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Articles contributed by Kim & Chang
The draft amendment to the Enforcement Decree of the Network Act (the "Amendment") was recently announced, which sets forth details of the new obligations and scope of the amended Act on Promotion of Information and Telecommunications Network Utilization and Information Protection (the "Network Act") that focuses on reinforcement of privacy and data protection and is scheduled to take effect on August 18, 2012.
The Asbestos Safety Management Act (the "Asbestos Act"), which is designed to ensure safe and effective management of asbestos became effective as of April 29, 2012. In the face of growing public concerns over escalating risk associated with asbestos, the Asbestos Act was promulgated last year to effectively control and manage asbestos-containing products, potential asbestos-containing materials and asbestos construction materials. The main features of the Asbestos Act are as follows.
In connection with the consent decree system adopted on December 2, 2011, the KFTC introduced the Rules on Management of and Procedures for the Consent Decree System (the "Rules") on March 28, 2012.
Cooperation for Tax Information Exchange
The Ministry of Strategy and Finance (the "MOSF") announced through its official press release dated March 12, 2012 its plan to strengthen the international cooperation for the exchange of tax information with other countries.
1. The Obligation to Hire Illegal Dispatch Workers Arises Immediately When the Violation is Found.
Public Health Control Act Legalizing Serviced Residences
Serviced residences combine features of the hotel business and short-term leasing business and typically target medium or long-term guests. On April 15, 2010, the Supreme Court ruled that operating a serviced residence constitutes accommodation business rather than real estate leasing business and therefore the operation of a serviced residence without reporting itself as an accommodation business was illegal.
On February 27, 2012, the National Assembly passed the draft amendments to the Monopoly Regulation and Fair Trade Law (the “FTL”) (the “Draft Amendments”), which will become effective on June 22, 2012. The following summarizes the major changes to the FTL that will be effectuated through the Draft Amendments:
New amendments to the Enforcement Decree of the Korean Commercial Code (the "Amendments") were passed by the National Cabinet on April 3, 2012.
On December 16, 2011, the Financial Services Commission (the "FSC") proposed to enact two new pieces of legislation, the Act on Financial Consumer Protection (the "AFCP") and an amendment to the Act on Establishment of Financial Services Commission (together with the AFCP, the "Proposed Legislation"). The Proposed Legislation aims to strengthen the protection of consumers of financial products from financial institutions.
On December 15, 2011, the Korea Fair Trade Commission (the “KFTC”) announced the key elements of its 2012 business plan. According to the 2012 business plan, the KFTC’s main goal is to establish a fair market economy that benefits the small and medium-sized enterprises, large conglomerates and consumers altogether. The key points of the KFTC’s 2012 business plan are outlined below.
On December 28, 2011, the Ministry of Justice announced a proposed amendment to the Enforcement Decree of the Korean Commercial Code (the "Amendment"). The Amendment elaborates on certain provisions in the newly-amended Korean Commercial Code – which will come into effect on April 15, 2012 – and aim to improve and supplement the current regime.
An amendment to the Employee Retirement Benefits Security Act (the “Act”) was promulgated on July 25, 2011 and is scheduled to take effect on July 26, 2012. The following is a brief summary of the key provisions of the amendment.
On September 22, 2011, the Korea Fair Trade Commission (the “KFTC”) reported its future plans to the National Assembly’s Government Affairs Committee (the “Committee”) during the National Assembly’s Audit, details of which are described below.
The recent amendments to the Act on Prevention of Divulgence and Protection of Industrial Technology, which were passed by the National Assembly on June 30, 2011, were promulgated on July 25, 2011. The amendments are scheduled to become effective six months from the promulgation date - on January 26, 2012.
1. Separate Consent for Privacy Matters
The Amendment to the Act on Promotion of Information Telecommunication Networks and Protection of Information ("APITN") came into effect on July 6, 2011.
Shortly after the enactment of the Act on Relief of Asbestos-Related Damages on January 1, 2011, the Asbestos Safety Act (the "Asbestos Act") was approved by the National Assembly and thereafter promulgated on April 28, 2011. The Asbestos Act is scheduled to become effective on April 29, 2012.
During a meeting with the State Affairs Committee held on June 13, 2011, the Korea Fair Trade Commission (the "KFTC") reported that "establishing a platform for growth and strengthening law enforcement" was the KFTC's top priority.
Pursuant to the Trade Union and Labor Relations Adjustment Act amended on January 1, 2010, more than one union may be established in a given company ("Multiple Union System") starting from July 1, 2011. Even where there are two or more labor unions in a single company, however, the company is only required to engage in collective bargaining with one bargaining channel per company, unless the company agrees otherwise. The single bargaining channel requirement will not apply to pre-existing multiple unions until July 1, 2012. The following may serve as the relevant single bargaining channel:
On March 11, 2011, the National Assembly passed a number of proposed amendments to the Korean Commercial Code (the "KCC"). These amendments, which comprise the final phase of an amendment process that began in 2005, represent the most large-scale revisions to the KCC since its inception. Notably, they include an array of provisions that aim for more flexibility in relation to corporate financing and enhanced transparency in relation to corporate governance.
On March 11, 2011, the National Assembly passed a draft bill for the Personal Information Protection Act ("PIPA"), which is expected to take effect within approximately 6 months. The information telecommunications service providers who are subject to the Act on Promotion of Information Telecommunications Networks and Protection of Information ("APITN") will also have to comply with the following aspects of the PIPA that are not currently covered by the APITN:
The National Tax Service (the "NTS") announced through its official press release dated February 8, 2011 the recent launch of a Forensic and Anti Tax-Evasion Center ("FAC") within the NTS and plans for other FACs to be established within the various regional tax offices across Korea.
The Korean government recently amended the guideline of the Bank of Korea ("BOK") regarding certain advance reporting or approval of the BOK that a Korean resident trading with Iranian entities and individuals need to be obtain (the "Amended Guideline").
The Ministry of Environment on December 3, 2010 issued "Provisions on Post-Import or Manufacture Enforcement of Chemical Substances Control" under the Toxic Chemicals Control Law (the "TCCL"). The provisions apply to the commissioners of local environmental agencies, to whom certain authorities are delegated by the Minister of Environment, in enforcing the TCCL with respect to manufacturers and importers of chemical substances.
The bills for tax laws as proposed by the Ministry of Strategy and Finance ("MOSF") last August have been reviewed and ratified by the Strategy and Finance Committee of the National Assembly ("NA") on December 7, 2010. After subsequent ratifications by the Legislation & Judiciary Committee and a plenary session of the NA, the bills became effective as of January 1, 2011. Summarized below are the key amendments in the final bills that were not included in the original MOSF proposals last August.
On December 15, 2010, the Korea Fair Trade Commission ("KFTC") announced the key elements of its business plan for the year 2011. The KFTC's 2011 business plan aims to foster stability in the everyday life of the average consumer and to promote the development of small, medium and large-sized businesses through the reinforcement of its competition policies.
On December 27 and December 30, 2010, amendments to tax laws and related presidential decrees have been promulgated, most of which took effect as of January 1, 2011 (with the exception of those provisions for which different effective dates are specified). It is also expected that there will be further amendments to presidential decrees unrelated to the above amendments to tax laws sometime around February or March 2011. Among the amendments for this year, we provide you below with some of the major items that may affect your business or may be of interest to you.
On August 17, 2010, the Daegu District Court issued a ruling on the scope of one's legitimate rights in a domain name under the Internet Address Resource Act ("IARA"). This case is now pending before an appellate court.
On September 28, 2010, the Korean government announced a list of 470 companies whose emissions of greenhouse gases ("GHG") shall be regulated ("Regulated Companies") pursuant to the Framework Act on Low Carbon Green Growth ("Framework Act") and the Guidelines on the Designation and Supervision of GHG and Energy Regulated Companies.
On August 23, 2010, the Ministry of Strategy and Finance ("MOSF") announced a series of proposals for revisions to the tax laws before the end of 2010. The proposals include revisions to tax laws aimed at mitigating potential tax burdens arising from the adoption of the International Financial Reporting Standards ("K-IFRS") by listed companies or financial institutions starting from next year.
In mergermarket M&A League Tables of Legal Advisers up until Q3 in 2010, Kim & Chang ranked as the no.1 legal advisor in Korea based on both deal volume and count.
On August 9, 2010, the Korean Fair Trade Commission (“KFTC”) launched an industry-wide investigation into possible abuses of patent rights in the IT industry. This is the first time that the KFTC has launched an extensive investigation into whether domestic or foreign/multinational corporations in the IT industry have abused their patent rights. According to the KFTC’s press release, 59 companies (40 domestic and 19 multinational corporations) that have direct or indirect relationships with the domestic IT industry are subject to the initial investigation.
New Guidelines of the Korea Fair Trade Commission on Unfair Exercise of Intellectual Property Rights
The Korea Fair Trade Commission (“KFTC”) recently approved the “Guidelines on the Exercise of Intellectual Property Rights” (“Guidelines”), which specify a basic principle of applying the Monopoly Regulation and Fair Trade Law (“FTL”) against abuse of IP rights and provide guidance on the scope of transactions to be covered and the standards for determining when enforcement of IP rights may constitute a violation of the FTL. The Guidelines has come into effect as of April 7, 2010 and the main contents of the Guidelines are as follows:
On December 1, 2009, the Ministry of Justice announced amendments to the Commercial Code setting forth proposed legislation on poison pills. A poison pill is a defensive tactic used by companies to protect management rights in the event of a hostile takeover. It typically works by granting existing shareholders the right to increase their holdings by purchasing newly issued securities at a below-market price. Despite repeated requests from Korean conglomerates to allow poison pills as a management rights protection device, the introduction of poison pill legislation had been delayed due to conflicting views held among different government circles. The government authorities have, however, reached a consensus on the issue, culminating in the announcement of pending legislation by the Ministry of Justice.