Largest Korean Law Firm in Asia
Kim & Chang placed 35th in the “Asia Top 50” rankings, released in the November 2025 issue of Asian Legal Business (“ALB”). This year, our firm obtained the highest ranking among Korean law firms once again.
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法律简讯 查看更多法律简讯FSC Strengthens English Disclosures and Those on AGM and Officer Compensation In furtherance of enhancing corporate governance, the Korean Commercial Code has been amended to strengthen directors' obligations and responsibilities and improve minority shareholders' rights while restricting major shareholders' voting rights. Similarly, continuous emphasis has been placed on improving the disclosure system applicable to shareholders, investors and other stakeholders in the market, to enable more effective oversight and engagement in corporate management. In this regard, as noted in our previous newsletters, financial regulators such as the Financial Services Commission (the “FSC”), the Financial Supervisory Service, and the Korea Exchange (the “KRX”): strengthened requirements for disclosure of stock-based compensation for officers in December 2023 (Link); mandated English disclosure for large KOSPI-listed companies in January 2024 (Link); and enhanced disclosure requirements for securities transactions by listed companies (including transactions involving treasury shares and convertible bonds), implemented between 2024 and 2025 (Link 1, Link 2). Building on these ongoing enhancements, the FSC announced a new set of corporate disclosure improvement measures on November 17, 2025, aimed at increasing access to capital markets and reinforcing the rights of general shareholders. These measures, among other things, further strengthen requirements for disclosure in English, the disclosure of results of annual general meetings of shareholders (“AGMs”) (Link). Please see further details below. 1. Expanded Application of English Disclosure Requirements Currently, English disclosure requirements apply only to KOSPI-listed companies with (i) assets of KRW 10 trillion or more and at least 5% foreign ownership, or (ii) assets of KRW 2 trillion or more and at least 30% foreign ownership. Of the items concerning major management matters requiring ad hoc disclosure to the KRX, English disclosure is required for 26 key items such as governance or organizational restructuring (mergers, spin-offs, etc.), settlements (dividends, submission of audit reports, etc.), and the issuance of securities. Starting on May 1, 2026, the mandatory English disclosure requirement will enter its second phase. Under this new phase, companies subject to English disclosure will be expanded to include all KOSPI-listed companies with assets of KRW 2 trillion or more, and the scope of disclosure items will also be expanded to include all key management items requiring ad hoc disclosure to the KRX, as well as general KRX disclosure items such as fair disclosure and inquiry disclosure. The deadline for English disclosure will also be shortened: (i) for large KOSPI-listed companies with assets of KRW 10 trillion or more, English disclosure must generally be made on the same day as the Korean disclosure (or, if the Korean disclosure is made in the afternoon, by noon the following business day, and, for key subsidiary management items, within three business days from the Korean disclosure); and (ii) for KOSPI-listed companies with assets of KRW 2 trillion or more (but less than KRW 10 trillion), English disclosure must be submitted to the KRX within three business days after the Korean disclosure. The third phase of mandatory English disclosure will begin in 2028. The FSC will consider extending the English disclosure requirements to all KOSPI-listed companies and large KOSDAQ-listed companies (e.g., KOSDAQ-listed companies with assets of KRW 2 trillion or more). 2. Enhanced Requirements for Disclosures of AGM Results While companies currently disclose only whether each agenda item at the AGM has been passed, detailed voting results such as approval rates are not made available. Starting with AGMs held in March 2026, companies will be required to disclose detailed voting results, including the percentage of votes approving each agenda item. Under the new requirements, companies will be required to file with the KRX (through its ad hoc disclosure system) the voting results (including approval, opposition and abstention rates) for each agenda item, on the same day as the AGM. In addition, periodic reports such as the annual business report will need to include the same voting results for each agenda item for the relevant period. Moreover, incentives for listed companies to hold AGMs on dates other than the end of March will be strengthened. Despite ongoing efforts to encourage companies to hold AGMs on different dates — including operating a program for companies to voluntarily choose a different date and revising the model articles of incorporation for listed companies — about 90% of listed companies still hold their AGMs in late March. In response, the KRX will award extra points to companies with AGMs on different dates when selecting outstanding disclosure practices and will reduce demerits for inadequate disclosures. In addition, disclosure guidelines will be revised to require companies to include in their corporate governance reports whether they have amended their articles of incorporation to set the record date for voting rights other than the end of the fiscal year, as well as any other efforts made to change AGM dates. 3. Improved Officer Compensation Disclosure Requirements Improved disclosure requirements regarding officer compensation will begin to apply from the semi-annual reports for 2026. To facilitate a clearer understanding of the relationship between company performance and officer compensation, amendments will require disclosure of figures such as total shareholder return and operating profit for the past three years alongside total officer compensation. Companies will also be required to disclose detailed justifications and specific calculation criteria for each item. Currently, disclosure regarding the basis for calculating officer compensation is often insufficient, and the relationship between performance and compensation is unclear, which has led to criticism that Korea’s disclosure requirements are less robust than those of other major markets such as the United States. Furthermore, to better reflect the true scale of officer compensation, including stock-based compensation, companies will be required to disclose every type of stock-based compensation in both the aggregate and individual officer compensation statements, and also provide the cash value of any unrealized stock-based compensation. In line with these improvements, the FSC plans to amend the Regulations on the Issuance and Disclosure of Securities. The proposed amendment will be published for comment from November 17 to December 8, 2025, followed by deliberation by the Regulatory Reform Committee, the Securities and Futures Commission, and the FSC, with implementation targeted for the first half of 2026. Amendments to the KRX’s Securities Market Disclosure Regulations to implement the expanded second phase of mandatory English disclosure are also planned. These improvements to the disclosure system require close monitoring, as they are likely to significantly impact AGM operations and corporate governance. The expansion of English disclosure requirements may lead to an increase in inquiries and proposals from foreign institutional investors and activist shareholders. In addition, mandatory disclosure of approval, opposition, and abstention rates for each AGM agenda item will make shareholder decisions more transparent, and in the case of significant support for proposals that are nevertheless rejected, there could be ongoing challenges from shareholders in subsequent AGMs. Likewise, greater transparency in officer compensation, including stock-based compensation, may prompt shareholders to express their views or submit advisory proposals such as Say on Pay resolutions. [Korean Version]2025.11.25
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法律简讯 查看更多法律简讯Proposed Amendments to the Enforcement Decree for the Yellow Envelope Act As you may know, the amended Trade Union and Labor Relations Adjustment Act (the “TULRAA”), frequently referred to as the “Yellow Envelope Act,” has expanded the definition of an “employer”. The definition now encompasses those who, despite not being a direct party to an employment contract, exercise “substantial and specific control” over a worker’s terms and conditions of employment. Under this new definition, principal contractors (prime contractors) who exercise “substantial and specific control” may be deemed employers of their subcontractors’ employees. Consequently, if a subcontractor’s labor union makes a demand for collective bargaining, the principal contractor may be obligated to respond. This creates a scenario where a principal contractor must manage bargaining demands not only from its own employee union but also from the unions of multiple subcontractors. To facilitate a substantive collective bargaining process between principal contractors and subcontractor unions while mitigating potential confusion at industrial sites caused by multiple bargaining demands, the Ministry of Employment and Labor (the “MOEL”) has announced a legislative notice period for a partial amendment to the Enforcement Decree of the TULRAA (the “Amendment”), which runs from November 25, 2025, to January 5, 2026. The key highlights of the proposed Amendment are provided below. 1. Bargaining Unit Separation within Single Representative Framework The MOEL’s primary stance is to respect autonomous labor-management relations. The government intends to actively support cases where the principal contractor and subcontractor unions agree to engage in autonomous or joint bargaining. However, if the parties fail to reach an agreement, the procedure for establishing a single bargaining channel will proceed based on the principal contractor’s workplace. In such cases, the Labor Relations Commission (the “LRC”) will utilize the separation of bargaining units procedure to ensure subcontractor unions can exercise their substantive bargaining rights. The Amendment adds Article 14-11, Paragraph 3, establishing clear criteria for the LRC to separate bargaining units based on the specific circumstances of the subcontractor union. The LRC must now consider the union’s scope, commonality of interests, adequacy of representation by other unions, potential inter-union conflicts, and the parties’ preferences—expanding on prior factors such as differences in working conditions, employment types, and bargaining practices. Based on these criteria, bargaining units for subcontractors are expected to be separated in various ways such as the following: (1) Individual unit: If the duties, interests, or union characteristics differ significantly among subcontractors, units may be separated by individual subcontractors. (2) Group unit: If there are subcontractors with similar duties or characteristics, they may be grouped as separate units. (3) Unified unit: If the duties and characteristics of all subcontractors are similar, all subcontractors may be separated into a single, unified bargaining unit. Once the units are separated, the procedure for establishing a single bargaining channel will proceed within each separated unit to determine a representative bargaining union. The MOEL plans to provide guidance to ensure minority unions are not excluded during this process, encouraging the selection of representatives through autonomous decisions, delegation, or the formation of joint negotiation teams. 2. Streamlined Procedures for Employer Status Determination If a principal contractor fails to publicize the fact that a bargaining demand has been made, or fails to publicize the finalized list of demanding unions, the subcontractor union may file a request for correction with the LRC (Amendment Article 14-3, Para. 2 and Article 14-5, Para. 4, Subpara. 1). Upon such a request, the LRC will examine whether the principal contractor constitutes an “employer” exercising substantial control over the subcontractor’s employees through its authority under the Labor Relations Commission Act to conduct investigations and demand the submission of necessary documents. Recognizing that determining employer status for a principal contractor involves a complex review of “substantial control” over working conditions, the Amendment allows for an extension of the LRC’s current decision-making period of 10 days by up to 10 additional days (maximum 20 days) (Amendment Article 14-3, Para. 3 and Article 14-5, Para. 5). If the LRC recognizes the principal contractor’s substantial control over specific working conditions, the principal contractor must proceed with bargaining procedures as an employer. This administrative determination is expected to minimize labor disputes regarding employer status before full-scale bargaining begins. If a principal contractor refuses to bargain without justifiable cause, the MOEL plans to enforce compliance through administrative guidance and judicial proceedings (e.g., unfair labor practices). To increase predictability and facilitate bargaining, the MOEL has announced plans to establish an “Employer Status Determination Support Committee.” This body will assist in determining the existence of a bargaining obligation when there is disagreement or ambiguity regarding the scope of employer status between the principal contractor and subcontractor unions. 3. Practical Implications for Companies The MOEL has emphasized that this Amendment aims to create a stable framework for collective bargaining between principal contractors and subcontractor unions while upholding the principle of labor-management autonomy. In anticipation of the amended TULRAA’s enforcement, companies operating with principal-subcontractor structures are advised to: (1) Proactively identify which specific working conditions of subcontractor employees are subject to the company’s substantial and specific control. (2) Conduct a preliminary legal review to determine the potential scope of the company’s bargaining obligations. (3) Develop a clear understanding of the single bargaining channel establishment and unit separation procedures to ensure readiness for potential negotiations with subcontractor unions. As the Amendment is currently in the legislative notice phase, specific details may be subject to adjustment based on public feedback. Given that the forthcoming guidelines on employer status and labor disputes will significantly impact practical operations of businesses, we recommend continuous monitoring of these legislative developments and regulatory trends. [Korean Version]2025.11.26
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法律简讯 查看更多法律简讯Amendments to the Industrial Technology Protection Act: Expanded Coverage and Strengthened Court Order Procedures On November 13, 2025, the National Assembly passed partial amendments to the “Act on the Prevention of Leakage and Protection of Industrial Technology” (the “Industrial Technology Protection Act” or the “Act”) during it plenary session. The amendments designate core strategic technologies in the materials, parts, and equipment sectors (“Core Strategic Technologies”) and include them within the scope of protected industrial technology under the Act and clarify the rules and procedures relating to the court order system for the submission of materials in litigation involving industrial technology infringement or leakage (the “Amendments”). 1. Addition of “Core Strategic Technologies” to Protected Industrial Technology The Amendments have expanded the definition of industrial technology to include “Core Strategic Technologies,” as designated under Article 12 of the “Special Act for Strengthening Competitiveness and Stabilizing Supply Chains in the Materials, Parts, and Equipment Industry” (new Article 2(i) of the Act). This change clearly identifies vital technologies in the materials, parts, and equipment sectors—such as semiconductors, secondary batteries, and displays—that are essential to national economic security, extending the protection of the Act to those technologies. By explicitly incorporating Core Strategic Technologies, enhanced criminal penalties and other safeguards under the Act will apply to any unauthorized use, leakage, or infringement of these technologies. Specifically, Core Strategic Technologies have been designated across several sectors, including: semiconductors (32 items), displays (14 items), automobiles (15 items), machinery and metals (41 items), electrical and electronics (24 items), chemicals (15 items), bio (19 items), aerospace (20 items), defense (2 items), and hydrogen (18 items), in accordance with the [Appendix] to the “Notice on the Procedures for the Selection and Review of Core Strategic Technologies and Related Items”. Consequently, companies operating in these sectors are expected to more proactively assert their rights under the Industrial Technology Protection Act. 2. Clarification and Strengthening of the Court Order System for Submission of Materials Under the current law (Article 22-3), courts may order the submission of materials; however, specific procedures for handling non-compliance have been lacking, which has limited the practical use of this provision. The Amendments significantly enhance these procedures to improve trial efficiency and the court’s ability to compel the submission of materials in cases of alleged industrial technology infringement or leakage. (1) Establishment of In Camera Review Procedure If a holder of materials refuses submission citing legitimate grounds, the court may now order that the materials be presented confidentially for an in camera review, allowing it to assess the validity of the refusal (new Article 22-3(2) of the Act). This process enables courts to determine whether the refusal is justified while safeguarding the confidentiality of sensitive information. (2) Restriction on Grounds for Refusal The Amendments make clear that refusal to submit materials is generally not permissible—even where the materials involve industrial technology or trade secrets—if they are essential to proving infringement or the calculation of damages. In such cases, the court must define the scope of disclosure or specify who may access the materials, consistent with the purpose of the submission order (new Article 22-3(3) of the Act). (3) Strengthening Sanctions for Non-compliance When a party fails to comply with a court’s order to submit materials without just cause, the court may deem the opposing party’s assertions regarding those materials to be true (new Article 22-3(4) of the Act). Furthermore, if the requesting party faces significant difficultly in specifically asserting the content of the materials and proving facts by other evidence, the court may also accept as true the facts the opposing party seeks to prove through those materials (new Article 22-3(5) of the Act). These provisions substantially strengthen the enforceability and effectiveness of submission orders by clearly establishing legal sanctions for non-compliance. 3. Expansion of the Court’s Authority to Order Confidentiality The Amendments expand the court’s authority to require the maintenance of confidentiality, extending protection beyond industrial technology to include trade secrets (new Articles 22-4 and 22-5 of the Act). This counter-balances the new requirement for the compulsory submission of trade secrets when necessary to prove infringement or calculate damages, and aims to prevent the unfair disclosure or misuse of trade secrets disclosed during litigation. Following previous amendments to the Industrial Technology Protection Act that relaxed the requirements for establishing industrial technology infringement and significantly increased penalties, the latest Amendments further expand protection by explicitly adding Core Strategic Technologies to the scope of protected industrial technology and reinforcing measures for the submission and protection of sensitive information. Right holders may now benefit from a lessened evidentiary burden and more robust relief mechanisms. Conversely, companies accused of infringement will face greater burdens when faced with infringement claims. Therefore, companies involved in industries such as semiconductors, displays, automobiles, machinery and metals, electrical and electronics, chemicals, bio, aerospace, defense, and hydrogen energy, are advised to assess the adequacy of their compliance systems and proactively monitor and update their practices. The Amendments will take effect six (6) months following promulgation. [Korean Version]2025.11.18
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法律简讯 查看更多法律简讯KFTC’s Market Survey and Guidelines on AI Washing (Part 3) What types of conduct does the Korea Fair Trade Commission (“KFTC”) aim to regulate as AI washing? This newsletter is the third of the series in which we will introduce the KFTC’s AI Washing Status Survey and Guidelines, and explore the KFTC’s stance on AI washing. I. Types of AI Washing and Regulatory Trends II. Enforcement Trends in Korea and Other Jurisdictions III. KFTC’s Market Survey and Guidelines on AI Washing IV. AI Washing Compliance The KFTC, in collaboration with the Korea Consumer Agency, conducted monitoring and consumer awareness survey over suspected cases of ‘AI Washing’ on November 7, 2025, and announced the results of the first status survey, as explained in detail below. 1. KFTC’s Monitoring and Corrective Measure Cases The KFTC monitored suspected cases of AI washing in home appliances and electronic products sold on major domestic open markets. It identified a total of 20 cases of suspected AI washing and took corrective measures such as voluntary correction or deletion. Below is a summary of the representative cases. (1) Cases where the expression ‘AI’ is included in product names or AI features are exaggerated in advertisements even though the product cannot be viewed as utilizing AI technology (19 cases) For cases where a product name included “AI” or where the advertisement exaggerated AI functionality even though it could not be viewed that AI technology has been utilized, such as the application of a simple sensor technology not based on machine learning, the KFTC required these expressions to be modified to a more accurate description, such as “automatic temperature control” or entirely removed. (2) Case where the operating conditions and limitations of the AI functions embedded in the product was not specified, making it difficult for consumers to perceive such restrictions (1 case) In this case where the AI functions only operate under specific conditions, but the restrictions such as operating conditions and limitations were not clearly disclosed making it difficult to perceive the restrictions, the KFTC ordered that the restrictions of the AI functions be clearly disclosed. 2. Consumer Awareness Survey Results The KFTC conducted a consumer awareness survey to understand the impact of AI washing on consumers’ purchasing decisions and announced the following survey results. Item Key Details Willingness to pay extra for AI technology Willing to purchase AI products or services even if they are more expensive (57.9%) Ability to distinguish products with AI technology applied Has difficulty in distinguishing products or services with AI technology applied (67.1%) Policies needed to protect consumers from AI washing Establish guidelines to prevent AI washing and to assist businesses and consumers’ understanding (31.5%) Develop national standards, technical criteria, certification systems, etc. (26.1%) Continuous monitoring of AI washing (19.4%) Based on the results of the consumer awareness survey, the KFTC has determined that there is a need to prevent consumer harm and enhance predictability for businesses, and on this basis, has announced plans to establish guidelines on unfair AI-related labeling and advertising, as well as continuous monitoring and corrective activities in cooperation with the Korea Consumer Agency. Given the KFTC’s announcement of its plans to prepare the legal basis for regulating AI washing by establishing guidelines on unfair AI-related labeling and advertising during 2026, we anticipate the KFTC will more actively engage in monitoring of AI washing going forward. Accordingly, it is advisable to keep a close eye on updates in the regulatory trends taking into account enforcement cases in Korea and abroad and corrective measures imposed by the KFTC, to assist companies to proactively and effectively respond to the KFTC’s future regulatory actions. In particular, it is strongly recommended to make sure that the company has supporting technical materials when using “AI” in the names of products and services, and to disclose any restrictions or operating conditions pertaining to the activation of the AI function in a clear and easily recognizable manner. [Korean Version]2025.11.20
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法律简讯 查看更多法律简讯MSIT Issues Advance Notice for the Enforcement Decree of the AI Basic Act On November 12, 2025, the Ministry of Science and ICT (“MSIT”) issued an advance notice regarding the bill for the Enforcement Decree (the “Bill”) of the Act on the Development of Artificial Intelligence and Establishment of Trust (the “AI Basic Act”) (MSIT Notice No. 2025-0970) with the advance notice period open until December 22, 2025. As background, on September 8, 2025, the MSIT released a preliminary draft of the Enforcement Decree (the “Draft”) (refer to our newsletter (Link) dated September 10, 2025). The current Bill incorporates refinement in language as well as substantive changes to certain requirements. We summarize below the principal amendments. 1. Revisions to Labeling Obligations for Generative AI Outputs Under the AI Basic Act, AI business operators providing generative AI or related products and services are required to clearly label the outputs as being generated by AI (Article 31(2); the “Labeling Obligations”). The Bill modifies the scope of this obligation and provides further details on acceptable methods of compliance, as compared to the earlier Draft. 1) Obligation to Provide Additional Information for Machine-Readable labels The Draft permitted AI business operators to fulfill the Labeling Obligations by using either human- or machine-readable formats. While the Bill retains both options, it now specifically requires that when a machine-readable format is used, users must also be notified at least once - via text or voice message - that the output is AI generated. 2) Exemption When “Deepfake” Transparency Obligations are Satisfied The AI Basic Act establishes three separate transparency obligations: (i) advance notice obligations regarding generative AI (Article 31(1)), (ii) Labeling Obligations (Article 31(2)), and (iii) the notification or labeling obligations for “deepfake” content (Article 31(3)). According to the Guidelines on Securing AI Transparency announced by the MSIT (see our newsletter (Link) dated September 26, 2025), each obligation generally must be fulfilled separately. However, the Bill introduces an exemption: where notification or labeling requirements for “deepfake” content under Article 31(3) are met, the Labeling Obligations under Article 31(2) need not be separately fulfilled. Draft dated September 8, 2025 Bill dated November 12, 2025 Article 22 (Obligation to Secure Transparency for AI) (2) An AI business operator may choose to use either human- or machine-readable formats to make the labeling under Article 31(2) of the Act when providing generative AI or any products, etc. utilizing the same. Article 22 (Obligation to Secure Transparency for AI) (2) An AI business operator may choose one of the following methods to satisfy the labeling under Article 31(2) of the Act (other than for outputs that are difficult to distinguish from reality and users are clearly notified or labeled as AI pursuant to Article 31(3) of the Act): 1. In human-readable formats; or 2. In machine-readable formats, subject to a mandatory at least one-time user notification by text or voice that the content is AI generated. 2. Revisions to the Criteria for Recognizing Compliance for High-Impact AI The AI Basic Act imposes obligations to ensure the safety and reliability of high-impact AI. The Act allows these obligations to be deemed satisfied if equivalent measures under other laws have been implemented (Articles 34(1) and (2)), with details set out in Annex 1 of the Enforcement Decree. Compared to the Draft, the Bill introduces a new provision stating that AI business operators adhering to the requirements in Chapters 4 and 5 of the Personal Information Protection Act shall be deemed as meeting obligations under Article 34(1) of the AI Basic Act, to the extent that those obligations relate to the processing and protection of personal information (Annex 1, Paragraph 7 of the Bill) (However, if partial compliance only to secure safety and reliability, it will result in partial recognition to the specific parts). The Bill also removes the prior provision recognizing full compliance with the “robo-advisor” requirements as defined in Article 2, Subparagraph 6 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act as satisfying the “human oversight” obligations under the AI Basic Act (Annex 1, Paragraph 4). In addition, the Bill introduces specific additions, such as (i) mandating the MSIT to publish the results, statistics, and indices of any AI status surveys on its website (Article 29(3)); and (ii) authorizing a reduction of up to 50% in administrative fines based on mitigating factors, such as the severity and intent of the violation (Annex 2, Criteria for Imposition of Administrative Fines, Item C). 3. Next Steps If you wish to submit comments on the Bill, you may do so online (Link) or by post by December 22, 2025. The Bill provides greater clarity regarding the scope of specific obligations under the AI Basic Act and set forth detailed compliance pathways. AI business operators planning to develop or launch any AI-based products or services are strongly encouraged to carefully review the Bill and assess its potential impacts on your business operations. [Korean Version]2025.11.13
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“Korea Law Firm of the Year” for 13 Years in a Row
For the thirteenth consecutive year, Kim & Chang won the “Korea Law Firm of the Year” award at the ALB Korea Law Awards 2025 held in Seoul on November 6, 2025.
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Recognized in 4 Categories Including “South Korea Firm of the Year”
At the eighth annual asialaw Awards, Kim & Chang received four awards in total, including the “South Korea Firm of the Year” award.
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