法律简讯Kim & Chang Legal Newsletter (2020 Issue 2) This issue includes: Korea Fair Trade Commission’s Enforcement Plan for 2020 Launch of Bank’s Ancillary Business for Big Data and Measures to Support Distribution of Big Data Asia Region Funds Passport Is Implemented in Korea in Accordance with the Amended Financial Investment Services and Capital Markets Act National Assembly Passes Amendments to the Monopoly Regulation and Fair Trade Law Amendment to the Korea Development Bank Act and Its Enforcement Decree to Establish the Key Industry Stabilization Fund Amended Guidelines on Corporate Governance Report and Recent Trends of ESG Reporting Recent Amendment to the Act on the Allocation and Trading of Greenhouse-Gas Emission Permits Amendments to the Subordinate Statutes of the Waste Control Act Coinsurance Is Introduced, Along with Eased Restrictions on Insurers’ Management of Foreign Currency Assets Supreme Court Establishes Criteria for Application of the “Catch-All” Unfair Competition Provision Virtual Hearing in International Arbitration US Department of Commerce Enforces Countervailing Duty Regulations Against Countries with Undervalued Currencies Adoption of Customs Act Regulations on Overseas Direct Purchases Strengthens Responsibility of Purchasing Agents and Open Market Operators Amended Labor Standards Act Limits Use of Annual Paid Leave for Employees with Less Than One Year of Continuous Employment Supreme Court Finds That More Favorable Terms and Conditions of an Existing Employment Agreement Take Precedence over Amended Rules of Employment New Amendments to Capital Markets Act’s Enforcement Decree Heighten Standards for Replacement of Asset Management Company and Trustee/Custodian Implementation of Policy Reinforcing Duties of Internet Service Providers to Eradicate Digital Sex Crimes Update on Key Legislative and Policy Developments on Self-Driving Vehicles Kim & Chang Legal Newsletter (2020 Issue 2)2020.07.03
法律简讯KFTC Announces Proposed FTL Amendment Bill On June 10, 2020, the Korea Fair Trade Commission (the "KFTC") announced an amendment bill to comprehensively overhaul the Monopoly Regulation and Fair Trade Law (the "FTL") (the "Proposed Amendment"). If eventually passed by the National Assembly, the Proposed Amendment will have significant ramifications on antitrust investigations and enforcement, particularly from the perspective of (i) strengthening enforcement (e.g., allowing the prosecutors' office to initiate investigations without a criminal referral from the KFTC, doubling the maximum amount of administrative fines, introducing a "size of transaction" test for merger filings), (ii) bolstering due process (e.g., guaranteeing the right to counsel in KFTC investigations), and (iii) clarifying/simplifying legal requirements (e.g., including information exchange as a type of illegal collusive conduct, clarifying the definition of resale price maintenance). The Proposed Amendment is substantively identical to the amendment bill that had been proposed in 2018 (the "2018 Amendment Bill"), except that part of the 2018 Amendment Bill was passed as law in April 2020. The April 2020 FTL amendments related to enforcement procedure, such as: obligating the KFTC to issue official notices for dawn raids; guaranteeing the respondent's right to provide written and oral testimony at all stages of an investigation; expanding the right for respondents and others to request access to the KFTC case materials; and changing the statute of limitations for FTL violations, other than cartels. During the mandatory opinion canvassing period from June 11 to July 21, 2020, the KFTC will receive opinions from interested parties, submit the Proposed Amendment bill to other government bodies for further review, and then submit the final draft of the Proposed Amendment bill to the National Assembly. Overview and Expected Implications The KFTC has grouped the proposed amendments into the following four categories. 1. Enforcement Procedure Reform In terms of improving enforcement procedures, the Proposed Amendments institute measures, such as removing the exclusive criminal referral powers of the KFTC to allow prosecutors to bring indictments in hardcore cartel cases without the KFTC's criminal referral; increasing certain administrative fines (doubling the maximum percentage of revenues); and guaranteeing private citizens the right of action to enjoin certain FTL violations without going through the KFTC investigation process. If passed, we expect these will lead to closer collaboration between the KFTC and prosecutors from the earliest cartel investigation stages, which would be a significant departure from previous practice, where the prosecutors would normally become involved largely after the KFTC enforcement is complete. We also expect the KFTC to take advantage of the higher administrative fine amounts; for example, the maximum percentage of relevant revenues would increase from 10% to 20% for cartels. Further, we expect more private causes of action, even in the absence of a related KFTC investigation. 2. Due Process The Proposed Amendments continue in the KFTC's continued efforts to improve due process, such as by explicitly guaranteeing the right to counsel in all KFTC investigations and proceedings and by obligating the KFTC to prepare official written statements when obtaining testimony from individuals under investigation. 3. Encouragement of Innovation and Growth The KFTC has grouped a number of its proposed amendments under this heading to highlight the Proposed Amendment's efforts to relax certain regulations (e.g., relaxing the requirements to establish and operate venture capital holding companies) and to clarify certain statutory definitions and legal grounds (e.g., clarifying the basis for market surveys, clarifying the definition of resale price maintenance). However, this category also includes potentially significant amendments that could materially affect a company's business. For example, certain types of information exchange are included in the definition of illegal collusive conduct. In addition, a "size of transaction" test is introduced for merger filings, even if the parties to a merger fail to meet the existing worldwide assets/sales revenues and Korean sales revenues thresholds. 4. Conglomerate Regulation The Proposed Amendments introduce a host of measures to strengthen regulatory oversight over the conglomerates in Korea, largely to lessen the concentration of economic power of leading conglomerates and modernize their corporate governance structure. For more details, please see the attached file. [Korean version]2020.06.15
法律简讯Revised Amendments to the Enforcement Decree of the Personal Information Protection Act On March 31, 2020, key points of the draft amendments to the Enforcement Decree of the Personal Information Protection Act (the "Draft Amendments") were published. The Ministry of the Interior and Safety announced on June 8, 2020 the revised amendments based on the opinion gathered from the interested parties (the "Revised Amendments"). While the Revised Amendments largely follow the Draft Amendments, please refer to below for key changes. Specific Standards for Using and Providing Personal Information within the "Scope Reasonably Related to Original Purpose of Collection" The Draft Amendments stipulated that in order to use or provide personal information without the consent of data subjects within the scope reasonably related to original purpose of collection, all of the following four conditions need to be satisfied: (i) the purpose of additional use and provision is substantially related to the original purpose for which the personal information was collected; (ii) the additional use and provision is foreseeable in light of the circumstances and practices; (iii) the additional use and provision does not unfairly infringe on the interests of the data subject or a third party; and (iv) if the purpose of additional use and provision can be achieved with the personal information being pseudonymized, then the personal information must be pseudonymized. While the Revised Amendments have retained most of these conditions, the underlined parts have been revised. The reference to the purpose of additional use and provision having to be "substantially" related to the original purpose in the first condition has also been deleted. The requirement that both the circumstances and practices be considered under the second condition has been relaxed, now only either the circumstances or the practices having to be taken into account. Security Measures for Pseudonymized and Additional Information The Revised Amendments specify the requirements concerning pseudonymized information, such as keeping a record of processing pseudonymized information, and obligations to retain and destroy it. If data controllers process pseudonymized information, they need to maintain a record of the following matters and retain it for at least three years after destroying the pseudonymized information (except where the record is pseudonymized to ensure data security): (i) The purpose of pseudonymization (ii) Items of personal information which have been pseudonymized (iii) Retention period for which pseudonymized information (iv) History of using the pseudonymized information (v) Recipient of the pseudonymized information (if provided to a third party) (vi) Matters related to destruction of pseudonymized information (vii) Any other matters notified by the Personal Information Protection Committee According to the Revised Amendments, data controllers must destroy the pseudonymized information without delay when the retention period expires. Further, data controllers must separately store pseudonymized information and the information that can be combined with the pseudonymized information to identify an individual ("additional information"). The additional information must be destroyed if it is no longer needed and access to pseudonymized and additional information, respectively, must be separated. Request to Remove Combined Pseudonymized Data The Draft Amendments stated that when a data controller files a request to combine pseudonymized information, the request is to be assessed and approved in view of whether it is difficult to achieve the purpose of combination in the Analysis Space within the premises of the expert organization where technical, organizational and physical measures have been implemented or whether such Analysis Space is not readily available. By deleting the underlined part above in the Revised Amendments, the restrictions on removing the combined information from the expert organization have been relaxed. [Korean version]2020.06.12
法律简讯Promulgation of Amendments to the Enforcement Decree of the Local Tax Act Affecting Property Tax and Aggregate Real Estate Tax on Land of Private REF/REIT On June 2, 2020, certain proposed amendments to the Enforcement Decree of the Local Tax Act (the “Local Tax Act”) were promulgated into the law (the “Amendments”) changing the scope of certain tax benefits granted to real estate funds (“REF”) and real estate investment trust companies (“REIT”). The Amendments took immediate effect as of June 2, 2020 with certain transitional measures. Before the Amendments, REF and REIT enjoyed a flat property tax on land of 0.24% (compared to an incremental tax rate of up to 0.48% for regular companies) and an exemption of aggregate real estate tax (in contrast to an incremental tax rate of up to 0.84% for regular companies). After the Amendments, such flat property tax rate on land and aggregate real estate tax exemption for PRIVATE REF/REIT will no longer apply in principle (while certain transitional rates and exceptions exist as explained below). Instead, generally speaking the following tax rates will apply to PRIVATE REF/REIT after the Amendments. Before the Amendments After the Amendments Property tax on land: Flat 0.24% (plus 0.14% in the city areas) No aggregate real estate tax on land Property tax on land: 0.24% to 0.48% per annum (plus 0.14% in the city area) Aggregate real estate tax on land: 0.6% to 0.84% (minus the property tax paid on land to avoid double-taxation) Please note, however, that the following categories of REF and REIT will continue to enjoy the reduced property tax rate on land and the aggregate real estate tax exemption: Public REF and REIT; Private REIT whose investors are comprised only of (i) REIT listed on stock exchange, (ii) REF which is not a private REF, or (iii) a trust company that manages a specified money trust (“특정금전신탁” in Korean) entrusted by 50 or more trustors; and Private REF (i) whose investors are comprised only of REIT listed on stock exchange, REF which is not a private REF, or a trust company that manages a specified money trust (“특정금전신탁” in Korean) entrusted by 50 or more trustors, AND (ii) which invests in excess of 80% of the fund assets into real estate. Lastly, as a transitional matter, under the Amendments, it is understood that for land acquired by private REF/REIT on or before June 1, 2020, to the extent that there is no change in the ownership of the land, the flat tax rate of the property tax and the exemption of the aggregate real estate tax on the land will apply for certain time period in proportion to the annual rates provided in the table below: Year 2020 2021 2022 2023 2024 2025 Percentage of land recognized for flax tax on land for property tax and exemption of aggregate real estate tax on land 100% 100% 80% 60% 40% 20% Since the application of the foregoing summary on the Amendments as well as transitional measures may vary depending on the acquisition timing of each individual asset, the acquiring entity, as well as the specific asset type, more detailed analysis on the application of the new tax regime under the Amendments on specific assets or investment opportunities will be needed.2020.06.03
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