International Trade 2024 Comparisons

South Korea has been a member of the WTO since 1 January 1995. Among WTO-affiliated agreements, South Korea is a party to the Government Procurement Agreement (GPA), the Information Technology Agreement (ITA), and participated in the negotiation of the Plurilateral Trade in Services Agreement (TiSA).

South Korea has been one of the most active FTA participants, with 22 FTAs in force, and 4 FTAs that have been concluded but have not yet entered into force as of October 2023.

22 FTAs in Force

South Korea is a party to the following FTAs in force:

• South Korea-Chile FTA;
• South Korea-Singapore FTA (KSFTA);
• European Free Trade Association (Norway, Switzerland, Iceland, and Liechtenstein)-South Korea FTA; 
• ASEAN-South Korea FTA;
• Comprehensive Economic Partnership Agreement (CEPA) with India;
• South Korea-European Union FTA;
• South Korea-Peru FTA;
• South Korea-U.S. FTA (KORUS FTA);
• South Korea-Türkiye FTA;
• South Korea-Australia Free Trade Agreement;
• South Korea-Canada FTA;
• South Korea-China FTA;
• South Korea-New Zealand FTA;
• South Korea-Vietnam FTA;
• South Korea-Colombia FTA;
• South Korea-Central America (Partial) FTA;
• Korea-United Kingdom FTA;
• Regional Comprehensive Economic Partnership (RCEP);
• Korea-Israel FTA;
• South Korea-Cambodia FTA (KCFTA);
• CEPA with Indonesia; and
• Digital Partnership Agreement with Singapore (KSDPA).

Four FTAs Concluded But Not Yet in Force

Additionally, Korea is a signatory to the following FTAs which are not yet in force:

• Korea-Philippines FTA;
• Strategic Economic Cooperation Agreement (SECA) with Ecuador;
• CEPA with UAE; and
• Digital Economy Partnership Agreement (DEPA) with Chile, New Zealand, and Singapore.

For more information, please refer to the Korean Ministry of Foreign Affairs website.

South Korea is a party/member of the following preferential agreements.

GSTP (Global System of Trade Preferences)

The GSTP was initiated by the United Nations Conference on Trade and Development (UNCTAD) to develop trading opportunities among developing countries to support their economic growth. South Korea has participated in the GSTP since its establishment in 1989 and currently offers preferential tariffs on certain items based on the country of origin.

PTN (Protocol on Trade Negotiations)

South Korea provides tariff concessions for members of the Protocol Relating to Trade Negotiations Among Developing Countries (PTN) in the Framework of the WTO Agreement. The PTN was signed in December 1971 and became effective on 11 February 1973.

APTA (Asia-Pacific Trade Agreement, Formerly Known as the Bangkok Agreement)

South Korea is a member of the APTA, which is a preferential regional trade agreement among developing countries in Asia and the Pacific region signed in 1975. It aims to promote economic development by expanding tariff concessions in the trade of goods between member countries. The APTA has five members, namely Bangladesh, China, India, South Korea, Lao People’s Democratic Republic and Sri Lanka. The Economic and Social Commission for Asia and the Pacific (ESCAP) functions as the secretariat for the Agreement.

Least-Developed Countries (LDCs)

South Korea provides preferential tariff treatment to products of LDCs designated by the UN. The countries and areas covered by the scheme of South Korea are listed in Appendix 1 of the Presidential Decree on Preferential Tariffs for Least Developed Countries.

For more information on the first three agreements outlined above, please refer to the Regulations on Tariff Concessions in the Framework of the Agreement Establishing the WTO.

South Korea has recently been exploring regional trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Indo-Pacific Economic Framework for Prosperity (IPEF). In 2022, South Korea has commenced the application process on acceding to the CPTPP. While South Korea’s accession requires negotiations with existing members, the CPTPP Commission has not yet decided on whether to commence negotiations. Meanwhile, South Korea has also officially confirmed that it is joining the IPEF, including all four pillars in which the IPEF seeks co-operation:

• Trade and Fairness;
• Supply Chain Resiliency;
• Clean Energy, Decarbonisation and Infrastructure; and
• Tax and Anti-Corruption. 

Additionally, South Korea has been working to diversify its trading partners by negotiating new FTAs, particularly in emerging markets in Southeast Asia and Latin America, and by revamping existing trade agreements. Examples of new FTAs include the following:

• South Korea-China-Japan Free Trade Agreement;
• South Korea-Pacific Alliance (PA: Colombia, Mexico, Peru, Chile) FTA;
• South Korea-Mexico FTA;
• Korea-MERCOSUR FTA;
• South Korea-Russia FTA;
• Korea-Malaysia FTA (although South Korea has an FTA with ASEAN, it has sought to strike bilateral deals with each member to bolster ties with ASEAN countries);
• Agreement for Sustainable Trade and Economic Partnership (STEP) with Uzbekistan;
• South Korea-Georgia FTA; and
• South Korea-Egypt FTA.

Furthermore, South Korea is planning to update and expand existing FTAs with ASEAN, India, Chile, and China, focusing on services and investment.

South Korea and the United Arab Emirates finalised negotiations on a bilateral FTA on 14 October 2023, marking South Korea’s 24th FTA and its first with a Middle Eastern country. The agreement will remove tariffs on 92.8% of all items traded by South Korea and 91.2% by the UAE within a decade.

Furthermore, the UK and South Korea have agreed to extend the grace period of low or zero tariffs on bilateral trade of products made with parts from the European Union for two more years until 2025. The two-year extension will particularly benefit the car industry considering that South Korea is the seventh-largest export market for British-made cars and the third-largest supplier of new cars to Britain. Also, the two countries have decided to amend the previous FTA to include provisions for investment and digital trade, which will promote economic growth and job creation, and intend to start negotiations by the end of this year.

South Korea has continued to actively participate in Indo-Pacific Economic Framework (IPEF) discussions. With the finalisation of the IPEF, Korean trade policy may change in accordance with such framework.

In addition, South Korea is planning to amend FTAs with several countries, including India and Chile. As regards the FTA between South Korea and India, known as the Comprehensive Economic Partnership Agreement (CEPA, which took effect in 2010), both sides have agreed to engage in discussions on improving concessions, investment in goods and services, streamlining product specific rules, and lowering non-tariff barriers. With Chile, South Korea is planning to ensure that the Korea-Chile FTA does not only deal with trade in goods, but becomes a new channel for co-operation in supply chain resiliency, the energy and resources sector, and digital trade. Accordingly, the changes may have a significant impact on Korea’s economy.

The Customs Act is the main legislation governing customs matters in South Korea. In addition, two further acts govern customs matters in South Korea, namely the Act on Special Cases of the Customs Act for the Implementation of Free Trade Agreements, and the Act on Special Cases concerning the Refund of Customs Duties Levied on Raw Materials for Export.

The Korean Customs Service is the main authority that administers and enforces customs laws and regulations in Korea. Besides being responsible for enforcing the Customs Act, the Customs Service also oversees the implementation of the Foreign Exchange Transactions Act and the Foreign Trade Act in relation to import and export transactions.

Under the Act on the Investigation of Unfair International Trade Practices and Remedy Against Injury to Industry, the Korea Trade Commission may conduct an investigation into whether a particular domestic industry producing certain goods or services suffers, or is expected to suffer, any injury due to the systems and practices of trade counterparts that violate international trade norms, including WTO Agreements and other international agreements that South Korea is a party to.

The Korea Trade Commission may conduct an investigation into injury ex officio or upon request of an interested person. When the Korea Trade Commission has established, based on the outcome of its investigation, that a domestic industry suffers injury or has concerns over potential injury, it may recommend that the head of the relevant central administrative agency implement measures to remedy the violations of international trade norms by the trade counterparts.

However, such investigations are rarely triggered. Typically, the interested parties, individually or via industry associations, approach the Ministry of Trade, Industry and Energy (MOTIE) and request the initiation of the dispute settlement mechanism under the WTO or other relevant institutions, including FTAs. MOTIE then reviews the case and decides how to address the matter at its discretion.

Recently, the Korea Customs Service has been focusing its investigation and enforcement efforts on (i) drug smuggling; (ii) food and liquor products; and (iii) foreign exchange violations involving import and export of goods. One reason for such strengthened enforcement was due to a shortage of tax revenue.

With respect to food and liquor products in particular, the Korea Customs Service has specifically enhanced its scrutiny of two aspects:

• whether agricultural and livestock products imported under FTA preferential tariff rates qualify for such preferential treatment; and
• whether such imports comply with all necessary customs clearance requirements for public health and safety, such as permits, approvals, and examinations mandated by relevant laws throughout the import and export clearance stages.

Lastly, the Korea Customs Service is conducting thorough investigations into Chinese companies attempting to mislabel the origin of their goods as Korean in order to circumvent US sanctions stemming from the ongoing trade war between the US and China.

South Korea amended the Foreign Exchange Transactions Act on 4 July 2023, aiming to minimise the burden of conducting ordinary foreign exchange transactions on a daily basis. The major amendments include:

• raising the threshold for criminal penalties for negligence violations from KRW1 billion to KRW2 billion for capital transaction reporting violations and from KRW25 billion to KRW5 billion for unstructured payment reporting violations); and
• relaxing requirements for submitting supporting documentation for overseas remittances and for advance capital transaction reporting.

In general, South Korea’s sanctions regime closely follows the sanctions regime of the UN and its allies, such as the US and the EU. However, there is a notable exception, namely sanctions against North Korea, in relation to which almost all transactions are prohibited, unless otherwise permitted by certain government agencies.

There are various domestic legal authorities to implement international sanctions. Depending on the type of sanctions, different legislations come into play, for example:

• The Foreign Trade Act mainly governs trade sanctions.
• The Foreign Exchange Transactions Act and the Act on Prohibition against the Financing of Terrorism and Proliferation of Weapons of Mass Destruction (CFT/WMD Act) govern economic and financial sanctions.
• The Immigration Act, the Customs Act, the Coast Guard Affairs Act, the Act on Arrival and Departure of Ships, and the Aviation Safety Act may apply to other types of sanctions such as travel bans, aviation bans and maritime sanctions.

From time to time, South Korea issues administrative regulations to implement sanctions, such as the Public Notice on Special Trade Measures Necessary to Perform Duties to Maintain International Peace and Security, the Payment and Payment Receipt Notification Necessary to Perform Duties to Maintain International Peace and Security, and the Regulation on the Designation of Persons as Subject to Financial Transaction Restrictions and the Revocation of Such Designation.

Different government agencies are involved in the administration and enforcement of sanctions, depending on the type of sanction.

Trade Sanctions

Trade sanctions, including arms embargoes as outlined in the Foreign Trade Act, are primarily overseen by MOTIE and the Korean Security Agency of Trade and Industry, which manages most dual-use items. If the dual-use items are related to nuclear activities, the Nuclear Safety and Security Commission will be the relevant government authority. Lastly, the Defense Acquisition Program Administration is responsible for military materials and dual-use items for military purposes.

Economic Sanctions

Economic and financial sanctions, encompassing asset freezes, as stipulated in the Foreign Exchange Transactions Act and CFT/WMD Act, are under the purview of the MOEF, the Financial Services Commission, and the Bank of Korea.

Others

Other types of sanctions, including travel bans, aviation bans, and maritime sanctions, are managed by different governmental bodies, including, as the case may be, the Ministry of Justice, the Ministry of Land, Infrastructure and Transport, the Ministry of Oceans and Fisheries, and the Ministry of Unification.

As a general rule, Korean laws are applicable to Korean citizens and individuals present within the territory of Korea. Nonetheless, sanctions can also extend to foreign nationals based on the overarching criminal law principle, which encompasses foreign nationals committing offenses against Korean citizens or the Korean government in foreign jurisdictions. Additionally, foreign exchange transactions that involve a Korean element, such as one of the parties being a Korean resident or involving Korean currency, may trigger financial sanctions.

Under the Foreign Exchange Transaction Act and the Notification of Payment and Receipt of Payment for Implementation of Obligations for Maintaining International Peace and Security, certain individuals and entities subject to sanctions designated by the United Nations Security Council Resolutions (UNSCR), the executive orders of the US, or the Council of the European Unions may be obligated to obtain approval from the Bank of Korea for their foreign exchange transactions. These individuals and entities are referred to as “persons subject to financial sanctions”. The MOEF has the authority to designate such persons when it deems such designation as indispensable for South Korea’s faithful adherence to international treaties, generally recognised international laws and regulations, or when it is crucial for actively contributing to international efforts aimed at maintenance of international peace and security.

Additionally, the CFT/WMD Act and the Regulation on Designation and Cancellation of Designation of Financial Transaction Restricted Persons designate individuals and entities involved in terrorist activities or proliferation of weapons of mass destruction as “persons subject to financial transaction restrictions”. These individuals and entities are automatically subject to financial and other commercial transaction restrictions. To engage in such transactions, persons subject to financial transaction restrictions must seek approval from the Financial Services Commission, which is equivalent to the US Securities and Exchange Commission. The Financial Services Commission has authority to designate persons as subject to financial transaction restrictions if it determines that such persons are involved in terrorist activities or the proliferation of weapons of mass destruction. Currently, such persons are mainly those designated by the UNSCR in relation to the economic sanctions against North Korea, or other terrorist groups such as the Taliban and Al-Qaeda.

The scope of persons subject to financial sanctions is typically broader compared to that of persons subject to financial transaction restrictions.

Almost all transactions related to North Korea are effectively prohibited under a series of administrative measures and the Inter-Korean Exchange and Cooperation Act, unless otherwise permitted by the Ministry of Unification or other government agencies.

Korea has instituted regulations for the trade of rough diamonds in alignment with the Kimberley Process. The Kimberley Process represents a global commitment to eradicate the circulation of conflict diamonds. As an active participant in the Kimberley Process, Korea mandates that all importers of rough diamonds possess a Kimberley Process certificate to verify the conflict-free status of the diamonds. All exporters of rough diamonds are obliged to secure an export license to ensure that these diamonds are only traded with entities that are part of the Kimberley Process network.

South Korea does not apply or threaten sanctions in connection with transactions that have no nexus to Korea (ie, secondary sanctions).

Depending on the specific sanctions laws and regulations, the wrongdoer may be subject to criminal penalties, including imprisonment, and administrative penalties, including business suspension and the revocation of licenses. The company may be held vicariously liable for the violations committed by its employees. 

Although the Korean government is authorised to adopt its own unilateral sanctions as it deems necessary, a person who violates Korean sanctions laws and regulations is unlikely to be listed as a sanctioned person, unless the same person was designated as a sanctioned person by an international organisation or its major allies, such as the US or EU.   

Individuals designated as persons subject to financial transaction restrictions under the Regulation on the Designation of Persons as Subject to Financial Transaction Restrictions and the Revocation of Such Designation can proceed with their transactions subject to the Financial Services Commission’s specific approval. Similarly, persons subject to financial sanctions, as defined in the Notification of Payment and Receipt of Payment for Implementation of Obligation for Maintaining International Peace and Security, may participate in foreign exchange transactions once the chairperson of the Bank of Korea provides approval. However, the laws and associated regulations do not outline specific criteria or conditions under which such approvals are issued. In practice, such approvals are seldom granted.

Financial institutions must implement a compliance programme to address a variety of financial regulations, including anti-money laundering, encompassing programmes related to sanctions compliance. Unlike companies in other industries, they are obligated to establish internal controls and compliance systems to ensure effective compliance with sanction programmes. Nevertheless, despite the lack of mandatory requirements for companies in various sectors, numerous Korean businesses have proactively instituted and sustained internal controls and systems to comply with sanction programmes. This is particularly evident in enterprises engaged in activities associated with high-risk geographic areas such as China, Iran and Russia, or with sensitive technology and items.

According to the CFT/WMD Act, financial institutions are mandated to report to investigative authorities when they identify that funds received from a financial transaction are intended for terrorist activities or the proliferation of weapons of mass destruction. They must also report if the other party involved in the transaction is conducting the transaction without the necessary approvals.

Although there is no legal requirement nor distinct benefit for self-reporting in the context of sanctions enforcement, the Criminal Code of Korea generally provides lenient treatment by the court in sentencing if the defendant co-operates during investigations, which includes the act of self-reporting. Therefore, companies may consider the advantages of self-reporting when deciding how to respond to potential enforcement actions.

South Korea does not have blocking statutes, anti-boycott regulations, or other restrictions that prohibit adherence to other jurisdictions’ sanctions.

Starting from March 2022, following Russia’s invasion of Ukraine, South Korea joined in international efforts to sanction Russia. These measures encompass:

• suspending transactions with specific Russian financial institutions, such as:
1. Sberbank, VEB, PSB, VTB, Otkritie, Sovcom, Novikom, Bank Rossiya and its affiliates;
2. the Central Bank of Russia;
3. the National Wealth Fund of the Russian Federation (NWF); and
4. the Russian Direct Investment Fund (RDIF);
• suspending investments in Russian sovereign debt; and
• excluding certain Russian banks, such as Rossiya, VEB, PSB, VTB, Otkritie, Sovcom and Novikom, from the SWIFT network.

With respect to the novel export control-related sanctions against Russia, please see 4.12 Key Developments Regarding Exports.

Please see 3.14 Key Developments regarding Sanctions.

The Export Control regulations for strategic materials in South Korea are mainly stipulated in the Foreign Trade Act, and the Public Notice on Export and Import of Strategic Items. The term “strategic materials” refers to both military goods and dual-use items that can be used for developing weapons of mass destruction, necessitating adherence to international control measures such as the Wassenaar Arrangement. Failure to acquire the necessary permit renders the exporter, both the individual violator and the implicated company, subject to legal ramifications, including criminal prosecution. Additionally, the penalised entity will face up to a three-year restriction on exporting strategic materials.

The main legal authority for export controls in South Korea is the Foreign Trade Act, while the main administrative authority for export controls is the Public Notice on Export and Import of Strategic Items.

Separately, depending on the nature of the items and their use, other laws would apply, such as the Defense Acquisition Program Act (for military items and dual-use items exported for military purposes), the Nuclear Safety Act (for dual-use items relevant to nuclear activities), and the Inter-Korean Exchange and Cooperation Act (for trade with North Korea).

The main government authority in charge of export controls in South Korea is the Ministry of Trade, Industry and Energy.

Additionally, other government agencies may play a role depending on the nature of the items and their use, such as the Defense Acquisition Program Administration (for military items and dual-use items exported for military purposes), the Nuclear Safety and Security Commission (for dual-use items relevant to nuclear activities), and the Ministry of Unification (for trade with North Korea).

Under the Foreign Trade Act and the Public Notice on Export and Import of Strategic Items:

• any person who intends to export strategic items (military equipment and dual-use items, including technologies) must obtain a license from the relevant authorities of the South Korean government (export license);
• any person who intends to export goods or technologies that do not fall within the category of strategic items but have a high potential of being used for manufacturing, developing, using, or storing weapons of mass destruction or missiles as carriers of such weapons, must obtain permission from the relevant authorities of the South Korean government (a catch-all licence), if that person (i) becomes aware that the importer or end user of the goods intends to use the goods for manufacturing, developing, using, or storing weapons of mass destruction; or (ii) suspects such intent.

MOTIE maintains a denial list posted on the Strategic Items Export Control Information System. An exporter who intends to export items to a person on the denial list (including purchaser, final consignee or end user) must obtain a catch-all license.

MOTIE can place a person on the denial list if that person is designated as subject to UN sanctions, as subject to notification to member countries as a trader that must be flagged in international export control regimes, or if MOTIE determines that such persons should be listed for the purposes of international security and world peace.

As of 14 November 2023, the following countries and organisations are on the denial list:

• Iran;
• Al-Qaeda/ISIL;
• the Taliban; and
• the Democratic People’s Republic of Korea (DPRK).

The Export and Import Notice strictly prohibits the export of export-prohibited goods, including whale meat and natural granite stone. Export- or import-restricted goods such as natural sand and steel products that meet certain requirements are generally prohibited from trade but may be permitted subject to approval by the relevant government agencies.

The Public Notice on Special Trade Measures Necessary to Perform Duties to Maintain International Peace and Security provides for certain restrictions on trade to and from:

• Iraq;
• Somalia;
• the Democratic Republic of the Congo;
• the Republic of the Sudan;
• the Lebanon;
• Libya;
• Syria;
• the DPRKl;
• the Central African Republic; and
• Yemen.

Penalties and consequences for violating export controls include:

• imprisonment and fines;
• administrative fines;
• export/import restrictions; and
• placement on the denial list.

A company can be subject to vicarious liability if its employees are found guilty of committing export control violations.

Export licenses and catch-all licences can be granted if the intended use of the items is for peaceful purposes and the importer or end user is duly qualified for the relevant transaction.

While the statutory period for processing an application for an export or catch-all license is 15 days from the application date, it would generally take around two months for the applicant to receive a final decision. During the review process, the authority may conduct a separate technical review, liaise with other relevant government agencies and/or other countries (including obtaining authorisation), and request additional application documents.

In principle, there are no specific compliance standards beyond those outlined in 4.9 Export Licenses. However, under the Foreign Trade Act, MOTIE has the authority to appoint certain traders as self-compliance traders. This special designation is for traders who demonstrate the ability to accurately identify strategic items and thoroughly assess the credentials of importers and end users. This designation aims to enhance a company’s self-governing capabilities in managing strategic materials. Designated self-compliance traders are granted limited authority to handle aspects of export control over strategic items and receive a “comprehensive export permit” that exempts them from the requirement to obtain permission for individual export transactions.

In general, there is no mandatory reporting obligation; however, self-compliance traders (see 4.10 Compliance) are required to report, inter alia, the export performance of strategic materials to MOTIE.

Russia-related Export Controls

The Korean government has tightened its export controls on strategic items destined for Russia and Belarus. It has formally implemented a policy of non-approval, refusing to grant permissions for the export of strategic items to these countries. It also mandated catch-all licences for the export of non-strategic items to Russia and Belarus.

China-related Export Controls

Following the implementation of new export controls on advanced computing and semiconductor manufacturing items to China by the US Department of Commerce in October 2022, the US government has sought collaboration from Japan to restrict China’s access to purchasing and manufacturing semiconductors. There is a possibility that Korea might be the next country to join this effort. Semiconductor manufacturing technologies are categorised as a national core technology in Korea, requiring clearance from MOTIE under the Prevention of Divulgence and Protection of Industrial Technology Act. Therefore, it is advisable to closely monitor the evolution of Korea’s export control regime concerning the semiconductor industry.

There are no other significant topics or concerns pertaining to export controlsbesides those addressed in other sections of this chapter.

The Korea Trade Commission is responsible for implementing trade remedies and safeguard measures, such as anti-dumping duties, countervailing duties and the investigation of unfair trade practices. The MOEF imposes the definitive measures based on the determination made by the Korea Trade Commission.

The Korea Customs Service is responsible for collecting AD/CVD duties and clearing imported goods.

Domestic companies may petition the Korea Trade Commission to initiate a review. The Korea Trade Commission may initiate a review at its own discretion.

Domestic companies can petition the Korea Trade Commission on an ad hoc basis.

Non-domestic companies have the opportunity to participate in reviews as long as they are interested parties.

AD/CVD Duties

Decision on initiating investigation (by the Korea Trade Commission (KTC))

Two months after receiving an application, the KTC is required to decide if an investigation is required.

Preliminary decision on investigation and provisional measures (by the KTC)

Within three months after the initiation of the investigation, the KTC is required to complete it and prepare provisional measures. During the preliminary phase of the investigation, a questionnaire is sent to the foreign exporter, domestic producer(s), importer and distributor(s) involved. If the KTC decides that a domestic industry has suffered injury, it recommends that the MOEF impose a provisional anti-dumping or countervailing duty.

Final decision (by the KTC)

Within three months after the preliminary decision, the KTC is required to make a final decision on any injury suffered by the domestic industry, and determine the dumping margin or subsidy rate (if it determines that injury has been suffered). During the final phase of the investigation, the KTC is required to carry out an on-the-spot investigation and a public hearing involving the interested parties.

During the on-the-spot investigation, an investigation team is required to visit the foreign suppliers and domestic producers, associations, societies, importers and consumers. During this investigation, the accuracy of their submitted responses is assessed by comparing them with various documents, including accounting books and other documentary evidence. Furthermore, the planning of a public hearing is announced in the Official Gazette at least 30 days prior to the public hearing. Anyone who seeks to attend the public hearing is required to submit an application for permission with evidentiary materials, a statement summary, and contact information for its representative. During the investigation process, the interested parties are allowed to present her or his opinion in a written statement.

Definitive measure (by the MOEF)

The anti-dumping or countervailing duty must be imposed to an extent not exceeding the amount of the dumping margin.

Safeguards

Decision on initiating investigation (by the KTC)

Upon receipt of any investigation application, the KTC is required to decide whether to initiate an investigation in consultation with the head of the relevant central administrative authorities within 30 days from the application date.

Investigation of injury to domestic industry and recommendations for safeguard measures (by the KTC)

Within four months after the decision to initiate an investigation, the KTC must decide if the relevant domestic industry has suffered serious injury or if there is a threat of serious injury. If it decides that it has, the KTC may decide on measures and recommend that the head of the relevant central administrative authorities take safeguard measures within one month of the decision.

Provisional measures (by the KTC)

If the relevant domestic industry will suffer, or is likely to suffer, irreparable injury unless provisional safeguard measures are taken, the KTC may recommend that the heads of the relevant central administrative authorities take provisional measures in the form of a customs tariff adjustment.

Determination and implementation of safeguard measure (by the MOEF)

The MOEF shall decide whether to take the safeguard measures within one month of the KTC’s recommendation.

The KTC publishes reports of preliminary and final decisions.

There are no jurisdictions on which the authorities cannot or will not impose AD/CVD duties or safeguards based on trade agreements or other relevant laws and regulations.       

There is no annual review of duties; instead, they are subject to review upon completion of the period of imposition of AD/CVD duties, when a sunset review is requested from an interested party.

There is no annual review of such duties; instead, they are subject to review upon completion, when a sunset review is requested from an interested party.

The sunset review process is slightly different from the investigation process.

• Decision on initiating a review (by the MOEF): Within two months after receiving an application, the MOEF shall decide if a review needs to be initiated.
• Decision (by the KTC): Within six months after initiation, the KTC is required to make a decision on any injury suffered by the domestic industry, and determine the dumping margin or subsidy rate (if it determines that injury has been suffered). During the investigation phase, the KTC can carry out an on-the-spot investigation and a public hearing involving the interested parties.
• Definitive measure (by the MOEF): The AD/CVD duty shall be imposed to an extent not exceeding the amount of the dumping margin or subsidy rate.

An interested party may file lawsuits in administrative courts regarding AD/CVD and safeguard measures.

There have been no changes in the relevant laws or regulations in the past 12 months.

There are no significant changes anticipated over the next 12 months pertaining to trade remedies.

The security review procedure under the Foreign Investment Promotion Act (FIPA) aims to assess whether a proposed deal poses harm to national security. The overall process is expected to take about four months from the beginning to the end (30 days from the filing of the foreign investment declaration form to reach the Security Review Expert Committee and then the Foreign Investment Committee, and 90 days for the Foreign Investment Committee to make its decision and for KOTRA (the Korea Trade-Investment Promotion Agency) or foreign exchange banks to issue the certificate).

MOTIE administers the relevant regulations and procedures.

A review is required for investments that meet all of the following conditions:

• where a foreigner intends to acquire de facto control over the management of an existing domestic company by acquiring its stocks, etc; and
• any of the following cases where:
1. manufacturing defence materials may be hindered;
2. goods, etc, or technologies subject to permission or approval for exportation under the Foreign Trade Act are likely to be used for military purposes (which constitute strategic goods or technologies);
3. contents of a contract, etc, classified as a state secret are likely to be disclosed;
4. international efforts of the UN, etc, to maintain international peace and security may be substantially and critically hindered; or
5. disclosure of national core technology is highly likely.

While a separate application for security review is not required, anyone who intends to engage in foreign investment activities, such as acquiring shares in a Korean company, is obligated to submit a report on foreign investment. If the reported foreign investment falls within the type of foreign investment as specified in 6.3 Transactions Subject to Investment Security Measures, it will undergo an automatic security review in accordance with the operational rule of the FIPA.

There are no exemptions from review under FIPA.

If MOTIE determines that an acquisition of shares or other assets by a foreign investor poses a national security risk, the investor must transfer the acquired shares or assets to a Korean citizen, Korean corporation, or another foreign national who does not pose a national security concern (hereinafter referred to as “Korean entities”) within six months of the decisions. However, if deemed necessary, MOTIE may authorise foreign investment provided that a specific segment of the business is separated from the investment or that the investor commits to adhering to certain security compliance measures. If a conditional investment is permitted, the relevant shares or assets must be transferred to Korean entities within six months from the date when the Minister of MOTIE becomes aware of the violation of the condition. However, if there are unavoidable reasons, the transfer period may be extended for up to one year with the approval of MOTIE. 

There are no fees associated with investment security reviews or filings.

There have been no changes to the relevant laws or regulations in the past 12 months.       

No significant changes pertaining to investment security measures are expected over the next 12 months.

There are no incentive programmes that are specifically aimed at reducing imports and/or encouraging domestic production.

There are no standards or other technical requirements that are specifically aimed at reducing imports and/or encouraging domestic production

There are no sanitary and phytosanitary requirements that are specifically aimed at reducing imports and/or encouraging domestic production.

There are no competition policies or price controls that are specifically aimed at reducing imports and/or encouraging domestic production.

There are no state trading, state-owned enterprises or privatisation measures that are specifically aimed at reducing imports and/or encouraging domestic production.

There are no “buy national/local” requirements in government procurement that are specifically aimed at reducing imports and/or encouraging domestic production.

In accordance with the Agricultural and Fishery Products Quality Control Act, the Minister of Agriculture, Food and Rural Affairs and the Minister of Oceans and Fisheries have implemented a geographic indications registration system. The system aims to improve the quality of agricultural and fishery products with geographical characteristics, promote regional specialty industries, and safeguard consumer interests. Individuals who register a geographical indication obtain exclusive intellectual property rights to the specified item. 

There are no other significant developments in the law not otherwise addressed herein.