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Press releases and law firm thought leadership

This page is dedicated to keeping readers informed of the latest news and thought leadership articles from law firms across the globe.

If your firm wishes to publish press releases or articles, please contact Shehab Khurshid on +44 (0) 207 396 5689 or shehab.khurshid@legalease.co.uk

 

Legal Developments Worldwide

Articles contributed by Lee & Ko

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Successful Challenges to Korean Health Insurance Regulator’s 13-Year Old System...

April 2019 - Intellectual Property. Legal Developments by Lee & Ko .

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Successful Challenges to Korean Health Insurance Regulator’s 13-Year Old System of Automatic Reduction of Original Drug Price

The Seoul Administrative Court and the Seoul High Court issued orders suspending the automatic reduction of the price of the original drug “A” upon generic entry claiming patent non-infringement and the automatic reduction of the price of the original drug “B” upon generic entry claiming patent invalidity, respectively. The automatic price reduction of the original drug B has been continuously suspended since the Administrative Commission’s suspension order issued in April 2018.

Korean Supreme Court Confirms Licensee’s Standing to Challenge Patent Validity

March 2019 - Intellectual Property. Legal Developments by Lee & Ko .

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On February 21, 2019, the Supreme Court of Korea issued an en banc decision overruling its prior precedents on the issue of whether a licensee who is continuing to make royalty payments under an existing license agreement nevertheless has standing to challenge the validity of the licensed patent. In short, the Korean Supreme Court held that absent special circumstance, a patent licensee is an “interested party” eligible for challenging the validity of a licensed patent, despite the lack of any threat or potential threat posed by the patent holder against the licensee’s right to use the patented invention. (Supreme Court En Banc Decision No. 2017Hu2819).

Amendments to the KFTC Merger Review Guidelines

March 2019 - Antitrust & Competition. Legal Developments by Lee & Ko .

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The Korea Fair Trade Commission (the “KFTC”) recently amended its Guidelines for Merger Review (the ”Guidelines”), which took effect from February 27, 2019. The Guidelines now provide for particular issues relating to “innovation markets” and “big data” that will be considered during the KFTC’s review of mergers within R&D-intensive (i.e. innovative) industries.

Korea strengthens protection against IP infringement and unfair competition (Amendment of the Patent

February 2019 - Intellectual Property. Legal Developments by Lee & Ko .

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Korea strengthens protection against IP infringement and unfair competition (Amendment of the Patent Act and the Unfair Competition Prevention Act)

On December 7, 2018 the Korea National Assembly approved a bill to amend the Patent Act and the Unfair Competition Prevention and Trade Secret Protection Act (“UCPA”). Highlights of the proposed amendments include stronger penalties for patent infringements and further relaxation of the burden of proof for patent holders. The amendments are to be effective on July 9, 2019.

Korean TR, Finally and Officially Coming Soon

February 2019 - Finance. Legal Developments by Lee & Ko .

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Korean TR, Finally and Officially Coming Soon

Korea is finally adopting a trade repository (“TR”), which is an infrastructure that collects and stores data related to over-the-counter (“OTC”) derivatives transactions. The Financial Services Commission (“FSC”) has decided to implement the TR system by making amendments to the Regulations on Financial Investment Business (which is aligned with Article 166-2(2) of the FSCMA), instead of making amendments to the Financial Investment Services and Capital Markets Act (“FSCMA”) or its Enforcement Decree, and has approved the amendment as of January 31, 2019. As a result, the TR is expected to be activated in July, 2020 as scheduled. Korea is introducing the TR system in order to improve transparency and systematic risk management in its OTC derivatives market as part of its effort to adhere to the G20 accord.

Key Changes to Korean Labor Standards Act in 2019

February 2019 - Employment . Legal Developments by Lee & Ko .

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Key Changes to Korean Labor Standards Act in 2019

In 2018, Korea experienced major reforms to the employment laws including, but not limited to, the Labor Standards Act. For example, many employers scrambled – many are still struggling – to adjust their work hour structures to comply with the new 52-hour work hour limit. In 2019, legislative reforms and amendments proposed in 2018 have taken effect. For your information, we have highlighted two major changes in the employment law landscape for 2019.

Direction of Financial Regulatory Environment of Korea in 2019: Legislation Supporting Financial Inn

February 2019 - Finance. Legal Developments by Lee & Ko .

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Direction of Financial Regulatory Environment of Korea in 2019: Legislation Supporting Financial Innovation and Reform of Supervisory System

For 2019, it is expected that the financial regulatory/legislative environment will see further developments along two key tracks, with one track consisting of the enactment of special laws favoring new business initiatives aimed at promoting innovation in the financial business sector, and the other track consisting of legislative activity aimed at reforming and improving the existing financial supervisory system to promote greater efficiency and integration.  The following specific examples of legislation are representative of the overall direction planned for the financial regulatory environment in the year ahead.

Korean Financial Regulators Advance Legislation to Introduce Regulatory Sandbox to Spark FinTech

January 2019 - Finance. Legal Developments by Lee & Ko .

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Korean Financial Regulators Advance Legislation to Introduce Regulatory Sandbox to Spark FinTech

The 2018 year in review in Korea was notable for the sluggish overall economy, uncertainty surrounding the geo-politics and impact on Korea due to the global trade wars, on-going concerns related to the lack of jobs and unemployment, increased taxes and burdens for businesses and families, and no meaningful improvement or clarity in the current situation for 2019. In response, the Korean National Assembly passed a legislation called the Financial Innovation Support Act (the “FinISA”) on December 7, 2018 to spark the financial services industry in conjunction with FinTech products and services. The FinISA, which will soon take effect in March 2019, is intended to lay the legal foundation to introduce a regulatory sandbox for innovative financial services, where FinTech firms test their new products and services without certain regulatory oversight pursuant to exemptions for a limited period of time (“Sandbox”). As the FinISA exempts or defers application of existing finance-related regulations for new financial technology, products or services with the purpose of fostering the creation of innovative and new financial products and services, it will also support the stabilization of such services in the financial services market at the end of the testing period and is expected that the FinISA will support a revitalization of the FinTech industry which experienced sluggish growth in recent times. In particular, as companies and investors become more interested in security tokens and Security Token Offerings (“STO”) which are regulated by the Financial Investment Services and Capital Markets Act (the “FSCMA”), there have been on-going discussions and debates as to whether the FinISA could lead to a breakthrough in the crypto-asset industry based on blockchain technology. Crypto assets encompasses those assets which utilize blockchain technology where the asset is digitalized by utilization of cryptography, peer-to-peer networks and a public ledger of verified transactions resulting in a ‘units’ of such a crypto asset without any involvement by middle-persons or brokers (e.g., cryptocurrency.

Flying Under the Radar

January 2019 - Employment . Legal Developments by Lee & Ko .

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Flying Under the Radar: Companies Must Increase Awareness of the Potentially Dormant and Disruptive Changes to the Minimum Wage in Korea

Korea has experienced unprecedented yearly increases to the statutory minimum wage since 2017 in addition to changes in the applicable legislation. While companies are aware of the more patent impacts of the recent major changes to the Labor Standards Act and have initiated proactive measures to ensure legal compliance, companies often overlook the impacts of the significant changes to the statutory minimum wages and associated legislation until it is too late. And as an employer may face criminal sanctions (i.e., imprisonment up to 2 years or criminal fine not exceeding KRW 20 million) for unpaid wages, companies must be aware of the changing legislation related to the statutory minimum wage and – as with changes to the Labor Standards Act – take proactive measures to ensure continued legal compliance.

New Legislation: Amendment to the Enforcement Decree of the Act on External Audit of Stock Companies

January 2019 - Corporate & Commercial. Legal Developments by Lee & Ko .

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New Legislation: Amendment to the Enforcement Decree of the Act on External Audit of Stock Companies

The amendment to the Act on External Audit of Stock Companies (the “Act”) and the enforcement decree thereof (the “Enforcement Decree”), whose key feature pertains to the external audit and disclosure requirements for limited liability companies, became effective as of November 1, 2018. Certain provisions relating to the category of targets of external audits will become effective with respect to the fiscal years that commence on or after November 1, 2019. Therefore, for the majority of companies whose fiscal years begin on January 1 and ends on December 31 of each year, the revised category will become effective with respect to the fiscal year that begins on January 1, 2020.

New Proposed Tax Law Amendments Provide Clarification on the Taxation of Foreign Funds

November 2018 - Tax & Private Client. Legal Developments by Lee & Ko .

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On July 30, 2018, the Korean Ministry of Economy and Finance (“MOEF”) announced the proposed tax law changes/amendments for 2019 and beyond (“Proposals”). The Proposals are expected to be reviewed and finalized by the Korean National Assembly in December 2018.

Some key Proposals that should be of great interest to private equity funds and other investors relate to the Korean taxation of a foreign collective investment vehicle, referred to as an Overseas Investment Vehicle (“OIV”) in the Korean tax law. An OIV is broadly defined as an overseas vehicle that raises funds through an investment offering, manages investment assets, derives value from the acquisition and disposition of such assets, and distributes such derived value to its investors. Consequently, partnerships, limited liability companies and other types of collective investment vehicles (e.g., trusts) would likely be included in the definition of OIV.

The key provisions of the Proposals in relation to an OIV that will impact tax planning for foreign funds are summarized below.

KFTC to Expand Scope and Penalties of Korea’s Antitrust Enforcement Regime

November 2018 - EU & Competition. Legal Developments by Lee & Ko .

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Korea’s competition authority, the Korea Fair Trade Commission (the “KFTC, has announced a proposal to expand its existing enforcement authority to the courts and prosecutors through a full-scale reform of the Monopoly Regulation and Fair Trade  Act, Korea’s primary competition statute. If all proposed reforms are passed by the National Assembly as currently drafted, the impact on the Korean economy and antitrust enforcement will require companies doing business in Korea to tighten their risk management and compliance measures, as the scope and penalties of Korean antitrust enforcement would be broadened.

The Use of Dispatch Workers: Ironing Out Yet Another Wrinkle for its Successful Implementation

February 2017 - Tax & Private Client. Legal Developments by Lee & Ko .

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From a purely employer’s perspective, foreign companies operating in Korea are often frustrated (or at times, even amazed) at some of the protections provided to employees under the Korean employment laws. A few of the most difficult legal requirements include the strict just-cause requirement for termination, the durational limits on the use of fixed-term (contract) employees, the statutory severance obligation, and the statutory allowances for overtime, night-time, and holiday works. In light of such requirements and to minimize the burden of potential employer liabilities, many foreign companies may naturally wonder: How can we structure our workforce so that we can preserve an increased degree of flexibility when managing our personnel?

KOREA’S NEW SUPREME COURT CASE EXCLUDES MILEAGE FROM VAT TAXATION:

February 2017 - Tax & Private Client. Legal Developments by Lee & Ko .

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Used mileage points interpreted as sales allowance deductible from tax base

If a business operates a customer loyalty program together with other business, in which the amount of mileage points granted for the customers’ primary transaction is deducted from the purchase price of the customers’ secondary transaction and those customers only have to pay the remaining price, the amount deducted from the purchase price during the secondary transaction should not be additionally included as the value of supply(i.e. should not be subject to VAT) of the secondary transaction(Summary of Supreme Court 2015 du 58959, 2016. 08. 26.).

Korea strengthens taxation on multi-national enterprises in 2017

September 2016 - Tax & Private Client. Legal Developments by Lee & Ko .

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On July 28, 2016, the Ministry of Strategy and Finance (“MOSF”) announced the annual proposal to amend the tax law for 2017 (the “Proposal”). The Proposal was submitted to the National Assembly on 2 September 2016.

Protecting the ‘Little-Guy’ in Distributorship Arrangements in Korea

September 2016 - EU & Competition. Legal Developments by Lee & Ko .

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- Enforcement Decree to the Fair Retail Agency Transactions Act

On July 26, 2016, the Korea Fair Trade Commission (the “KFTC”) issued a public notice of draft legislation regarding its proposed Enforcement Decree to the Fair Retail Agency Transactions Act (the “draft Decree”). With the public notice/comment period (July 26, 2016 to September 4, 2016) now expired, the draft Decree awaits legislative review and proclamation, after which it will take effect as of December 23, 2016, together with the Fair Retail Agency Transactions Act (the “FRATA”).

Substantial Developments in Korean Bankruptcy Laws

August 2016 - Corporate & Commercial. Legal Developments by Lee & Ko .

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Substantial Developments in Korean Bankruptcy Laws Reflecting Practical Needs of the Parties Involved: CRPA and DRBA

Recently, substantial developments have been made with regard to the two bodies of laws that regulate the corporate restructuring process in Korea to reflect the needs of the parties involved in such process.

Breaking Down the Just-Cause Barrier

August 2016 - Employment . Legal Developments by Lee & Ko .

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A Systematic Approach of Securing Greater Flexibility in Managing Poor Performing Employees

Imagine being a foreign employer in Korea and maintaining a business operation with over 50 local employees.Imagine further that amongst these employees, one individual (“Employee X") has been missing his sales targets by a margin greater than 70% for the past four consecutive months. Although he has no history of disciplinary sanctions, Employee X slouches around the office, is unmotivated and appears overly relaxed. He also shows no outward display of initiative to turn his performance situation around. As an employer, you decide that he is unfit for continued employment, and as you may have done in other jurisdictions, you seek to terminate Employee X for inadequate performance. However, under Korean law, you may lack just-cause for terminating Employee X despite his blatant performance shortcomings, and employers in Korea have often expressed tremendous frustration when they are forced to continue retaining an employee who, like Employee X, consistently fails to perform.

Korean Regulator, Encouraging Financial Institutions by Relaxing the Chinese Wall Regulations

August 2016 - Finance. Legal Developments by Lee & Ko .

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On 28 June 2016, the Korean government enacted an amendment (the "2016 Amendment") to the Enforcement Decree of the Financial Investment Services and Capital Markets Act (the "FSCMA") which, among others, expands the exception (the “Wall-Cross exception”) to the Chinese wall regulations, i.e., restriction on the communication and exchange of information between business sectors within financial institutions (The term “financial institutions” as used in this article refers to dealers, brokers, fund managers, investment advisors, discretionary investment companies and trust companies (all of which are regulated under the FSCMA) to the exclusion of all other types of financial business entities such as merchant banks.) The 2016 Amendment seeks to enhance the competitiveness of financial institutions by allowing them to integrate activities which do not - or are unlikely to - conflict with one another, and further simplifies the regulatory scheme by removing the exceptions to the Chinese wall regulations from the Regulation on Financial Investment Business and incorporating the same in the Enforcement Decree.

Court Holds Royalties for Foreign-Registered Patents are Not Subject to Withholding Tax in Korea

June 2016 - Tax & Private Client. Legal Developments by Lee & Ko .

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Court adhered to the existing position on the determination of royalty payment

In May 2016, a Korean taxpayer won its victory over the Korean tax authority when the Seoul High Court overruled the tax authority’s assessment against the taxpayer in connection with its royalty payments made with respect to non-Korean registered patents. The tax authority challenged against the Supreme Court’s well-established position on the determination of source with respect to royalty payments and the tax payer, represented by Lee& Ko, successfully persuaded the Seoul High Court to adhere to the Supreme Court’s existing position.

Korean High Court Overrules the KFTC’s decision in Strike by Physicians

June 2016 - EU & Competition. Legal Developments by Lee & Ko .

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Strike by the Korean Medical Association physicians leads to the Korea Fair Trade Commission sanctions.

In March 2016, the Korean Medical Association (the "KMA"), an association of more than 100,000 Korean physicians, won a decisive victory over the Korea Fair Trade Commission (the "KFTC") when the Seoul High Court entirely overruled the KFTC's sanctions against the KMA in connection with a general strike of member physicians organized by the KMA. The decision of the lawsuit, where Lee & Ko represented the KMA, is a meaningful one, as the arguments presented in the case covered fundamental matters in Korean competition law such as the reach of the Monopoly Regulations and Fair Trade Act of Korea (the "MRFTA"), the meaning and assessment standards of anti-competitive effects, and the antitrust law as it applies to the medical field.

Korea Trade Commission “Overrules” Intellectual Property Tribunal’s Decision

January 2012 - Intellectual Property. Legal Developments by Lee & Ko .

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On September 21, 2011, the Korea Trade Commission (“KTC”) (equivalent to the International Trade Commission in the U.S.) found no cause against local companies that manufacture and export photosensitive drums for recycled cartridges in an investigation sought by Canon, a Japan-based printer manufacturer.

Extensive Amendments to the Financial Investment Services and Capital Markets Act

January 2012 - Finance. Legal Developments by Lee & Ko .

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Paving Way for Introduction of Full-Service Investment Bank, Are under Delay

The amendments to the Financial Investment Services and Capital Markets Act (FSCMA), the first draft of which was announced in July 2011, are likely to be submitted to the National Assembly at the earliest sometime this month, which makes it unlikely for the amendments to be enacted until sometime this year.  

Korea: Regulatory Hurdles to Islamic Finance

November 2010 - Finance. Legal Developments by Lee & Ko .

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Over the last couple of years, market participants in Korea have been following developments in the Islamic finance market with keen interest. They realise that becoming a direct or indirect participant in the Islamic finance market, with its huge potential for market growth, will provide them with advantages.