption on Saturday evening of December 12, 2015. French Foreign Minister Laurent Fabius, serving as the President of the COP21, hurriedly but clearly declared the conclusion of negotiations by stating, “Looking out to the room, I see that the reaction is positive, I see no objections. The Paris Agreement is adopted.”

With the final strike of his gavel, the four years of intense negotiations had finally reached a historic moment in the global fight against climate change.

The Paris Agreement is a new framework for the Post-2020 climate regime replacing the current Kyoto Protocol regime, which was extended up to the year 2020. The Paris Agreement is designed to enhance the implementation of the UNFCCC by covering almost all of the world’s emissions with universal participation. To this end, in contrast to the Kyoto Protocol, the Paris Agreement has a hybrid structure in terms of its legal nature. One is the legally binding provisions that each country Party is to comply with. The other is the facilitative and voluntary provisions that each Party is encouraged to take action on. The Paris Agreement includes not only mitigation but also the adaptation and support of all Parties, unlike the mitigation focused commitments of developed countries under the Kyoto Protocol. More specifically, the Paris Agreement consists of the following six pillars - mitigation, adaptation, finance, technology, capacity building and transparency.

This article will focus on the legal aspect of the Paris Agreement along with the concept of the NDC as well as the key provisions related to the six pillars.

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Legal characteristics of the Paris Agreement and the new concept of the NDC The issue of legal form played a central role in drafting the Durban Mandate in 2011, which provided guidance for the then upcoming four year-long negotiations. The result was a mandate calling to 'adopt a protocol, another legal instrument or an agreed outcome with legal force under the Convention applicable to all Parties.' Despite the mandate’s ambiguity, the new agreement was expected to have legal force and be applicable to all Parties.

However, the negotiations came to a standstill for several critical reasons. Developing countries were against any idea of legally binding obligations and insisted that developed countries should take the lead by making compulsory commitments for action and support under a new agreement. On the contrary, developed countries wanted to reflect the changing reality of the world by engaging emerging economies in legally binding actions. The key question was on how to seek a balance between stringency and flexibility. The experiences from the Kyoto Protocol and the Copenhagen Accord had been widely discussed and shared among all those that were involved.

In the midst of all the hard work regarding this issue, a creative concept emerged. In 2013, the COP19 in Warsaw went from experiencing a bottleneck to a breakthrough with the Intended Nationally Determined Contributions (INDCs). The INDCs have emerged as a policy tool which will ensure a balance between stringency and flexibility. The INDCs mean that each Party will take its own climate action, taking into account its capacity and capability in light of different national circumstances. Each Party’s INDC shall provide relevant information which will facilitate clarity, transparency and understanding.

The Paris Agreement inscribed the INDCs as NDCs (Nationally Determined Contributions) in Article 3. All Parties are to undertake and communicate ambitious climate action via NDCs, while respecting the norm of progression over time. The global community shall assess collective progress towards achieving the long-term goals of the Agreement by undertaking a global stocktake in 2023 and every five years thereafter as stipulated in Article 14.

Key elements of the Paris Agreement : Six pillars 1. Mitigation (Article 4, 5, 6) Article 4 refers to the extent to which countries shall reduce their GHG emissions and the ways in which they strengthen their ambitions over time. Firstly, the Article sets out two goals regarding mitigation: to peak greenhouse gas emissions as soon as possible; and to balance the sources and sinks of greenhouse gases in the second half of this century.

In order to achieve these goals, the Parties shall submit to the UNFCCC

Secretariat their NDCs every five years with more ambitious mitigation targets than their previous ones, together with the relevant information to facilitate transparency, clarity and understanding of the NDC. The scope of the legal bindingness applied to the NDC is delicately elaborated. According to Article 4.2, each Party shall regularly prepare and communicate its NDCs. Once a Party submits its NDC with a mitigation target, that Party shall pursue domestic measures with the aim of achieving the objectives of its contributions. Thus, achieving a target contained in the NDC can be interpreted as politically binding rather than legally binding.

As agreed, developed country Parties should continue to take the lead by undertaking economy-wide absolute emission reduction targets.

Developing country Parties should continue to enhance their mitigation efforts, and are encouraged to move over time towards economy-wide emission reduction or limitation in the light of different national circumstances. Developing country Parties that submitted their NDCs will get support for the implementation process.

Based on Article 6, Parties can also engage on a voluntary basis in international cooperative approaches that involve the use of internationally transferred mitigation outcomes towards achieving their NDCs. These approaches may vary as long as Parties use them on the principle of sustainable development, environmental integrity and transparency, while avoiding double counting. Therefore, Article 6 is interpreted to serve as a basis of a ‘market mechanism’.

2. Adaptation & Loss and Damage (Article 7 and 8) Adaptation is vital in order to respond to the adverse effects of climate change that are already happening. Developing countries demanded the equal treatment of mitigation and adaptation in the new climate agreement. Some of them went further by insisting the legal parity of mitigation and adaptation. Developed countries were ready to accept the language on the crucial importance of adaptation but were against the introduction of parity. Against this backdrop, the Agreement stipulates adaptation as one of the core pillars of a climate action under the new climate regime together with mitigation.

Article 7 begins by setting out the global goal on adaptation of enhancing adaptive capacity, strengthening resilience and reducing vulnerability to climate change. Taking into account the specific nature of adaptation action that is country-driven, each Party should engage in the adaptation planning processes and the implementation of actions.

Parties should submit and update periodically an adaptation communication which will be registered to the public registry of the UNFCC Secretariat. Developing countries will be supported by developed countries to this end.

Loss and Damage is closely associated with impacts of climate change, including extreme events and slow-onset events, in developing countries that are particularly vulnerable to the adverse effects of

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climate change. Many developing countries, including small island developing countries, demanded that the compensation of loss and damage be recognized as a stand-alone issue. The question at hand was on who actually pays the compensation. After a series of informal high level consultations, developed countries finally accepted the inclusion of Loss and Damage in the Paris Agreement. However, the relevant COP decision explicitly states that Article 8 does not provide a basis for liability and compensation. Article 8 recognizes the importance of averting, minimizing and addressing Loss and Damage associated with the adverse effects of climate change.

3. Support: Finance, Technology and Capacity-Building (Articles 9, 10, 11) The Paris Agreement underlines the importance of adequate support to developing countries for climate action. Support includes finance, technology and capacity-building.

Climate finance was a major point of contention during the negotiations. It was a highly complex issue both politically and technically. Developed countries have committed to mobilizing jointly 100 billion USD per year by 2020 from public and private sources.

Developing countries insisted that a clear roadmap for scaling up the climate finance should be part of the Paris Agreement and a new goal beyond the 100 billion USD target needs to be set. On the other hand, developed countries stressed the need to reflect evolving capabilities and responsibilities of all countries, in particular, major emerging countries by expanding the donor base.

In the negotiation process, the notion of “other Parties in a position to do so� emerged as a middle ground for breaking a firewall between developed and developing countries. Article 9 reflects a delicate balance of interests of all Parties. It states that developed countries shall provide financial resources to assist developing countries for climate action and other Parties are encouraged to provide support voluntarily. A new collective quantified goal will be set before 2025 from the floor of 100 billion USD per year. The Green Climate Fund and the Global Environment Facility have been designated as the financial mechanism under the Paris Agreement.

Technology and capacity-building are important components for enhancing climate action of developing countries. International cooperation on technology and capacity–building has been significantly strengthened under the Paris Agreement. Article 10 recognizes the importance of strengthening cooperative action on technology development and transfer. These cooperative actions will be implemented through the current Technology Mechanism which is the Technology Executive Committee (TEC) and the Climate Technology Centre and Network (CTCN).

Article 11 of the Paris Agreement obligates Parties to enhance the capacity and ability of developing country Parties, in particular Small Island Developing States, to take effective climate change action. In this light, developed country Parties should enhance support for capacity-

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building actions in developing country Parties. Although developing Parties insisted that should be a new mechanism for capacity-building, it was concluded to enhance the existing institutional arrangement to support the implementation. Also it was decided that the Paris Committee meeting on capacity-building will be held and the involved members will annually focus on enhanced technical exchange on capacity-building, with the purpose of maintaining up-to-date knowledge on the successes and challenges in building capacity effectively.

4. Transparency (Article 13) The climate action and support undertaken by a country Party shall be nationally determined under the Paris Agreement. Accordingly, it is extremely important to track and verify the progress made in the implementation of NDCs of an individual country Party. In this context, the Paris Agreement establishes an enhanced transparency framework for action and support which aims to build mutual trust and confidence among countries. Article 10 provides general guidance for the purpose

and key operating principles of the transparency framework. The differentiation was a source of division between developed and developing countries. Developed countries preferred to establish a unified common transparency framework, while developing countries insisted on differentiated transparency framework building upon existing two- tiered review mechanism adopted at COP 16 in Cancun, Mexico.

The compromise was reached on the language of an enhanced transparency with built-in flexibility which takes into account the Parties’ different capacities.

Conclusion The Paris Agreement is a historic achievement that brings all countries together for the first time to combat climate change. Each country will take part in climate action and support, taking into account the principles of common but differentiated responsibilities and respective capabilities in light of different national circumstances. A global stocktake will be held every five years to assess the collective progress towards achieving long-term goals. An enhanced transparency framework will provide trust and confidence among countries for reviewing the performance of each country’s NDC. By doing so, the Paris Agreement sends a strong signal that the world is moving towards a low-carbon, climate resilient future. The prevailing sentiment of delegates was echoed by the COP 21 President Laurent Fabius in his final remarks; “The Paris Agreement allows each delegation and group of countries to go back home with their heads held high. Our collective effort is worth more than the sum of our individual effort. Our responsibility to history is immense.”

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Recent Trends of Law & Regulation in Korea |

Introduction to the Korean Legal System

A Brief Overview of Korean Regulatory Regimes on Climate Change

1

Hong Sik, Cho and Gina Jeehyun Choi 2

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1. Introduction Korean people are facing an enormous upheaval in regulatory regimes on climate change. Korea submitted the Intended Nationally Determined Contribution (“INDC”) containing plan to reduce greenhouse gas emissions by 37% from the business-as-usual (BAU, 850.6 MtCO2-eq) level by 2030 to the United Nations Framework Convention on Climate Change (“UNFCCC”) on June 2015 in order to prepare for the Paris Climate Change Conference of the UNFCCC in December 2015 (the “Paris Climate Conference”).3 Korea originally announced its voluntary mitigation target in 2009 to reduce greenhouse gas emissions by 30% from the BAU level by 2020 and adjusted the target upwards considering Korea’s leadership in the new global climate regime, which has strengthened through various efforts including hosting the Global Climate Fund and chartering the Global Green Growth Institute. This plan will be reviewed every five years in accordance with the Paris Agreement adopted by the Conference of the Parties (“COP”) during the Paris Climate Conference.

As a domestic effort to implement the Paris Agreement, the Korean government announced a reinforcement plan to respond to the climate change on February 25, 2016 including detailed plans for policy making and legislative changes and the upward shift of the leadership of the overall scheme responding to climate change from the Ministry of Environment (the “MOE”) to the Prime Minister’s Office. It is a crucial moment to review the Korean domestic regulatory regime on climate change to seek a desirable direction of the fast changes.

The Low Carbon, Green Growth Fundamental Act (the “LCGGFA” or the “Act”), the primary basis of Korean regulations responding to climate change, passed the plenary session of the National Assembly on December 29, 2009 after years of political debates and came into effect on April 10, 2010. 4 This sweeping piece of legislation asserted to dramatically reform Korean environmental regulation and to integrate environmental considerations into a broad set of policy choices.5 More than just a watershed moment in Korean environmental law, the Act also presents a unique approach to the diverse problems and opportunities currently presented by changing environmental and climate conditions. 6 The Act takes as its scope a general and inclusive understanding of the relationship between “green growth” and Korean society and economy.7 The LCGGFA provisions range from direct supervision of energy and emission-related business and consumption practices, 8 to channeled investment and stimulus for certain industries in relation to implementation of green growth.9

Korea’s subsequent efforts to create an emissions-trading system led to enact the Allocation and Trading of Greenhouse-Gas Emission Permits Act (“ETS Act”) in May 2012, which prescribes allocation methods of the allowable quantity of emissions and registration, management, establishment and operation methods of a new exchange implementing the ETS. Korea launched the national ETS based on the KETS Act in January 2015, known to be the second nation-wide cap-and-trade program in operation in Asia after Kazakhstan. Currently 525 entities from 23 industrial sectors are participating in the Korean ETS and the cap of 573 MtCO2–eq in 2015 is the second largest worldwide after the EU ETS. 10 This article proceeds by introducing the key provisions of the LCGGFA with their implications and continues onto the structure and major aspects of the Korean emissions trading system launched under the ETS Act.

2. Framework: the LCGGFA The Act seeks to establish a framework of duties and responsibilities, including binding obligations and incentivized voluntary behavior, for public and private parties, both institutional and individual. Beyond the general emphasis on responsibilities for the national government, the Act includes local government responsibilities, business entity responsibilities, and responsibilities for citizens.11 In terms of institutionalizing the regulatory scheme, the Act establishes a centralized structure of actors oriented around the key and the highestlevel decision-maker, the Korean President and Prime Minister. The Committee on Green Growth (the “Committee”), the executive powerwielding body for the Act, is instituted under the control of the Prime Minister’s Office. 12 The functions of the Committee are vast and include making key determinations regarding the basic direction of policies under

the Act, the development and execution of the national green growth and climate change strategies, and supervision and support for administrative agencies as they participate in the implementation of green growth. The head of each central administrative agency is responsible for establishing and implementing an “action plan” for that agency, pursuant to Presidential Decree. 13 Similarly, local government leaders can be

1 Professor of Law, Seoul National University School of Law. 2 Attorney, Kim & Chang.

3 S ubmission by the Republic of Korea, Intended Nationally Determined Contribution, June 30, 2015, available at http://www4.unfccc.int/submissions/INDC/ Submission%20Pages/submissions.aspx.

4 The analysis on the LCGGFA of the ensuing part of this article heavily relies on Hong Sik Cho, John Leitner, Jae-Hyup Lee, Seong Wook Heo, Korean Green Growth: A Paradigm Shift in Sustainability Policy, and its International Implications, 13 Journal of Korean Law, 301(2014).

5 According to the Act, “The State shall, whenever it formulates various policies, take into consideration impacts on the harmonized development of the economy and environment and climate change.” Art. 4(2).

6 See Cho, supra note 4, at 302.

7 According to Article 2(2) of the LCGGFA, “green growth” is defined as “growth achieved by saving and using energy and resources efficiently to reduce climate change and damage to the environment, securing new growth engines through research and development of green technology… and achieving harmony between the economy and environment”. There have been discussions on the relationship between “green growth” and “sustainable development”, the latter of which has long been a touchstone concept of international economic, environmental, and sociolegal philosophy. See Cho, supra note 4, at 318-23.

8 LCGGFA, Art. 42(5)-(11).

9 See generally LCGGFA, Chapter 4.

10 International Carbon Action Partnership, Emissions Trading Worldwide, 2015, available at https://icapcarbonaction.com/en 11 See Art. 3-7.

12 Art. 14.

13 Art. 10.

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instructed by Presidential Decree to advance and implement action plans for the local area in question.14 Consistent with the many interconnections between green growth policy and national economic policy, the Act contains many provisions that articulate general principles for the relationship between “green” and “growth”, and provides specific initiatives and policy directions. The executive is instructed to undertake a central role in “materializing green economy”, including (the role of) identifying and fostering what it considers to be promising industries and supervising existing economic actors. 15 Further provisions instruct the government to manage and facilitate improvements in resource recycling. 16 Numerous provisions relate to the support for research and development and the subsequent product commercialization of green technology. 17 The Act also prescribes the government-facilitated establishment of “green finance” (measures to promote investment in key industries and development of useful financial instruments, and to create a carbon-trading market). 18 Tax policy is to be reformed in the direction of “green” objectives. 19 In general, the character of these provisions is to establish potentially broad discretion for the executive, with the latitude to exercise regulatory power to cultivate efficient incentives and stimulate the progress of “green industry”.

Climate change is embedded in the underlying purposive fabric of the

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Act, and is explicitly discussed in certain key provisions. The government is instructed to compose and implement successive fiveyear plans concerning climate change, with the deliberation of the Committee and the Cabinet Council. 20 Emission targets shall be set by sector and by individual “controlled entity” (emitter of a certain amount of greenhouse gases) as part of the target management scheme. 21 The government is to establish reporting and information management standards for emissions. 22 Of considerable domestic and international interest is the language concerning the greenhouse gas emission cap-and trade system (as the Act describes it, using “market functions”); 23 the Act gives the government the discretion to introduce a carbon market, a course of action that the President and the Korean national assembly (the “National Assembly”) have jointly pursued.

Finally, the research component of developing and refining climate change-related policies is addressed with a command to deepen and enhance the useful output of such research. 24 While this chapter of the Act is most commonly discussed in the context of the cap-andtrade system, it advances a more immediate set of regulatory parameters related to the target management scheme for “controlled entities”.

3. Korean Emissions Trading Scheme

4. Conclusion: Prospects / Challenges Ahead

Korean ETS operates under the KETS Act and six notifications issued by the MOE including the Notification on Allocation, Adjustment and Cancellation of Greenhouse Gas Emissions Permits. The Korea Exchange (the “KRX”) has been designated as the sole operator of the emissions trading market. Greenhouse gases, including CO2, CH4, N2O, HFCs, PFCs, SF6, are subject to emissions trading under this scheme. 25 Business entities eligible for allocation permits are those with the average total amount of greenhouse emissions produced during the preceding three years not less than 125,000 tons of comparable CO2 equivalents (CO2-eq) or business entities with a business place that has produced the average total amount of 25,000 tons of comparable CO2 equivalents (CO2-eq) during the preceding three years, among the controlled entities as defined in the LCGGFA. 26 The MOE maintains a registry for the trading of emission permits to register and manage the allocation and trading of emission permits and greenhouse gas emissions from each business entity eligible for allocation.27 The total emissions allowance are set for each sector or industry and emission permits are then allocated to individual business entities for free and/or by auction. Allocation will be 100% free during the first phase of the plan from 2015 to 2017. The proportion of auctioned allocation will be gradually increased during the second and third phases, 3% between 2018 and 2020 and 10% or more between 2021 and 2025 to reduce the industrial burden in the early stages of implementation and facilitate the soft landing of the scheme. 28 However, energy-intensive and tradeexposed sectors will receive 100% free allowances in all phases 29 in order to maintain global competitiveness.

A business entity’s annual emissions allowance during the first phase has been calculated based on the average emissions volume during the years 2011, 2012 and 2013 and a sector-specific coefficient that is less than 1. During the first phase, approximately 5 percent of the total allowances is retained in the reserve for market stabilization, recognition of early action and other purposes including new entrants, voluntary participants, etc. 30 A business entity that wishes to object to the allowance allocation, addition or cancellation decision of the MOE may submit an objection to the MOE within 30 days of the relevant decision 31 and appeal to the court the MOE’s decisions of allowance allocation, addition or cancellation within 90 days from the decision.32 Business entities from a few sectors, e.g., chemical industry and nonferrous metal industry, have reportedly brought in lawsuits to litigate detailed methods of allocation per each sector or business entity, including fairness of allocation in comparison with other business entities subject to the ETS within the same sector. 33 Challenges from the private sector may have been expected especially during the initial stage of the new regime, given the immediate cost incurred to participate in the ETS as we saw from the cases concerning the European Union’s emissions trading scheme. Those disputes may be hopefully resolved and reduced as the initial scheme becomes more fine-tuned the Korean government's green growth policy derives more cooperation from the civil society.

The LCGGFA and the KETS Act provided a dramatic entrance of Korea onto the world stage as a potentially serious factor in any emerging international understanding of environment and energy policy. 34 The Korean regulatory scheme and institutional efforts responding to climate change may be a great reference to other states trying to develop a domestic regime responding to climate change to implement the Paris Agreement. Trans-border cooperation, e.g., international green investments and environmental protections projects, is also promising and already starting. Korea entered into an MOU with Indonesia to receive 100 million tons of carbon emission credits over the next decade in return for planting trees on a 200,000-hectare plot of land in Indonesia, as a pilot project for reducing greenhouse gas in 2012.35 The KRX signed a memorandum of understanding for cooperation with China Beijing Environment Exchange (CBEEX) under which those two exchanges will work together toward market linkage and expansion of their clients, according to the KRX in December 2015. 36 Korean emissions trading scheme, still in its initial stage of implementation, may hopefully prove a reliable foundation for addressing economic and social challenges facing Korea and potentially other states as well.

14 Art. 11.

15 Art. 23, 25.

16 Art. 24.

17 Art. 26; Art. 31-35.

18 Art. 28.

19 Art. 30.

20 Art. 40.

21 Art. 42.

22 Art. 44-45.

23 Art. 46, 28.

24 Art. 48.

25 LCGGFA, Art. 2(9), KETS Act, Art. 2(1).

26 KETS Act, Art. 8.

27 KETS Act, Art. 11.

28 KETS Act, Art. 2 of Supplementary Provisions; Presidential Decree of KETS Act, Art. 13.

29 KETS Act, Art. 12(4); Presidential Decree of KETS Act, Art. 14.

30 KETS Act, Art. 18.

31 KETS Act, Art. 38.

32 Administrative Litigation Act, Art. 20.

33 Sang-Heon Lee, Interview with Minister of Environment: Active Responses to Companies Litigating Emissions Trading Scheme, Yonhapnews (February 7, 2015).

Most of the lawsuits are still pending at the first level court and it is early to predict the result.

34 See Cho, supra note 4, at 333.

35 Korea to Plant Trees in Indonesia for Carbon Emission Credits, the Chosunilbo, (May 2, 2012).

36 S. Korea, China Agree to Expand Cooperation in Carbon Trading, Yonhapnews (December 21, 2015).

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Recent Trends of Law & Regulation in Korea |

Law and Regulation The National Assembly of the Republic of Korea

Enactments and Amendments of Law NOTE: The translation is NOT official. It only serves as a guideline.

01 Enforcement Decree of the Corporate Tax Act

Presidential Decree No. 26981, Feb. 12, 2016, Partial Amendment Legislative Intent This amendment aims to improve and complement the existing inadequacies in the operation of the current system by (1) acknowledging the exception of deduction limit of deficiencies for domestic corporations, (2) following the amendment of the Corporate Tax Act, the content of which provides the inclusion of only the expenditure for official business use, among the expenditure of each business year used for acquiring and maintaining vehicles for official use, in the losses of the relevant business year, providing matters delegated from the Act such as the exception of the scope of corporations to which the deduction limit of deficit brought forward is not applied, and the standards for deeming the expenditure related to vehicles for official use as deductible expenses, (3) deferring taxation of constructive dividend for domestic corporations even when merging with foreign corporations that are under complete control relation, the purpose of which is to support structural adjustment for foreign subsidiary companies of domestic corporations, (4) giving notice to

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designated donation organizations, before cancelling the designation, about the fact that they are the subject of cancelling, the purpose of which is to strengthen post management of designated donation organizations, (5) giving preference to workers in youth provided in the taxation for redistribution of corporate income, in order to support youth employment.

Main Contents

A Determining the Exemption Scope of Applying the Deduction Limit of

Losses Brought Forward (Article 10 (1) and Article 120-17 (1) are newly added) Currently the deduction limit of losses brought forward is determined as 80% of income of the relevant business year or losses brought forward of individually reverted amount of consolidated income. However, these articles exempt the following from applying the deduction limit of losses brought forward: corporations fulfilling the rehabilitation plan decided by the Court or those fulfilling the normalization of management through an agreement with the financial company that possesses the relevant corporations’ claims.

B Deferral of Taxation in the Case of Reverse Affiliation between

Foreign Corporations under Complete Control Relation (Article 14 (1) 1-2 is newly added) Previously, in the case of affiliation between corporations under complete control relation, the deferral of taxation for constructive dividend was only applied in affiliations between domestic corporations. Currently, the deferral has been expanded to affiliations between foreign corporations that satisfy certain conditions.

C Rationalization of Calculating the Standard Depreciation Cost (Proviso of the Article 26-3 (2) 3 item b is deleted) Following the adoption of the International Financial Reporting Standards, when the means of depreciation for relevant domestic corporations has been changed from the diminishing method to the straight-line method, calculation method of the depreciation cost limit of assets of the same kind, which considers the previous depreciation cost, is streamlined. Thus, the burden of calculating the depreciation cost of corporations that have adopted the International Financial Reporting Standards is relieved, and the depreciation cost is rationally adjusted.

D Rationalization of Post Management of Designated Donation Organizations (Article 36 (11) and (12) are newly added) The fact and the reason of cancellation are previously noticed to designated donation organizations before requesting the cancellation of the relevant organizations. The opportunity to state the case is provided in order to rationalize the post management procedure of designated donation organizations.

E Allowing the Inclusion of Mixed Retirement Annuity Charge in the Calculation of Deductible Expenses (Article 44-2 (4)) With regard to the inclusion of the paid amount of retirement annuity charge into deductible expenses, the mixed retirement annuity charge, which is a combination of the defined contribution retirement annuity and the defined benefit retirement annuity, is deemed as deductible expenses.

F Establishing the Standard of Deeming the Expenditure Related to

following cases: (1) when a corporation’s officers or employees drive the vehicles for official use during the entire relevant business year, (2) when a person who is under a contractual relationship with the relevant corporation or the corporation’s employees subscribe to Automobile Accident Insurance, which only compensates for driving for official purpose, and prepare the operation record. However, if the operation record is not prepared, the expenditure related to vehicles for official use is included in the calculation of losses, the amount of which is calculated according to the rate of official use, under the limit of 10 million won.

4) Depreciation cost, used for official purpose, that exceeds eight million won is brought forward to the next period of taxation and included in the calculation of losses.

5) The cost of disposing vehicles for official use is included in the calculation of losses every year under the limit of eight million won.

The amount exceeding the limit is brought forward to the next business year, which also has the limit of eight million won. In the business year that arrives 10 years after the disposal, the leftover that had not been previously included in the calculation of losses is included in the calculation of losses.

G Deferral of Taxation for Physically Divided Corporations (Article 84 (5) 3 is newly added) When a divided corporation, which has received the deferral of taxation for transfer marginal profit generated through physical division, disposes stocks received from the newly divided corporation, the transfer marginal profit is included in the calculation of gross income. However, if the disposal of stocks occurs due to division upon qualified division, only the first transfer marginal profit is not included in the calculation of gross income as an exception.

H Standards of Judgment for an Operable Independent Business Sector Separated by an Investment in Kind (Article 84-2 (14) and (15) are newly added) When an invested corporation succeeds a business sector through the investment in kind by an investing corporation, and when the business

Vehicles for Official Use as Deductible Expenses (Article 50-2 is newly added) 1) The scope of the expenditure related to vehicles for official use is provided as expenditure for acquiring and maintaining vehicles for official use. The following are included in the expenditure: depreciation cost, lease charge, oil expenses, insurance premium, repair costs, automobile tax, toil, and interest cost for financial lease.

2) It is obligatory to depreciate vehicles for official use according to the straight-line method, and the durable years are applied as 5 years.

3) The expenditure related to vehicles for official use, the amount of which is calculated according to the rate of official use and proved by the operation record, is included in the calculation of losses only in the

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sector is mostly composed of real estates or stocks, the business sector is not regarded as an independent business sector that is operable after separation. However, a business sector that establishes a holding company or a financial holding company is regarded as an independent business sector that is operable after separation.

I Special Taxation for Income of Property Conveyance (e.g. Land) for Enterprise Type Lease Business Operators (Article 92-2 (4) 5 is newly added) Income of property conveyance, generated when a domestic corporation conveys non-business land to an enterprise type lease business operator, is excluded from additional taxation of corporate tax, in order to foster enterprise type lease business operators.

J Taxation Preference for Redistribution of Corporate Income in the Case of Funding for Employment of Full-time Youth Workers or Collaborative Cooperation (Article 93 (9) and (11)) 1) In the calculation of wage increase, deducted from taxable income in the taxation for redistribution of corporate income, if the number of full-time youth workers has increased compared to the previous business year, the wage increase is calculated by adding 50% to the wage increase of full-time youth workers.

2) Contributions made by domestic corporations for joint labor welfare fund or Intra-company Welfare Fund of cooperating small and medium enterprise are deducted from taxable income in the taxation for redistribution of corporate income.

K Adjustment of Application for Corporate Tax Report Deadline Extension (Article 97 (12) and Article 120-24 (2)) To increase convenience of tax payment, when a domestic corporation applies for deadline extension of corporate tax report due to incompletion of external audit, the deadline is adjusted from two weeks before the last day of the report period to three days before the last day of the report period.

L Disambiguation of the Special Scope of Withholding for Bonds Subject to Withholding, etc. (Article 114-2 (1), (2), and Article 138-3 (2), (3)) To increase convenience of tax payment, transaction of repurchase agreements and claim loans, consecutive or mixed, which are confirmed

by Korea Securities Depository, are included in the scope of transaction of repurchase agreements and claim loans that are exempt from withholding of income from interest, determined by the period of possession.

M Application of Minimum Tax for Consolidated Corporations (Article 120-23 (4) is newly added) Tax amount that falls short of the minimum corporate tax, and thus is neither deducted nor exempt, is proportionally calculated according to deducted or exempt tax amount of each consolidated corporation.

N Supplementation of Source Taxation of Foreign Corporations (Article 123 (11) is newly added)

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The amendment aims to consider the following in judging corporations that excessively possess real estates: (1) the current status of domestic corporations possessing stocks of foreign corporations, (2) the case in which the relevant domestic corporation possesses real estates of other corporations in the form of stocks, and the rate of possession exceeds 50%. The judgment aims to impose corporate tax on transfer income including stocks of domestic corporations possessed by foreign corporations.

O Creation of Composition Basis for Sum Table that Verifies Expenditure (Article 158 (6) is newly added) A corporation that has generated over two billion won of earnings in the previous business year, and has acquired and preserved the document verifying expenditure, shall compose a sum table that verifies expenditure and preserve it.

Enforcement Date Feb. 12, 2016

02 Special Act on Enhancing Business Vitality

Act No. 14030, Feb. 12, 2016, Enactment Legislative Intent

With the rapid development of emerging economies, the Korean economy has been suffering from export slump in key industries, deterioration of business results, and shrinking investment activities, which have been understood as signs of languishing vitality and competitiveness in the domestic economy.

Small and medium-sized firms have been suffering from financial difficulties due to excessive competition and growth stagnation in the domestic market, while the development of a new global specialized company that is anticipated to lead the domestic economy has been postponed.

Even major domestic industries such as that of steel and automobile have been stagnant in growth for over 30 years, and the new emerging industries have yet been able to develop into major industries.

Measures to improve industry competitiveness and enhance business vitality are needed to overcome such economic situations and to maximize new opportunities so the Korean economy can prosper.

This enactment aims to establish applicable provisions that (1) acknowledge exceptional cases such as procedure simplification on business reorganization pursuant to Commercial Law as well as a prolongation of grace period on holding company regulations in order to nudge firms to take voluntary and preemptive action on reorganizing their business, and to (2) assist businesses’ innovative activities by supporting the taxation system, finance, research, development, business innovation and employment stability in small and medium-sized firms.

Main Contents

A This enactment aims to enhance business vitality and industry

competitiveness as well as to promote competition within the market by improving related procedures and regulations so businesses can push forward business reorganization quickly, which could ultimately contribute to the sound development of the national economy (Article 1).

B The Deliberative Committee of Business Reorganization Plan shall be established within the Ministry of Trade, Industry and Energy to discuss important issues regarding business reorganization plans (Article 6).

signs of violation of worker’s interests, etc. Once it is decided that the company is likely to reach its productivity and financial stability objectives, the Head of the competent Ministry can approve of the business reorganization plan of the company (Article 10).

E If an approved company splits according to its business reorganization plan, when the total amount of assets of the company established after the split is less than 10 hundredths of that of the approved corporation, the approval of the general meeting of shareholders of the company can be substituted by the approval of the Board of Directors (Article 15).

C Companies wishing to receive support pursuant to this enactment

F When an approved company holds a general meeting of shareholders

must prepare a business reorganization plan that includes the following information: the necessity of business reorganization within the company, its productivity and financial stability objectives, post-reorganization employment and investment plans, etc. Once prepared, the business reorganization plan must be approved by the Head of the competent Ministry (Article 9).

for mergers, splits and split mergers, comprehensive exchange and transfer of stocks, business transfers and buyouts, it may send a written note or an electronic document to each shareholder or an electronic document, when shareholders’ consent is provided, seven days before the general meeting in spite of Article 363 (1) of Commercial Law (Article 19).

D The Head of the competent Ministry, with the deliberative committee,

Trade Act, the duration of which a holding company can own less than 40 hundredths of a subsidiary’s total number of issued stocks is extended from one or two years to three years for approved companies (Article 21).

must consider the company’s new employment, anticipated investment results, possibility of advancement in industrial structure, as well as any

G Pursuant to Article 8-2 (2) 2 of the Monopoly Regulation and Fair

H Tax support shall be given to approved companies pursuant to the decision of the state and local governments on tax related law (Article 27).

I The Act supports approved companies’ business reorganizations by assisting in equipment investments, subsidizing funds for establishing, transferring, or expanding, and financing, etc. (Article 28).

J The Act will provide for all or part of the research and development expenses needed by the state or local governments for the business innovation of accepted companies (Article 29).

K The state or local government must assist in finding new domestic and international markets, providing information, training professional workforce and giving business, technology, and accounting advice needed for business reorganization if the accepted company is small or medium in size (Article 30).

L An accepted company must try to prevent unemployment due to business reorganization and to foster vocational development in current employees according to related statutes such as the Framework Act on Employment Policy and the Act on the Development of Workplace Skills of Workers. The government must work to prepare a support plan that includes assistance on vocational capability development, etc. for the accepted company’s employment adjustment, current workers’ employment stability and capability development, etc. (Article 31).

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03 Enforcement Decree of the Restriction of

Special Taxation Act

Presidential Decree No. 26959, Feb. 5, 2016, Partial Amendment Legislative Intent The amendment of the Restriction of Special Taxation Act is due to the following reasons: (1) to stabilize the economic structure and promote economic growth by extending the tax incentive application due date, (2) to extend the application period of deduction of investment tax amount and increase the benefit support for small and medium enterprises, (3) to promote the establishment of high-quality jobs by expanding the tax system for earned income increase of an employee from a temporary to permanent position, (4) to establish a tax deduction system for firms increasing their youth employment rate.

This amendment establishes new requirements and standards accruing from (1) tax credit of win-win payment, (2) special treatment taxation of profit from industrial property right contribution in kind, (3)tax for the youth employment, (4) Individual Savings Account and investment in foreign stock funds.

This amendment aims to improve and complement the existing inadequacies in the operation of the current system by (1) adding security system business for the small and medium enterprises, (2) simplifying the selection process of enterprises subject to tax benefit from their size to their sales revenue, (3) adjusting requirements for corporation tax, transfer income tax, value-added tax and special treatment in taxation.

Technological Innovation-Oriented Stocks (Article 11-3 (1) 1 and Article 11-4 (2) 4 are newly added) The amendment expands the number of enterprises subject to tax credit from Technological Innovation-Oriented Merger and acquisition of Technological Innovation-Oriented Stocks from venture business to small or medium enterprises that certified their new technology or new product.

E Extending the Scope of Special Tax Treatment rRelating to Transfer Income Tax of Angel Investors (Article 13 (1) 1 and Article 13 (1) 2) The amendment extends the scope of Special Tax Treatment relating to taxation carried forward by angel investor to Venture Business that has been established not later than five years. Additional investment of stock will be subjected to the Special Tax Treatment under certain circumstances.

F Extending the Scope of Special Cases on Payment of Gains by Angel Investor (Article 14 (2)) The amendment extends the scope of Special Cases on Payment of Gains

by Angel Investor to investment exceeding KRW 30,000,000 in a year (exceeding KRW 20,000,000 for investment in Knowledge-intensive Services) on small or medium enterprise that has been established not later than three years.

G Transfer Income Tax Derived from Individuals’ Investment in Kind in

Credit (Article 2 (1)) In order to increase the investments relating to security, this amendment shall allow small or medium security enterprises to be subject to tax credit.

the Form of Industrial Property Right (Article 14-4 is newly added) Investment in kind in the form of industrial property right made to a venture business by individuals shall be exempt from taxation.

Transferring Stocks acquired from the investment shall be a subject of deferred taxation of transfer income tax. This amendment prescribes types of industrial property which are applicable to the special treatment in taxation, applicable subjects, documents, and the calculation method for acquisition value.

B Unifying Criteria for Small Enterprises (Article 6 (5))

H Extending the Type of Business for Deduction of Investment Tax

In order to increase the employment for the small enterprises, this amendment unifies the criteria for small enterprise subject to the special tax reduction for small or medium enterprises by relating to their sales revenue instead of the previous indices, the number of employees and the sales revenue.

Amount and Job Creation (Article 23 (1) 7-2 is newly added) For the purpose of increasing investment and supporting job creation, this amendment adds restaurant business in the type of business for deduction of investment tax amount and job creation, which deducts certain part of investment, unless the number of full-time workers shall not decrease compared to that of the immediately preceding taxable year.

Main Contents

A Expansion of Small and Medium Sized Enterprise Subject to Tax

C New Tax Deduction for Win-win Payment Amount (Article 6-4 is newly added) As regulation for tax deduction on win-win payment amount is newly enacted, the amendment establishes regulation relating to win-win payment settlement such as win-win payment system and the range of semi-cash payment amount.

D Expanding the Number of Enterprises Subject to Tax Credit from Technological Innovation-Oriented Merger and Acquisition of

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I Supplementation of Calculation Method of Full-time Workers in the Type of Business for Deduction of Investment Tax Amount and Job Creation, etc. (Article 23 (11) 2 item d and Article 27-4 (5) 2 item d) For the purpose of supporting job creation in small and medium-sized businesses, when the number of full-time workers shall be calculated 0.75 person, not 0.5 person, as short-time workers, the hourly wage shall be relieved from 130/100 to 120/100 of the minimum wage (prescribed under Article 5 of the Minimum Wage Act).

J Relaxation of Requirements of Tax Deduction for Small or Medium Enterprises Rehiring Women with Job Discontinuation (Article 26-3 (3) 1 is newly added) For the purpose of supporting reemployment of women with job discontinuation, the amendment allows small or medium enterprises to get a tax credit when the firms hire women who get pregnant or infertility treatment within two years after their retirements.

K Tax Leading an Increase in Earned Income Preferential Treatment to Converted Regular Workers (Article 26-4 (13) to Article 26-4 (15) are newly added) For the purpose of supporting conversion of non-regular workers to regular workers, the amendment prescribes the range of regular workers, the calculation method for the sum amount of increase in payment and the calculation method for tax amount collected which are objects of tax deduction regarding the amount of increase in payment of converted regular workers.

L New Tax for the Youth Employment (Article 26-5 is newly added) As Tax for the youth employment for job creation for the youth is enacted, the amendment prescribes (1) excluded business from Tax for the youth employment application, (2) the range of regular and full-time workers, and (3) the calculation method for the number of workers, and (4) the calculation method for the amount of tax collection in the case that the number of workers falls.

M Exclusion of the Performance Compensation Receipt Earned by Core Manpower of Small or Medium Enterprises from Tax Credit (Article 26-6 is newly added) This amendment prescribes the calculation method and procedure of application relating to the tax deduction.

The amendment excludes (1) the largest shareholder and his / her spouse, (2) their lineal ascendant, descendant and relatives from the scope of application (of the performance compensation receipt of core manpower of small or medium enterprises).

N Exclusion of Employees in Small and Medium Enterprises from Income Tax Deduction, etc. (Article 27 (5), (8) and (9)) This amendment allows employees, who are not subjects of national pension, to get the income tax deduction and clarifies how to apply tax deduction for earned income into the income tax deduction.

O Supplementation of Requirements Relating to Fund for Establishment and Special Treatment in Donation Taxation (Article 27-5) Donated fund from parents to their children as foundation fund is a subject of the deferred taxation. This amendment specifies fund as business assets acquired from the direct management.

P Relaxation of Requirements for Tax Deduction Relating to Small and

Medium Enterprises Converting Their Business - Enterprises Supporting Trade Adjustment (Article 30-2 (3) and (4)) The business conversion under Article 33-2 (1) 2 of the Act means a case where the gross sale of the business before conversion under Article 33-2 (1) of the Act (hereafter referred to as "business before conversion" in this Article) has been reduced, within three years after the commencement date of the taxable year immediately following the taxable year in which the converted business was added, to 50/100 or less of gross sales for the taxable year immediately before the taxable year during which the converted business was added (hereafter referred to as "reference gross sales" in this paragraph), and the sale of the converted business has increased to 50/100 or more of the reference gross sales during the same period.

Q Support for the Establishment of Holding Company (Article 35-3 (3) is newly added) When a domestic company sells issued stocks of holding company subject to investment in kind to establish pure holding company, the funds shall be subject of deferral of tax again.

R Rationalization of Self-management Relating to Investment in Kind from Land for Fishery (Article 64 (3) and Article 64 (5), (11) are newly added) Fishermen who finance land, etc. as investment in kind for Fishery partnership corporation become subject to transfer income tax reduction or exemption under following conditions: (1) fishermen who intend to apply for a tax reduction shall reside within the relevant land more than four years and work in the fishing industry (2) the relevant land shall be directly used for fishery for more than a year. In such cases, (ancestor and heir’s ) period of cultivation shall be merged. If the sum of total income and a business income exceeds 37,000,000 KRW, the period shall be excluded from the year of cultivation.

S Establishment of Basis for Submission of Application for Donation Subsidies and Additional Period for Designation of Donation Subsidies Organizations (Article 71 (2), (3) and Article 71 (10) are newly added) In order to settle donation subsidies in the short term, this amendment allows organizations to request application for the designation of donation subsidies organizations from March 1, 2016 to March 31, 2016.

Donator shall submit application for donation subsidies to donation subsidies organization so that the donation subsidies organization can get tax reduction on the fair amount of donation.

S Adjustment of the Average Holding Ratio of the Total of Inferior Bonds of High-Yield High-Risk Investment Trust (Article 93 (3) 1) The average holding ratio of the total of inferior bonds and KONEX-listed bonds incorporated into the high-yield high-risk investment trust obtaining separate taxation shall be raised to at least 40/100.

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T Addition of Special Taxation for Collective Investment Scheme for the Exclusive Use of Foreign Stock Investment (Article 93-3 is newly added) Pursuant to the addition of special taxation for collective investment scheme for the exclusive use of foreign stock investment, collective investment securities savings for the exclusive use of foreign stock investment, the payment amount and methods for calculating the payment amount, the requirement for collective investment scheme for the exclusive use of foreign stock investment, and the scope of foreign listed stocks shall be provisioned.

U Introduction of Special Taxation for Individual Savings Account (Article 93-4 is newly added) 1) Following the addition of special taxation for individual savings account, the scope of farmers and fishermen subject to participation shall be prescribed as farmers as provided in Framework Act on Agriculture, Rural Community and Food Industry, or fishermen as provided in Framework Act on Fisheries and Fishing Villages Development.

2) Financial items that can be incorporated shall be prescribed as bonds or securities with repurchase agreements and securities of real estate investment company. The special taxation shall also prescribe detailed matters necessary for the operation of the system such as joining procedures and method for confirmation and management of applicable subjects, etc.

V Expansion of Tax Support System for Small-Housing Rental Business Operators (Article 96 (2) to (6)) 1) In order to expand supply of private rental housing, the standard market value requirement among the requirements for a rental housing eligible for tax reduction and exemption shall be expanded from an amount not more than three hundred million won as of the commencement date of the rent of such housing to an amount not more than six hundred million won.

2) As the compulsory rental period of general small rental housing is reduced to four years, if a general small rental housing has been rented for at least 43 months, it shall be eligible for tax reduction or exemption for rental income.

W Ex Post Facto Management, etc. of Special Taxation of Land Transfer Income Tax for a Rental Business Operator (Article 97-7 is newly added) In case of applying tax reduction or exemption from transfer income tax for a land transfer to a rental business operator, the calculation method of transfer income subject to tax reduction or exemption, the application procedure of special application, and ex post facto management method, etc. are newly added.

X Relaxation of Standards for Delinquent Taxes in the Special Application of Postponement of Disposition on Arrears for Delinquent Taxes of Resurgent Small or Medium Entrepreneurs (Article 99-6)

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The standards for “delinquent taxes� in the special application of postponement of disposition on arrears for delinquent taxes of resurgent small or medium entrepreneurs shall be relaxed from below 20 million won to below 30 million won. The subject, requirement, deferment period, and reasons for cancellation of deferment for the special application of deferment of collection for delinquent taxes of resurgent small or medium entrepreneurs shall be prescribed in the same manner as those for the application of postponement of disposition on arrears.

Y Adjustment of the Scope of One Household for Special Taxation for Heightening Willingness to Work (Article 100-4 (1)) The scope of one household for calculating labor encouragement subsidies shall be limited to the resident, spouse, and lineal ascendant or descendent sharing the same livelihood in same address or residence.

Brothers and sisters shall be explicitly excluded from the scope of one household.

AA. Expansion of the Subjects Eligible for Special Cases concerning Computation of Corporate Tax Base for Shipping Enterprises (Article 104-7 (1) 3 is newly added) In order to support fostering of cruise industry, international cruise business shall be added to the subject of special cases concerning computation of corporate tax base.

BB. Expansion of Subjects Eligible for Deduction of Tax Amount on Educational Expenses, etc. for Specific University or College (Article 10417 (1) is newly added) In order to lay systemic foundation to allow balancing of job seeking and study, the subjects eligible for deduction of tax amount for research and human resource development expenses shall be expanded from the currently eligible companies providing operating expense to the major or curriculum of vocational education and training in universities and high schools tailored to industrial demand, etc., to include those companies providing operating expense to high schools for technical training and the major or curriculum of vocational education and training at general high schools that have installed a major or curriculum tailored to industrial demand.

CC. Addition of Foreign Corporation Eligible for Exemption from Corporate Tax Related to the 2018 PyeongChang Olympics and Paralympics (Article 104-25 is newly added) In order to support hosting of the 2018 PyeongChang Olympic Games and Paralympic Games, foreign corporations such as international sports federations or international paralympic sports federations, etc. conducting activities directly related to the operation of the Games shall be added to the subjects eligible for exemption from corporate tax.

DD. Addition of Intermediate Wholesaler of Unlisted Items Trade to the Substitute Organizations of Government Affairs (Article 106 (7)) In order to stabilize price of agricultural and fishery products, and to reduce burden of farmers and fishermen, an intermediate wholesaler handling unlisted items is added to the scope of substitute organizations of government affairs exempt from value-added tax.

EE. The Detailed Application Method, etc. of Ex Post Refund for ValueAdded Tax, etc. on Medical Service of Foreign Tourist Cosmetic Surgery (Article 109-3 is newly added) 1) When a foreign tourist is provided medical service subject to refund at a special case applied medical institution pursuant to <Medical Service Act>, the tourist shall receive refund of the value-added tax amount for the medical service from the operator of refund counter, and the operator of refund counter refunding the value-added tax amount shall have the tourist receive the value-added tax amount from the operator of special-case-applied medical institution.

2) When an operator of special-case-applied medical institution who has provided payment of the value-added tax amount seeks to obtain tax credit, tax base and tax amount due or tax refund amount of the taxable period in which the date he/she has received certificate of refundㆍremittance falls shall be submitted with the confirmation statement of medical service supply and certificate of refundㆍ remittance, upon reporting to the head of a tax office having jurisdiction over the place of tax payment.

3) If an operator of special-case-applied medical institution issues falsely written confirmation statement of medical service supply, or has a foreign tourist facilitated by a facilitator other than those who have registered to the Minister of Health and Welfare pursuant to the Medical Services Act obtain refund by providing him/her medical service, etc., such operator of special-case-applied medical institution shall be subject to collection of the relevant value-added tax and additional tax.

FF. Expansion of the Subjects Eligible for Exemption from Securities Transaction Tax (Article 115 (5) to (7) are newly added) Market makers of equity index derivatives and market makers of stocks shall be included to the subjects eligible for exemption from securities transaction tax. The subjects applicable shall be investment traders who have concluded a market making contract with Korea Exchange. Detailed matters necessary for the operation of the system, such as directing the exchange of equity index derivatives or stock index derivatives, etc. to be conducted through the stock account for the exclusive use of market making, shall also be prescribed.

GG. Promoting Efficiency of Consultation Procedure for Application of Tax Reduction or Exemption for Foreign Investment (Article 116-13 (1)) The Minister of Strategy and Finance may entrust the consultation procedure of the relevant department to the head of Korea TradeInvestment Promotion Agency, etc. when receiving applications for tax reductions or exemptions, applications for modification of tax reductions or exemptions, or requests for prior verification, made by foreign investors.

HH. Additional Requirement for Tax Credits for Increased Revenue, etc.

Operators Eligible for Special Taxation of Payment of Tax by Purchasers (Article 117-4 (2) is newly added) In order to prevent excessive tax credit for operators eligible for special taxation of payment of tax by purchasers, when calculating the increased amount of revenue, the revenue amount paid by a purchaser of the year

immediately preceding the concerned year shall be converted at the unit of operator’s taxable year.

II. Expansion of Culture Entertainment Expenses Eligible for Inclusion in Deductible Expenses (Article 130 (5) 11 and 12 are newly added) In order to induce establishment of sound consumption culture, and to support expenses on culture and art, expenses on culture and art events directly hosted by the company and expenses on culture and art events organized with the sponsorship from the Ministry of Culture, Sports and Tourism shall be added to the expenses eligible for inclusion in deductible expenses.

JJ. Addition of Transitional Measures with Respect to Tax Exemption of Companies that have been Relocated to an Area Other than the Overconcentration Control Region of the Seoul Metropolitan Area, Pursuant to Reorganization of Administrative Districts (Presidential Decree No. 24368 Enforcement Decree of the Restriction of Special Taxation Act Partial Amendment APPENDUM Article 32 is newly added) In order to protect trust of taxpayers in cases of unexpected change of circumstance, and taking into account the amount of time it takes to relocate factories, etc., a company shall be eligible for tax reduction or exemption for a relocating company on the basis of the area before the reorganization of administrative districts, if (1) the relocation of a factory, etc. to an area before the reorganization of administrative districts is actually commenced by such means as concluding a purchase contract of a factory facility or headquarters, receiving approval of factory establishment etc., or receiving factory construction permission, etc. before the reorganization of administrative districts, and (2) the company completes the relocation and commences business within three years after the reorganization of administrative districts.

KK. Exclusion of Research Management Personnel from the Subjects Eligible for Application of Tax Credit for Research and Human Resource Development Expenses (attached Table 6) Personnel expenses on research management personnel shall be excluded from those eligible for application of tax credit for research and human resource development expenses.

LL. Re-Adjustment of Technologies Eligible for Tax Credit for Research and Development Expenses of Technology in the Field of New Growth Engine and Original Technology (attached Table 7 and 8) In order to enhance the effectiveness of support on R&D of new growth engine, the following technologies shall be added to the technologies in the field of new growth engine and original technologies eligible for tax credit: technologies related to Intelligent Internet of Things, Wearable Smart Device, Flexible Display, Smart Healthcare, Hyper-plastic materials, Smartcar, etc. The following technologies shall be excluded: substitute crude oil purification fuel system, construction-purpose LED lighting equipment manufacturing technology, and clean fuel liquefying gas refinement technology.

Enforcement Date Feb. 5, 2016

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04 Special Act on Imported Food Safety

Management Enactment Rule

Ordinance of the Prime Minister No. 1253, Feb. 04, 2016, Enactment Legislative Intent This enactment aims to (1) systematically control imported food by registration of foreign food facilities, (2) suspend importation of food from foreign food facilities in the case of sanitation hazards, and (3) prepare a system of traceability of imported food in order to identify the cause in the case of safety problems of imported food, etc. The enactment of the Special Act on Imported Food Safety Management (Act No.13201, February. 04, 2015) is to determine matters delegated by the Act and necessary matters in its enactment such as the (1) registration of foreign food facilities, (2) suspension of import and revocation procedures, (3) institutions that may be designated as foreign food sanitation audit institutions, (4) the content and period of the employerâ&#x20AC;&#x2122;s sanitation education, traceability of imported food, etc.

A Registration of Foreign Food Facilities (Article 2) A person who intends to import food into the Republic of Korea or a person who establishes and operates a foreign food facility shall register matters such as the name, location of, representative, items

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manufactured and the type of business of the foreign food facility concerned.

B Suspension of Import and Revocation Procedures (Article 3) In the case of the suspension of the importation of imported food, etc. of the foreign food facility concerned by the Minister of Food and Drug Safety, he/she shall inform the person who establishes or operates a foreign food facility about the reason and date of suspension in writing in advance. In the case when the Minister of Food and Drug Safety revokes the suspension of importation, he/she shall inform the government of an exporting country, foreign food facility, or business entity in writing in advance.

C Designation of Imported Food Sanitation Audit Institution (Article 7) The Minister of Food and Drug Safety may reinforce Korean Food Safety Managers and designate an institution with the appropriate organization, resources, labor force to ensure the adequacy and reliability of audits of an imported food sanitation audit institution, in order to seek efficiency in conducting affairs such as on-site inspections.

D Sanitation Assessment of Livestock Products (Article 11) In cases where the government of an exporting country requests the government of the Republic of Korea to permit the importation of

livestock products for the first time, or reassessment on the sanitary control of the exporting country is deemed necessary according to changes in international standards, new identification of hazards, or change in the exporting nation’s sanitation standards, the Minister of Food and Drug Safety may conduct sanitation assessments on the conditions of livestock products’ sanitary control of the exporting country.

E Content and Period of Sanitation Education for Business Entity (from Articles 22 to 24) The content of sanitation education to those who intend to import or sell food in the Republic of Korea or existing importers is to be determined by acts or systems related to imported food, sanitation management and quality control. The education period shall be four hours for those who intend to start business and three hours every year for existing business entities. When he/she may is unable to undergo education in advance for unavoidable reasons, he/she may designate a person in charge of management among employees instead of him/her.

F Control of Business Entities by Classification (Article 26) The Minister of Food and Drug Safety may control business entities differentially in entry, inspection, collection, etc. by classifying them into good importers, general importers, and special importers.

G Traceability of Imported Food (Article 35) Infant formulas, functional health foods, milk formulas, and imported food that the business entity wishes to register shall be prescribed as traceable imported food.

Enforcement Date Feb.04, 2016

05 Foreign Legal Consultant Act

Act No. 14056, Mar. 2, 2016, Partial Amendment The Purpose of the Revision and the Main Content Based on the agreement on Three-Phase Legal Services Liberalization to the foreign countries in the International Trade Agreements such as “Free Trade Agreements between the Republic of Korea, European Union and its Member Countries”, “Free Trade Agreements between the Republic of Korea and the United States of America” and etc., the act determines the procedures and requirements for the establishment of a Joint Venture Law Firm and the specific scope of its execution of operation. By doing so, it aims to promote the globalization and advancement of domestic legal service. At the same time, by allowing Foreign Attorneys, not Foreign Legal Consultants, to perform on behalf in international arbitration cases through temporary entrance, this act aims to improve and to complement some imperfections that arose under the operation of current institutions.

A portion of Foreign Legal Consultant Act is revised as follows.

In Article 1, change “practice of Foreign Legal Consultants who deal with foreign legal services in the Republic of Korea” into “practice of Foreign Legal Consultants who deal with foreign legal services in the Republic of Korea and authorization of joint venture law firm incorporation.”

In Article 2 (7), change “the law of Foreign Legal Consultant's home country of license, treaties under which a home country of license is one of the parties” into “the law of foreign country, treaties under which Republic of Korea and foreign countries are one of the parties, treaties under which foreign countries are one of the parties.” In the same article, further establish subparagraph nine through 12 as the following.

9. “Joint Venture Law Firm” refers to the corporation incorporated under this act to execute foreign legal affairs and domestic legal affairs provided by the act.

10. “Domestic Joint Venture Participant” refers to law firm, law firm (ltd.) or lawyers union which participates in the incorporation of a Joint Venture Law Firm under ATTORNEY-AT-LAW ACT. 11. “Foreign Joint Venture Participant” refers to those who participate in the incorporation of a joint venture law firm. The Foreign Joint Venture Participant are ones incorporated under Article 35-2 (1) in the party country of free trade agreement and etc. announced by the Minister of Justice, with the execution of legal affairs regardless of the legal form as a primary purpose.

12. “Joint Venture Participant” refers to domestic joint venture participant or foreign joint venture participant”.

In Article 9 (2), change “administrative authorities” as “administrative agency”.

In Article 13 (2) 3, change “violates Articles 24, 25, and 34 of this Act,” into “violates Articles 24, 25, and 34 of this Act,”.

In Article 16 (1) 3, change "seven years" into "five years".

Article 19 (2) and 19 (3) shall be as follows. 19 (4) will be changed into 19 (5), and paragraph 4 in the same article will be newly added as follows.

(2) Where the headquarter office establishes a joint venture law firm according to 35-2, the Minister of Justice shall revoke the authorization for establishment of a Foreign Legal Consultant Office established under Article 15 by the corresponding headquarter office.

(3) W here the authorization for establishment of a Foreign Legal Consultant Office is revoked according to Subparagraph 1 of Paragraph 1 to Subparagraph 7 of Paragraph 1 or Paragraph 2, it is deemed to have revoked the registration of Korean Bar Association.

(4) The Minister of Justice shall practice hearing in order to revoke the authorization for establishment of a Foreign Legal Consultant Office in relation to Paragraph 1.

Article 24 subparagraph 3 shall be as follows.

3. International arbitration case agency. However, affairs regarding law of Republic of Korea shall be excluded.

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24-2 shall be newly added as follows.

24-2 (International arbitration case agency of foreign attorneys, not foreign legal consultant) (1) a Foreign Attorney-at-Law (Those who correspond to any subparagraphs of the Article 5 shall be excluded. The others within the article stay the same), not a Foreign Legal Consultant, can perform the business affairs in the Article 24 subparagraph 3.

(2) The length of stay in the Republic of Korea permitted for a Foreign Attorney-at-Law as defined in Paragraph 1 for business affairs in the Article 24 subparagraph 3 shall be less than 90 days per year.

However, the length of stay in Republic of Korea due to one’s injury or disease, to nursing or visit for the injury or disease of family, and to other inevitable affairs, is not counted when calculating the length of stay.

25 (1) 4 and 25 (1) 5 shall be newly added as follows. In 25 (2), change “law firm (limited) or lawyers union” into “law firm(limited), lawyers union or joint venture law firm”.

4. An Appointed Foreign Legal Consultant of a Joint Venture Law Firm (Refers to a Foreign Legal Consultant equipped with the requirements specified in 35-11 (1). The others stay the same.)

5. An Assigned Foreign Legal Consultant of a Joint Venture Law Firm, not an Appointed Foreign Legal Consultant In 27 (1) preceding clause, change “The others” into “The others within the article”. Change Paragraph 6 of the same article into Paragraph 7, and add the new paragraph 6 into the same article as follows.

(5) A Joint Venture Law Firm shall indicate all the information of total Joint Venture Participants, Appointed Attorneys, Assigned Attorneys, Appointed Foreign Legal Consultants and Assigned Foreign Legal Consultants (In case of a Foreign Legal Consultant, a Foreign Legal Consultant’s home country of license designated by the Minister of Justice shall be involved) at the appropriate places in and out of the office which are easily recognizable by the public.

(6) A Foreign Legal Consultant or a Joint Venture Law Firm shall specify the home country of license (In case of a Joint Venture Law Firm, it refers to relevant Foreign Legal Consultant’s home country of license) and scope of business to the clients before concluding a contract with clients on foreign legal affairs.

In 31 (1), change “Foreign Legal Consultant and Foreign Legal Consultant Office” into “Foreign Legal Consultant, Foreign Legal Consultant Office and Joint Venture Law Firm,” and change “partners’” into “partners’(In case of Joint Venture Law Firm, it refers to Joint Venture Participants, Appointed Attorneys and Appointed Foreign Legal Consultant)”. Also, in the latter clause of the Paragraph 3, change “”Foreign Legal Consultant” or “Foreign Legal Consultant Office.”” into “”Foreign Legal Consultant”, “Foreign Legal Consultant Office”, or “Joint Venture Law Firm.””

In 32 (1), change “Any Foreign Legal Consultant and Foreign Legal Consultant Office” into “Any Foreign Legal Consultant, Foreign Legal Consultant Office and Joint Venture Law Firm”. In the Paragraph 2 of the same article, change “a Foreign Legal Consultant or a Foreign Legal

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Consultant Office” into “a Foreign Legal Consultant, a Foreign Legal Consultant Office, or a Joint Venture Law Firm”.

In Article 33, change “a Foreign Legal Consultant or a Foreign Legal Consultant Office” into “a Foreign Legal Consultant, a Foreign Legal Consultant Office, or a Joint Venture Law Firm”.

In the preceding clause of the Article 35, change “the Attorney-at-Law Act” into “the Attorney-at-Law Act 28 (2)”, and in the latter clause of the same article, change “”law office” shall be construed as “Foreign Legal Consultant” and “Foreign Legal Consultant Office,”” into “”law office” shall be construed as “Foreign Legal Consultant” and “Foreign Legal Consultant Office,” and “Affiliated Local Bar Association” shall be construed as “Korean Bar Association”.”

The Chapter 5-2 (35-2 to 35-33) shall be newly added as follows.

Chapter 5-2 JOINT VENTURE LAW FIRM Article 35-2 (Establishment) (1) L aw Firm, Law Firm(Ltd.) or Lawyers Union can join with ones incorporated into the party country of free trade agreement and etc. announced by the Minister of Justice, with the execution of legal affairs regardless of the legal form as a primary purpose and establish a Law Firm.

(2) Where a Foreign Joint Venture Participant has Office, Local Office, Local Law Firm, Branch, Branch Office across plural countries whose primary purpose is to execute legal affairs, a Party Country of Free Trade Agreement and etc. in the Paragraph 1 shall be decided based on the country where the office in which the highest decision making is carried out is located at.

Article 35-3 (Establishment Application and etc.)

(1) To establish a Joint Venture Law Firm, it is required that a Joint Venture Participant shall prepare the bylaws and receive the authorization from the Minister of Justice, through Local Bar Association in charge of the region where the principal office is located at and Korean Bar Association. The same procedure is required when modifying the bylaws.

(2) To receive authorization for establishing a Joint Venture Law Firm or authorization for modification of the bylaws, a Joint Venture Participant shall apply in written form, with documentary evidence defined in Presidential Decree attached.

(3) The valid term of the authorization relevant to the Paragraph 1 is 5 years since the day when the establishment is authorized by the Minister of Justice.

(4) The Application for Renewal of the Authorization for establishment is accepted from 5 to 10 months before the day when the term of validity in Paragraph 3 is expired.

Article 35-4 (Matters to be included in the bylaws) In the bylaws of a Joint Venture Law Firm, the following matters of each subparagraphs shall be included.

1. The purpose, name, place of location of principal office and branch office.

2. The name of all Joint Venture Participants, registration number (If a registration number is not given, a number which corresponds to a registration number), the address of principal office.

3. The type of investment, its equivalent value or standard of estimation and ratio of share.

4. Matters regarding the subscriptionㆍwithdrawal of a Joint Venture Participant and any other modifications.

5. Matters regarding Joint Venture Participants Conference.

6. Name and resident registration number (In cases of foreigners, it can be replaced with birthdate) of Appointed attorneys (it refers to lawyers equipped with requirements specified in 35-11 (1)) and Appointed Foreign Legal Consultants in a Joint Venture Law Firm, and the address of the representative.

7. Matters regarding the right and obligation of Appointed Attorneys and Appointed Foreign Legal Consultants in a Joint Venture Law Firm.

8. Matters regarding the representative of a Joint Venture Law Firm.

9. Matters regarding assets and account.

10. Where the date of existence or reason for dissolution is decided, its date or the reason.

Article 35-5 (registration) (1) Where a Joint Venture Law Firm is authorized for establishment, it should register of establishment in two weeks. The same procedure is required when contents of registration are modified.

(2) The contents of registration of the Paragraph 1 are as following subparagraphs.

1. The purpose, name, and place of location of principal offices and branch offices.

2. The name, registration number (If a registration number is not given, a number which corresponds to a registration number), the address of principal office.

3. The type of investment, its equivalent value and the performed parts.

4. Name and resident registration number (In cases of foreigners, it can be replaced with birthdate) of Appointed attorneys and Appointed Foreign Legal Consultants in a Joint Venture Law Firm, and the address of the representative.

5. Matters regarding the representative of a Joint Venture Law Firm.

6. Where more than two people have decided to represent a Joint Venture Law Firm jointly, its provisions.

7. Where the date of existence or reason for dissolution is decided, its date or the reason.

8. Year Month Day of the date of authorization for establishment.

(3) A Joint Venture Law Firm is established by registering for establishment at the place where a principal office is located at.

Article 35-6 (Name) (1) A Joint Venture Law Firm shall write the name (which involves acronyms in common use) of all Joint Venture Participants, and use the letter “Joint Venture Law Firm” within the names.

(2) The one who is not a Joint Venture Law Firm shall not use “Joint Venture Law Firm” or any similar title as its name.

Article 35-7 (Composition of Joint Venture Law Firm) (1) Any Joint Venture Law Firm shall be comprised of one or more domestic Joint Venture participant and one or more foreign Joint Venture participant.

(2) No Joint Venture participant shall establish two or more Joint Venture Law Firms.

(3) In cases where a Joint Venture Law Firm fails to secure the required number of participants referred to in paragraph (1), such Joint Venture Law Firm shall secure the required number of participants within three months from the date on which the Joint Venture Law Firm is found to secure the required number of participants.

Article 35-8 (Participants of Joint Venture) (1) Any domestic participant of Joint Venture who establishes a Joint Venture Law Firm shall satisfy the requirements prescribed in the following subparagraphs.

1. The Joint Venture Law Firm shall be duly established in accordance with the Attorney-at-Law Act and have been normally operated for more than three years; 2. The Joint Venture Law Firm shall be comprised of not less than five attorneys-at-law who have served for not less than five years in total in positions that fall under any subparagraph of Article 42 (1) of the Court Organization Act, and at least three of them shall be members of the domestic Joint Venture participant.

3. The high-level decision body of the principal office shall have passed a resolution or decided to establish a Joint Venture Law Firm.

4. The Joint Venture Law Firm shall have been operated satisfying the requirements prescribed in the following cases. (a) The Joint Venture Law Firm shall not be subject to any grounds for disciplinary actions or criminal punishments in accordance with the Attorney-at-Law Act for the last five years. Provided, That the cases of being subject to a disciplinary action or a criminal punishment of fines not exceeding 3 million won, where considering the details and the intent of the conduct which has been the cause of the disciplinary action or the criminal punishment falls under such negligible cause as prescribed by the Presidential Decree shall be excluded. (b) The representative of the Joint Venture Law Firm shall not be subject to any grounds for disciplinary actions or criminal punishments of imprisonment without labor or heavier punishments in accordance with the Attorney-at-Law Act for the last five years. Provided, That the cases of being subject to a disciplinary action where considering the details and

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the intent of the conduct which has been the cause of the disciplinary action falls under such negligible cause as prescribed by the Presidential Decree shall be excluded.

5. The Joint Venture Law Firm shall have appropriate expertise to deal with legal services of a Joint Venture Law Firm considering its composition, examples of the services, work ability, etc.

(2) Any foreign Joint Venture participant who establishes a Joint Venture Law Firm shall satisfy the requirements prescribed in the following subparagraphs.

1. The Joint Venture Law Firm shall be duly established in the party of Free Trade Agreement and other treaties in accordance with the Acts and subordinate statutes of the party and have been normally operated for more than three years; 2. The Joint Venture Law Firm shall be comprised of not less than five foreign attorney-at-law who has three or more years of experience with legal services after acquiring the qualification as an overseaslicensed lawyer, and at least three of them shall be members of the foreign Joint Venture participant.

3. The high-level decision body of the office where high-level decisions are made as referred to in Article 35-2 (2) shall have passed a resolution or decided to establish a Joint Venture Law Firm.

4. The Joint Venture Law Firm shall have been operated satisfying the requirements prescribed in the following cases. (a) The Joint Venture Law Firm, regardless of nationality, shall not be subject to any grounds for disciplinary actions or criminal punishments in accordance with the Attorney-at-Law Act (including foreign acts equivalent to this Act) for the last five years. Provided, That the cases of being subject to a disciplinary action or a criminal punishment, where considering the details and the intent of the conduct which has been the cause of the disciplinary action or the criminal punishment falls under such negligible cause as prescribed by the Presidential Decree shall be excluded. (b) The representative of the Joint Venture Law Firm, regardless of nationality, shall not be subject to any grounds for disciplinary actions or criminal punishments of imprisonment without labor or heavier punishments concerning performance of practices of the foreign Joint Venture participant in accordance with the Attorneyat-Law Act (including foreign acts equivalent to this Act) for the last five years. Provided, That the cases of being subject to a disciplinary action where considering the details and the intent of the conduct which has been the cause of the disciplinary action falls under such negligible cause as prescribed by the Presidential Decree shall be excluded.

5. The Joint Venture Law Firm shall have appropriate expertise to deal with legal services of a Joint Venture Law Firm considering its composition, examples of the services, work ability, etc.

Article 35-9 (Subscription of Joint Venture Participants) (1) Those who want to participate in the Joint Venture can join a Joint

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Venture Law Firm if all the Joint Venture Participants give their assents and the Minister of Justice authorizes it.

(2) The Joint Venture Participants who are to newly join a Joint Venture Law Firm shall fulfill the requirements specified in the Article 35-8.

Article 35-10 (Withdrawal of Joint Venture Participants) (1) A Joint Venture Participant can withdraw from the joint venture voluntarily. However, he/she must make prior notice before six months.

(2) A Domestic Joint Venture Participant rightly withdraws from the joint venture if he/she has reasons corresponding to any of the following subparagraphs.

1. Where a joint venture is dissolved according to Attorney-At-Law Act. 2. Where a joint venture received an order to suspend its operation 3. Where a reason for withdrawal specified in the bylaws of a Joint Venture Law Firm came to arise (3) A Foreign Joint Venture Participant rightly withdraws from a joint venture if he/she has reasons corresponding to any of the following subparagraphs.

1. Where a joint venture is dissolved according to a party countryâ&#x20AC;&#x2122;s law such as Free Trade Agreements and etc. or situations equivalent to such happens 2. Where a joint venture received an order to suspend its operation according to a party countryâ&#x20AC;&#x2122;s law or situations equivalent to such happens 3. Where a reason for withdrawal specified in the bylaws of a Joint Venture Law Firm came to arise Article 35-11 (Appointed Attorney and Appointed Foreign Legal Consultant) (1) Despite of the 34 (4) of ATTORNEY-AT-LAW ACT, a Joint Venture Law Firm shall have more than two of the Appointed attorneys and Appointed Foreign Legal Consultants who fulfill all the requirements specified in the following subparagraphs.

1. A member of Joint Venture Participants 2. Have a total working experience of more than 5 years at the position that corresponds to any of the subparagraphs specified in 42 (1) of COURT ORGANIZATION ACT, or has an experience of performing legal affairs for more than total 5 years including 2 years of period at its home country of license after acquiring a license of Foreign Attorney.

3. In case of a Foreign Legal Consultant, his/her home country of license shall be the member country of Free Trade Agreements and etc. announced by the Minister of Justice according to 35-2 (1).

(2) The number of Appointed Foreign Legal Consultants within a Joint Venture Law Firm cannot overcome the number of Appointed Attorneys within.

(3) Despite of the 35-15 (3), 21 (3) of the ATTORNEY-AT-LAW ACT and 48 (3) (includes the cases applied mutatis mutandis according to the Article 58-16 and the Article 58-30 of the same law), Appointed

Attorneys and Appointed Foreign Legal Consultants within a Joint Venture Law Firm can concurrently take the position of Joint Venture Participant with the permission of the Minister of Justice.

(4) Where a Joint Venture Law Firm can no longer fulfill the requirements on the number of Appointed Attorneys or Appointed Foreign Legal Consultants specified in the Paragraph 1 and the Paragraph 2, it should be complemented within 3 months.

Article 35-12 (Assigned Attorney and Assigned Foreign Legal Consultant) (1) Despite of the 34 (4) of the ATTORNEY-AT-LAW Act, a Joint Venture Law Firm can have Assigned Attorney, not Appointed Attorney, and Assigned Foreign Legal Consultant, not Appointed Foreign Legal Consultant.

(2) In case of a Foreign Legal Consultant in the Paragraph 1, his/her home country of license shall be a member country of Free Trade Agreements and etc. announced by the Minister of Justice according to 35-2 (1).

(3) The number of Assigned Foreign Legal Consultants within a Joint Venture Law Firm cannot surpass the number of Assigned Attorneys within.

(4) Where a Joint Venture Law Firm can no longer fulfill the requirements specified in the Paragraph 3, it should be complemented within 3 months.

Article 35-13 (Representative) The representative of a Joint Venture Law Firm should be assigned among the members who fulfill all the requirements in the following subparagraphs, at the Joint Venture Participants Conference (Refers to a conference composed of those who represent the Joint Venture Participants. The others stay the same.)

1. An Appointed Attorney or an Appointed Foreign Legal Consultant 2. In case of a Foreign Legal Consultant, his/her home country of license shall be the place where a Foreign Joint Venture Participant according to 35-2 (2) is located at.

Article 35-14 (Office Employees) (1) Any Joint Venture Law Firm may employ office staff.

(2) Article 22 (2), (4), and (5) of the Attorney-at-Law Act shall be applied mutatis mutandis to office employees in a Joint Venture Law Firm. In such cases, "attorney-at-law" and "head of local bar association" shall be deemed "joint venture law firm" and "head of the Korean Bar Association," respectively.

Article 35-15 (Offices) (1) Any Joint Venture Law Firm may establish branch offices.

(2) When a Joint Venture Law Firm opens or relocates an office, or establishes a branch office shall report to the Minister of Justice through local bar association and Korean Bar Association.

(3) No attorney-at-law and foreign legal consultant at Joint Venture Law Firm shall establish an office other than a Joint Venture Law Firm with objectives of providing legal services, regardless of its legal form.

(4) The standard of establishment of branch offices in accordance with

paragraph (1) shall be prescribed by the Presidential Decree.

Article 35-16 (Shares) (1) No foreign Joint Venture participant shall own more than 49 percent of total shares of the Joint Venture Law Firm.

(2) If there are plural foreign Joint Venture participants, the sum of each participant’s share will be the standard when applying paragraph (1).

(3) No participant of a joint venture may transfer its share entirely or partially without obtaining the consent of every other participant.

Article 35-17 (Exercising voting rights) (1) A participant of a joint venture exercises its voting right at joint venture participants’ meeting proportionate to the ratio of its share.

(2) The decisions of a joint venture participants’ meeting shall be made by majority.

Article 35-18 (Distribution of profit) Every participant shall acquire profit proportionate to the ratio of its share if not prescribed otherwise by the articles of association notwithstanding article 34 (5) of the Attorney-at-Law Act. Article 35-19 (Scope of Practice) Any Joint Venture Law Firm shall perform services outlined in the following subparagraphs within the limits of this Act and any other Acts.

1. Representation of judicial or legal proceedings at State, local governments and any other public agencies or preparation of legal documents for such proceedings.

2. Representation of requisition to prepare a copy referred to in the subparagraphs Article 2 of Notary Public Act. 3. Legal advice on labor issues.

4. Representation of services for the primary purpose of acquiring, losing, or changing a right regarding an immovable located in the Republic of Korea, an intellectual property right, a mining right, and other rights which shall be constituted or serve as requirements for setting up against upon the registration with an administrative authority or preparation of documents for the purpose thereof.

5. Representation of services pertaining to kinship and inheritance where citizens of the Republic of Korea are the parties, or where related properties are located in the Republic of Korea or preparation of documents for the purpose thereof.

Article 35-20 (Method of Execution of Operations) (1) Each Joint Venture Law Firm shall execute operations in its name and designate attorney-at-law(hereinafter referred to as “attorney-at-law in charge”) or foreign legal consultant(hereinafter referred to as “foreign legal consultant in charge”) to be in charge of such operations. An affiliated attorney or an affiliated foreign legal consultant shall be jointly designated with designated attorney or designated foreign legal consultant.

(2) When appointing attorney or consultant under paragraph (1), no

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foreign legal consultant shall be designated as foreign legal consultant in charge of services other than those prescribed in each subparagraph of Article 24.

(3) When any Joint Venture Law Firm executes an operation referred to in Article 49 (2) of Attorney-at-Law Act, it shall appoint attorney-at-law to be in charge of the operations, from among the attorneys-at-law who are capable of performing such duty.

(4) When a Joint Venture Law Firm fails to designate an attorney-at-law in charge or foreign legal consultant in charge, all designated attorneys and all designated foreign legal consultants are deemed to be designated as attorney in charge and foreign legal consultant in charge. Provided, that all designated attorneys are deemed to be designated as attorney in charge of other services than those prescribed in each subparagraph of Article 24.

(5) Any Joint Venture Law Firm shall, when an attorney-at-law in charge or a foreign legal consultant in charge is unable to be in charge of an operation, designate without delay another attorney-at-law in charge or another foreign legal consultant in charge under paragraph (1).

(6) When any Joint Venture Law Firm fails to designate another attorneyat-law in charge or another foreign legal consultant in charge under paragraph (5), paragraph (4) shall apply mutatis mutandis.

(7) When any Joint Venture Law Firm designates an attorney-at-law in charge or a foreign legal consultant in charge under paragraphs (1) through (6), it shall notify, in writing, the client of the accepted case concerned of such fact without delay. The same shall apply to cases where an attorney-at-law in charge or a foreign legal consultant in charge is replaced.

(8) Each attorney-at-law in charge or foreign legal consultant in charge shall represent his/her law firm when he/she executes designated operations.

(9) Every Joint Venture Law Firm shall mark its name on every document that it prepares in connection with its operations, and the attorney-atlaw in charge or the foreign legal consultant in charge shall sign it and affix his/her seal thereto or sign it.

Article 35-21 (Prohibition of Undue Participation) No foreign legal consultant affiliated with a Joint Venture Law Firm shall give professional orders to any attorney-at-law affiliated with the Joint Venture Law Firm or make undue participations when handling legal services other than those prescribed in each subparagraph of Article 24.

Article 35-22 (Restrictions on Services of Attorneys-at-Law and Foreign Legal Consultants) (1) Every attorney-at-law and foreign legal consultant affiliated with a Joint Venture Law Firm shall be prohibited from providing services as an attorney-at-law or foreign legal consultant on his or her account or on a third person’s account. Provided, that when a designated attorney-at-law or a designated foreign legal consultant concurrently holds the office of a member of participants of Joint Venture Law Firm, providing services on the participant’s account shall be excluded.

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(2) Every person who was an attorney-at-law or a foreign legal consultant affiliated with a Joint Venture Law Firm shall be prohibited from providing services as an attorney-at-law or a foreign legal consultant for cases which the Joint Venture Law Firm accepted through consulting during the period in which he or she worked for the Joint Venture Law Firm.

Article 35-23 (Separate Execution of Operations of Domestic Joint Venture Participants) Any domestic participant of Joint Venture may execute operations referred to in Article 3 of Attorney-at-Law Act separate from Joint Venture Law Firm.

Article 35-24 (Preparation and Keeping of Register) Any Joint Venture Law Firm shall prepare and keep a register on cases it accepts. In such cases, Article 28 (2) and (3) of the Attorney-at-Law Act shall be applied mutatis mutandis to the preparation of a register on accepted cases, etc.

Article 35-25 ((Restriction on Acceptance of Case) No Joint Venture Law Firm shall provide its services with respect to a case that falls under any of the following subparagraphs: Provided, That the same shall not apply to cases under subparagraph 2 in which the client of the already accepted case consents: 1. A case brought by the opposing party, for which the Joint Venture Law Firm has been consulted by the other party of the case and which the Joint Venture Law Firm has already accepted; (including the case which a participant of the Joint Venture has accepted) 2. A case brought by the opposing party of another case which the Joint Venture Law Firm has already accepted; (including the case which a participant of the Joint Venture has already accepted) 3. A case which the designated attorney-at-law, designated foreign legal consultant, affiliated attorney-at-law, affiliated foreign legal consultant, or affiliated foreign attorney-at-law at the Joint Venture Law Firm (including members or affiliated attorney-at-law of domestic Joint Venture participants members, affiliated foreign legal consultant or affiliated attorney-at-law of foreign Joint Venture participants) handles or has come to handle in his or her capacity as a public official, mediator or arbitrator.

Article 35-26 (Prohibition of Employment, Partnership, Concurrent Positions, etc.)

(1) No Joint Venture Law Firm shall employ any Korean-certified judicial scrivener, Korean-licensed patent attorney, Korean-certified public accountant, Korean-certified tax accountant, nor Korean customs broker.

(2) No Joint Venture Law Firm shall deal with clients' cases in any manner including partnership, affiliation, establishment of a comprehensively collaborative relationship, and joint acceptance of

cases, and accordingly share compensation or proceeds therefrom with any Korean-certified judicial scrivener, Korean-licensed patent attorney, Korean-certified public accountant, Korean-certified tax accountant, and Korean customs broker.

(3) No Joint Venture Law Firm shall make a contract of association, establish a law firm, hold shares with, and entrust the operation to any attorney-at-law, law firm, law firms (in the form of Limited Liability Company), association of law offices, Korean-certified judicial scrivener, joint firm of Korean-certified judicial scriveners, Koreanlicensed patent attorney, patent firm, Korean-certified public accountant, accounting firm, Korean-certified tax accountant, tax firm, Korean customs brokers and customs firm. No Joint Venture Law Firm, in any manner, jointly establish and operate, or have a partnership with any Korean-certified judicial scrivener office, joint firm of Koreancertified judicial scriveners, patent lawyer's office, patent firm, patent firm (in the form of Limited Liability Company), Korean-certified public accountant office, accounting firm, Korean-certified tax accountant office, tax firm, Korean customs broker office, and customs firm.

subparagraphs, the Minister of Justice may revoke its authorization for its establishment. Provided, That if any Joint Venture Law Firm falls under subparagraph (2), the Minister of Justice shall revoke its authorization of its establishment: 1. Where an important part of an application form or documentary evidence is omitted, or there are justifiable grounds to deem the content of the application form or evidence thereof to be false; 2. Where its participant establishes two or more Joint Venture Law Firms in violation of Article 35 (7) 2; 3. Where it fails to fill the vacancy of the participant within three months in violation of Article 35 (7) 3; 4. Where its participant fails to satisfy the requirements of Article 35 (8); 5. When it has violated the provisions of Acts and subordinate statutes in providing its services.

(2) The Minister of Justice shall hold a hearing when he/she intends to revoke its authorization for the establishment of a Joint Venture Law Firm under paragraph (1).

Article 35-27 (Reporting, etc.)

(1) If the matters in each of the following subparagraphs change, every Joint Law Firm shall report it to the Minister of Justice.

1. Matters with respect to Article 35 (8).

2. Matters with respect to Article 35 (11) through (13).

3. Matters with respect to Article 35 (16) 4. Other matters with respect to authorization for establishment.

(2) The Minister of Justice may request a Joint Venture Law Firm to submit material to confirm the facts prescribed in paragraph (1).

(3) The Minister of Justice may request administrative authorities or other public and private organizations to submit materials required to grant or revoke the authorization of establishment.

Article 35-30 (Dissolution) (1) Any Joint Venture Law Firm shall be dissolved when a cause falling under any of the following subparagraphs occurs: 1. When a cause for dissolution as prescribed in the articles of incorporation occurs; 2. When there is the consent of all participants to dissolution; 3. When it becomes bankrupt 4. When the authorization for establishment is revoked; 5. When it fails to renew authorization after the validation period of authorization expires.

(2) When a law firm is dissolved, a liquidator shall immediately file a report thereon with the Minister of Justice through the local bar association in the locality of its principal office and the Korean Bar Association.

Article 35-28 (Damage Compensation) (1) When any representative of a Joint Venture Law Firm (including attorney-at-law in charge and foreign legal consultant in charge) causes loss to any other person due to execution of operations, the Joint Venture Law Firm shall be liable to compensate for such loss in concert with the representative.

(2) Each Joint Venture Law Firm shall, in order to indemnify the liability for the compensation of losses related to its execution and operation subscribe to the mutual aid fund that is operated by the Korean Bar Association as prescribed by Presidential Decree.

(3) Each Joint Venture Law Firm shall explicitly indicate the matters concerning the liability for the compensation of losses referred to in paragraph (2) on case acceptance contracts and advertisements as prescribed by Presidential Decree.

Act 35-29 (Revocation of Authorization) (1) When any Joint Venture Law Firm falls under any of the following

Article 35-31 (Notices of Authorization, etc.)

When there is authorization for establishment and revocation thereof, dissolution or merger of a Joint Venture Law Firm, the Minister of Justice shall, without delay, give notice thereof to the local bar association in the locality of the law firm's principal office and the Korean Bar Association.

Article 35-32 (Provisions Applicable Mutatis Mutandis) Chapter VI shall apply mutatis mutandis with respect to the disciplinary actions against Joint Venture Law Firm.

Article 35-33 (Other Acts Applicable Mutatis Mutandis) (1) The provisions of Articles 27, 28 (2), 30, 32 through 37(excluding Articles 34 (4) and (5)) of Attorney-at-Law Act shall apply mutatis mutandis to Joint Venture Law Firms. In such cases, “attorney-at-law” shall be deemed as “Joint Venture Law Firm,” “local bar association”

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shall be deemed as “Korean Bar Association.”

(2) Except as provided otherwise in this Act, the provisions pertaining to unlimited liability partnership companies in the Commercial Act shall apply mutatis mutandis to Joint Venture Law Firms. Provided, That the same shall not apply for the provisions of Articles 173, 230, 232 through 240 and 242 through 244.

Paragraph (9) shall be newly inserted in Article 40 as follows: (1) Other matters necessary for the operation of Disciplinary Committee of the Ministry of Justice or the procedure of disciplinary acts, except as provided for in paragraphs (1) through (8), shall be prescribed by the Ordinance of the Ministry of Justice.

“Person” in Article (1) shall be replaced with “person.” A proviso shall be newly inserted in paragraph (1) as follows. “Article 35” and “Attorney-atLaw Act Article 33 and” in paragraph (2) shall be replaced with “Article 35 and 35 (33)” and “Attorney-at-Law Act Article 33 or” respectively.

Provided, that foreign attorney-at-law who executes operations under the Article 24 (2) 1 who is not a foreign legal consultant shall be excluded.

“Services” in Article 47 (1) shall be replaced with “services outside of the scope of practice,” “a person and attorney-at-law employed by such person” in paragraph (3) shall be replaced with “a person,” “administrative authority” and “acquiring, losing, or changing (得失變更 )” shall be replaced with “administrative agency” and “acquiring, losing, or changing” respectively. Paragraph (6) shall be newly inserted in Article 47 as follows: (6) A Foreign Legal Consultant or an attorney-at-law who violates Article 35 (26) 2 or 3.

Article 48 (2) shall be changed as follows. Paragraph (4) shall be deleted, and paragraphs (3) and (5) shall be paragraphs (4) and (6) respectively.

Paragraphs (3), (5) and (7) through (10) shall be newly inserted as follows: (1) Any attorney-at-law employed in violation of Article 34 (1); (2) A person who has employed Korean-certified judicial scriveners, Korean-licensed patent attorneys, Korean-certified public accountants, Korean-certified tax accountants, and Korean customs brokers in violation of Article 34 (1); (1) A person to whom the rights in dispute were assigned in violation of Article 32 of the Attorney-at-Law Act that applies mutatis mutandis pursuant to Article 35 and Article 35 (33) 1; (1) A person who has obtained authorization of establishment through false application with means of submitting false letters of confirmation to the Minister of Justice, manipulating documents, etc. with respect to the authorization of establishment of Joint Venture Law Firm as referred to in Article 35 (3) 1; (2) A person who has used similar titles in violation of Article 35 (6) 2; (3) A person who has employed Korean-certified judicial scriveners, Korean-licensed patent attorneys, Korean-certified public accountants, Korean-certified tax accountants, and Korean customs brokers in violation of Article 35 (26) 1;

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(10) Any Korean-licensed patent attorney, Korean-certified public accountant, Korean-certified tax accountant, or Korean customs broker who has violated Article 35 (26) 2 or 3.

Article 49 (2) shall be changed as follows, and paragraphs (3) through (5) shall be newly inserted as follows: (1) Any Korean-licensed patent attorney, Korean-certified public accountant, Korean-certified tax accountant, or Korean customs broker who has been employed in violation of Article (34) 1; (2) A person who has violated Articles 31 (1) 3 or 35 (25) 3 of Attorneyat-Law Act which applies mutatis mutandis under Article 35; (3) Any Korean-licensed patent attorney, Korean-certified public accountant, Korean-certified tax accountant, or Korean customs broker who has been employed in violation of Article 35 (26) 1; (4) A person who has introduced, referred or enticed a party to a case or other interested persons in a case to a specific attorney-at-law or office staff in violation of Article 37 (1) of Attorney-at-Law Act which applies mutatis mutandis under Article 35 (33) 1; “Person” in parts other than each subparagraph of Article 35 (1) shall be replaced with “one,” paragraph (4) shall be changed as follows, and paragraph (6) shall be newly inserted as follows: (1) A foreign legal consultant, a representative of a foreign legal consultant office, or a Joint Venture Law Firm who has violated provisions of Article 27 (3) through (6); (1) A Joint Venture Law Firm which has violated Article 35 (28) 2 or 3; “Person” in parts other than each subparagraph of Article 53 (2) shall be replaced with “one,” “who has violated” in paragraph (1) shall be replaced with “who has violated,” and subparagraph (1) 2 shall be newly inserted. “Person” in paragraph (2) shall be replaced with “a foreign legal consultant, a representative of a foreign legal consultant office, or a Joint Venture Law Firm”, “a copy of notarial deed” in paragraph (4) shall be replaced with “copies in accordance with each subparagraph of Article (2) of Notary Public Act”. Paragraphs (5) through (8) shall be newly inserted, and “provisions of Article 117 (3) through (6) in Attorney-at-Law Act” in paragraph (3) shall be replaced with “provisions of Article 117 (4) through (7) in Attorney-at-Law act”.

1.1. A person who has stayed in violation of Article 24 (2) 2; (1) A person who has failed to report the number and the amount of attorney fees of the cases he/she has handled in violation of Article (28) 2 of Attorney-at-Law Act which applies mutatis mutandis under Article 35; (2) A Joint Venture Law Firm which has violated Article 22 (22) 1 or 35 (24) of Attorney-at-Law Act which applies mutatis mutandis under Article 35 (14) 2; (3) A person who has failed to make a report on dissolution in violation of Article 35 (30) 2; (4) A person or a Joint Venture Law Firm that has failed to report the number or the amount of attorney fees of the cases he/she/it has handled in violation of Article 28 (2) of Attorney-at-Law Act which

applies mutatis mutandis under Article 35 (33) 1, or that has entered or remained for the purpose of soliciting legal cases in violation of Article 35 of Attorney-at-Law Act, or that has introduced, referred or enticed cases in violation of Article 36 of Attorney-at-Law Act;

ADDENDA Article 1 (Enforcement Date) This Act shall enter into force on July 1, 2016.

Article 2 (Amendment to Other Acts) Attorney-at-Law Act shall be amended partially as follows: “Law firm” in Article 21-2 (1) 3 shall be replaced with “law firm, Joint Venture Law Firm as referred to in Article 2 subparagraph 9 in Foreign Legal Consultant Act”.

“Law firm, limited liability law firm, law firm partnership (hereinafter referred to “law firm, etc.” in this Article)” in Article 31 (4) 1 shall be replaced with “law firm, limited liability law firm, law firm partnership or Joint Venture Law Firm (hereinafter referred to “law firm, etc.” in this Article) as referred to in Article 2 subparagraph 9 in Foreign Legal Consultant Act”.

“In cases of being designated as an attorney-at-law in charge of a law firm, limited liability law firm or law firm partnership” in Article 31 (2) 1 shall be replaced with “in cases of being designated as an attorney-atlaw in charge of a law firm, limited liability law firm or law firm partnership or being designated as an attorney-at-law in charge of a Joint Venture Law Firm pursuant to Article 35-20 of Foreign Legal Consultant Act”.

“In cases of being designated as an attorney-at-law in charge in a law firm, a limited liability law firm or a law firm partnership” shall be replaced with “in cases of being designated as an attorney-at-law in charge of a law firm, limited liability law firm or law firm partnership or being designated as an attorney-at-law in charge of a Joint Venture Law Firm pursuant to Article 35-20 of Foreign Legal Consultant Act”.

“Attorney-at-law in charge of a law firm, limited liability law firm or law firm partnership” shall be replaced with “attorney-at-law in charge of a law firm, limited liability law firm or law firm partnership or attorney-atlaw at a Joint Venture Law Firm pursuant to Article 35-20 of Foreign Legal Consultant Act”.

“Law firm, limited liability law firm, law firm partnership (hereinafter referred to “law firm, etc.” in this Article)” in Article 89-6 (1) shall be replaced with “law firm, limited liability law firm, law firm partnership or Joint Venture Law Firm (hereinafter referred to “law firm, etc.” in this Article) as referred to in Article 2 subparagraph 9 in Foreign Legal Consultant Act”.

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Court Decisions NOTE: The translation is NOT official. It only serves as a guideline.

01 Revocation of Disposition Imposing Corporate Tax, etc.

Supreme Court, 2014Du335, Nov. 26, 2015 Main Issues and Holdings

[1] The meaning of the taxation principle of economic substance under Article 14 (1) of the former Framework Act on National Taxes / Whether the principle of actual taxation can be applied to an international transaction in which a resident or domestic corporation establishes, and uses only the corporate form of, a merely formal “base company” in a tax haven to avoid domestic taxes (affirmative) [2] In cases where it is difficult to apply the transfer price tax system under the former Adjustment of International Taxes Act to an international transaction between persons in special relationship, and the substance of the transaction constitutes a transfer of domestic corporate profits to a foreign related person without consideration, whether the said transaction falls under any of the items under Article 3-2 of the former Enforcement Decree of the Adjustment of International Taxes Act (affirmative) / In cases where a domestic corporation jointly holding derivative-based rights with a foreign related party distributes profits to said foreign related party by allowing it to exercise the entire right, whether such an act falls under the scope of repudiation of wrongful

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calculation under Article 52 (1) of the former Corporate Tax Act and Article 88 (1) 7-2 of the former Enforcement Decree of the Corporate Tax Act (affirmative) [3] In cases of a transfer of a corporation’s issued stocks together with its managerial control, whether the transaction price may be deemed as an ordinary market price (negative) / In cases of stock transactions involving a complete transfer of managerial control, whether the transaction price may be deemed a normal price. (negative in principle)

Summary of the Decision [1] The taxation principle of economic substance as provided under Article 14 (1) of the former Framework Act on National Taxes (amended by Act No. 9911 of Jan. 1, 2010) means that, when there is a person to whom taxable items such as income, profit, property, or transaction substantially accrue, different from the one nominally designated, the tax authority shall deem liable for taxing the one to whom such items substantially accrue, instead of the nominally designated person in formality or appearance.

Thus, in cases where: (a) the person to whom a property nominally accrues lacks the capacity to control/manage the property; (b) there is another person who substantially controls/manages the property by means of governance, etc. other than the nominal owner; and (c) the disparity between name and substance arose out of the intent to avoid tax, the

income on property shall be deemed to accrue to the person substantially controlling/managing the property, and said person shall be deemed liable for taxation. In addition, the taxation principle of economic substance may be applicable not only to those international transactions in which a nonresident or foreign corporation establishes, and uses only the corporate form of a nominal corporation in a country eligible for tax treaty benefits in order to avoid domestic taxes as the source country, but also to those international transactions in which a resident or domestic corporation establishes a so-called “base company” only in form without the capacity to carry out business activities in a tax haven where income tax is exempted or imposed at a low rate, and uses only the corporate form of said base company as a means to avoid domestic taxes as the country of residence, thereby unfairly reserving the income which ought to have accrued to the substantial controller/manager.

[2] In cases where it is difficult to apply the transfer price tax system under the former Adjustment of International Taxes Act to an international transaction between persons in special relationship, and the substance of the transaction constitutes a transfer of domestic corporate profits to a foreign related person without consideration, said transaction shall be construed to fall under each of the items under Article 3-2 of the former Enforcement Decree of the Adjustment of International Taxes Act, in full view of the following: (a) transitional process of the enactment and amendment of the Adjustment of International Taxes Act; (b) developments leading up to the establishment of Article 3 (2) of the former Adjustment of International Taxes Act (amended by Act No. 9914 of Jan. 1, 2010; hereinafter the “former International Taxes Adjustment Act”); (c) interrelationship between the former Corporate Tax Act (amended by Act No. 10423 of Dec. 30, 2010; hereinafter the “Corporate Tax Act”) and the former International Taxes Adjustment Act; and (d) each item under Article 88 (1) of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 20720 of Feb. 29, 2008; hereinafter the “Corporate Tax Act Enforcement Decree”) setting out the object and types of repudiation of wrongful calculation, and the features and organization of each item under Article 3-2 of the former Enforcement Decree of the International Taxes Adjustment Act (amended

by Presidential Decree No. 21299 of Feb. 4, 2009; hereinafter the “former International Taxes Adjustment Act Enforcement Decree”) setting out the scope of exclusion from the applicability of the former International Taxes Adjustment Act. Therefore, it falls under the scope of repudiation of wrongful calculation under Article 52 (1) of the Corporate Tax Act and Article 88 (1) 7-2 of the Corporate Tax Act Enforcement Decree for a domestic corporation jointly holding derivative-based rights with a foreign related party to forego its rights to exercise corresponding to its holding ratio, and to instead distribute profits to said foreign related party by allowing it to exercise the entire right, which is tantamount to an asset transfer without consideration under Article 3-2 subparagraph 1 of the former International Taxes Adjustment Act Enforcement Decree.

[3] In the case of a transfer of a corporation’s issued stocks together with its managerial control, the transaction price may not be deemed an

ordinary market price reflecting the objective exchange value in a transfer of stocks only. Likewise, it is difficult to regard a stock transaction involving a complete transfer of managerial control as a transaction highly comparable to a domestic corporate transfer of only a part of the stocks to a foreign related party. Thus, barring any special circumstances, the transaction price in such a context may not be deemed a normal price.

02 Damages (Med.)

Supreme Court, 2011Da28939, Nov. 27, 2015 Main Issues and Holdings [1] In cases where the patient’s physical functions are terminally damaged by doctor’s negligence of one’s duties with such due care as required of a well-intentioned administrator, and only a mere treatment of aftereffects or prevention of worsening has been exercised, whether claim for payments of medical and surgical expenses could be made (negative), [2] Whether the same applies in case where doctor’s liability of compensation is restricted in consideration of the patient’s physical constitution and the risk of the surgery performed (affirmative).

Summary of the Decision [1] In cases where the patient’s physical functions are rather terminally damaged by doctor’s negligence of one’s duties with such due care as required of a well-intentioned administrator, and only a mere treatment of aftereffects or prevention of worsening has been exercised, since the doctor’s medical procedure has failed to follow the object of medical obligation or been only a part of a compensation for the damages done, the hospital cannot charge the patients for medical and surgical treatments.

[2] The same shall apply when the doctor’s liability of compensation is restricted, not because the occurrence or expansion of damage is imputed to the sufferer, but in consideration of the sufferer’s physical constitution and the risk of medical procedures by the rules of equity.

03 Revocation of Re-adjudication on Relief Request for Unfair Dismissals

Supreme Court, 2015Du48136, Nov. 27, 2015 Main Issues and Holdings

[1] The purpose of Article 27 of the Labor Standards Act, stipulating that the dismissal of a worker shall become effective only upon stating grounds and timing for the dismissal in a written notice and the method of stating grounds in a written notice [2] In cases where the term of trial employment has expired, whether employer must notice in a writing the specific·practical reason for a refusal of further conclusion of labor contract

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Summary of the Decision [1] Article 27 of the Labor Standards Act stipulates that the termination of employment shall become effective only upon stating grounds and timing for the dismissal in a written notice as it aims: (1) for the employer to take close attention in dismissing the worker, (2) to clarify the existence, timing and reason of dismissal for appropriate and simple settlements of related disputes, (3) for the worker to cope with the dismissal accordingly, a specific ground of dismissal must be acknowledgeable for the worker when the employer notifies grounds of dismissal etc. in a written form.

[2] Taking into account of the intention∙objective of trial period employment which is to observe, judge and evaluate worker’s vocational eligibility such as vocational ability, qualification, personality characteristics, diligence etc., even though a refusal of the labor contract conclusion at the expiration of trial period can be more widely accepted than general dismissal, this as well requires objectively rational reasons in view of the prevailing social norms.

In view of the aforementioned contents·intention of the Article of Labor Standards Act and the requisites for the legitimacy in refusal of labor contract conclusion at the expiration of trial period etc., in cases where an employer in trial period employment relation refuses further conclusion of the labor contract, the specific and practical reason of refusal should be notified in a writing so that the worker can better cope with the dismissal by comprehending the reason of refusal.

04 Supreme Court Decision 2015Du50085 Decided December 23, 2015

[Revocation of the Notification of the Change of the Income Amount] Main Issues and Holdings In the case in which foreign corporations, not the existing shareholders of corporations that issue new shares, have been distributed profit, due to low-price takeover, from existing stockholders under special relationships, whether the profit can be deemed as domestic source income of foreign corporations as provided in the former Corporate Tax Act Article 93 subparagraph 11 item i (negative)

Summary of Decision Article 93 subparagraph 11 item i of the former Corporate Tax Act (before being amended into Act No. 10423, Dec. 30, 2010) provides the following as a part of domestic source income of foreign corporations: income accruing from the increase of the value of the stocks and investment shares of a domestic corporation that are possessed by the person in special relationship as prescribed by the Presidential Decree. According to the delegation, Article 132 (14) of the former Enforcement Decree of the Corporate Tax Act (before being amended into Presidential Decree No. 21302, Feb. 4, 2009; hereinafter the same shall apply) provides this income as the income that accrues from profits that are provided to foreign corporations which are shared by other shareholders, etc. who are in the special relationship provided for in each subparagraph of paragraph (13)

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as a result of the transaction falling under any item of Article 88 (1) 8.

Article 88 (1) 8 item b of the former Enforcement Decree of the Corporate Tax Act provides the case where the right to allot and take over new shares in transactions executed to increase the capital of the corporation is partially or completely waived or bought at a price higher than the market price of the new shares. However, this Article does not provide the case in which other persons than shareholders of the corporation are directly allotted new shares from the relevant corporation, as provided in Article 418 (2) of the Commercial Act. Therefore, even in the case in which foreign corporations, not the existing stockholders of corporations that issue new stocks, have been distributed profit, due to low-price takeover, from existing stockholders under special relationships, the profit cannot be deemed as domestic source income of foreign corporations as provided in the former Corporate Tax Act Article 93 subparagraph 11 item i (negative).

05 Supreme Court, 2015Do11550, Dec. 10, 2015

Violation of Trademark Act, Violation of Copyright Act, and Violation of Unfair Competition Prevention and Trade Secret Protection Act Holding [1] In the issue where the defendant was prosecuted for violation of trademark holder A’s registered trademark (hereinafter referred to as “registered trademark”) rights by importing and selling designated goods such as dolls with a trademark identical or similar (hereinafter referred to as “trademark used by defendant”), it was decided that the trademark used by the defendant was indeed a similar trademark that could cause confusion and misconception regarding the source of each product.

[2] By importing and selling human-like rabbit dolls, the defendant was prosecuted of violation of the copyright act, violation of the Unfair Competition Prevention and Trade Secret Protection Act (hereinafter referred to as “Unfair Competition Prevention Act”), and violation of the trademark act as the defendant had (1) infringed upon the author’s economic rights of limited liability company A from Japan, and (2) violated the trademark rights of company B, who sold these dolls in the domestic market with the commercialization agreement it made with foreign company A and others. It was concluded that the violation of the copyright act and the violation of unfair competition prevention have relationships of imaginative concurrence of crimes, whereas the violation of the trademark act was seen to have a relationship of actual concurrence of crimes with the other offenses.

Summary of the Decision [1] In the issue where the defendant was prosecuted for violation of trademark holder A’s registered trademark (hereinafter referred to as “registered trademark”) rights by importing and selling designated goods such as dolls with a trademark identical or similar (hereinafter referred to as “ trademark used by the defendant”) to A’s registered trademark, it was decided that the trademark used by the defendant was indeed a similar

trademark that could cause confusion and misconception in consumers and traders regarding the source of the products as it gives them a similar impression, memory, and association. Such a decision was made because (1) the registered trademark, which is a rabbit head drawn in a blue rolypoly with the French words ‘le Sucre’ at the bottom, is one of the major features that grabs the attention of the consumers considering the rabbit head’s size, place, and its importance within the trademark, and because (2) the trademark used by the defendant, although the rabbit is clothed with limbs and a body, essentially uses the same rabbit head as that of the registered trademark.

[2] By importing and selling human-like rabbit dolls, the defendant was prosecuted of violation of the copyright act, violation of the Unfair Competition Prevention and Trade Secret Protection Act (hereinafter referred to as ‘Unfair Competition Prevention Act’), and violation of the trademark act.

It was pointed out that the defendant had (1) infringed upon the author’s economic rights of limited liability company A from Japan, and (2) violated the trademark rights of company B, who sold these dolls in the domestic market with the commercialization agreement it made with foreign company A and others. It was concluded that pursuant to Article 40 of the Criminal Act, the violation of the copyright act and the violation of unfair competition prevention have relationships of imaginative concurrence of crimes. The violation of the trademark act, which differs in component and form of action from the other offenses, has a relationship of actual concurrence of crimes pursuant to the first part of Article 37 of Criminal Law.

06 Confirmation of Worker Status

Supreme Court, 2013Da14965, Nov. 26, 2015 Court Decision [1] In cases where a user company fails to perform its obligation to directly employ a worker, in violation of the temporary agency term limit under the amended Act on the Protection, Etc. of Temporary Agency Workers, Act No. 8076 of December 21, 2006, whether the temporary agency worker has a judicial right to seek judgment against the user company in lieu of its expression of intention to employ (affirmative); and once the judgment becomes final and conclusive, whether a direct employment relationship is established between the user company and the temporary agency worker (affirmative) / In this context, whether the temporary agency worker may claim for damage compensations against the user company for its nonperformance of its direct employment obligation in the amount corresponding to the wages up to the point of establishment of a direct employment relationship (affirmative). [2] In cases where a user company continues to use a temporary agency worker in violation of the temporary agency term limit, whether the applicability of the main text of Article 6 (3) of the former Act on the Protection, Etc. of Temporary Agency Workers or Article 6-2(1) of the subsequently amended Act on the Protection, Etc. of Temporary Agency Worker may be excluded solely for the reason that there was a change in the temporary work agency during the temporary agency term (negative in principle).

Summary of the Decision [1] The former Act on the Protection, Etc. of Temporary Agency Workers (Amended by Act No. 8076 of December 21, 2006) provides in the main text of Article 6 (3) that “in case where the user company continues to use the temporary agency worker in excess of two years, it shall be deemed that the temporary agency worker is employed from the day following the date of expiry of the two year-term” (hereinafter the “deemed direct employment clause”), thereby treating the user company’s violation of the temporary agency term limit as grounds for deeming a direct employment relationship to have been established.

The subsequently amended Act on the Protection, Etc. of Temporary Agency Workers (hereinafter the “Temporary Agency Act”) replaced the deemed direct employment clause with Article 6-2 (1), stipulating to the effect that “if the user company continues to use a temporary agency worker in excess of two years, it shall directly employ the relevant temporary agency worker” (hereinafter the “direct employment obligation clause”). As such, a user company in contravention of the temporary agency term limit under the amended Temporary Agency Act bears an obligation to directly employ the relevant temporary agency worker under the direct employment obligation clause. That is to say, a temporary agency worker has a judicial right to seek judgment against the user company in default of its direct employment obligation, in lieu of its expression of intention to employ. Once the judgment becomes final and conclusive, a direct employment relationship is established between the user company and the temporary agency worker. In addition, the temporary agency worker may claim for damage compensations for the user company’s non-performance of its direct employment obligation in the amount corresponding to the wages up to the point of establishment of a direct employment relationship.

[2] The main text of Article 6 (3) of the former Act on the Protection, Etc. of Temporary Agency Workers (Amended by Act No. 8076 of December 21, 2006) (hereinafter the “deemed direct employment clause”) or Article 6-2 (1) of the subsequently amended Act on the Protection, Etc. of Temporary Agency Workers (hereinafter the “direct employment obligation clause”) sets out the legal relationship and the consequent legal effect between the user company and the temporary agency worker in their judicial relationship. It is to prevent a habitual prolongation of temporary agencies and promote employment stability on the part of temporary agency workers, either by deeming a direct employment relationship to have been established or by imposing on the user company an obligation to directly employ the worker, apart from the administrative supervision or punishment of the user company’s continued use of a temporary agency worker in violation of the term limit. As such, the contents of said clauses neither directly pertain to a temporary work agency, nor require the identity of a temporary work agency throughout the temporary agency term as a condition for their applicability. Thus, in cases where the user company continues to use a temporary agency worker in violation of the term limit, barring any special circumstances, the applicability of the deemed direct employment clause or the direct employment obligation clause may not be excluded solely for the reason that there was a change in temporary work agency during the temporary agency term.

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Recent Trends of Law & Regulation in Korea |

Interview

“Our Action Must Happen Now, Not Tomorrow.”

Interview with Ms. Héla Cheikhrouhou, Executive Director of GCF

GCF (Green Climate Fund) Created by the United Nations Framework Convention on Climate Change (UNFCCC), the Fund aims to support a paradigm shift in the global response to climate change. It allocates its resources to lowemission and climate-resilient projects and programmes in developing countries. The Fund pays particular attention to the needs of societies that are highly vulnerable to the effects of climate change, in particular Least Developed Countries (LDCs), Small Island Developing States (SIDS), and African States.

The Green Climate Fund was established by 194 countries party to the UN Framework Convention on Climate Change in 2010. It is designed as an operating entity of the Convention’s financial mechanism and is headquartered in the Republic of Korea. It is governed by a 24 Board member Board, representing countries, and receives guidance from the Conference of the Parties to the Convention (COP).

Q:

Although numerous international organizations are located in Europe, GCF is located in Korea. Are there any particular reasons for choosing Korea instead of other eligible countries when establishing GCF? There was an international competition to select the location of the headquarter of the fund, and Korea won the competition. Those who were part of that decision clearly indicated that it is because Korea is now an example of the fact that developing countries are also evolving and can grow into developed nations. Korea is an example in terms of quick evolution and a model that many of the developing countries, like mine, Tunisia, are always trying to learn and replicate. In recent years, Korea has also promoted some vision about how to reconcile economic growth with respect for your stance towards your environment and that’s exactly the theme that the Green Climate Fund is working on- how do you reconcile? So, the government of Korea was very effective in presenting the case for hosting the Green Climate Fund. From my side, even before assuming duty formally, the Deputy Prime Minister had written me in the summer of 2013 to come after I was selected by the board. That’s when we had the discussion about commencement of the implementation of the headquarter agreement and the establishment of the Fund’s headquarters. Ever since then, the collaboration between the Green Climate Fund and the government of Korea has been exemplary. The ability to have a timely opening of the headquarters was quite successful. It was a good partnership between the government of Korea and GCF, and it was attended by her Excellency, President Park. And I think that being in Korea, in my view, in my experience, has been overall a plus. For the Fund, I very much appreciate the work ethics in Korea, and we have many Korean colleagues that have joined the Green Climate Fund staff. Also in the world of the UNFCCC that we serve, Korea is one of the countries that are between the two worlds, and able to be a neutral between the developed and the developing.

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Q:

UNFCCC Paris Agreement, which mainly aims to keep a global temperature rise in this century well below 2 degrees Celsius and to drive efforts to limit the temperature increase even further to 1.5 degrees Celsius above preindustrial levels. In this context, what kind of efforts will the GCF be making for achieving this goal?

The Paris Agreement has also included the decision that the Green Climate Fund will be part of the financial mechanism to support the countries in their implementations of the Paris Agreement. And the nationally determined contributions of all the countries that came into contributing to the Paris Agreement, many of them have explicitly mentioned that they count on GCF for the implementation of their commitment under the Paris Agreement. So this means that there is a lot of expectations for the Green Climate fund. And now our constitutional document, the governing institution, says clearly that we will be promoting approaches that help us shift the paradigm from fossil fuel intensive and resilience lacking, to a low emission and climate resilient development pathway for the developing world. So, this means that the Green Climate Fund must accelerate its efforts and scale up its work. We think that the beginning of the fundâ&#x20AC;&#x2122;s operations has happened on a timely basis, and was quite supportive even to create the needed platform for successful negotiation of the Paris Agreement.

Q:

According to the Cancun Agreement, the GCF will provide funds rising to USD 100 billion per year by 2020 to support mitigation and adaptation actions by developing countries. It seems that mobilizing USD 100 billion a year voluntarily is quite high goals. To encourage voluntary mobilization of the fund what does GCF put its efforts? And during the process of operating the funds how is GCF going to handle with the challenges?

The 100 billion a year by 2020 is an overall target for how much climate finance is going from the developed world to the developing world. And over the last few years, it has been clarified that these amounts are supposed to go through a variety of institutions. For instance, the OECD made an estimate last year that the global volume of climate finance, public and private, going from developed nations to developing nations, has reached 66 billion dollars per annum. So in this context, the role of the Green Climate Fund is to mobilize a share of the 100 billion. And in that regard, the initial resource mobilization of the Green Climate Fund has been extremely successful. The fund has received about 10 billion dollars in contributions to be implemented within the next 3 years, and that has come from 48 nations and regions and cities. So, in that regard, itâ&#x20AC;&#x2122;s a good beginning. Now, the important thing is to invest this money wisely and to show results so when we go to replenish and to raise new money, the fund can grow overtime based on results.

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Q:

We are aware that there are various kinds of funds other than GCF established by the UNFCCC to support financial matters, including Special Climate Change Fund (SCCF) and Least Developed Countries Fund (LDCF) managed by Global Environment Facility (GEF) and Adaptation Fund (AF). Is there any distinctive feature or function of GCF that distinguishes itself from other funds?

The GCF was established 22 years ago and the Adaptation Fund was established under the Kyoto protocol in 2001. It is not technically an operating entity of the financial mechanism of UNFCCC. So one of them has more than 20 years and the other has 15 years. In this time, the annual contribution of these funds to climate change action has been smaller than what the Green Climate Fund, already from the first day, is able to mobilize for the developing countries. Today, the Green Climate Fund is the largest global climate fund in the world with 10 billion dollar initial resources. In terms of scale, the scale is different. In terms of mandate, our mandate is all encompassing; we are fully dedicated to climate change actions, equal initiations and adaptations.

Those specialized firms have a narrower scope of work, and they are focusing on relatively smaller initiatives. Our mandate is actually quite daunting, very significant. It is to, really, if you know

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our governing instrument, we need to change the course, really, to help countries move away from current unsustainable trajectory of greenhouse gas emissions and also fully integrate the adverse impact of climate change on their economies. This requires a different scale of approach. We need to have systemic interventions that can basically open new markets, change the way we do things when we invest. For instance, the IPCC has indicated that energy efficiency is the biggest climate finance gap we have today. There is need for hundreds of billions of dollars per annum of investment in energy efficiency and this problem is not tackled properly. So one of the first eight projects done by the Green Climate Fund, is a programmatic approach, that with catalytic intervention of the fund, through liquidity facility and guarantee, we will help mobilize more than a billion dollars of investments in energy efficiency initiatives in Latin American and the Caribbean, in a number of countries by creating a first-ever energy efficiency-backed green bond. Green bonds that exist are different. This one is the first ever, based on financing from the big pool of institutional investors at pension funds and insurance companies which is based on expected revenues from savings of energy efficiency. And this is excellent because, the big problem why energy efficiency investment is not happening is because it is difficult to finance based on future savings of energy consumption.

So we found a solution to work with this energy saving service companies to mobilize finance and scale up. This gives you one example of how we are opening new markets and changing the way of doing things. And we want to bring the need of investments in developing countries are not in billions, they are in trillions, so we really need to make the institutional savings and the corporate needs meet together and move towards the green no-emission and the resiliency. So we act as a catalytic instrument that changes the game. Of course, this is not easy to do in all projects and interventions, so this is why we introduced criteria to try and select the best possible projects—even if some other projects maybe good and can be financed by other funds and institutions, but they will not really make a difference that we must deliver.

Q:

We noticed that there is no member from Korea among GCF’s Board of 24 members. Apart from providing the location and funds, what else should the Korean government support for the GCF? Korea was a very active and supportive alternate Board member for the first 3 year term of the Board. And even though in this new term—of course there is a rotation of countries, so we serve 195 countries, with 24 seats so there are changes—still, as a host country, Korea has a very special status in the Fund. In the UNFCCC negotiations, Korea is a very important ally of the Green Climate Fund. For instance, in the run-up to the Paris Agreement,

they convened an informal dinner between developing countries’ and developed countries’ heads of delegation to think about how the Green Climate Fund can serve the implementation of the Paris Agreement. So, as our work with the Ministry of Strategy and Finance of Korea, the Ministry of Foreign Affairs of Korea, and the Ministry of Justice, as well as the city of Incheon continues, we really see this as a valuable partnership. Also, under the guidance of President Park, there are efforts to create partnerships in delivering projects in developing countries, so a number of Korean institutions are in the process of looking for ways of co-financing together. For instance, one of the first projects of the Green Climate Fund in Peru was a joint effort between Korea and GCF. That is of course one of our projects that can really make a big difference by saving these forests and improving the livelihood of indigenous people.

Q:

In order to ensure that the climate change negotiations will continue to be the key arena for international policy, what specific institutional reforms of international organization or funds do you think are required?

After my experience with climate finance so far, I think the most important development that we need is to introduce a sense of urgency and focus on results. I believe that both in the UNFCCC

process and the international organizations and funds that serve the action on climate, we are not acting as fast and with as much urgency as we need. And science is telling us, that action at scale must happen now, not tommorow. In the mean time, we all, as part of these multinational processes, that move with consensus, can be distracted from the main mission and end up not delivering as effectively and with as much urgency and impact as we need.

So, I think there has to be ongoing effort by everybody—the science community, the non-govermental organization—to shake the international organizations, the UNFCCC, the institution’s partners to say, there is no place for complacency and for feeling “Ok, we agreed on the Paris Agreement, that’s it, we can go to sleep.“ No, it’s just a text. You really need to change the way you consume, you need change the way you invest. Our behaviors as indiviuals and as a society must change radically if we want to avoid for ourselves and our fellow citizens of the planet to have more and more disasters, and less and less opportunities for the future generations. This sense of urgency gets lost in the day today. We need to find ways so that it never happens, that people feel the urgency, that they continue to fight and to change behaviors. Otherwise we are really not acting as quick as we should.

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Q:

There is no doubt about the severity of climate change and the immediate need for countries to address it. But there is a dilemma. The best individual outcome for any country would be for them to continue to pollute while other nations cooperate to reduce carbon emission. With this in regard, there has been significant debate over what exactly a climate model payoff structure should look like. What is your view on this matter as the executive director of GCF? It has sort of links with what I have said. We have a chronic issue of myopia. Myopia means I see very well here, but I don’t see the long way. That’s exactly what’s happening in these national discussions. People think in 3 years, within the 3 year term, it is better for me to use fossil fuels. But if they looked 20 years, no, the answer would you’d better change your energy mix. That horizon is not there, and we are talking about planetary horizon.

So the inherent potential tension between short term national interests and long term global interests must change, because it’s a lose-lose proposition. If everybody put their head in the sand and say “let somebody else take care of it. I need to feed my people today. I need to create jobs today.” But instead, if we put together the scientific and research and development efforts from all over

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the world and stop only focusing on protecting our respective IP rights wouldn’t our common intelligence be able to find cheaper solutions for being resilient, for being low emission? Certainly, there would be.

I am concerned that it will only happen when there are some catastrophic events at scale. There are some endeavors to move in that direction, so in Paris there were a number of initiatives announced, like the solar initiatives by Prime Minister Modi, like the clean tech initiative by Bill Gates. We need more scale and more mainstream about this and we need media. We need educators and we need scientists, civil societies to raise awareness that this is a great threat to humanity but also a great opportunity for innovation. If we send the right market signal, we remove subsidies to fossil fuels, and we subsidize solutions, we don’t subsidize the problems. Then also this can change behaviors and direct all the creative genius of the humanity toward solving this immediate problem.

Q:

Holding an MSc in “Finance” from HEC Montreal, you spent 4 years at the World Bank working on private and financial sector development in Latin America, and 7 years in Citigroup focusing on North Africa trading and risk management. Yet, you are currently working for

GCF trying tto find a solution for "Climate Change.” Do you have particular interest in environmental issues? What motivated you to dedicate your experiences in financial field to save the Earth?

You see it happened gradually. And that’s like Steve Jobs when he said, “you look backwards to connect the dots, not look forward”—so it was not foreseen like that. But I started my journey thinking about the fact that access to finance is a big constraint in the developing country. Which one of the reasons why our economy in the developing world are not developed is because the local financial system are not playing their role which is savings and to help make the investments. So I started looking at this and I identified that one of the big bottom next strategy to infrastructure financing when I was working in Latin America and the Caribbean. Then when I worked with the African Development Bank, I was in charge of mobilizing private finance for infrastructure in Africa which is a big challenge. We have an energy crisis in Africa. You can’t talk about development without infrastructure. They say “development stops where the road stops.” And then that was where immediately the environment became an important consideration because you need not only to think of creating the infrastructure for development but also to make it in a sustainable manner that is respectful of the environment in response to the climate change.

So I was among the first—I think it is fair to say that I led the effort in the African Development Bank to introduce greater emphasis on reconfining the needs for infrastructure for development and the need to do it the right way. Because infrastructure will last for decades. A Hydro power plant can last 60, a 100 years. So why not build it correctly the first time, minimize the damage and maximize the positives for environment, and choose the right technology. That is how I started and then it became—the problem is finance. Why would anyone build a heavy fuel oil or diesel plant instead of hydro power? It is because one requires 1 million dollars per megawatt installed; the other requires three or four million dollars per megawatt installed. So it is again the myopia. It is easier to mobilize the money for dirty energy. So I worked on mobilizing more money for new investment sources to choose the clean energy. Some of the largest solar plants are now in Morocco, it was inaugurated recently, and that was one of my projects. The initial work to mobilize global interest on the India project was my project. And these are feasible. These amounts are not insurmountable. Billion dollars for Morocco, ten billion dollars for DRC, you can mobilize the money the right way.

And that way, the Green Climate Fund was a big hope for Africa and for the developing countries because it is a source of new money—new sources, new investors, new appetite—that can help us make the right investments. That is how it became…So it started as a finance issue and it ends up being an environment

issue. But environmental issues are there because of finance, because of the economics. If it was economically viable not to pollute, we will not pollute. So we must make it economically viable not to pollute. Then we mobilize the money. It is a money problem.

Q:

What is the GCF heading toward?

I think the fund is now in a very good place. I would believe that if the word of the fund takes that approach that I mentioned—focus on urgency and results— the fund can make a lot of goods. It is still at risk because we must choose the ambitious decisions and the right decisions. And those are not always the popular decisions. So in my heart, I truly hope and pray that the fund becomes the game changer that it hopes to be. We already have a pipeline of projects and programs that would bring to the world more than 5 billion of investments for a first year of operations. It is quite remarkable. So we need to continue that look for quality rather than quantity. And also focus on results. That would be my vision for the future of the fund.

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Recent Trends of Law & Regulation in Korea |

Recent Events

Recent Events 01 Entry Threshold Lowered for Chinese

Tourists

For the ‘Visit Korea Year’ of 2016, group tour visa fee will be exempted until the end of this year. Also, to attract Chinese tourists, the subject of multiple-entry visa issuance has been expanded and its 10-year long validation period has been newly implemented from January 28th.

Even when the number of foreign visitors plummeted due to MERS (Middle East Respiratory Syndrome) last year, the Ministry of Justice reacted preemptively by lowering the entry threshold for Chinese tourists and simplifying the visa issuance procedure, which resulted in the recovery of the average number of annual foreign visitors.

Age limit of visa issuance has been lowered from over 60 to over 55 years old, and the duration of single-entry visa has been extended from 30 to 90 days. Due to the lowering of age limit, about 80 million Chinese people have been included in the subject of visa issuance. The extension of the duration has helped the Chinese tourists to experience Korean culture with greater ease.

Visa valid for 10 years has been implemented for the first time for professionals such as lawyers, college professors or representatives of public or private enterprises and people with Master’s degree or higher.

From March, the issuance of electronic visa for group tourists will be expanded from some parts of China to the entire country, which will make the visa issuance procedure faster and more convenient. The tentatively-named “Korean Wave Visa” that combines Korean wave contents (e.g. fashion, cosmetics, and cultural experience) and tourism will be created in the second half of the year. In this wise, the Ministry of Justice plans to actively support the diversification of tourist attraction to create more jobs in the related industries.

The Ministry expects the tourism demand of people in China, which has good geographical accessibility to Korea, to last for a long time.

Accordingly, visa requirements and the issuance procedure for the Chinese will be improved stage by stage in accordance with the domestic situations. Through the improvement, Chinese tourists visiting Korea will play the role of locomotive to spur the Korean tourism market.

Along with this, considering the point that the current rate of Chinese tourists revisiting Korea is below 12%, the Ministry will put effort to upgrade the kindness of public officials in the immigration office, which forms the first impression of Korea, in order to make Korea as a place where they want to visit again.

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02 The 2016 International Conference on

Improving the Business - The Discussion to Improve the Contract Dispute Settlement System and Financing Abilities -

On January 27, 2016, the Ministry of Justice held the APEC International Conference to Improve the Business Environment at the Ritz-Carlton Hotel located in Seoul.

Approximately, 30 officials including those from the World Bank, UNCITRAL, and the government officials from Thailand, the Philippines, and Mexico attended the conference to discuss methods to improve the respective nations’ business environments.

This conference was arranged in order to share Korea’s valuable experience with other nations, to support Thailand and the Philippines in their efforts to improve their contract dispute settlement procedures, and to search for ways to improve Korea’s financing abilities.

Hochul Kim, the Deputy Minister for Legal Affairs Office at the Ministry of Justice, stated at the opening address that “the event of government officials and jurists from Korea, Thailand, Mexico, and the Philippines gathering in one place and sharing their experiences is important not only to create a better business environment but also to promote friendly ties and good cooperation among the participating nations.”

Through crucial measures such as the introduction of the electronic litigation system in 2010, Korea had established a prompt and efficient contract dispute settlement system, and in result, Korea was selected as a forerunner in the respective field at the 2009 APEC Economic Leaders’ Meeting, as Korea received high international praise in regards to its business managerial dispute settlement system.

- Through such success, the Ministry of Justice had extended its support to ten APEC nations including Indonesia, Peru, and Vietnam in improving their contract dispute settlement system.

By exporting Korea’s legal system to other nations, this enables Korean businesses expanding their activities to such nations to pursue their economic activities within a familiar legal environment. As a result, this is expected to greatly help such businesses with the support they need.

Sector

̒ 09

̒ 10

̒ 11

̒ 12

̒ 13

̒ 14

̒ 15

Ranking

23

19

16

8

8

7

5

① Starting a Business

126

53

60

24

24

34

17

② Construction permits

23

23

22

26

26

18

12

-

-

-

11

3

2

1

④ Registering Property

67

71

74

71

75

75

79

⑤ Getting Credit

12

15

15

8

12

13

36

⑥ Protecting Investors

70

73

74

79

49

52

21

⑦ Paying Taxes

43

49

49

38

30

25

25

⑧ Trading Across Borders

12

8

8

4

3

3

3

⑨ Enforcing Contracts

8

5

5

2

2

2

4

⑩ Resolving Insolvency

12

12

13

13

14

15

5

③ Getting Electricity

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Recent Trends of Law & Regulation in Korea |

Policies of the Ministry of Justice

Expansion of Supporting Living Expenses to Guarantee Basic Livelihood for Refugee Status Applicants - Grants are increased by 2.3%, benefiting 53% wider from the year before-

Supporting living expenses for refugee status applicants is expanded to guarantee basic livelihood. Ministry of Justice will support 418,400 won per single household of refugee status applicants in 2016, increased 2.3% from 409,000 won in 2015. The average beneficiaries in a month will be up to 200, a 53% increased amount of people, compared to 130 people in 2015, and 88 people in 2014.

Pursuant to article 40 of Refugee Act, refugee status applicants are provided with living expenses within six months from when the refugee application was received, and the amount of aid is equivalent to aid money provided by Emergency Aid and Support Act. Article 40 of Refugee Act (Provision of Living Expenses) ① The Minister of Justice may provide living and other expenses to refugee status applicants as specified by the Presidential Decree. ② Determined by the Presidential Decree, the Minister of Justice may permit a refugee status applicant to engage in wage-earning employment six months after the date on which the refugee application was received.

Article 17 Enforcement of Refugee Act

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① The Minister of Justice … may provide living expenses within six

months from when the refugee application was received.

A person who submits refugee application within six months will be provided with aids. With regard to budget, to prioritize persons eligible for support, income(assets)·residence·critical illness and etc. are taken account. A refugee status applicant to whom any of the following applies will be limited from aid: a person in litigation of administrative appeal or law suit about rejection of refugee status application, a person who re-applied for refugee status without material change in circumstances, a person who has stayed in the Republic of Korea over one year and applied for refugee status when the expiration of the sojourn period was imminent, a person subject to forcible removal who applied for refugee status for the purpose of delaying the enforcement of the removal order.

Persons eligible for support are determined by several criteria including dwelling pattern, pregnancy, diseases, ages of refugee status applicants, and persons who have received higher scores by summing up those criteria will be assigned with priorities. Ministry of Justice will continuously endeavor to guarantee basic livelihood and substantial improvement of treatment of refugee status applicants.

Korea Embraces Resettling Refugees from Myanmar Ministry of Justice held an entry welcoming ceremony for 22 people from 4 families who resettled in Korea in Incheon International airport at 08:30 on December 23rd, 2015, the purpose of which was to take a role in protecting refugees in the international society, improve the status of Korea as a country protecting human rights, and perform warm constitutionalism.

Ministry of Justice is accepting resettling refugees from 28 countries including USA, Australia, and Canada by operating the institution which has been pushed forward with encouraging voluntary repatriation and integrating districts by UNHCR from 1950s as solutions to solve perpetual refugee problems. The institution makes it possible to accept refugees who are currently accommodated in refugee camps overseas and desire to resettle in Korea, and it requires recommendations of UNCHR and some judging procedures such as interviews for refugee acceptance.

The 4 resettling refugee families who recently entered Korea (11 adults, 11 children) are harmless and good people, who are chosen after overall consideration about possibility of settling down well domestically and being integrated into the society and they also went through strict accepting procedures such as document examination, background investigation, on-site interviews, and examination for issuing travel document and visa (Embassy of the Republic of Korea in Thailand).

In Asia, Japan first instituted a pilot project related with accepting resettling refugees in 2010, and Korea is currently equipped with applicable provisions, concerning the definition of resettling refugees and their acceptance, in Refugee Law which was implemented in July 1st,

2013. In April, 2015, after the consideration of the immigration policy committee, it was decided to allow 30 Myanmarese refugees annually to resettle in Korea for 3 following years on a trial basis, and whether it will be officially and regularly prosecuted henceforth will be determined after later monitoring.

Refugees who were accepted to resettle in Korea according to Refugee Law are provided with the status of acknowledged refugees, and they stay domestically with the residential quallifications (F-2). They first stay in the international foreigner support center for 6-12 months, where they are granted Korean language education, education for adapting to Korean society and acquiring basic law and order, support for putting children in school and their attendance to school, support for employment and welfare, settlement supporting programs such as mentoring and consultation, and various information which is useful for living in Korea as well.

Youngjoon Kim, the chief director of the international foreigner support center, said that care and active supports from warm-hearted citizens are needed for resettling refugees to settle down well in Korea, achieving their Korean dreams like the scientist Albert Einstein and the former Secretary of State Madeleine Albright, and for successfully establishing refugee acceptance in Korea as well.

Dirk Hebecker, representative of UNHCR Korea, said that he welcomes Korean acceptance of resettling refugees after 2 years from the enforcement of Refugee Law, and hopes refugees can settle down well in local communities and be in harmony with native residents, thereby contributing much to Korea.

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Recent Trends of Law & Regulation in Korea |

Law in Your Daily Life

Housing Lease Protection Act for Foreigners

Precedent of Leasing for Foreigners

Application of 「Housing Lease Protection Act」

Seoul Civil Cases Court (Seoul Central District Court) 93Ga-Hap73367, Dec. 16, 1993 【Amount obtained by unjust enrichment】 [Ha-Jip1993(3),268]

Lessee subject to protection of the 「Housing Lease Protection Act」 is a natural citizen of the Republic of Korea, with exception of foreigner and oversea Korean who meet certain criteria.

【Holding】

Subject of application of the 「Housing Lease Protection Act」 is the lease for residential building and unregistered lease on a deposit basis.

Temporary lease is not subject of application of the 「Housing Lease Protection Act」.

Whether a foreigner housing lessee reported a change in place of sojourn should be considered to have completed the prescribed registration of residence 【Summary of the Decision】

A foreigner housing lessee who reported a change in place of sojourn according to the Immigration Control Law is considered to have completed the prescribed registration of residence as stated in the Article 3 (1) of Housing Lease Protection Act established as a public notice for safe transaction which the third party can clearly recognize the existence of leasehold.

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Meaning of 「House Leasing Protection Act」 【House Leasing Protection Act】

House leasing is established when there is an agreement that the lessor

allows the lessee to use and to profit from the building, and the lessee pays the rent as a compensation (「Civil Act」 Article 618).

However, the House Leasing Regulations according to the「Civil Act」 provided limited protection of the rights of the economically disadvantaged lessee, therefore as a special law of 「Civil Act」, the 「Housing Lease Protection Act」 was enacted (「Housing Lease Protection Act」 Article 1).

Even though the Housing Lease is a contract established by agreements of the parties, the lease that puts the lessee at disadvantage when violated has no legal effect (「Housing Lease Protection Act」 Article 10).

※ “Overseas Korean” is ① a person with the nationality of the

Republic of Korea who has acquired the right of permanent residence in a foreign country or is residing in a foreign country with a view to living there permanently, ② a person who, having held the nationality of the Republic of Korea (including those who had emigrated abroad before the Government of the Republic of Korea was established) has acquired the nationality of a foreign country, or ③ a person who has acquired the nationality of a foreign country but has/had a parent or grandparent that held the nationality of the Republic of Korea (Article 2 of Act on the Immigration and Legal Status of Overseas Koreans and Article 3 of Decree on Act on the Immigration and Legal Status of Overseas Koreans).

※ “Any agreement contrary to this Act and unfavorable to the lessee

shall be ineffective” in Article 10 of Housing Lease Protection Act does not mean all agreements contrary to the Act are ineffective. If an agreement is contrary to the Act but is not unfavorable to the lessee, it is effective. (Supreme Court, 95Da22283, Oct. 12, 1995)

Natural Person Housing Lease Protection Act aims to protect the stability of residential life of citizens who are natural persons. Therefore, persons subject to protection are those with the nationality of the Republic of Korea in principle (Article 1 of Housing Lease Protection Act).

Foreigners and Overseas Koreans As the persons subject to protection of Housing Lease Protection Act are natural persons with the nationality of the Republic of Korea, foreigners cannot be subject to the protection of Housing Lease Protection Act (Article 1 of Housing Lease Protection Act). However, if a foreigner who leased a house made an alteration report of his/her place of sojourn, equal to a moving-in report, he/she may be subject to protection of Housing Lease Protection Act as an exception (Article 88-2 (2) of Immigration Control Act and Seoul Civil District Court, 93Ga-Hap73367, Dec. 16, 1993) When an overseas Korean leases a house and makes an extended stay, he/she is subject to protection of Housing Lease Protection Act. To be a subject, the overseas Korean must fix a place of residence in Korea and report to the head of regional immigration office or foreign office. In case his/her place of residence has been changed, he/she must report to the mayor of the city, district, or borough, or the head of regional immigration office or foreign office, that has jurisdiction over the new place of residence (Article 3 (1) and (2) of Act on the Immigration and Legal Status of Overseas Koreans).

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Recent Trends of Law & Regulation in Korea |

Ministry of Justice at a Glance

Need a Free Legal Aid? Consult with Ma-eul lawyer

Ministry of Justice at a Glance introduces major projects and initiatives of the Ministry. This time we cover the Ma-eul Lawyer system by interviewing Mr. Gi-Hoon, Kim, Public Prosecutor and the head of this system in the Legal Affairs Division. Ma-eul Lawyers are now providing free legal aid services with people who need help or live in a distant place where they can not easily access legal consultation.

Q:

Simultaneously with its launch, the Ma-eul lawyer system was successfully established and expanded. What are some factors that contributed to the systemâ&#x20AC;&#x2122;s successful progress?

Fundamentally, the Ma-eul lawyer system begins with talent donation of the lawyers. We discerned a critical perspective that Eup-Myeon residents are legally alienated due to the lack of lawyers in those areas.

The Ministry of Justice founded the Ma-eul lawyer system, and many lawyers sympathized with this critical perspective and voluntarily offered to donate their talent. As a result, Ma-eul lawyers are assigned to every 1,412 Eup-Myeon regions and currently 1,530 lawyers render pro bono legal assistance.

We attribute the first success factor mainly to voluntary participation and devotion of the lawyers. Administratively, the Ministry of Justice, the Korean Bar Association, and the Ministry of the Interior assisted tremendously in order to stabilize the system. We think that collaborative effort of the three organizations is a significant success factor. We are striving to improve the system in terms of applicability, but we believe that the system is stabilized.

Q:

The most significant purpose of adopting the Ma-eul lawyer system is to protect the citizens who are in the legal blind spot. In what other ways will the Ma-eul lawyer system continue to expand and to develop?

The Ma-eul lawyer system is easily accessible online and by phone calls.

Therefore, it eliminates possible inconvenience for both the users and the lawyers to visit each other in person. If the users acknowledge the system, they can utilize it and feel socially more included. I hope the system would initiate a virtuous cycle of happy town residents and lawyers finding gratification from their talent donation and devotion.

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Q:

It appears that the Ma-eul lawyer system offers pro bono primary legal consultation. In case the users want further legal service, is there a procedure for providing additional legal aid?

For instance, it seems that after the pro bono primary consultation, lawyers are not obligated to represent the users in lawsuits. What types of support are provided if the users of the Ma-eul lawyer system want assistance through lawsuits?

Even though the main task of the Ma-eul lawyers is not representing the users in lawsuits, if the users wish to be further aided through lawsuits, the cases may be consecutively entrusted to the Ma-eul lawyers. Moreover, we are improving the system by affiliating the litigation aid system and Ma-eul lawyer consultations so that the Ma-eul lawyers may serve as a link enabling the town residents to further benefit from legal aids.

When this affiliation becomes effective, in addition to the Ma-eul lawyers legal consultation, the Korea Legal Aid Corporation as well as the Legal Aid Foundation of the Korean Bar Association are to give assistance with attorney fees for the financially burdened users.

Furthermore, the Korean Legal Aid Corporation has a ‘Na-hol-lo’ litigation system, which enables self-sufficient litigation where users can enter types of litigation and refer to the actions associated with each standardized litigation cases. We plan to relate this system with the Ma-eul lawyers. Since the Ma-eul lawyers can more easily compile documents, we expect this to practically assist the users. We continuously aim to expand legal assistance beyond legal consultation and will study to utilize newly developed systems.

Q:

Is there a particular sector through which users frequently request consultations? Or furthermore, are there memorable cases received during the operation of the Ma-eul lawyer system?

The Ma-eul lawyers mainly consult in Eup-Myeon rural areas.

Consequently, problems that frequently arise in rural areas, for instance, issues regarding repair, passing due to parts of the rice paddy belonging to other people, piling of construction materials and fertilizers on others’ territory are recurrent problems.

Law is the means of resolving conflicts based on rational standards.

Hence, we consult on how to legally handle issues and when should one adequately settle. One of the memorable cases is consulting a townsperson who stacked materials on other people’s land that paying usage fee is a fair deal. Both parties consented to the consulted matters and the conflict was resolved amicably without causing significant troubles between the neighbors. Other various types of cases common in human lives such as inheritance and divorce cases exist as well.

Q:

In addition to satisfaction obtained through partaking in volunteer activities for the public good, are there motivations or incentives provided to the lawyers to encourage their participation in legal consultation within the Ma-eul lawyer system?

We always contemplate regarding this matter. Since lawyers voluntarily opt to donate their talent for pro bono consultation rather than to receive high attorney fees corresponding to there talents, we presume that the lawyers participate out of benevolence or for self-gratification. As an effort to further uplift lawyers’ self-esteem and to reciprocate their kindness, we are proceeding to grant awards to the lawyers with positive feedback.

Frankly, establishing a positive rapport with the users receiving aids from the Ma-eul lawyers is highly ideal. Unofficially we believe that their must have been multiple cases where the users gave small gifts such as a dozen of eggs to the Ma-eul lawyers. As such, we think that the establishment of rapports becomes an incredibly successful incentive.

In addition, I have seen numerous interviews in which the Ma-eul lawyers said that the town users’ sincere gratitude is significantly rewarding. Some Ma-eul lawyers said they volunteered in their hometowns and received simple gifts from the town elderly. We believe that established rapport and genuine appreciation are the most powerful motivation.

Q:

What are some difficulties arising from operating the Ma-eul lawyer system and efforts to overcome these difficulties?

For the town residents, the most noticeable difficulty in utilizing the Ma-eul lawyer system is calling the Ma-eul lawyers who are virtually strangers and asking them to resolve personal legal issues. According to the public opinion, the Ma-eul lawyers’ consultation in person with the users of Eup-Myeons was crucial in the stabilization of the Ma-eul lawyer system. Developing rapport and meeting the users in person enable the residents to call the lawyers more easily.

Thus, at the early stage of stabilization, we focused on conducting local consultation and local briefing sessions regarding the Ma-eul lawyer system. The local briefing sessions were usually intended for audience composed of village foremen who can most extensively inform of the system and acknowledge a vast number of legal concerns. We believed that effectively advertising to the people who can be valuable medium and diligently recommend the system was the key point. Thereby we put in notable effort so that the town residents can be familiarized with the lawyers.

Then we devoted on improving the quality of consultations so that the users find the Ma-eul lawyer system constructive. Although the lawyers are experts at consulting, we published a manual reflective of the unique circumstances the Ma-eul lawyer system operates in and instructed the lawyers with the manual.

Additional to increasing satisfaction rates and applicability, we are seeking to provide lawyers tailored to each region. For facilitated Ma-eul lawyers consultations under collaboration with local autonomous entities and local bar associations, we actively offer consultations in person and provide basic settings such as consultation places.

According to the public opinion polls, the users mostly discovered the Ma-eul lawyer system through village meetings, leaflets and posters in Eup-Myeon offices and local media such as local publications, regional newspapers. Hence, we plan to advertise more actively through these three mediums. For further advertisement and higher applicability of the system, we endeavored through various methods and will continue to elevate satisfaction rate by affiliating the system with the legal aid.

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Recent Trends of Law & Regulation in Korea |

Living in Korea

A Guide for Purchasing or Renting a Home in Korea

Adapting to a new environment is a daunting task for many, especially when it includes learning new customs and procedures of a foreign country. As such it may be an ordeal for a foreigner to learn all the necessary information needed to purchase/rent a home in South Korea. This article is intended to assist and alleviate the hardships such people may face when purchasing/ renting their home.

Types of Housing in Korea Apartment Koreans have responded to the extremely high population density, especially in urban areas, with apartments. As a result, apartments have become the most popular housing type in Korea today. Benefits of living in apartments are usually related to convenience. Most apartment complexes have public facilities nearby, or even within them these days.

Thus residents can easily access services such as post office, transportation, schools, and/or supermarkets. In addition, public utilities such as gas, water, and electricity are well-established and collectively administered. On the other hand, demerits of living in apartments include lack of privacy and noise issues.

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Officetel Officetels are special residential concept, unique to Korea. They are tall buildings with both residential and office units, originally introduced for the convenience of those who wish to work and reside in the same building. They are especially popular among Seoulites and students, and are often contracted on annual or biennial basis. They come fully furnished, so the tenants only have to be responsible for monthly maintenance and additional utility fees.

One room / Studio Studio apartments are very similar to officetels, but are different in that they are lower (4-5 floors) and smaller (27m2 on average). They are also very popular among students because their price is relatively low and the rooms are furnished. As studio apartments are often in close proximity with each other, lack of sunlight and poor inadequate ventilation should be taken into account.

Detached House Usually comes in two-stories with a garden, detached houses are increasingly difficult to spot in Seoul due to high demand for apartment buildings. Today, they can be found in areas such as Itaewon, Ichondong, and Pyeongchang-dong in Seoul.

Payment Methods and Procedures for Purchasing or Renting a Home In Korea one can either purchase or rent a home, and in either case is typically overlooked by a real estate agent. An estate agent in Korea is someone who is licensed by the government to carry out property transactions between the property owner and potential buyer or tenant.

The agent is required to display his/her certificate and should be checked before hiring.

When purchasing a home in Korea, foreigners are subject to the Foreignerâ&#x20AC;&#x2122;s Land Acquisition Act and the Real Estate Registration Act (non-residents are subject to the aforementioned acts with the addition of the Foreign Exchange Transaction Act). Typically the purchasing process is as the following: 1. Making the offer 2. Making the initial deposit: Although a deposit is not mandatory by law, it is the norm for the buyer to deposit 10% of the purchasing fee to initiate the purchasing process.

3. Making the final payment: The payment is generally divided into

two or three separate transfers depending on the contract terms.

When the final payment is paid for, the seller gives the buyer all the documents necessary and the key to the house to complete the transaction.

4. Property registration: Foreigners should report the transaction to the district office in which they made the purchase within 60 days of the transaction. Residents and non-residents differ in the paperwork needed to register their property As for renting a home in Korea the two most common payment methods are Jeonse and Wolse.

Jeonse is simply paying the full lease price upfront in the form of a deposit. Thus, when the contract expires the payer receives the deposit money back fully under normal circumstances. When in cases such as damages are done to the home, the payer may have to reimburse the cost of repair with the deposited money. This Jeonse payment method is typically signed in two year intervals. An advantage of the Jeonse payment method is that no additional monthly payment is needed, and thus, it may be a better choice if the renter has a large sum of capital available to spend when leasing a home. In cases where the renter wishes to terminate the Jeonse contract before it expires, negotiation with the landlord is necessary. Under law, the landlord has the right to hold the tenantâ&#x20AC;&#x2122;s deposit until a new tenant signs a new contract.

Wolse is paying a small deposit supplemented with a monthly payment.

Normally the minimum deposit is approximately 5 million won and the monthly payment various from district to district. The monthly payment also varies according to the deposited money. For instance the higher the deposited fee the lower the monthly payment will be. In the Wolse system, the deposited money will be wholly returned to the tenant when the contract expires. However, in various cases such as damage to the home is done, the returned deposit may see some deduction.

Conversion from a Jeonse system to the Wolse system is possible, and it is advised that a third party such as an estate agent help supervise the process.

International Districts in Korea For foreigners who wish to live in a relatively global district, here are a few places in Seoul known to accommodate more foreigners relative to other districts: Itaewon, Hannam-dong, Ichon-dong, Seodaemun-gu, and Seorae Village. Korea is a very beautiful country where people can enjoy its vibrant culture as well as all four seasons that the world can offer. Welcome to Korea.

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List of Useful Organizations

Government Departments Anti-Corruption & Civil Rights Commission http://www.acrc.go.kr/eng/index.do 82-2-2012-9110 acrc@korea.kr Constitutional Court of Korea http://english.ccourt.go.kr/ 82-2-708-3460 interdiv@ccourt.go.kr Fair Trade Commission http://eng.ftc.go.kr 82-44-200-4318 kftc@korea.kr Financial Services Commission http://www.fsc.go.kr/eng/index.jsp 82-2-2156-8000 aykim@korea.kr

Korea Law Service Center http://law.go.kr/LSW/main.html 82-2-2100-2520(Ministry of Government Legislation)/82-2-2100-2600(Legislative Research Services) lawmanager@korea.kr Korea Meteorological Administration http://web.kma.go.kr/eng/index.jsp 82-2-2181-0900 webmasterkma@kma.go.kr Korean Bar Association http://www.koreanbar.or.kr/eng/ 82-2-3476-4008 Korean Library Information System Network (Korean Library Information System) http://www.nl.go.kr/kolisnet/index.php 82-2-535-4142(National Library of Korea)

Global Legal Information Network http://www.nanet.go.kr/glin/index.jsp 82-2-788-4211 (National Assembly Library) glin@nanet.go.kr

Korean National Police Agency http://www.police.go.kr/eng/index.jsp 82-182

Judicial Research & Training Institute http://jrti.scourt.go.kr/ 82-31-920-3114

Ministry of Agriculture, Food and Rural Affairs http://english.mifaff.go.kr/main.jsp 110 (from Korea) / 82-2-6196-9110 (from overseas)

Korea Communications Commission http://eng.kcc.go.kr/user/ehpMain.do 82-2-2110-2114 webmaster@kcc.go.kr

Ministry of Culture, Sports and Tourism http://www.mcst.go.kr/english/index.jsp 82-44-203-2000 webadmin@mcst.go.kr

Korea Consumer Agency http://english.kca.go.kr/index.do 82-43-880-5500

Ministry of Education http://english.moe.go.kr/enMain.do 82-2-6222-6060 webmaster@moe.go.kr

Korea Customs Service http://english.customs.go.kr/ 82-1577-8577 Ministry of Food and Drug Safety http://www.mfds.go.kr/eng/index.do 82-43-719-1564/ 82-1577-1255 Korean Intellectual Property Office http://www.kipo.go.kr/kpo/user.tdf?a=user.english. main.BoardApp&c=1001 82-42-481-5073 kipoicd@kipo.go.kr

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Ministry of Employment and Labor http://www.moel.go.kr/english/main.jsp 82-52-702-5089(National Labor Consultation Center) 82-44-202-7137(International Cooperation Bureau) 82-44-202-7156 (Foreign Workforce Division) interco209@moel.go.kr (International Cooperation Bureau) Ministry of Environment http://eng.me.go.kr/ 82-44-201-6568 / 82-1577-8866 webmaster@me.go.kr

Ministry of Foreign Affairs http://www.mofa.go.kr/ENG/main/index.jsp 82-2-2100-2114 web@mofa.go.kr Ministry of Gender Equality and Family http://english.mogef.go.kr/index.jsp 82-2-2100-6000 mogef@korea.kr Ministry of Government Legislation http://www.moleg.go.kr/english 82-44-200-6900 Ministry of Health and Welfare http://english.mw.go.kr/front_eng/index.jsp 82-44-202-2001~3 Ministry of Justice http://www.moj.go.kr/HP/ENG/index.do 82-2-2110-3000 webmaster@moj.go.kr Ministry of Land, Infrastructure and Transport http://english.molit.go.kr/intro.do (Day) 82-44-1599-0001, (Night) 82-44-201-4672 Ministry of National Defense http://www.mnd.go.kr/mbshome/mbs/mnd_eng/ 82-2-748-1111 cyber@mnd.go.kr Ministry of Security and Public Administration http://www.mospa.go.kr/eng/a01/engMain.do 82-2-2100-3399 unah88@mospa.go.kr Ministry of Strategy and Finance http://english.mosf.go.kr 82-44-215-2114 fppr@mosf.go.kr Ministry of Trade, Industry and Energy http://www.motie.go.kr/language/eng/index.jsp 82-2-1577-0900 / 82-44-203-4000 Ministry of Unification http://eng.unikorea.go.kr/main.do 82-2-2100-5722 National Assembly Library http://www.nanet.go.kr/english/ 82-2-788-4211 webw3@nanet.go.kr

National Intelligence Service http://eng.nis.go.kr/svc/index.do 82-111

The National Digital Library http://www.nl.go.kr/english/ 82-2-535-4142

National Research Foundation of Korea http://www.nrf.re.kr/nrf_eng_cms/ 82-2-3460-5500 / 82-42-869-6114

VOD Service for Conferences http://na6500.assembly.go.kr/ 82-2-788-2298 webcast@assembly.go.kr

National Tax Service http://www.nts.go.kr/eng/ 82-2-397-1200 / 82-1588-0560 Network of Committed Social Workers http://www.welfare.or.kr/ 82-2-822-2643 Public Procurement Service http://www.pps.go.kr/eng/index.do 82-70-4056-7524 Small & Medium Business Administration http://www.smba.go.kr/eng/index.do 82-42-481-4499 Statistics Korea http://kostat.go.kr/portal/english/index.action 82-2-2012-9114 Supreme Court Library of Korea https://library.scourt.go.kr/Eng/main.jsp 82-2-3480-1551~2 libmaster@scourt.go.kr Supreme Prosecutorsâ&#x20AC;&#x2122; Office http://www.spo.go.kr/eng/index.jsp 82-2-3480-2337 koreapros@spo.go.kr The Board of Audit and Inspection of Korea http://english.bai.go.kr 82-2-2011-2114 koreasai@korea.kr The Supreme Court of Korea http://eng.scourt.go.kr/eng/main/Main.work 82-2-3480-1100 webmaster@scourt.go.kr The National Assembly of the Republic of Korea http://korea.assembly.go.kr/index.jsp 82-2-788-3656 ENGLISH@assembly.go.kr

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The Ministry of Justice of the Republic of Korea is the leading state authority which promotes liberty, democracy, equality, justice and respect for humanity through fair and transparent enforcement of law.

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Vol.22 spring 2016

Recent Trends of Law & Regulation in Korea Ministry of Justice, government Complex Gwacheon, 47 Gwanmoonro, Gwacheon-si, Gyeonggi-do, 427-720, Republic of Korea TEL: 82-2-2110-3661, FAX: 82-2-2110-0327 / ildhd@moj.go.kr, www.moj.go.kr