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Kim & Chang Legal Newsletter (2025 Issue 1) This is a quaterly update of legal developments in Korea from Kim & Chang. This issue includes: MOEL Issues Revised Labor-Management Guidance on Ordinary Wage in Response to Supreme Court’s En Banc Decisions KFTC Announces Key Initiatives for 2025 Plans to Revamp IPO and Delisting Systems FSS’s 2025 Audit Operation Plan ? Key Issues and Implications Recent Regulatory Trends in Corporate Governance Restructuring Transactions Discussions on Introduction of Directors’ Duty to Protect All Shareholders’ Interests and Acting President’s Veto of Proposed Amendment to Korean Commercial Code Recent Developments and Trends in Greenwashing Financial Authorities’ Policy Trends for Virtual Assets Amendment to Industrial Technology Protection Act and Fifth Comprehensive Plan for Prevention of Divulgence and Protection of Industrial Technology Key Agenda Items of Sixth Insurance Reform Conference Key Contents and Implications of Amended 2025 SIAC Arbitration Rules Key Amendments to Customs Act and Act on Special Cases of the Customs Act for the Implementation of Free Trade Agreements in 2025 Abusive Patent Lawsuits Expressly Added to KFTC Guidelines as Example of Unfair Solicitation Recent Amendments to Patent Act, Utility Model Act, Trademark Act, and Design Protection Act Key Provisions of Best Practices for Completion Guarantee Land Trusts Designed to Reinforce Real Estate PF System 2025 Key Amendments to Tax Law and Presidential Decree Enactment of AI Basic Act and Launch of Lower Statute Alignment Bureau To view the newsletter, please click on the link below. Kim & Chang Legal Newsletter (2025 Issue 1) .content_view .view_area a { color: #2c3e50; text-decoration: none; }
2025.05.14

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Strengthened Cooperation Between KFTC and Korea Consumer Agency over Monitoring and Correcting False and Exaggerated Online Advertising The Korea Fair Trade Commission (the “KFTC”) and the Korea Consumer Agency (the “KCA”) announced that they would strengthen their collaboration by organically linking the KCA’s advertising monitoring activities with the KFTC’s investigative authority. This joint effort aims to more effectively detect and address false or exaggerated advertisements online. This collaboration stems from the increasing prevalence of unfair labelling and deceptive advertising online, fueled by the expansion of transactions on open markets, intermediary platforms, and social media. The goal is to minimize consumer harm and swiftly correct violations. The details of the collaboration are as follows: First, before the KCA conducts sector surveys or investigations into advertising practices, it will consult with the KFTC to jointly identify specific areas where sector surveys or inspections are necessary. During these surveys and inspections, the KCA will leverage not only its own personnel, but also utilize multiple channels encouraging participation, such as direct consumer reports and collaboration with relevant organizations. This year, the KFTC is planning to conduct an ex officio investigation into unfair advertising in the child care products and AI washing sectors, which are already currently being inspected by the KCA. Going forward, the two agencies will remain vigilant in identifying sectors with frequent instances of unfair labelling and advertising, as well as areas warranting further inspection. If violations are identified during the KCA’s inspection process, the KCA will recommend improvements to encourage voluntary compliance. If the businesses in question do not respond to these recommendations or if significant violations with far-reaching impacts are identified, the KFTC will intervene and commence an ex officio investigation. During the KFTC’s investigation, the KFTC and the KCA will form a joint investigation team to strengthen their investigative capabilities, actively utilizing the findings of monitoring/inspection initiated by the KCA during the investigation. In April 2023, the KFTC underwent an organizational restructuring, during which the responsibility for investigating cases related to labelling and advertising was assigned to the Anti-Monopoly Investigation Bureau. Through close and effective cooperation with the KCA, the Anti-Monopoly Investigation Bureau is expected to conduct its investigations into false and exaggerated online advertising more efficiently, leading to the rapid resolution of such cases. In summary, by actively leveraging the KCA’s unfair advertising monitoring system, the KFTC is anticipated to enhance its monitoring functions, and is allowed to concentrate its investigative powers to more important and significant cases. At the same time, businesses will continue to be encouraged to promptly address minor issues voluntarily through the KCA’s improvement recommendations. [Korean Version]
2025.05.27

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Notice on Changes in Disclosure Requirements for Information Protection in 2025 On May 1, 2025, the Ministry of Science and ICT (“MSIT”) released an updated list of companies subject to the Information Protection Disclosure Obligation (the “Obligation”). Companies on this list will be required to submit certain forms by June 30, 2025, as explained below. Under Article 13(2) of the Act on the Promotion of Information Protection Industry (the “Information Protection Industry Act”), companies meeting specified criteria are required to disclose their information protection investment and staffing status. This includes details such as investment in the information protection sector, personnel allocation for information protection, and certification, evaluation, inspection, and other relevant activities related to information protection. Accordingly, companies must submit their information protection status through MSIT’s Information Protection Disclosure Comprehensive Portal (available in Korean, Link) by June 30, 2025. Failure to comply with the Obligation may result in an administrative fine of up to KRW 10 million as outlined in Article 41(1)1 of the Information Protection Industry Act. Starting this year, a new annotation format has been introduced, allowing companies to provide detailed descriptions of information protection matters that cannot be adequately explained through the existing disclosure forms alone. Companies may optionally prepare and submit additional information regarding the following items: Information protection strategies and policies: Identification and details of major information protection risks, strategic plans for information protection, policies and implementation systems, etc. Information protection organization and structure: Status and governance of information protection-related organization, operation of Chief Information Security Officer (“CISO”) and Chief Privacy Officer (“CPO”), retention of information protection specialists, related regulations and guidelines, etc. Information protection infrastructure: Establishment and operation of information protection systems, introduction and operation of protection solutions, security incident response and risk management systems, etc. Information protection certification, evaluation and activities: Acquisition of information protection certifications, security control activities, vulnerability inspection activities, employee education and training, and other related events and campaigns, etc. [Korean Version]
2025.05.26

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Amendments to the Enforcement Decree of the Insurance Business Act and the Insurance Business Supervisory Regulations to Improve Capital Regulation Following the announcement of the “Plan to Improve Capital Regulation” at the Insurance Reform Meeting, as previously reported (Link), on April 29, 2025, the financial supervisory authorities pre-announced amendments to the Enforcement Decree of the Insurance Business Act and the Insurance Business Supervisory Regulations. These amendments aim to rationalize the current K-ICS regulatory standards and ease the conditions for reversing emergency risk reserves. The key points of the proposed amendments are as follows: 1. Rationalization of K-ICS Regulatory Standards (Amendments to the Enforcement Decree of the Insurance Business Act and the Insurance Business Supervisory Regulations) Currently, insurance companies with a K-ICS ratio of 150% or higher can redeem subordinated bonds before maturity without additional requirements. The threshold will now be reduced to apply to insurance companies with a K-ICS ratio of 130% or higher. The applicable K-ICS ratio benchmark for approval of the addition of new insurance product categories, capital reductions, subsidiary holdings, and issuance of debt guarantees to overseas subsidiaries, will be reduced to 130% (from the current 150%, or 200% for issuing debt guarantees to overseas subsidiaries). The minimum K-ICS ratio benchmarks for insurers to be eligible to apply a ratio of 80% for surrender value reserves will be reduced in accordance with the following schedule: End of Fiscal Year K-ICS Ratio Benchmark Before Amendment K-ICS Ratio Benchmark After Amendment 2024 200% or higher - 2025 190% or higher 170% or higher 2026 180% or higher 160% or higher 2027 170% or higher 150% or higher 2028 160% or higher 140% or higher 2029 150% or higher 130% or higher 2. Improvements to the Emergency Risk Reserves System (Amendment to the Insurance Business Supervisory Regulations) By eliminating the current conditions for reversing emergency risk reserves (i.e., incurring of net losses or insurance operating losses), insurance companies will be able to reverse emergency risk reserves, without incurring net losses or insurance operating losses, provided that the loss ratio, assessed per type of insurance products, exceeds a set threshold. Industry participants are invited to submit opinions regarding the proposed amendments by June 9, 2025. Thereafter, the proposed amendments will be formally submitted for review and deliberation by the Regulatory Reform Committee, the Ministry of Government Legislation, Vice-Ministerial Committee, and approval by the State Council. The review process and formal promulgation of the proposed amendments are expected to be completed by the third quarter of this year. [Korean Version]
2025.05.07

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KFTC Announces Amendment to Guidelines on the Operation and Evaluation of Fair Trade Voluntary Compliance Programs (“CP”) On April 23, 2025, the Korea Fair Trade Commission (“KFTC”) announced an Amendment to the “Guidelines on the Operation and Evaluation of Fair Trade Voluntary Compliance Program (CP)” (“CP Guidelines”). This announcement follows the KFTC’s introduction of the fair trade voluntary compliance program (“CP”) in June 2024 and a public commenting process held in March 2025. Under this program, companies can voluntarily comply with fair trade regulations in exchange for incentives, such as reduced administrative fines. The Amendment includes several key changes: (i) a new system to designate companies with outstanding CP evaluation results, (ii) changes to how fair trade law violations affect companies’ CP ratings, and (iii) a process for the CP rating process to move forward (subject to possible downgrading) notwithstanding the pendency of formal inquiries against the relevant companies. We summarize below some key details of the Amendment for your further reference. 1. Key Details of the Amendment (1) Elimination of Incentives (Rating Adjustment and Ex Officio Investigation Exemption) (Articles 13 and 20) The Amendment simplifies the CP outstanding company rating system by reducing the current six-tier system to a three-tier* system (AAA, AA, A), without raising the baseline for each rating. The Amendment also removes the ex officio investigation exemption for companies with an “A” rating, which was previously available to those with AAA, AA, and A ratings. There will be a grace period for benefits associated with the “A” rating until 2026. * The existing ratings (AAA, AA, A, B, C, D) will be restructured into three ratings: (AAA (Outstanding), AA (Excellent), A (Relatively Excellent)). (2) Fair Trade Law Violations to Result in Point Deductions instead of Lower Ratings (Article 14) The Amendment changes the penalty structure for CP evaluation applicants who violate the Fair Trade Law and receive administrative fines or penalties. Instead of automatically downgrading a company’s rating by up to two tiers, the KFTC will now deduct points (five evaluation points) for such violations. Furthermore, companies applying for CP evaluation for the first time will not face point deductions, even if they have committed Fair Trade Law violations. (3) Removal of the Option to Withhold CP Rating or Reject CP Rating (Articles 9, 15, and 18) Previously, the KFTC had the authority to withhold or reject CP ratings for companies under formal investigation. The Amendment now allows for CP evaluations to continue during formal inquiries, as long as no formal charges have been confirmed. However, the KFTC retains the ability to lower a company’s CP rating or deny its designation as an outstanding CP company, if a potential violation of the Fair Trade Law is deemed significantly harmful to the integrity of the CP system. (4) Updated Evaluation Criteria and Procedures (Article 14) To reduce the burden of on-site evaluations for companies, the Amendment introduces a streamlined three-step evaluation process: First, there will be a document-based review (which includes the potential awarding of extra points), followed by a face-to-face evaluation. The KFTC will only proceed to the third step (on-site evaluation) for companies rated AA or higher, or if an on-site evaluation is deemed necessary. (5) Criteria for Awarding Extra Points (Attached Table 2.5) The Amendment establishes provisions for awarding up to 1.5 extra points to companies rated “excellent” (AA) or higher based on their performance in fulfilling obligations related to subcontracting, distribution, agency, and franchise agreements. Extra points can also be awarded based on the company’s dispute intake process and its dispute settlement performance. 2. Implications The Amendment introduces significant changes to the CP evaluation framework by (i) limiting the KFTC’s authority to withhold or reject CP ratings, (ii) optimizing the evaluation process through a sequential approach to face-to-face and on-site evaluations, and (iii) replacing automatic rating downgrades with point reductions for Fair Trade Law violations. These adjustments, made in response to stakeholder feedback, aim to correct previous deficiencies in CP evaluations and reduce the burden on participating companies. Notably, the KFTC has chosen to maintain the current baselines for AA and higher ratings while eliminating the B and lower rating categories and removing incentives that were previously associated with the A rating. This strategic shift underscores the KFTC’s intent to reserve the designation of “outstanding CP company” solely for entities rated AAA, AA, and A, thereby enhancing the credibility and effectiveness of the CP system. This approach reflects the KFTC’s commitment to the robust activation and continuous improvement of the CP framework through comprehensive evaluations, promoting a culture of compliance with fair trade regulations. As a result, it will be important for companies carefully consider proactively strengthening their internal control mechanisms, reinforcing their commitment to compliance with fair trade laws, and maintaining vigilant oversight of CP-related issues. [Korean Version]
2025.04.28

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김·장 홍보

“Tier 1” in All Ten Practice Areas

In the 2025 edition of Benchmark Litigation Asia-Pacific, a guide that recognizes leading litigation law firms and lawyers in the Asia-Pacific region, Kim & Chang once again received “Tier 1” (top tier) rankings across all ten practice areas surveyed.
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“Jurisdictional Firm of the Year: South Korea”

Kim & Chang was awarded the “Jurisdictional Firm of the Year: South Korea” recognition at the IFLR Asia-Pacific Awards 2025. This award is given to one law firm in each jurisdiction that has engaged in the most innovative cross-border transactions in the Asia-Pacific region.
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Ranked “Band 1” in All Nine Areas, 41 “Leading Individuals” Recognized

In the 2025 edition of Chambers Global, Kim & Chang was once again the only Korean law firm ranked “Band 1” in all nine practice areas that were surveyed for Korea. In the individual categories, 41 of our attorneys and patent attorneys were recognized as “Leading Individuals.”
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