1.

Competition law related exemptions

If a company approved for business restructuring (“Restructuring-Approved Companies”) collaborates with competitors, e.g., adjusting plant operation levels, reducing output, joint purchases or R&D, such actions are deemed to be authorized under the Korean competition laws (specifically, Article 40-2 of the Monopoly Regulation and Fair Trade Act or “FTL”). The action must be in accordance with the restructuring plan, and receive approval from the Minister of Trade, Industry and Resources (with the concurrence of the Korea Fair Trade Commission or “KFTC”.) The approvals are to be granted where (i) the companies cannot independently overcome a “structural crisis” such as chronic oversupply, deteriorating profitability or lack of competitiveness in the global market, (ii) the actions are strictly necessary and provide significant restructuring or efficiency benefits, and (iii) there is no unfair discrimination or restriction among the participating companies.
 

2.

Allowing the “limited and necessary” exchange of information

Two or more Restructuring-Approved Companies, or companies applying for restructuring approval, can notify the KFTC and exchange the following categories of information (to be further defined by the lower regulations). Such acts will be exempt from the Korean competition laws barring collusion.
 

• Information essential to restructuring reviews, e.g. plant utilization rates, production capacity, unit consumption indicators (energy and feedstock per unit of output), and product-level profit-and-loss data

• Confidential management information shared during due diligence or reviews for corporate mergers or facility consolidations

3.

Quicker merger reviews

Where a Restructuring-Approved Company (or a company which has applied for restructuring) requests the KFTC’s review at least 60 days before the scheduled corporate merger filing date (in accordance with its restructuring plan), the KFTC must complete its review within 30 days of the filing date. The KFTC can extend this by 60 days, for a maximum review period of 90 days (compared to the current 120 days).
 

4.

Streamlined restructuring process

The government is authorized to enact lower regulations to: (i) integrate or simplify permits and approvals related to industrial park development, new or expanded production facilities, process improvements, or facility closures; (ii) issue exemptions where exceeded environmental standards are unavoidable during a business transition, and (iii) take expedited measures to address any gaps in the technical verification or evaluation criteria needed for new technologies or processes.
 

5.

Tax and financial support by the national and local governments

The new legislation establishes a legal basis for national and local governments to provide tax benefits (including tax exemptions and measures such as expense recognitions, asset revaluations or tax deferrals) and financial support for restructuring projects.