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ENFORCEMENT DECREE OF THE DEFENSE ACQUISITION PROGRAM ACT

Presidential Decree No. 19321, Feb. 8, 2006

Amended by Presidential Decree No. 19507, Jun. 12, 2006

Presidential Decree No. 20120, Jun. 28, 2007

Presidential Decree No. 20675, Feb. 29, 2008

Presidential Decree No. 21087, Oct. 20, 2008

Presidential Decree No. 21214, Dec. 31, 2008

Presidential Decree No. 21255, Jan. 7, 2009

Presidential Decree No. 21351, Mar. 18, 2009

Presidential Decree No. 21596, Jul. 1, 2009

Presidential Decree No. 21641, Jul. 27, 2009

Presidential Decree No. 22151, May 4, 2010

Presidential Decree No. 22328, Aug. 11, 2010

Presidential Decree No. 22413, Oct. 1, 2010

Presidential Decree No. 22467, Nov. 2, 2010

Presidential Decree No. 23036, Jul. 19, 2011

Presidential Decree No. 24413, Mar. 23, 2013

Presidential Decree No. 24474, Mar. 23, 2013

Presidential Decree No. 25003, Dec. 17, 2013

Presidential Decree No. 25685, Nov. 4, 2014

Presidential Decree No. 26195, Apr. 14, 2015

Presidential Decree No. 26538, Sep. 22, 2015

Presidential Decree No. 26997, Feb. 29, 2016

Presidential Decree No. 27079, Mar. 31, 2016

Presidential Decree No. 27344, Jul. 19, 2016

Presidential Decree No. 27618, Nov. 29, 2016

Presidential Decree No. 28117, Jun. 20, 2017

Presidential Decree No. 28211, Jul. 26, 2017

Presidential Decree No. 28339, Sep. 22, 2017

Presidential Decree No. 28799, Apr. 17, 2018

Presidential Decree No. 28904, May 28, 2018

CHAPTER I GENERAL PROVISIONS
 Article 1 (Purpose)
The purpose of this Decree is to prescribe matters delegated by the Defense Acquisition Program Act and the matters necessary for the enforcement of the delegated matters.
 Article 2 (Classification of Weapons Systems)
Weapons systems defined in subparagraph 3 of Article 3 of the Defense Acquisition Program Act (hereinafter referred to as the "Act") shall be as follows: <Amended by Presidential Decree No. 25003, Dec. 17, 2013; Presidential Decree No. 26997, Feb. 29, 2016>
1. Weapons systems for command and control, and communications, such as communications networks;
2. Weapons systems for surveillance and reconnaissance, such as radar;
3. Mobile weapons systems, such as tanks and armored personnel carriers;
4. Ship weapons systems, such as battleships;
5. Air weapons systems, such as combat aircraft;
6. Firepower weapons systems, such as self-propelled artillery;
7. Defense weapons systems, such as guided anti-air weaponry;
8. Other weapons systems, such as software for simulation analysis and simulation exercise and equipment essential for supporting combat forces.
CHAPTER II TRANSPARENCY AND SPECIALIZATION OF EXECUTION OF DEFENSE ACQUISITION PROGRAM
 Article 3 (Implementation of Real-Name Policy System)
(1) The major policies through which the real-name policy system shall be implemented pursuant to Article 5 (1) of the Act shall be subject to deliberation and coordination by the Defense Acquisition Program Promotion Committee (hereinafter referred to as the "Committee") pursuant to Article 9 (2) of the Act.
(2) Where the plans, reports, etc. on the major policies are made out pursuant to the provisions of paragraph (1), the Minister of National Defense and the Administrator of the Defense Acquisition Program Administration shall have the position, post, and names of the participants, and the details of opinions, plans, reports, etc. recorded and preserved by relevant department. When they are corrected or modified in the course of a decision or execution, he/she shall have the grounds for such correction or modification, the relevant persons and the relevant details recorded.
(3) Where the Minister of National Defense and the Administrator of the Defense Acquisition Program Administration hold public hearings, seminars, meetings of the relevant persons, etc. pursuant to paragraph (1), he/she shall cause the department in charge to record the date and time when they wear held, names of participants, details of remarks, voting, etc.
 Article 4 (Submission and Details of Pledge of Integrity)
(1) Where the Minister of National Defense appoints or commissions the members of the Committee or a subcommittee thereof provided for in Article 10 (1) of the Act, he/she shall require them to submit a pledge of integrity.
(2) Where public officials designated by the Minister of National Defense belong to the department related to defense acquisition programs in the Ministry of National Defense by new appointment, promotion, advancement, transfer, or change of position, the Minister of National Defense shall require them to submit a pledge of integrity. <Added by Presidential Decree No. 25685, Nov. 4, 2014>
(3) Where public officials belong to the Defense Acquisition Program Administration, or any persons become executive officers or employees of the Agency for Defense Development or the Defense Agency for Technology and Quality, by new appointment, promotion, advancement, transfer, or change of positions, the Administrator of the Defense Acquisition Program Administration shall require them to submit a pledge of integrity.
(4) Where defense contractors, general enterprises (hereinafter referred to as "defense contractors, etc."), general enterprises which have no relationship with the defense industry, or research institutes specified in Article 6 (1) 4 of the Act are registered as bidders to participate in defense acquisition programs, the Administrator of the Defense Acquisition Program Administration shall require them to submit a pledge of integrity. <Amended by Presidential Decree No. 27344, Jul. 19, 2016>
(5) Where a munitions sales agent specified in Article 6 (1) 5 of the Act enters into a contract concerning intermediation or agency with a foreign enterprise participating in a defense acquisition program, the Administrator of the Defense Acquisition Program Administration shall require it to submit a pledge of integrity. <Added by Presidential Decree No. 27344, Jul. 19, 2016>
(6) "Amounts of money prescribed by Presidential Decree" in Article 6 (1) 6 of the Act means one billion won, respectively. <Added by Presidential Decree No. 28339, Sep. 22, 2017>
(7) Where a defense contractor who has entered into a contract for a defense capability improvement project or the acquisition of munitions (hereinafter referred to as "defense acquisition contract"), a general enterprise which has no relation to defense acquisition programs, specialized research institution or ordinary research institution intends to enter into a subcontract relating to a defense acquisition contract defined in Article 6 (1) 6 of the Act with a subcontractor (in cases of a sales contract, referring to a supplier; hereinafter referred to as "subcontractor") or a subcontractor intends to enter into a further subcontract relating to a defense acquisition contract defined in Article 6 (1) 6 of the Act, it shall notify the party to the contract in advance of the fact that the party to the contract should submit a pledge of integrity to the Administrator of the Defense Acquisition Program Administration pursuant to Article 6 (1) of the Act. <Added by Presidential Decree No. 28339, Sep. 22, 2017>
(8) Matters to be included in the pledge of integrity pursuant to Article 6 (2) 3 of the Act shall be as follows: <Amended by Presidential Decree No. 25685, Nov. 4, 2014>
1. Matters concerning the prohibition of profiteering by the person himself/herself, or by a third person, by taking advantage of his/her position;
2. Matters concerning the prohibition of mediation and solicitation that obstruct fair performance of duties;
3. Matters concerning the prohibition of unfair practices that obstruct free competition in bidding, such as revealing bid prices in advance and collusion for a successful bid by a specific person, etc.;
4. Matters concerning the prohibition of unjust subcontracting.
 Article 5 (Formation, Term of Office, etc. of Ombudsmen)
(1) Ombudsmen under Article 6 (4) of the Act shall be not more than three persons. <Amended by Presidential Decree No. 22413, Oct. 1, 2010>
(2) Ombudsmen under paragraph (1) shall be commissioned by the Administrator of the Defense Acquisition Program Administration among the persons recommended by non-profit non-governmental organizations (hereinafter referred to as "non-profit non-governmental organization") under Article 2 of the Assistance for Non-Profit, Non-Governmental Organizations Act.
(3) Deleted. <by Presidential Decree No. 22413, Oct. 1, 2010>
(4) The term of office of ombudsmen shall be two years, and they may be re-commissioned only once.
(5) Any ombudsman commissioned pursuant to paragraph (2) shall not be discharged from office against his/her will: Provided, That where an ombudsman falls under any of subparagraphs 2 through 4, the Administrator of the Defense Acquisition Program Administration may discharge him/her from office, and where he/she falls under any of subparagraph 1, 5, or 6, the Administrator shall discharge him/her from office: <Amended by Presidential Decree No. 22413, Oct. 1, 2010>
1. Where he/she has given or received money or other articles or entertainment in connection with his/her duties;
2. Where he/she has been negligent in performing his/her duties due to irresponsibility, or intentionally evaded the execution of duties;
3. Where he/she has performed an act in violation of security in the course of performing his/her duties;
4. Where he/she has violated the proviso to Article 7 (5);
5. Where it is recognized as being difficult for him/her to execute his/her duties as usual due to physical or mental incapacity;
6. Where a reason pursuant to the proviso to Article 6 (5) of the Act is disclosed or he/she comes to hold concurrent posts under the subparagraphs of Article 6 (8) of the Act after he/she is commissioned as an ombudsman.
 Article 6 (Representative Ombudsman)
(1) For the purposes of efficient operation of the ombudsman system, there may be a representative ombudsman.
(2) The representative ombudsman shall be elected from among the ombudsmen.
(3) The representative ombudsman shall represent other ombudsmen, and take overall control over the business of the ombudsmen.
(4) Where the representative ombudsman fails to perform his/her duties temporarily, the ombudsman whom the representative ombudsman has appointed in advance shall perform his/her duties as proxy.
(5) The representative ombudsman shall submit details of the semi-annual accomplishments of the ombudsmen to the Administrator of the Defense Acquisition Program Administration within one month after the end of each half-year.
 Article 7 (Procedures for Handling, etc. Investigation of Civil Petitions)
(1) Where ombudsmen request for correction or inspection pursuant to the main sentence of Article 6 (6) of the Act, the representative ombudsman shall make such a request with the consent of all the ombudsmen.
(2) Where the results of an investigation on a civil petition does not require a request for correction or inspection, but where the improvement of institutions, policies, etc. is deemed necessary, ombudsmen may advise the Administrator of the Defense Acquisition Program Administration to make a reasonable improvement therein or pronounce their opinion to him/her.
(3) Where any ombudsman receives the original copies of the relevant documents in the course of conducting an investigation pursuant to Article 6 (7) of the Act, he/she shall return them within seven days from the date he/she receives them.
(4) Where the Administrator of the Defense Acquisition Program Administration receives a request for correction or inspection or such, from the representative ombudsman pursuant to paragraph (1), he/she shall notify the representative ombudsman of the result of such management within 30 days from the date he/she receives a request for correction or inspection, etc.
(5) The representative ombudsman may announce the details of a request for correction or inspection, etc. referred to in paragraph (1) and the details of the result of management referred to in paragraph (4): Provided, That this shall not apply to information under the objects which should not be disclosed pursuant to Article 9 of the Official Information Disclosure Act.
(6) For the efficient activities of ombudsmen, the Administrator of the Defense Acquisition Program Administration may subsidize allowances, travel expenses and other necessary expenses and provide them with an office, etc. within budget limits.
[This Article Wholly Amended by Presidential Decree No. 22413, Oct. 1, 2010]
 Articles 8 and 9 Deleted. <by Presidential Decree No. 22413, Oct. 1, 2010>
 Article 10 Deleted. <by Presidential Decree No. 21087, Oct. 20, 2008>
 Article 11 (Scope of Key Positions and Standards for Qualification)
(1) The positions particularly deemed to require expertise referred to in Article 7 (1) of the Act (hereinafter referred to as "key position") shall be positions such as director general or director of the Defense Acquisition Program Administration and the agencies under its control, and the head of the integrated project administration team.
(2) Persons eligible for key positions pursuant to Article 7 of the Act shall satisfy any of the following qualifications: Provided, That a person for whom five years have not elapsed since he/she was subject to a heavy disciplinary measure or sentenced to imprisonment without labor or heavier punishment pursuant to Article 57 (1) of the Military Personnel Management Act or Article 1-2 of the Decree on Disciplinary Action against Public Officialsshall not be appointed to any key position: <Amended by Presidential Decree No. 21351, Mar. 18, 2009>
1. Persons who have worked for three or more years in a field relating to the positions to be appointed;
2. Persons who hold qualifications or a bachelor's or higher degree in a field relating to a defense acquisition program;
3. Persons who have been educated in a field relating to a defense acquisition program.
(3) Matters necessary regarding the extent of the fields relating to the positions to be appointed, qualifications, degrees, kinds of education, etc. under paragraph (2) shall be prescribed by the Administrator of the Defense Acquisition Program Administration.
 Article 12 (Review of Legal Issues, etc. concerning Defense Acquisition Programs)
Matters that require prior legal review in entering into a contract or negotiation, etc. pursuant to Article 8 of the Act shall be as listed in the following subparagraphs: <Amended by Presidential Decree No. 22413, Oct. 1, 2010>
1. Matters relating to the basic strategy for the promotion of projects for improving defense capability, the total cost of which is ten billion won or more;
2. Matters relating to the preparation of requests for project proposals regarding defense acquisition programs and the evaluation thereof;
3. All kinds of contracts regarding defense acquisition programs;
4. Matters regarding major decision-making on projects for improving defense capability prescribed by the Administrator of the Defense Acquisition Program Administration;
5. Matters regarding the transfer of national defense science and technology pursuant to Article 31 (3) of the Act;
6. Matters regarding the revocation of designation of defense contractors (hereinafter referred to as "defense contractors"), defense materials (hereinafter referred to as "defense materials") or guarantee organizations under Article 48 of the Act;
7. Matters regarding the termination of commission of specialized research institutes under Article 63;
8. Other matters that the Administrator of the Defense Acquisition Program Administration recognizes as necessary for the smooth implementation of defense acquisition programs.
 Article 12-2 (Operation of In-house Supervisory Organization)
(1) The Administrator of the Defense Acquisition Program Administration may establish and operate an in-house supervisory organization, as prescribed by related statutes, such as the Organization of the Defense Acquisition Program Administration and the agencies under its jurisdiction, for the inspection and investigation of all the defense acquisition programs, the collection of information related to defense acquisition programs, and the prevention of absurdities and irregularities, and legal reviews, etc. on matters under Article 12.
(2) The Administrator of the Defense Acquisition Program Administration shall guarantee independence at the maximum in performing duties of an in-house supervisory organization under paragraph (1) in order to ensure transparency in defense acquisition programs.
(3) Matters necessary for the operation, etc. of an in-house supervisory organization under paragraph (1) shall be prescribed by Ministerial Decree of National Defense.
[This Article Added by Presidential Decree No. 27079, Mar. 31, 2016]
 Article 13 (Organization, etc. of Committee)
(1) The members of the Committee referred to in Article 9 (4) 2 of the Act shall be as follows: <Amended by Presidential Decree No. 22510, Dec. 7, 2010; Presidential Decree No. 25003, Dec. 17, 2013; Presidential Decree No. 25685, Nov. 4, 2014>
1. The Director General of the Office of Military Force and Resources Management of the Ministry of National Defense;
2. The Vice-Commissioner of the Defense Acquisition Program Administration and the director generals thereof;
3. The Director General of Strategy and Planning of the Headquarters of the Joint Chiefs of Staff;
4. The Deputy Chiefs of Staff of the Army, Navy, and Air Force (hereinafter referred to as "armed forces") and the Assistant Commandant of the Marine Corps.
(2) The term of office for the members commissioned pursuant to Article 9 (4) 5 and 6 of the Act shall be two years, renewable for only one further term. ＜Amended by Presidential Decree No. 25685, Nov. 4, 2014＞
[This Article Wholly Amended by Presidential Decree No. 22413, Oct. 1, 2010]
 Article 14 (Operation of Committee)
(1) The Chairperson of the Committee (hereinafter referred to as "Chairperson") shall represent the Committee and exercise an overall control over its business.
(2) Where the Chairperson fails to perform his/her duties due to extenuating circumstances, the Vice Chairperson shall perform the duties as proxy.
(3) The Committee shall convene a meeting when at least one third of the members on the register makes a request, or when the Chairperson or Vice Chairperson deems it as necessary.
(4) Meetings of the Committee shall be held with a majority of the members on the register, and pass resolutions upon approval by a majority of those members present, and the vote shall be made by an open vote.
(5) Deleted. <by Presidential Decree No. 25003, Dec. 17, 2013>
(6) Where it is necessary for the deliberation upon and coordination of projects regarding the National Intelligence Service, the Committee may have a public official belonging to the National Intelligence Service attend a meeting and hear his/her opinions.
(7) Other matters necessary for the operation of the Committee shall be prescribed by the Chairperson after the resolution by the Committee.
 Article 14-2 (Exclusion, Challenge, Avoidance of Members of Committee)
(1) Where a member of the Committee falls under any of the following, he/she shall be excluded from deliberation or coordination of the relevant item on the agenda:
1. Where he/she or a corporation or organization to which he/she belongs has an interest in the relevant item on the agenda;
2. Where a person who is his/her spouse, his/her relative within the fourth degree of consanguinity or his/her relative by marriage within the second degree of consanguinity has an interest in the relevant item on the agenda;
3. Where he/she is deemed to have a direct interest in the resolution of the relevant item on the agenda.
(2) Where a person who has a direct interest in matters deliberated or coordinated by the Committee has a ground to hardly expect a member of the Committee to fairly perform his/her duties, such person may file an application for challenge of such member with the Committee, and where the Committee deems such application for challenge reasonable, it shall decide the challenge by adopting a resolution. In such cases, no member subject to application for challenge shall participate in the resolution.
(3) Where a member of the Committee has a ground referred to in the subparagraphs of paragraph (1), he/she shall inform the Committee of the fact that he/she has such ground, and avoid deliberating on the relevant item on the agenda.
[This Article Added by Presidential Decree No. 28117, Jun. 20, 2017]
 Article 14-3 (Dismissal of Members of Committee)
Where a commissioned member of the Committee falls under any of the following, the Minister of National Defense may dismiss the relevant member of the Committee:
1. Where he/she is unable to perform his/her duties due to any mental or physical disorder;
2. Where he/she is involved in irregularities related to his/her duties;
3. Where he/she is deemed unsuitable for the member of the Committee due to dereliction of a duty, degradation to dignity or other grounds;
4. Where he/she fails to avoid deliberating the relevant item on the agenda though he/she falls under any of the subparagraphs of Article 14-2 (1);
5. Where he/she makes it clear for himself/herself that it is impracticable for him/her to perform his/her duties.
[This Article Added by Presidential Decree No. 28117, Jun. 20, 2017]
 Article 15 (Subcommittees)
(1) Subcommittees by field referred to in Article 10 of the Act and matters to be deliberated on and coordinated by each subcommittee shall be as follows: ＜Amended by Presidential Decree No. 25685, Nov. 4, 2014＞
1. Military force policy subcommittee: Matters regarding Article 9 (2) 2, 10, and 14 of the Act;
2. Policy and planning subcommittee: Matters regarding Article 9 (2) 1, 3, 4, 11, and 14 of the Act;
3. Project administration subcommittee: Matters regarding Article 9 (2) 5 through 7 and 14 of the Act;
4. Munitions procurement subcommittee: Matters regarding Article 9 (2) 8, 9, and 12 through 14 of the Act.
(2) Each subcommittee shall be comprised of not less than five nor more than twenty members including one chairperson, in consideration of gender. <Amended by Presidential Decree No. 28117, Jun. 20, 2017>
(3) The chairperson of each subcommittee shall be appointed by the Chairperson on the recommendation of the Vice Chairperson, from among the members of the Committee, and the members of each subcommittee shall be appointed or commissioned by the Chairperson on the recommendation of the Vice Chairperson, from among the following persons: <Amended by Presidential Decree No. 25003, Dec. 17, 2013; Presidential Decree No. 26195, Apr. 14, 2015; Presidential Decree No. 28117, Jun. 20, 2017>
1. Persons recommended respectively by the members of the Committee under the jurisdiction of the Ministry of National Defense, the Headquarters of the Joint Chiefs of Staff, the headquarters of armed forces, and the Headquarters of the Marine Corps, from among public officials at the level of director general or military officers of the rank of general in the relevant agencies;
2. Public officials at the level of director general or military officers of the rank of general belonging to the Defense Acquisition Program Administration;
3. Persons recommended by the members of the Committee falling under Article 9 (4) 3 and 4 of the Act, from among public officials at the level of director general or executive officers or employees of the agencies to which such members belong;
4. Persons commissioned pursuant to Article 9 (4) 5 and 6 of the Act.
(4) The term of office for members of each subcommittee commissioned pursuant to paragraph (3) 1 through 3 shall coincide with the term of service in their positions, and the term of office for members of each subcommittee appointed pursuant to subparagraph 4 of the same paragraph shall coincide with the term of service as a member of the Committee.
(5) Articles 14 (1) through (4) and (7), 14-2 and 14-3 shall apply mutatis mutandis to the operation of subcommittees. In such cases, the "Committee" shall be construed as "each subcommittee", the "Chairperson" as the "chairperson of each subcommittee", the "Vice Chairperson" as a "member designated in advance by the chairperson of each subcommittee." <Amended by Presidential Decree No. 28117, Jun. 20, 2017>
 Article 15-2 (Working Committees)
(1) Working committees necessary in each field shall be established under the control of subcommittees (excluding the military power policy subcommittee) prescribed in Article 15 (1) pursuant to Article 10 (3) of the Act.
(2) Each working committee shall deliberate on and coordinate matters requiring prior review before deliberation or coordination by the relevant subcommittee and other matters necessary for supporting affairs of the subcommittee.
(3) Each working committee shall be comprised of not less than five nor more than twenty members, including one chairperson, in consideration of gender.
(4) A person appointed by the Administrator of the Defense Acquisition Program Administration, from among public officials at the level of director or military officers of the rank of general of the Defense Acquisition Program Administration, shall serve as the chairperson of each working committee, and the following persons shall serve as members of each working committee:
1. Persons appointed by the head of an agency to which they belong from among public officials or military officers of the rank of section chief belonging to the Ministry of National Defense, the Defense Acquisition Program Administration, the Joint Chiefs of Staff, the Headquarters of each Armed Force and Marine Corps;
2. Persons appointed by the head of the relevant agency from among public officials of the rank of section chief or higher in agencies to which members of the Committee prescribed in Article 9 (4) 3 of the Act belong;
3. Persons recommended by members of the Committee prescribed in Article 9 (4) 4 of the Act from among executives and employees under their jurisdiction;
4. Persons commissioned by the Administrator of the Defense Acquisition Program Administration, who are experts who have expert knowledge of and experience in defense acquisition programs.
(5) Each working committee shall convene a meeting, when the chairperson of each working committee deems it necessary.
(6) Articles 14 (1), (2) and (4), 14-2 and 14-3 shall apply mutatis mutandis to the operation of each working committee. In such cases, the "Committee" shall be construed as "each working committee", the "Chairperson" as the "chairperson of each working committee", the "Minister of National Defense" as the "Administrator of the Defense Acquisition program Administration", and the "Vice Chairperson" as a "member appointed in advance by the chairperson of each working committee".
(7) In addition to matters provided for in paragraphs (1) through (6), the Administrator of the Defense Acquisition Program Administration shall prescribe matters necessary for the organization, operation, etc. of each working committee.
[This Article Added by Presidential Decree No. 28117, Jun. 20, 2017]
 Article 16 (Expert Members)
(1) The number of expert members referred to in Article 10 (4) of the Act shall be not less than two nor more than five, and shall be commissioned by the Chairperson on the recommendation of the Vice Chairperson. <Amended by Presidential Decree No. 28117, Jun. 20, 2017>
(2) The term of office of expert members referred to in paragraph (1) shall be one year, and they may be reappointed: Provided, That where an expert member is entrusted for consultation on a specific matter, he/she shall be deemed discharged from such commission on the completion of such consultation.
 Article 17 (Requests, etc. for Submission of Data)
(1) Where necessary for deliberation and coordination, the Committee, a subcommittee or working committee may request the Ministry of National Defense, the Defense Acquisition Program Administration, the Joint Chiefs of Staff, armed forces, the Agency for Defense Development, the Defense Agency for Technology and Quality, defense contractors, etc. to submit data or present its opinions. ＜Amended by Presidential Decree No. 25685, Nov. 4, 2014; Presidential Decree No. 28117, Jun. 20, 2017>
(2) Each agency or organization, in receipt of a request to submit data or present opinions pursuant to paragraph (1), shall cooperate therewith, except in extenuating circumstances.
 Article 18 (Allowances and Travel Expenses)
The members present at the Committee, a subcommittee and working committee, expert members, and persons who have attended and submitted opinions to the Committee, a subcommittee and working committee pursuant to the provisions of Article 17 may be paid allowances and travel expenses within the budgetary limits: Provided, That where the relevant public official has attended the Committee in connection with his/her duties, this shall not apply. <Amended by Presidential Decree No. 28117, Jun. 20, 2017>
CHAPTER III DEFENCE FORCE IMPROVEMENT PROJECTS
Section 1 Principles for Execution of Defense Force Improvement Projects
 Article 19 (Request for Manpower Support, etc.)
Where manpower support from the relevant organizations, such as armed forces, agencies under the direct control of the Ministry of National Defense (including military units under the direct control of the Ministry of National Defense; hereinafter the same shall apply), the Agency for Defense Development, and the Defense Agency for Technology and Quality, is necessary for the efficient operation of the comprehensive project administration system pursuant to Article 12 of the Act in executing defense force improvement projects, the Administrator of the Defense Acquisition Program Administration may request the relevant agencies and organizations to provide manpower support, following deliberation by the Committee. In such cases, where manpower support from armed forces and the agencies under the direct control of the Ministry of National Defense is necessary, he/she shall request the Minister of National Defense to provide manpower support.
Section 2 Medium-Term National Defense Plans and Budget
 Article 20 (Formulation of Medium-Term National Defense Plans, etc.)
(1) In order to formulate a medium-term national defense plan pursuant to Article 13 (1) of the Act, the Minister of National Defense shall prepare guidelines for the formulation of medium-term national defense plans (hereinafter referred to as "guidelines for medium-term national defense plans").
(2) Where the Minister of National Defense intends to prepare the guidelines for medium-term national defense plans pursuant to paragraph (1), with regard to defense force improvement projects, he/she may receive a prior written opinion from the Administrator of the Defense Acquisition Program Administration, and reflect it in such guidelines.
(3) Where the Minister of National Defense formulates the guidelines for medium-term national defense plans or the Administrator of the Defense Acquisition Program Administration prepares a written opinion pursuant to paragraph (2), he/she shall consider the following:
1. Matters regarding Article 22 (3) 1 through 5;
2. The order of priorities in the requirements for weapons systems for the purposes of achieving goals regarding combined military strategy;
3. Medium- and long-term policies regarding the advancement of national defense science and technology provided for in Article 30 of the Act.
(4) Where the Administrator of the Defense Acquisition Program Administration intends to formulate a written request for a medium-term plan for defense force improvement projects pursuant to Article 13 (2) of the Act, the requirements for support elements of force integration pursuant to Article 28 (1) shall be submitted to such Administrator by the headquarters of armed forces, the Headquarters of the Marine Corps, and agencies under the direct control of the Ministry of National Defense. <Amended by Presidential Decree No. 25003, Dec. 17, 2013; Presidential Decree No. 25685, Nov. 4, 2014>
 Article 20-2 (Requirement Reviews)
(1) A review of the adequacy of requirements for weapons systems, etc. pursuant to Article 13 (3) of the Act (hereinafter referred to as “requirement review”) shall be performed with respect to the requirements deemed necessary by the Minister of National Defense for a medium-term national defense plan, from among requirements for weapons systems, etc. determined under Article 15 (1) of the Act.
(2) Requirement reviews shall be deliberated by the Requirement Review Committee under Article 20-3.
(3) Except as otherwise expressly provided for in paragraph (1) and (2), matters necessary for the methods, procedures, etc. of requirement reviews shall be prescribed by the Minister of National Defense.
[This Article Added by Presidential Decree No. 25685, Nov. 4, 2014]
 Article 20-3 (Requirement Review Committee)
(1) A Requirement Review Committee shall be established under the jurisdiction of the Minister of National Defense (hereinafter referred to as the “Review Committee”) to deliberate on requirement reviews.
(2) The Review Committee shall be comprised of not exceeding 21 members, including one chairperson.
(3) The Vice Minister of National Defense shall serve as the chairperson of the Review Committee, the Director General of the Office of Military Force and Resources Management of the Ministry of National Defense shall serve as the vice chairperson, and members of the Committee shall be as follows: <Amended by Presidential Decree No. 28211, Jul. 26, 2017>
1. The Director General of Strategy and Planning of the Headquarters of the Joint Chiefs of Staff, the Deputy Chiefs of Staff of armed forces, and the Assistant Commandant of the Marine Corps;
2. The Vice-Commissioner of the Defense Acquisition Program Administration;
3. Persons appointed by the Minister of Strategy and Finance, the Minister of Science and ICT, and the Minister of Trade, Industry and Energy, from among public officials at the level of an executive director or director-general of such Ministries;
4. The Deputy Chief of the Korea Institute for Defense Analysis, the Deputy Director of the Agency for Defense Development, and the Director General of Technology and Planning of the Defense Agency for Technology and Quality;
5. Persons commissioned by the Minister of National Defense, from among executive officers and employees of Government-funded research institutes established under the Act on the Establishment, Operation and Fostering of Government-Funded Research Institutes, Etc. who are recommended by the heads of such institutes;
6. Persons commissioned by the Minister of National Defense, from among those with considerable knowledge and experience in the requirements of weapons systems, etc., defense acquisition programs, economy or industries.
(4) The Minister of National Defense may organize and operate a working committee for requirement review to effectively conduct the affairs of the Review Committee.
(5) Matters necessary for the operation of the Review Committee, such as meetings of the Review Committee and the organization and operation of a working committee for requirement review, shall be prescribed by the Minister of National Defense.
[This Article Added by Presidential Decree No. 25685, Nov. 4, 2014]
 Article 21 (Budget Formulation)
(1) Where the Minister of National Defense prepares guidelines for budget formulation referred to in Article 14 (1) of the Act with regard to defense force improvement projects, he/she shall receive, in advance, written opinions from the Administrator of the Defense Acquisition Program Administration and reflect them in such guidelines.
(2) Where the Administrator of the Defense Acquisition Program Administration formulates a budget for defense force improvement projects, he/she shall receive data required for budgeting support elements of force integration referred to in Article 28 (1) from the headquarters of armed forces, the Headquarters of the Marine Corps, and agencies under the direct control of the Ministry of National Defense. <Amended by Presidential Decree No. 25003, Dec. 17, 2013>
Section 3 Decision on Requirements and Revision Thereof
 Article 22 (Decision-Making Processes regarding Requirements)
(1) Where the Chairman of the Joint Chiefs of Staff intends to determine the requirements for weapons systems, etc. pursuant to Article 15 (1) of the Act, he/she shall first obtain written proposals of requirements, stating the following matters, from the Ministry of National Defense, the Defense Acquisition Program Administration, the Joint Chiefs of Staff, the headquarters of armed forces, the Headquarters of the Marine Corps, and agencies under the direct control of the Ministry of National Defense (hereinafter referred to as "agencies proposing requirements"): <Amended by Presidential Decree No. 25685, Nov. 4, 2014>
1. Necessity;
2. Concept of operation;
3. Capability required for operations;
4. Other reference materials for determining requirements for weapons systems, etc. and support elements for force integration.
(2) The Chairman of the Joint Chiefs of Staff shall formulate a force requirement plan, including the following matters, based on written proposals of requirements submitted by agencies proposing requirements prescribed in paragraph (1). In such cases, measures for the evolutionary development of weapon system performance, etc. necessary for operations (hereinafter referred to as "operational performance") may be included in the force requirement plan, based on trends in technological development: <Amended by Presidential Decree No. 25685, Nov. 4, 2014>
1. Necessity, concept of operation, the timing of fielding, and the quantity demanded, of weapons systems;
2. Operational performance;
3. Support elements for force integration specified in Article 28 (1).
(3) Each agency proposing requirements or the Chairman of the Joint Chiefs of Staff shall consider the following matters when preparing written proposals of requirements referred to in paragraph (1) or formulating force requirement plans referred to in paragraph (2): <Amended by Presidential Decree No. 25685, Nov. 4, 2014>
1. The basic direction-setting for policies on national defence;
2. Information acquired by analyzing the domestic and international situation of national defense;
3. The basic direction-setting for implementing a plan formulated by the Joint Chiefs of Staff for the construction of military capabilities based on current conditions of national security, military strategies, etc.;
4. The level of science and technology developed and secured for national defense;
5. The appropriate working efficiency and production capacity of defense contractors, etc.;
6. Matters regarding the maintenance and repair of weapons systems;
7. Compatibility and interoperability.
(4) The Agency for Defense Development, the Defense Agency for Technology and Quality, defense contractors, etc., or research institutes specified in Article 6 (1) 4 of the Act may present their opinions on requirements to the heads of agencies proposing requirements and the Chairman of the Joint Chiefs of Staff. <Amended by Presidential Decree No. 25685, Nov. 4, 2014>
(5) Where necessary for formulating force requirement plans referred to in paragraph (2) of this Article in a scientific and quantitative manner prescribed in the latter part of Article 15 (1) of the Act, the Chairman of the Joint Chiefs of Staff shall hear opinions on requirements of the following agencies, etc. or operate a joint concept team comprised of public officials or employees of the agencies prescribed in subparagraphs 1 and 2 and experts prescribed in subparagraph 4. In such cases, matters necessary for the organization and operation of the joint concept team shall be determined by the Chairman of the Joint Chiefs of Staff: <Amended by Presidential Decree No. 25685, Nov. 4, 2014; Presidential Decree No. 28904, May 28, 2018>
1. The Ministry of National Defense, the Defense Acquisition Program Administration, the Joint Chiefs of Staff, armed forces;
2. The Korea Institute for Defense Analysis, the Agency for Defense Development, and the Defense Agency for Technology and Quality;
3. Party interested in defense contractors, etc.;
4. Civil specialties in defense industry field.
(6) The Chairman of the Joint Chiefs of Staff shall hear the opinions of the Administrator of the Defense Acquisition Program Administration on the force requirement plans referred to in paragraph (2) of this Article before deliberation by the meeting of the Joint Chiefs of Staff prescribed in the latter part of Article 15 (1) of the Act. <Added by Presidential Decree No. 28904, May 28, 2018>
(7) Except as otherwise expressly provided for in paragraphs (1) through (6), matters necessary for the decision-making processes regarding requirements shall be prescribed by Ministerial Decree of National Defense.
[This Article Wholly Amended by Presidential Decree No. 25003, Dec. 17, 2013]
 Article 23 (Revision to Minor Matters of Requirements)
(1) "Minor matter prescribed by Presidential Decree" in the proviso to Article 16 (2) of the Act means the following:
1. Change of the annual quantity, or timing of fielding, of weapons systems, etc. on the grounds for changes in financial resources in the formulation of a medium-term national defense plan or formulation and execution of a budget pursuant to Articles 13 (1) and 14 of the Act;
2. Change of technical and incidental performance regarding weapons systems, etc.;
3. Revision to plans for securing support elements for force integration pursuant to Article 28 (1).
(2) Where any matter specified in paragraph (1) is revised by the Committee or subcommittee while deliberating on or coordinating medium-term plans for defense force improvement projects or formulating budgets thereof, the revision to such matter shall be deemed the revision to requirements thereof.
Section 4 Execution of Defense Force Improvement Projects
 Article 24 (Methods of Implementing Defense Force Improvement Projects)
(1) Where prior research referred to in Article 17 (1) of the Act has been completed, the Administrator of the Defense Acquisition Program Administration shall formulate a basic strategy for implementing defense force improvement projects and submit it for deliberation by the Committee.
(2) The basic strategy for project implementation referred to in paragraph (1) shall include the following:
1. Details of review on research and development, or decisions on purchasing;
2. Matters regarding the types of research and development, methods of purchasing, etc.;
3. Detailed direction-setting for project implementation, following research and development, or purchasing;
4. Schemes for test and evaluation;
5. Schedules for project implementation;
6. Administration schemes covering the whole life cycle of weapons systems;
7. Step-by-step goals and strategies for development, in cases of the evolutionary development of operational performance of weapons systems;
8. Interoperability among the weapons systems of armed forces under the condition of joint battlefield.
(3) The types of research and development referred to in paragraph (2) 2 shall be classified as follows:
1. Domestic research and development (including cases of receiving international technological cooperation) or joint international research and development;
2. Research and development funded by the Government, research and development funded by defense contractors, etc., or joint research and development funded by the Government, defense contractors, etc.;
3. Research and development supervised by the Agency for Defense Development or by defense contractors, etc. through competitive bidding.
(4) Methods of purchasing referred to in paragraph (2) 2 shall be classified into domestic purchase, offshore purchase, and lease. <Added by Presidential Decree No. 22413, Oct. 1, 2010>
 Article 24-2 (Methods of Purchase)
(1) Where the Administrator of the Defense Acquisition Program Administration purchases munitions produced in the Republic of Korea pursuant to the main sentence of Article 19 (1) of the Act, he/she may purchase a weapons system under development or developed in the Republic of Korea with partial remodeling.
(2) Where the Administrator of the Defense Acquisition Program Administration purchases munitions produced overseas pursuant to the proviso to Article 19 (1) of the Act, he/she may purchase a weapons system under operation or under development in foreign countries with partial remodeling. <Amended by Presidential Decree No. 28904, May 28, 2018>
(3) The Administrator of the Defense Acquisition Program Administration may lease munitions where it is more economical to lease munitions to purchase munitions domestically or overseas or it is necessary to satisfy the timing of fielding, etc.
[This Article Added by Presidential Decree No. 22413, Oct. 1, 2010]
 Article 24-3 (International Negotiation Support Officer and Site Supervisors of Overseas Projects)
(1) If necessary for purchasing the munitions manufactured overseas under the proviso to Article 19 (1) of the Act, the Administrator of the Defense Acquisition Program Administration may have public officials under his/her jurisdiction perform duties such as negotiation, support for conclusion of contracts and management of execution thereof overseas. <Added by Presidential Decree No. 28904, May 28, 2018>
(2) If necessary for performing any of the following duties, the Administrator of the Defense Acquisition Program Administration may dispatch competent public officials overseas to supervise the implementation of the relevant contracts pursuant to Article 13 of the Act on Contracts to which the State is a Party:
1. Joint international research and development projects (including domestic research and development projects with international technical cooperation) referred to in Article 24 (3) 1;
2. Purchase from a foreign country referred to in Article 24 (4).
(3) The Administrator of the Defense Acquisition Program Administration may subsidize expenses, within budgetary limits, for the competent public officials who perform the duties prescribed in paragraphs (1) and (2). <Amended by Presidential Decree No. 28904, May 28, 2018>
[This Article Added by Presidential Decree No. 25685, Nov. 4, 2014]
 Article 25 (Qualifications, etc. for Participants in Negotiation)
(1) Civilian specialists permitted to participate in purchase procedures for munitions pursuant to Article 19 (2) of the Act shall be as follows:
1. A public official who has at least five years’ work experience in the division of international contracts or international negotiations;
2. A lawyer, patent attorney, or certified public accountant who has at least three years’ work experience in the field of international contracts or international negotiations;
3. A person who has at least a master's degree in a field relating to an international contract or international negotiation, such as international trade and international commerce, and has at least five years’ work experience in international contracts or international negotiations;
4. A person who has at least ten years’ work experience in the field of science and technology.
(2) The Administrator of the Defense Acquisition Program Administration shall select up to 15 civilian specialists prescribed in paragraph (1) upon recommendation by the Committee, and then have them participate in purchasing munitions.
 Article 25-2 (Procedures for Purchasing Munitions Manufactured in Korea)
(1) Munitions manufactured in the Republic of Korea referred to in the main sentence of Article 19 (1) of the Act shall be purchased in the following order:
1. Formulation of a purchase plan;
2. Bid announcement;
3. Selection of qualified contractors through testing, evaluation, eligibility examination, etc.;
4. Conclusion of a purchase contract.
(2) Detailed procedures for selecting qualified contractors under paragraph (1) 3 shall be determined by the Administrator of the Defense Acquisition Program Administration, taking into consideration the nature of each purchase contract.
[This Article Added by Presidential Decree No. 25003, Dec. 17, 2013]
 Article 25-3 (Procedures for Purchasing Munitions Manufactured in Foreign Countries)
(1) Munitions manufactured overseas referred to in the proviso to Article 19 (1) of the Act shall be purchased in the following order: <Amended by Presidential Decree No. 25003, Dec. 17, 2013>
1. Formulation of a purchase plan;
2. Bid announcement;
3. Receipt and evaluation of proposals;
4. Selection of weapons systems or equipment subject to testing and evaluation (referring to testing and evaluation specified in Article 21 of the Act; hereafter the same shall apply in this Article);
5. Testing, evaluation, and negotiations;
6. Determination on the model of the weapons systems or equipment subject to purchase;
7. Conclusion of a purchase contract.
(2) Weapons systems or equipment subject to testing and evaluation referred to in paragraph (1) 4 shall be selected, based on the results of evaluation of proposals referred to in paragraph (1) 3, but no priority shall be given according to the results of evaluation.
(3) Negotiations referred to in paragraph (1) 5 mean negotiations on the purchase price, the performance of weapons systems or equipment, offset trade, and other terms and conditions of contracts, and may proceed simultaneously with testing and evaluation. <Amended by Presidential Decree No. 25003, Dec. 17, 2013>
(4) The model of the weapons systems or equipment subject to purchase referred to in paragraph (1) 6 shall be determined after comprehensively reviewing the results of testing, evaluation, and negotiations.
(5) Evaluation methods for determination on models referred to in paragraph (4) and other matters necessary for procedures for purchase shall be determined by the Administrator of the Defense Acquisition Program Administration.
[This Article Added by Presidential Decree No. 22413, Oct. 1, 2010]
 Article 26 (Standards for Offset Trade)
(1) The amount of each unit project of munitions for which offset trade shall be promoted pursuant to Article 20 (1) of the Act shall be at least ten million US dollars: Provided, That offset trade may be omitted in any of the following cases: <Amended by Presidential Decree No. 25003, Dec. 17, 2013>
1. Where parts for repair are purchased;
1-2. Where core parts are purchased to be used for the research and development of weapons systems referred to in Article 18 of the Act;
2. Where raw materials, such as petroleum, are purchased;
2-2. Where munitions are purchased under a contract concluded with a foreign government;
3. Where a purchase is made after deliberation by the Committee, in consideration of national security, economic efficiency, etc.
(2) "Matters prescribed by Presidential Decree, such as export linkages for commodities other than munitions" in Article 20 (3) 6 of the Act means the following: <Added by Presidential Decree No. 21596, Jul. 1, 2009; Presidential Decree No. 24413, Mar. 23, 2013; Presidential Decree No. 25003, Dec. 17, 2013; Presidential Decree No. 28211, Jul. 26, 2017>
1. Export linkages for commodities, other than munitions, selected by the Administrator of the Defense Acquisition Program Administration upon recommendation of the Minister of Trade, Industry and Energy or the Minister of SMEs and Startups;
2. Inducement of foreign investments (limited to foreign investments defined in Article 2 (1) 4 of the Foreign Investment Promotion Act) determined by the Administrator of the Defense Acquisition Program Administration, in consultation with the Minister of Trade, Industry and Energy for the improvement of the competitiveness of the defense industry.
(3) Matters necessary for the promotion of offset trade, such as procedures for promotion of offset trade, shall be prescribed by the Administrator of the Defense Acquisition Program Administration. <Amended by Presidential Decree No. 21596, Jul. 1, 2009>
 Article 27 (Formulation, etc. of Test and Evaluation Plan)
(1) Where the Minister of National Defense intends to formulate a test and evaluation plan for the research and development among tests and evaluations of weapons systems and core technologies pursuant to Article 21 (1) and (3) of the Act, he/she shall formulate a test and evaluation master plan including the following matters: Provided, That where he/she deems it unnecessary to formulate a test and evaluation master plan, as prescribed by him/her, he/she may choose not to formulate the test and evaluation master plan: <Amended by Presidential Decree No. 27344, Jul. 19, 2016>
1. Outline of weapons systems subject to test and evaluation;
2. Outline of developmental test and evaluation (hereafter in this Article, referred to as "developmental test and evaluation") specified in Article 21 (3) 1 of the Act;
3. Outline of operational test and evaluation (hereafter in this Article, referred to as "operational test and evaluation") specified in Article 21 (3) 2 of the Act;
4. Resources necessary for test and evaluation;
5. Other matters necessary for test and evaluation.
(2) The Minister of National Defense shall formulate a developmental test and evaluation plan and an operational test and evaluation plan based on a test and evaluation master plan under paragraph (1): Provided, That where he/she deems it unnecessary to undergo both the developmental test and evaluation plan and the operational test and evaluation plan, he/she may choose not to formulate part of the plans. <Amended by Presidential Decree No. 27344, Jul. 19, 2016>
(3) Where the Minister of National Defense intends to formulate a test and evaluation plan for the purchase of weapons systems among tests and evaluations of weapons systems pursuant to Article 21 (1) and (4) of the Act, he/she shall formulate a test and evaluation plan in accordance with the classification under the subparagraphs of paragraph (4) of the aforesaid Article. <Added by Presidential Decree No. 27344, Jul. 19, 2016>
(4) A test and evaluation plan referred to in paragraphs (2) and (3) shall contain the following matters: <Amended by Presidential Decree No. 27344, Jul. 19, 2016>
1. Items of equipment to be tested and evaluated, and quantities thereof;
2. The timing, place, and method of a test and evaluation;
3. Items of a test and evaluation, and the standards for evaluation;
4. Testers and evaluators;
5. Budgets needed for a test and evaluation.
(5) Where the Minister of National Defense formulates a test and evaluation plan pursuant to paragraph (2), he/she shall consider the following matters, and where he/she formulates a test and evaluation plan pursuant to paragraph (3), he/she shall consider a written request for proposal: <Amended by Presidential Decree No. 22413, Oct. 1, 2010; Presidential Decree No. 25003, Dec. 17, 2013; Presidential Decree No. 25685, Nov. 4, 2014; Presidential Decree No. 27344, Jul. 19, 2016>
1. A plan for research and development;
2. A proposal for a project for research and development by an enterprise;
3. An execution plan for a test and evaluation for development prepared by a research and development institute;
4. An execution plan for a test and evaluation for operations prepared by an agency proposing requirements.
(6) For the purposes of the efficient formulation of plans for a test and evaluation, confirmation of the progress of a test and evaluation, judgment of results, etc., the Minister of National Defense may operate a combined test and evaluation team consisting of staff members of the Ministry of National Defense, the Joint Chiefs of Staff, the Defense Acquisition Program Administration, armed forces, the Defense Agency for Technology and Quality, and each agency referred to in Article 21 (2) of the Act, and matters regarding the composition and operation thereof shall be prescribed by the Minister of National Defense. <Amended by Presidential Decree No. 25685, Nov. 4, 2014>
(7) Where armed forces or relevant agencies test or evaluate weapons systems and core technology pursuant to Article 21 (2) of the Act, the Minister of National Defense shall secure and provide the budget necessary for smoothly conducting a test and evaluation. <Amended by Presidential Decree No. 25685, Nov. 4, 2014>
(8) The Minister of National Defense may conduct a test and evaluation based on data pursuant to the latter part of Article 21 (4) of the Act in the following cases: <Added by Presidential Decree No. 27344, Jul. 19, 2016>
1. Where he/she purchases a weapons system which has no pilot product because it is being developed;
2. Where he/she purchases a partly remodelled weapons system currently in operation in the Republic of Korea;
3. Where he/she purchases a weapons system currently in operation in order to integrate it into the complex weapons system, such as naval vessels and aircraft.
(9) Matters necessary for conducting a test and evaluation, such as procedures for test and evaluation, shall be prescribed by Ministerial Decree of National Defense.
 Article 28 (Securing, etc. of Support Elements of Force Integration)
(1) The Administrator of the Defense Acquisition Program Administration, armed forces, and agencies under the direct control of the Ministry of National Defense related to requirements (hereinafter referred to as "requirement-raising armed forces") shall secure the following elements (hereinafter referred to as "support elements of force integration") to provide weapons systems with the military capability so that weapons systems are operational upon deployment. In such cases, the Administrator of the Defense Acquisition Program Administration shall secure the support elements of force integration set forth in subparagraphs 1 (a) and 2, and the requirement-raising armed forces shall secure the support elements of force integration set forth in subparagraph 1 (b): <Amended by Presidential Decree No. 27344, Jul. 19, 2016>
1. The following elements to facilitate combat development for demonstrating instantaneous defense capability on the battlefield by the weapons systems acquired:
(a) The hardware and software, etc. necessary for the interoperability of the facilities of military units and weapons systems;
(b) Organizations, equipment, education and training, and radio frequencies for the formation of military doctrine and military units;
2. Combined elements for assistance with munitions, such as parts for repair and operating manuals, necessary for the efficient and economical operation of the weapons systems acquired.
(2) Where necessary for securing support elements of force integration pursuant to paragraph (1), the Administrator of the Defense Acquisition Program Administration may request the requirement-raising armed forces to provide assistance. In such cases, the requirement-raising armed forces shall cooperate therewith, except in extenuating circumstances.
(3) Where the requirement-raising armed forces intend to secure support elements of force integration, such as formulation of military units or education and training, etc. following the deployment of weapons systems, the Administrator of the Defense Acquisition Program Administration may assist with the necessary budget, and where the requirement-raising armed forces agree, the Administrator may have a defense contractor, etc. execute all or part of the follow-up assistance with materials for a certain period under contract.
(4) The Administrator of the Defense Acquisition Program Administration may present guidelines of the result, such as the target rate of operation for the main weapons systems, after consultation with the requirement-raising armed forces so that a defense contractor, etc. execute all or part of the follow-up assistance with materials, and may pay the price according to the result thereof. <Added by Presidential Decree No. 21596, Jul. 1, 2009>
CHAPTER IV PROCUREMENT AND QUALITY ASSURANCE
 Article 29 (Methods, etc. of Procurement)
(1) Where the Administrator of the Defense Acquisition Program Administration procures munitions in a lump pursuant to the main sentence of Article 25 (2) of the Act, he/she may procure munitions by methods of domestic procurement, offshore procurement, or lease. In such cases, detailed procedures for procurement shall be determined by the Administrator of the Defense Acquisition Program Administration.
(2) Munitions that armed forces may directly procure pursuant to the proviso to Article 25 (2) of the Act (hereinafter referred to as "procurement by military unit") shall be as follows:
1. Pilot products developed directly by the military unit that manages munitions;
2. Consumable materials necessary for the maintenance of munitions performed by a military maintenance unit (including the military maintenance depot; hereinafter the same shall apply), and for the manufacture of necessary parts therefor;
3. Items the planned amount of annual procurement of which by item is less than 30 million won, and unitary items with a track record of procurement by the military unit among items the planned amount of annual procurement of which by item is between 30 million won and 50 million won;
4. Items for which there are no national defense standards pursuant to Article 31 (1) and no sample is available for presentation;
5. Items for which emergency purchasing is necessary due to war, disaster, etc.;
6. Items which require the maintenance of security, such as coding equipment used by armed forces, and items which require special manufacture and installation because the requirements of users are diverse;
7. Where equipment and parts procured by a military unit are serviced by entrusting an enterprise with such service, items necessary therefor;
8. Other items agreed with the armed forces which require them because the Administrator of the Defense Acquisition Program Administration deems the procurement by military unit is efficient.
(3) Where the Administrator of the Defense Acquisition Program Administration purchases munitions by requesting the Administrator of the Public Procurement Service pursuant to the proviso to Article 25 (2) of the Act, he/she shall decide the matters concerning munitions subject to purchase, and methods of and procedures for purchase in consultation with the Administrator of the Public Procurement Service. In such cases, the Administrator of the Defense Acquisition Program Administration shall hear an opinion of the armed forces which require such munitions.
[This Article Wholly Amended by Presidential Decree No. 22413, Oct. 1, 2010]
 Article 30 (Designation and Cancellation of Standard Items)
(1) Where the Administrator of the Defense Acquisition Program Administration formulates a plan for the standardization of munitions regarding non-weapon systems pursuant to Article 26 (1) of the Act, he/she shall seek opinions of the Minister of National Defense and reflect them in the plan. <Amended by Presidential Decree No. 25685, Nov. 4, 2014>
(2) Where the Administrator of the Defense Acquisition Program Administration intends to designate standard munition items, he/she shall consider the following matters. In such cases, the standard items for non-weapon systems acquired by purchase shall be designated in consideration of the opinions of armed forces, and the standard items for non-weapon systems acquired by research and development shall be designated upon request by the Ministry of National Defense or armed forces: <Amended by Presidential Decree No. 25685, Nov. 4, 2014>
1. Appropriateness of the purchase requirements by armed forces, and necessity of designation of standard articles;
2. Economic efficiency of the relevant munitions;
3. Fulfillment of requirements for support elements of force integration;
4. Degree of utilization in civilian and military fields;
5. Interoperability with the munitions in use.
(3) In any of the following cases, the Administrator of the Defense Acquisition Program Administration shall cancel the designation of standard munition items:
1. Where munitions are replaced by new standard items;
2. Where it is unnecessary to maintain a standard item as it fails to satisfy the military utility and is economically inappropriate;
3. Where it is necessary to replace the munitions with the items, etc. manufactured and distributed among civilians.
(4) Procedures necessary for the designation and cancellation of standard articles pursuant to paragraphs (2) and (3) shall be prescribed by the Administrator of the Defense Acquisition Program Administration.
 Article 31 (Enactment and Amendment of National Defense Standards)
(1) Where the Administrator of the Defense Acquisition Program Administration intends to enact the standards of munitions pursuant to Article 26 (3) of the Act (hereinafter referred to as "national defense standard"), he/she shall target the designated standard items, upon request for enactment by the following organizations: <Amended by Presidential Decree No. 25685, Nov. 4, 2014>
1. The Agency for Defense Development, in cases of research and development items under the supervision of the Agency for Defense Development;
2. The relevant enterprise, in cases of research and development items under the supervision of the enterprise, or items, etc. procured en bloc by the Defense Acquisition Program Administration pursuant to Article 25 of the Act;
3. The Ministry of National Defense or armed forces, in cases of items of non-weapon systems procured by the Ministry of National Defense or armed forces.
(2) For items whose national defense standard is not enacted, but procured by each military unit, the Administrator of the Defense Acquisition Program Administration may have each armed force enact the standards thereof.
(3) Where the effectiveness of the national defense standard has decreased due to changes in and development of the domestic industrial technology that manufactures munitions, or changes in the national defense standard that each armed force requests, the Administrator of the Defense Acquisition Program Administration may amend or abrogate the national defense standard.
(4) Procedures necessary for the enactment, amendment, and abrogation of national defense standards pursuant to paragraphs (1) and (3) shall be prescribed by the Administrator of the Defense Acquisition Program Administration.
 Article 32 (Administration of Form and Shape)
(1) The Administrator of the Defense Acquisition Program Administration shall, pursuant to the following subparagraphs, administer munitions in accordance with their physical or functional characteristics (hereinafter referred to as the "shape") so that the munitions shall fulfill the purpose of their utilities:
1. The discernment of shape so that the munition may satisfy the required level of performance of each armed force and show the utmost efficiency, etc. in operation;
2. The documentation of shape, such as the work, etc. of design drafting for the purposes of concrete embodiment of discerned shape;
3. The confirmation, coordination, and control of discerned details to be modified on the basis of the documented shape;
4. Confirmation as to whether the munition coincides with the discerned shape and the administration of data.
(2) The administration of shape of munitions shall be executed from the time when the method of project promotion regarding the method of acquisition of weapons systems, etc. pursuant to the provisions of Article 17 of the Act is decided until the munitions become obsolete pursuant to the provisions of Article 13 (3) of the Act on the Management of Military Supplies.
(3) The detailed procedures necessary for the administration of shape shall be prescribed by the Administrator of the Defense Acquisition Program Administration.
 Article 33 (Munitions Inventory Information)
(1) Where the Administrator of the Defense Acquisition Program Administration intends to allocate a stock number to munitions pursuant to the provisions of Article 27 (1) of the Act, he/she shall do so by classifying them in accordance with the drawing, price, packing unit, period of storage, and information, etc. on the manufacturer.
(2) Where the Administrator of the Defense Acquisition Program Administration formulates a plan for the administration and utilization of munitions inventory information pursuant to the provisions of Article 27 (2) of the Act, he/she shall hear and reflect the opinion of the Minister of the National Defense.
(3) Where the relevant organization, such as armed forces, agencies under the direct control of the Ministry of National Defense, the Agency for Defense Development, and the Defense Agency for Technology and Quality, needs to correct or supplement munitions inventory information, it shall submit the relevant details to the Administrator of the Defense Acquisition Program Administration. The Administrator of the Defense Acquisition Program Administration shall decide whether to correct or supplement the information and notify the result to the relevant organization.
(4) Where defense materials are exported, the Administrator of the Defense Acquisition Program Administration may conclude an agreement on the exchange of the munitions inventory information that can be supplied to the export partner country.
CHAPTER V ADVANCEMENT OF NATIONAL DEFENSE SCIENCE AND TECHNOLOGY
 Article 34 (Formulation of Policies and Plans for Advancement of National Defense Science and Technology)
(1) The medium and long-term policies on the advancement of national defense science and technology pursuant to Article 30 (1) of the Act (hereinafter referred to as the "policy on the advancement of national defense science and technology") shall be formulated every five years, and matters to be included herein shall be as follows:
1. The medium and long-term development objectives and the basic direction of the policy on the advancement of national defense science and technology;
2. The policy on the national defense science and technology necessary for reforming military capability;
3. Matters regarding the distribution of financial resources and expansion of investment for advancing national defense science and technology;
4. Other important policies necessary for advancing national defense science and technology.
(2) For the purpose of formulating the policy on the advancement of national defense science and technology, the Minister of National Defense may request the Defense Acquisition Program Administration, the Joint Chiefs of Staff, armed forces, the Agency for Defense Development, the Defense Agency for Technology and Quality, etc. to submit necessary materials.
(3) The action plan for advancing national defense science and technology pursuant to Article 30 (1) of the Act shall be formulated every year on the basis of the policy on the advancement of national defense science and technology, and matters to be included herein shall be as follows:
1. Matters regarding plans for securing and schemes for advancing national defense science and technology;
2. Plans for promoting policies on national defense science and technology pursuant to paragraph (1) 2;
3. Matters regarding the promotion plan for the advancement and internationalization of national defense science and technology;
4. Matters regarding plans for the organic supplementation and promotion of development between national science and technology and national defense science and technology;
5. Matters regarding investments in the research and development of national defense science and technology;
6. Matters regarding broadening of the foundations of national defense science and technology, such as the facilities, equipment, etc. for the development of national defense science and technology;
7. Matters regarding the fostering and improving treatment of human resources for national defense science and technology.
(4) The policy, etc. regarding the advancement of national defense science and technology subject to the deliberation of the National Science and Technology Advisory Council pursuant to Article 30 (1) of the Act shall be as follows: <Amended by Presidential Decree No. 20675, Feb. 29, 2008; Presidential Decree No. 24413 & 24474, Mar. 23, 2013; Presidential Decree No. 28211, Jul. 26, 2017; Presidential Decree No. 28799, Apr. 17, 2018>
1. Matters falling under the subparagraphs of paragraph (1);
2. Matters falling under paragraph (3) 1, 4, 6, and 7;
3. Other matters determined by the Minister of National Defense, after consultations with the Minister of Science and ICT.
 Article 35 (Duties, etc. for Administration of Information on National Defense Science and Technology)
(1) For the purposes of systemic, integrated administration of information on national defense science and technology pursuant to Article 31 of the Act, the Administrator of the Defense Acquisition Program Administration shall perform the following duties:
1. Collection and administration of information specified under Article 31 (1) of the Act, and the cataloging thereof;
2. Investigations into the level of domestic and foreign technology, and the analysis of trends in technological development;
3. Establishment of distribution channels for national defense scientific and technological information;
4. Publication and distribution of data regarding national defense scientific and technological information.
(2) Ownership of intellectual property rights (excluding the intellectual property rights of weapons systems and core technology specified in Article 31-2 of the Act) arising from the research and development of national defense science and technology shall be governed by Article 18 of the Act on the Agency for Defense Development and Article 20 of the Regulations on the Management, etc. of National Research and Development Projects. <Amended by Presidential Decree No. 22328, Aug. 11, 2010; Presidential Decree No. 23036, Jul. 19, 2011; Presidential Decree No. 26538, Sep. 22, 2015>
 Article 36 (Transfer of National Defense Science and Technology)
(1) A person, who intends to receive the transfer of national defense science and technology pursuant to Article 31 (3) of the Act (hereinafter referred to as "transfer of technology"), shall submit an application for the transfer of technology to the armed force or government-invested research institute that holds such technology (hereinafter referred to as "technology-holding organization"), along with the following documents:
1. Purposes of transfer of technology;
2. Details of the technology intended for transfer;
3. Plans for utilization of the technology intended for transfer.
(2) A technology-holding organization shall review the following matters within one month from the date of receiving an application for the transfer of technology, and then request the Administrator of the Defense Acquisition Program Administration to approve the transfer of technology, and the Administrator of the Defense Acquisition Program Administration shall determine whether to grant approval within two months from the date he/she receives the request and shall notify the technology-holding organization of such determination: <Amended by Presidential Decree No. 21255, Jan. 7, 2009>
1. The extent and details of the transfer of technology;
2. Whether the applicant for the transfer of technology is eligible;
3. The necessity of the transfer of technology;
4. The royalties for technology;
5. The procedures for the transfer of technology and points at issue;
6. Matters that the organizations, etc. that receive the transfer of technology shall abide by at the time of the transfer of technology;
7. Other matters required by the Administrator of the Defense Acquisition Program Administration.
(3) The technology-holding organization shall transfer technology in accordance with the contract for the transfer of technology with the person who intends to receive the transfer of technology. In such cases, matters to be included in the contract for the transfer of technology shall be determined by the Administrator of the Defense Acquisition Program Administration.
 Article 36-2 (Management, etc. of Intellectual Property Rights of Weapons Systems and Core Technology)
(1) The Administrator of the Defense Acquisition Program Administration shall perform the following duties to systematically manage intellectual property rights specified in Article 31-2 (1) of the Act (hereinafter referred to as "intellectual property rights"):
1. Listing of intellectual property rights;
2. Establishment of utilization systems of intellectual property rights;
3. Publication and distribution of data related to intellectual property rights.
(2) Where intellectual property rights are jointly owned pursuant to Article 31-2 (2) of the Act, the share ratio of joint ownership shall be determined by the agreement among the State, the Agency for Defense Development, or agencies specified under Article 31-2 (2) of the Act, in consideration of the degree of burden, level of contribution, etc. of research and development costs of weapons systems and core technology.
(3) Where intellectual property rights are jointly owned pursuant to Article 31-2 (2) of the Act, each joint owner may transfer his/her share or establish the right of pledge aimed at his/her share, only with consent from other joint owners.
[This Article Added by Presidential Decree No. 26538, Sep. 22, 2015]
 Article 36-3 (Licenses to Use Intellectual Property Rights)
(1) Where a specialized research institute, defense contractor, or general enterprise specified in Article 31-2 (3) of the Act intends to obtain a license to use intellectual property rights pursuant to the same paragraph, it shall submit an application for the license to the Administrator of the Defense Acquisition Program Administration or the Agency for Defense Development, by preparing documents in which the following matters are included:
1. Purposes of the licenses of intellectual property rights;
2. Details of the licenses;
3. Plans for using the licenses of intellectual property rights.
(2) Where any person intends to obtain a license to use intellectual property rights owned jointly pursuant to Article 31-2 (2) of the Act, he/she shall submit an application for the license to the Administrator of the Defense Acquisition Program Administration, the Agency for Defense Development, or an agency falling under Article 31-2 (2) of the Act, by preparing documents in which those specified under paragraph (1) are included.
(3) The Administrator of the Defense Acquisition Program Administration, the Agency for Defense Development, or an agency falling under Article 31-2 (2) of the Act (hereafter in this Article, referred to as the “Administrator of the Defense Acquisition Program Administration, etc.”) shall examine the following matters within two months from the date it is requested to grant a license pursuant to paragraph (1) or (2), determine whether to grant a license, and immediately notify an applicant for the license pursuant to paragraph (1) and (2) thereof:
1. Whether a person who submits an application for the license is eligible;
2. Scope and details of the licenses to use intellectual property rights;
3. Technology royalties for the licenses.
(4) A person, who obtains a license pursuant to Article 31-2 (3) and (4) of the Act, shall use the intellectual property rights pursuant to the agreement with the Administrator of the Defense Acquisition Program Administration, etc.
(5) Where the Agency for Defense Development or an agency falling under Article 31-2 (2) of the Act enters into an agreement pursuant to paragraph (4), it shall annually submit the terms and conditions of the agreement to the Administrator of the Defense Acquisition Program Administration.
[This Article Added by Presidential Decree No. 26538, Sep. 22, 2015]
 Article 37 (Operation, Supervision, etc. of Defense Agency for Technology and Quality)
(1) Projects implemented by the Defense Agency for Technology and Quality in connection with the administration, etc. of national defense science and technology pursuant to Article 32 (6) 9 of the Act shall be the following affairs entrusted by the Administrator of the Defense Acquisition Program Administration: <Amended by Presidential Decree No. 27344, Jul. 19, 2016; Presidential Decree No. 28904, May 28, 2018>
1. Affairs concerning investigation and analysis related to prior research;
2. Affairs concerning technical assistance related to offset agreements, improvement of performance, transfer of technology and permission for export, etc.
(2) Contributions by the Government to the Defense Agency for Technology and Quality pursuant to Article 32 (7) of the Act shall be made annually by the Administrator of the Defense Acquisition Program Administration paying funds to the budget.
(3) The President of the Defense Agency for Technology and Quality shall formulate an annual business plan and budget plan and submit them to the Administrator of the Defense Acquisition Program Administration by no later than ten months prior to the commencement of the relevant business year, and obtain approval from the Administrator. The same shall apply where an approved business plan and the budget are modified.
(4) The President of the Defense Agency for Technology and Quality shall report the quarterly results of the execution of business plans to the Administrator of the Defense Acquisition Program Administration within one month from the end of each quarter.
(5) The President of the Defense Agency for Technology and Quality shall have the settlements of each business year audited by a certified public accountant designated by the Administrator of the Defense Acquisition Program Administration, and submit the results thereof to the Administrator of the Defense Acquisition Program Administration by the end of March of the following year.
(6) In cases falling under paragraph (5), details of settlement relating to national secrets and matters directly related thereto shall be excluded from the subject matter of audits by the certified public accountant.
 Article 37-2 (Transfer, Lease, etc. of State-Owned Property)
(1) Permission to use, lease, or transfer munitions or State-owned property under Article 32-2 of the Act without compensation shall be governed by a contract by and between the head of a management agency under Article 6 of the Act on the Management of Military Supplies (hereinafter referred to as "management agency") or the head of a central government agency under Article 6 of the National Finance Act, which manages the relevant State-owned property, and the Defense Agency for Technology and Quality.
(2) Where the Defense Agency for Technology and Quality intends to borrow or acquire munitions by transfer without compensation pursuant to paragraph (1), it shall request a management agency to lend or transfer munitions without compensation, specifically specifying the following:
1. Reasons for borrowing or acquisition by transfer;
2. Classification of lease or transfer;
3. Detailed statement of munitions;
4. Timing, period, and other conditions of lease or transfer.
(3) Except as otherwise expressly provided for in paragraphs (1) and (2), the Act on the Management of Military Supplies or the State Property Act shall apply mutatis mutandis to permission to use, lease, or transfer of munitions or State-owned property without compensation.
[This Article Added by Presidential Decree No. 26997, Feb. 29, 2016]
CHAPTER VI FOSTERING OF DEFENSE INDUSTRY
 Article 38 (Formulation, etc. of Basic Plan for Fostering Defense Industry)
(1) A basic plan for fostering the defense industry pursuant to the provisions of Article 33 of the Act shall be formulated every five years, and may be corrected and supplemented on an annual basis where necessary.
(2) Where the Administrator of the Defense Acquisition Program Administration intends to formulate a basic plan for fostering the defense industry pursuant to the provisions of paragraph (1), he/she shall consult with the Minister of Trade, Industry and Energy regarding the matters falling under Article 33 (2) 2, 4, 5, and 7 of the Act. <Amended by Presidential Decree No. 20675, Feb. 29, 2008; Presidential Decree No. 24413, Mar. 23, 2013>
 Article 39 (Designation of Defense Materials)
(1) Materials that may be designated as defense materials, from among those that are not classified as weapons systems, pursuant to the proviso to Article 34 (1) of the Act shall be as follows:
1. The materials involved in the process of research and development for military purposes, which are expected to be selected as weapons systems after the completion of research and development;
2. Other materials that satisfy the standards prescribed by Ministerial Decree of National Defense.
(2) Materials falling under the subparagraphs of Article 35 (2) of the Act shall be the major defense materials pursuant to Article 34 (2) of the Act, and other defense materials shall be general defense materials.
(3) Anyone who manufactures, or intends to manufacture munitions may request the Administrator of the Defense Acquisition Program Administration to designate such munitions as defense materials, as prescribed by Ministerial Decree of National Defense. In such cases, the Administrator of the Defense Acquisition Program Administration shall determine, within three months, as to whether it is appropriate to designate those munitions as defense materials and notify the applicant thereof.
(4) Where the Administrator of the Defense Acquisition Program Administration has designated defense materials pursuant to paragraph (3) of this Article or Article 34 (1) of the Act, he/she shall notify the Minister of Trade, Industry and Energy thereof. <Amended by Presidential Decree No. 20675, Feb. 29, 2008; Presidential Decree No. 24413, Mar. 23, 2013>
 Article 40 (Scope, etc. of Designation of Defense Materials)
(1) The Administrator of the Defense Acquisition Program Administration shall designate defense materials by unit of a finished product or a main component (referring to a component comprised in one object connected by at least two combined bodies): Provided, That where the smooth procurement of munitions that involve a critical technology is necessary to enhance the efficiency of the operation of defense materials and weapons systems, defense materials may be designated by unit of a combined body (referring to a component assembled by at least two parts connected each other) or parts (referring to a single part as a minimal unit that cannot be further disassembled). <Amended by Presidential Decree No. 22413, Oct. 1, 2010; Presidential Decree No. 25003, Dec. 17, 2013>
(2) Parts used for defense materials and the following equipment required for the operation of defense materials shall be deemed designated by being included in such defense materials: Provided, That the foregoing shall not apply where the relevant parts and equipment are not manufactured or serviced by the relevant defense contractor, or are used for commodities which are not defense materials: <Amended by Presidential Decree No. 21596, Jul. 1, 2009; Presidential Decree No. 22413, Oct. 1, 2010; Presidential Decree No. 27618, Nov. 29, 2016>
1. Test and measuring equipment;
2. Inspection equipment;
3. Rectification equipment.
(3) When the Administrator of the Defense Acquisition Program Administration intends to designate commodities introduced from a foreign country as defense materials, he/she shall do so only where the relevant commodities are maintained in the Republic of Korea. <Added by Presidential Decree No. 27618, Nov. 29, 2016>
(4) The Administrator of the Defense Acquisition Program Administration may choose not to designate commodities as defense materials, for which it is deemed that at least two enterprises are able to manufacture them, in consideration of domestic technological standards. <Amended by Presidential Decree No. 27618, Nov. 29, 2016>
 Article 41 (Designation of Defense Contractors)
(1) Anyone who intends to be designated as a defense contractor pursuant to Article 35 (1) of the Act shall apply to the Minister of Trade, Industry and Energy along with the following documents: Provided, That where a defense contractor who has been already designated intends to be designated to engage in the manufacture of another defense materials, he/she may apply only with the documents falling under subparagraphs 1 and 4 through 7: <Amended by Presidential Decree No. 19507, Jun. 12, 2006; Presidential Decree No. 20675, Feb. 29, 2008; Presidential Decree No. 24413, Mar. 23, 2013>
1. An application form;
2. The articles of incorporation (limited to corporations);
3. A balance sheet and income statement;
4. Details and a description of the capacity of manufacturing facilities and the main facilities incidental thereto;
5. Results of use of raw materials and plans for procurement;
6. Kinds and specifications of products, and the results and plans for the manufacture and sale thereof;
7. A business plan;
8. Plans for upskilling engineers and technicians and a description of technical capability;
9. Plans for safety measures and explanation thereof.
(2) Where the Minister of Trade, Industry and Energy has received an application referred to in Article 31-2 (4) of the Act paragraph (1), he/she shall inspect the applicant’s manufacturing facilities, etc. in accordance with the standards for facilities prescribed in Article 42, and request the Administrator of the Defense Acquisition Program Administration to inspect security requirements referred to in Article 31-2 (4) of the Act Article 44. <Amended by Presidential Decree No. 20675, Feb. 29, 2008; Presidential Decree No. 24413, Mar. 23, 2013>
(3) Where the Minister of Trade, Industry and Energy has received an application for designation of defense contractors referred to in Article 31-2 (4) of the Act paragraph (2), he/she shall decide whether to designate the applicant as a defense contractor within six months and notify the applicant and the Administrator of the Defense Acquisition Program Administration of such decision and deliver the certificate of designation to the applicant if he/she decides to designate. <Amended by Presidential Decree No. 20675, Feb. 29, 2008; Presidential Decree No. 24413, Mar. 23, 2013>
(4) The Minister of Trade, Industry and Energy in receipt of an application for the designation referred to in Article 31-2 (4) of the Act paragraph (1) shall verify a certificate of corporation register (limited to corporations) through joint use of administrative information referred to in Article 36 (1) of the Electronic Government Act. <Amended by Presidential Decree No. 19507, Jun. 12, 2006; Presidential Decree No. 22151, May 4, 2010; Presidential Decree No. 22467, Nov 2, 2010; Presidential Decree No. 24413, Mar. 23, 2013>
 Article 42 (Standards for Facilities)
(1) The standards for facilities of defense contractors pursuant to the provisions of Article 35 (1) of the Act shall be based on standards prescribed by the Minister of Trade, Industry and Energy regarding the following personnel and material facilities: <Amended by Presidential Decree No. 20675, Feb. 29, 2008; Presidential Decree No. 24413, Mar. 23, 2013>
1. The general facilities and special facilities necessary for production of defense materials;
2. The facilities to inspect the quality of defense materials;
3. The technical manpower necessary for the manufacture of defense materials;
4. Other facilities recognized as necessary by the Minister of Trade, Industry and Energy.
(2) Where the Minister of Trade, Industry and Energy prescribes the standards for facilities pursuant to the provisions of paragraph (1), he/she shall consult with the Administrator of the Defense Acquisition Program Administration. <Amended by Presidential Decree No. 20675, Feb. 29, 2008; Presidential Decree No. 24413, Mar. 23, 2013>
 Article 43 (Modification of Standards for Facilities)
(1) Where idle or surplus manufacturing facilities come into existence and are recognized as placing an undue burden on management, the defense contractor may apply for the modification of standards for facilities referred to in Article 42 (1) to the Minister of Trade, Industry and Energy along with the relevant documentary evidence. <Amended by Presidential Decree No. 20675, Feb. 29, 2008; Presidential Decree No. 24413, Mar. 23, 2013>
(2) Where the Minister of Trade, Industry and Energy intends to modify standards for facilities in response to the request referred to in paragraph (1), he/she shall consult with the Administrator of the Defense Acquisition Program Administration. <Amended by Presidential Decree No. 20675, Feb. 29, 2008; Presidential Decree No. 24413, Mar. 23, 2013>
 Article 44 (Requirements for Security, Inspection, etc.)
(1) The requirements for security referred to in Article 35 (1) of the Act shall be as listed in the following subparagraphs:
1. Measures for security regarding areas and facilities where defense facilities are fully protected;
2. Measures for security regarding personnel employed by defense contractors;
3. Measures for security regarding the treatment, keeping, and management of secret documents;
4. Measures for protection of defense materials and raw materials;
5. Measures for protection of equipment and facilities;
6. Measures for security regarding communications facilities and method of communications;
7. Measures for procedures for processing all kinds of data and data arising from data processing;
8. Means of organic communications with relevant intellectual agencies in preparation for security accidents;
9. Other measures for security recognized by the Administrator of the Defense Acquisition Program Administration as necessary for the maintenance of security.
(2) The Administrator of the Defense Acquisition Program Administration shall request to the Minister of National Defense to investigate and verify the requirements for security listed in the following subparagraphs relating to the designation, etc. of defense contractors, and the Minister of National Defense shall notify the Administrator of the Defense Acquisition Program Administration of the result of investigation and verification:
1. Inspection of requirements for security following the designation of defense contractors pursuant to the provisions of Article 41 (2) and the commissioning of specialized research institutes pursuant to the provisions of Article 46 (1);
2. Verification of conditions necessary for the revocation of a designation as defense contractors pursuant to the provisions of Article 48 (1) 2 of the Act and the termination of commission of specialized research institutes pursuant to the provisions of Article 63 (1) 1.
 Article 45 (Sale, Acquisition, etc. of Defense Contractors)
(1) The standards for changes in substance in the governance of management of defense contractor pursuant to the provisions of Article 35 (3) of the Act shall be based on the instances falling under any of the following subparagraphs: <Amended by Act No. 22510, Dec. 7, 2010>
1. When the stocks, etc. (including equities or all other property rights; hereinafter the same shall apply) of a defense contractor are intended to be disposed of or taken over en bloc by means of sale and acquisition, exchange or merger between enterprises, execution of security rights, receipt of payment in kind, or by other means;
2. When a new corporation is established by spinning off the manufacturing sector of a defense contractor, or such manufacturing sector is intended to be disposed of or acquired en bloc by means of sale and acquisition, exchange or merger between enterprises, execution of security rights, receipt of payment in kind, or by other means;
3. When the same person intends to possess 50/100 or more of the stocks, etc. of a defense contractor independently or jointly with a person (hereinafter referred to as a "person related to the same person") falling under any of the following items (including when the same person possesses not more than 50/100 but becomes a major stockholder, and is able to exercise controlling influence over the selection of executives or management of the defense contractor directly or through a person related to the same person):
(a) Spouse, blood relatives as far as third cousins, and relatives as far as cousins of in-laws;
(b) A company where the same person exercises controlling influence over major decision making or conduct of the business, such as the organizational change of the relevant company, investment in the new business, etc. directly or through a person falling under item (a) or (c);
(c) A company where the same person appoints or dismisses the representative director of the relevant company, or appoints or designates 50/100 or more of the directors by contract or agreement with other major stockholders;
4. When a defense contractor is intended to be managed by means of acquisition by transfer, hire or entrustment of management of all or part of the business.
(2) Anyone who intends to obtain approval from the Minister of Trade, Industry and Energy in acquiring the controlling rights over a defense contractor pursuant to the provisions of Article 35 (3) of the Act shall submit an application for approval prescribed by Ministerial Decree of National Defense along with the documents falling under Article 41 (1) 2 and 3 and the documentary evidence regarding acquisition of stocks, etc. of a defense contractor to the Minister of Trade, Industry and Energy: Provided, That where a person intends to manage a defense contractor with modifying the manufacturing facilities or requirements for security after the acquisition of the defense contractor, he/she shall also submit the documents falling under Article 41 (1) 4 through 9. <Amended by Presidential Decree No. 20675, Feb. 29, 2008; Presidential Decree No. 24413, Mar. 23, 2013>
(3) Where the Minister of Trade, Industry and Energy has granted approval pursuant to the provisions of paragraph (2), he/she shall notify the applicant and the Administrator of the Defense Acquisition Program Administration of the fact. When the name, representative, address, etc. of the defense contractor are modified following such approval, he/she shall renew the certificate of designation of defense contractors. <Amended by Presidential Decree No. 20675, Feb. 29, 2008; Presidential Decree No. 24413, Mar. 23, 2013>
 Article 46 (Commissioning of Specialized Research Institutes)
(1) The Administrator of the Defense Acquisition Program Administration shall commission a specialized research institute, from among the organizations satisfying the requirements for security prescribed in Article 44 (1), in consideration of the research facilities and level of technology: Provided, That in cases of commissioning of specialized research institutes to implement projects for research and development other than those involving military secrets, the requirements for security pursuant to the provisions of Article 44 (1) may not apply.
(2) Where the Administrator of the Defense Acquisition Program Administration intends to commission a specialized research institute pursuant to the provisions of paragraph (1), he/she may cause the relevant organization to submit the documents in the following subparagraphs. In such cases, the provisions of Article 41 (4) shall apply mutatis mutandis to the commission procedure of specialized research institutes: <Amended by Presidential Decree No. 19507, Jun. 12, 2006>
1. The articles of incorporation (limited to corporations);
2. Details of research facilities and main annexed facilities, and a description of capacity;
3. A business plan and business outcomes;
4. A description of technical capacity.
(3) Where the Administrator of the Defense Acquisition Program Administration intends to commission a research institute operated by the Government or a local government, or a government-funded research institute as a specialized research institute, he/she shall consult with the supervising organization in advance.
(4) Where the Administrator of the Defense Acquisition Program Administration has commissioned a specialized research institute, he/she shall deliver a certificate of commission of specialized research institute to the specialized research institute. In such cases, he/she shall notify the supervising organization in charge of the fact where he/she has commissioned pursuant to the provisions of paragraph (3).
 Article 47 (Business Coordination System, etc.)
(1) The Administrator of the Defense Acquisition Program Administration shall, when he/she recommends agreement pursuant to the latter part of Article 36 (1) of the Act, present a mutual agreement proposal in the form prescribed by Ministerial Decree of National Defense.
(2) A person who intends to apply for business coordination pursuant to Article 36 (1) 2 of the Act shall present an application to the Administrator of the Defense Acquisition Program Administration along with documents prescribed by Ministerial Decree of National Defense attached thereto.
[This Article Wholly Amended by Presidential Decree No. 21596, Jul. 1, 2009]
 Article 48 (Methods, etc. of Investigation of Facts)
(1) Where the Administrator of the Defense Acquisition Program Administration conducts investigation of facts for business coordination pursuant to Article 36 (4) of the Act, he/she shall serve the relevant large enterprises, small and medium enterprises, or defense contractors (hereinafter referred to as "person subject to investigation") with documents stating the following matters at least ten days prior to the commencement of such investigation: Provided, That in cases where he/she conducts such investigation by obtaining voluntary cooperation of the person subject to investigation, he/she may present documents at the time of commencement of the investigation or orally notify objects of the investigation, etc.:
1. Objects of the investigation;
2. Period and place of the investigation;
3. Name and position of the investigator;
4. Scope and details of the investigation;
5. Materials to be presented;
6. Other necessary matters in connection with the investigation.
(2) The Administrator of the Defense Acquisition Program Administration shall not conduct investigation of facts under paragraph (1) before sunrise or after sunset: Provided, That this shall not apply in cases of falling under any of the following subparagraphs:
1. Where the person subject to investigation has agreed thereto;
2. Where he/she conducts the investigation during the business hours of the relevant office or place of business, etc.;
3. Where it is impossible to attain the objects of the investigation when he/she conducts such investigation from sunrise until sunset.
(3) A person who conducts investigation of facts pursuant to paragraphs (1) and (2) shall present a certificate indicating his/her powers to the person subject to investigation.
(4) Where a person conducts investigation of facts pursuant to paragraph (1), when he/she conducts such investigation by having access to an office or a place of business of the person subject to investigation, he/she shall have the relevant persons be present at the relevant office or place of business, and in cases where he/she listens to a statement of the relevant persons in the process of the investigation, he/she shall prepare the details thereof on record.
(5) The Administrator of the Defense Acquisition Program Administration shall notify a person subject to investigation of the result thereof within seven days from the date when the result of the investigation has been confirmed.
(6) When the Administrator of the Defense Acquisition Program Administration conducts investigation of facts under paragraph (1), he/she shall include all the following persons:
1. A certified public accountant;
2. A person who has qualifications for a lawyer;
3. A specialist at a specialized research institution.
[This Article Wholly Amended by Presidential Decree No. 21596, Jul. 1, 2009]
 Article 49 (Methods of Public Announcement of Execution, etc.)
(1) Deleted. <by Presidential Decree No. 21596, Jul. 1, 2009>
(2) Where the Administrator of the Defense Acquisition Program Administration publicly announces pursuant to Article 36 (5) of the Act, he/she shall publish in a nationwide daily newspaper at least twice, and notify the relevant large enterprises, defense contractors, etc. of the details thereof in writing. <Amended by Presidential Decree No. 21596, Jul. 1, 2009>
(3) Where the Administrator of the Defense Acquisition Program Administration orders the implementation of recommended matters to the large enterprises or defense contractors pursuant to the provisions of Article 36 (5) of the Act, he/she shall notify the large enterprises or defense contractors of the details in writing and verify the status of implementation.
(4) When the Administrator of the Defense Acquisition Program Administration has withdrawn the whole or part of the details of coordination pursuant to Article 36 (7) of the Act, he/she shall notify the relevant large enterprises or defense contractors of the details thereof in writing and announce them publicly. <Added by Presidential Decree No. 21596, Jul. 1, 2009>
(5) When the Administrator of the Defense Acquisition Program Administration has recommended takeover, commencement, or expansion of a business or temporary suspension of investment pursuant to Article 36 (8) of the Act, he/she shall notify the relevant large enterprises or defense contractors of the details thereof in writing. <Added by Presidential Decree No. 21596, Jul. 1, 2009>
 Article 50 (Protection and Fostering of Defense Contractors)
(1) The Government shall preferentially purchase defense materials manufactured by defense contractors.
(2) The Administrator of the Defense Acquisition Program Administration shall notify the relevant defense contractors annually of the quantity of defense materials planned for manufacturing.
(3) Where the defense contractor intends to manufacture the annual quantity before the procurement contract of the pertinent year is concluded from among the planned manufacturing quantity notified pursuant to the provisions of paragraph (2), he/she shall obtain approval therefor from the Administrator of the Defense Acquisition Program Administration.
(4) Where the Administrator of the Defense Acquisition Program Administration intends to conclude a long-term contract pursuant to Article 60 (1), he/she shall notify the defense contractor concerned of quantities of defense materials planned for manufacturing by year and such defense contractor may secure raw materials and parts within budget of the relevant year by obtaining approval from the Administrator of the Defense Acquisition Program Administration prior to the conclusion of a procurement contract. <Added by Presidential Decree No. 21255, Jan. 7, 2009>
(5) The defense contractor may request the Administrator of the Defense Acquisition Program Administration to grant a quality certification of the materials manufactured pursuant to paragraph (3) and raw materials and parts secured pursuant to paragraph (4), and the Administrator of the Defense Acquisition Program Administration shall comply therewith, except in extenuating circumstances. <Amended by Presidential Decree No. 21255, Jan. 7, 2009>
(6) Where there are materials manufactured pursuant to the provisions of paragraph (3) which are difficult to keep or are prone to safety accidents, etc., the defense contractor may deliver or keep the materials in the place determined by the relevant Chief of Staff after consultation with the armed force where such materials are to be delivered.
 Article 51 (Loans)
(1) "Materials as prescribed by Presidential Decree" in Article 38 (1) 4 of the Act means materials not designated as defense materials pursuant to Article 34 of the Act and fall under any of the following subparagraphs: <Added by Presidential Decree No. 21596, Jul. 1, 2009>
1. Weapons systems;
2. Strategic materials subject to permission for export of the Administrator of the Defense Acquisition Program Administration, from among the strategic materials designated and publicly announced pursuant to Article 19 of the Foreign Trade Act;
3. Other materials designated and publicly announced by the Administrator of the Defense Acquisition Program Administration for the promotion of investment in the defense industry and expansion of its export markets.
(2) Where an enterprise intends to take out a loan pursuant to Article 38 of the Act, it shall apply for a loan to a financial institute handling the relevant fund, after obtaining a recommendation of loaning from the Administrator of the Defense Acquisition Program Administration. <Amended by Presidential Decree No. 20675, Feb. 29, 2008; Presidential Decree No. 21596, Jul. 1, 2009>
(3) Interest determined by the Administrator of the Defense Acquisition Program Administration pursuant to the main sentence of Article 38 (1) of the Act and detailed matters concerning methods of and procedures for the recommendation of loaning under paragraph (2) shall be determined and publicly announced by the Administrator of the Defense Acquisition Program Administration. <Amended by Presidential Decree No. 21596, Jul. 1, 2009>
 Article 52 (Subsidization, etc.)
(1) Expenses that may be subsidized to foster the defense industry pursuant to Article 39 (1) 4 of the Act shall be as follows:
1. Expenses incurred in transferring defense facilities in accordance with orders under Article 49 (1) of the Act;
2. Interest on funds required for reserving raw materials pursuant to Article 55 of the Act;
3. Maintenance expenses for exclusive-use equipment kept idle due to the suspension of procurement of defense materials by the Government or marked decreases in the placement of order, and labor costs for employees;
4. Expenses for restoration of destroyed or lost defense facilities or defense materials or purchase of new ones due to natural disaster or other accidents;
5. Expenses for removal or scrapping of the facilities, machinery, and tools used exclusively for the manufacture of defense materials, which have become idle due to a restructuring plan of the Government for the defense industry.
(2) The Administrator of the Defense Acquisition Program Administration shall determine the standards, etc. for subsidization pursuant to Article 39 (1) of the Act and other necessary matters after consultation with the Minister of Trade, Industry and Energy. <Amended by Presidential Decree No. 21214, Dec. 31, 2008; Presidential Decree No. 24413, Mar. 23, 2013>
(3) Those who intend to be subsidized shall apply to the Administrator of the Defense Acquisition Program Administration along with the following documents:
1. An application form;
2. A business plan;
3. Details of required funds.
(4) Where substantial profits accrue to by a defense contractor, a general enterprise, or a specialized research institute due to their subsidies, the Administrator of the Defense Acquisition Program Administration, in granting subsidies, shall attach conditions that the amount equivalent to all or part of the subsidy should be refunded to the State. <Amended by Presidential Decree No. 27344, Jul. 19, 2016>
 Article 53 (Transfer, etc. of Assets by Subsidies)
(1) Anyone who intends to receive approval for disposal of assets acquired with subsidies or whose utility has been increased pursuant to the provisions of Article 39 (2) of the Act shall apply to the Administrator of the Defense Acquisition Program Administration, along with the following documents:
1. An application form;
2. A statement of grounds.
(2) Where the Administrator of the Defense Acquisition Program Administration has received an application for approval of disposal pursuant to the provisions of paragraph (1), he/she shall decide whether to approve the same within two months after consultation with the Minister of Trade, Industry and Energy, and notify the applicant and the Minister of Trade, Industry and Energy of the result. <Amended by Presidential Decree No. 20675, Feb. 29, 2008; Presidential Decree No. 24413, Mar. 23, 2013>
 Article 54 (Payment of Bounty to Technical Human Resources, etc.)
(1) Technical human resources referred to in Article 40 (1) of the Act shall be engaged in research and development, the localization of parts, etc., and recognized by the Minister of National Defense and the Administrator of the Defense Acquisition Program Administration as core officials of the Agency for Defense Development, the Defense Agency for Technology and Quality, defense contractors, specialized research institutes, military repair units, or military procurement units. <Amended by Presidential Decree No. 25685, Nov. 4, 2014>
(2) Matters necessary for the composition, operation, etc. of a committee for the standards, procedures, and examination for granting bounties to human resources of technology and research and development pursuant to Article 40 (1) of the Act shall be prescribed by the Administrator of the Defense Acquisition Program Administration. In such cases, the Administrator of the Defense Acquisition Program Administration shall hear and reflect the opinion of the Minister of National Defense. <Amended by Presidential Decree No. 25685, Nov. 4, 2014>
(3) Where the Administrator of the Defense Acquisition Program Administration determines securing financial resources and the standards for granting bounties pursuant to paragraph (2), he/she shall consult with the Minister of Strategy and Finance. <Newly Amended by Presidential Decree No. 25685, Nov. 4, 2014>
 Article 55 (Assistance to Defense Industry)
Where a defense contractor or a specialized research institute intends to receive technical assistance or manufacturing assistance pursuant to Article 41 of the Act, it shall submit an application for such assistance including the matters in the following subparagraphs to the Administrator of the Defense Acquisition Program Administration, the Chief of Staff of each armed force, the President of the Agency for Defense Development, the President of the Defense Agency for Technology and Quality, or the head of the military repair units:
1. Terms and period of assistance;
2. Terms and conditions for the share of expenses.
 Article 56 (Establishment, etc. of Associations, etc.)
(1) The association or organization pursuant to Article 42 (1) of the Act shall have not less than 20 members and have the object of fulfilling the duties in the following subparagraphs:
1. Duties of survey and research regarding the defense industry;
2. Duties to improve the competitiveness of the defense industry;
3. Duties to promote exports by the defense industry;
4. Other duties recognized as necessary by the Administrator of the Defense Acquisition Program Administration.
(2) The association or organization established pursuant to paragraph (1) shall obtain approval from the Administrator of the Defense Acquisition Program Administration by drafting its articles of incorporation including the matters in the following subparagraphs. The same shall apply when amending the articles of incorporation:
1. Purpose and title;
2. Address of its main office;
3. Matters regarding duties and the execution thereof;
4. Matters regarding executives;
5. Matters regarding the qualifications for membership;
6. Matters regarding the amendment of the articles of incorporation;
7. Other matters necessary for the operation of the association or organization.
(3) Where necessary for guidance and supervision of the association or organization established pursuant to paragraph (1), the Administrator of the Defense Acquisition Program Administration shall cause the matters regarding its duties to be reported or request the submission, etc. of information.
 Article 57 (Designation, etc. of Guarantee Organization)
(1) Anyone who intends to be designated as a guarantee organization pursuant to Article 43 (1) of the Act shall satisfy the requirements in the following subparagraphs:
1. Paid-in capital (an endowment in the case of a nonprofit corporation) shall be five hundred million won or more;
2. To have sufficient human resources and material facilities for conducting guarantee businesses in the each of subparagraphs of Article 43 (2) of the Act;
3. To secure funds (hereinafter referred to as "guarantee funds") necessary for conducting guarantee business for defense contractors, etc.
(2) Anyone who intends to be designated pursuant to paragraph (1) shall apply to the Administrator of the Defense Acquisition Program Administration after preparing the documents listed in the following subparagraphs. In such cases, the Administrator of the Defense Acquisition Program Administration shall verify a certificate of corporation register through joint use of administrative information referred to in Article 36 (1) of the Electronic Government Act: <Amended by Presidential Decree No. 20120, Jun. 28, 2007; Presidential Decree No. 22151, May 4, 2010; Presidential Decree No. 22467, Nov 2, 2010>
1. An application for designation;
2. Deleted; <by Presidential Decree No. 20120, Jun. 28, 2007>
3. Documents that can verify the qualifications in the subparagraphs of paragraph (1);
4. Documents regarding guarantee regulations, such as the scope of guarantees, the terms of guarantee contracts, the limits on guarantees, and guarantee fees.
(3) Where the Administrator of the Defense Acquisition Program Administration has designated a guarantee organization pursuant to paragraph (1), he/she shall publicly announce it.
 Article 58 (Measures, etc. for Assistance with Exports)
(1) The Administrator of the Defense Acquisition Program Administration may take the following measures, or request the heads of relevant agencies, etc. to take necessary measures, for the promotion of the export of defense materials, etc. (referring to defense materials, etc. referred to in Article 38 (1) 4 of the Act; hereinafter the same shall apply) and national defense science and technology pursuant to Article 44 (1) of the Act: <Amended by Presidential Decree No. 21596, Jul. 1, 2009; Presidential Decree No. 22413, Oct. 1, 2010; Presidential Decree No. 28339, Sep. 22, 2017>
1. Tax deductions or exemptions for defense materials, etc. to be exported;
2. Counter-purchase and technology transfer which a purchasing country requests as a consideration following the exportation of defense materials, etc.;
3. Investigations into the grievances suffered by defense contractors and manufacturers of defense materials, etc. which have advanced into foreign markets and assistance in the resolution thereof;
4. Cooperation in civilian trade and industries;
5. Education and training, and assistance in public relations;
6. Other measures the Administrator of the Defense Acquisition Program Administration deems necessary for promoting the exportation of defense materials, etc. and defense science and technology.
(2) The Administrator of the Defense Acquisition Program Administration may provide assistance in the following matters for the purposes of promoting export of defense materials, etc. pursuant to Article 44 (2) of the Act: <Amended by Presidential Decree No. 21596, Jul. 1, 2009; Presidential Decree No. 28339, Sep. 22, 2017>
1. Subsidization of expenses incurred in opening, participating in, etc. local or overseas exhibitions or conferences for the purposes of promoting export;
2. Subsidization of education expenses for upskilling human resources specialized in export;
3. Assistance in visits to purchasing countries for export negotiations, and invitation calls of important persons from purchasing countries;
4. Assistance in surveys and analysis of overseas markets, discovery of prospective export items and technology development to strengthen the export competitiveness of defense contractors, etc.;
5. Other assistance recognized by the Administrator of the Defense Acquisition Program Administration as necessary for promoting export.
(3) Where any person who intends to export defense materials, etc. pursuant to Article 44 (3) 1 of the Act intends to receive management of affairs related to subsequent support of munitions, he/she shall present a comprehensive management plan for subsequent support of munitions for export, in which all the following matters are stated, to the Administrator of the Defense Acquisition Program Administration: <Added by Presidential Decree No. 21596, Jul. 1, 2009; Presidential Decree No. 22413, Oct. 1, 2010>
1. The outline and scope of export;
2. The scope of subsequent support of munitions requested by the government of a purchasing country;
3. A plan for subsequent support of munitions of an exporting enterprise (including a plan in preparation for the discontinuance of parts);
4. Subjects of support by the government or the relevant agency, timing for providing support, equipment required for support, or a repayment method of such consideration, etc.
(4) Where a foreign government and any person who exports defense materials, etc. requests technical support for remodeling and development of defense materials, etc. for export pursuant to Article 44 (3) 2 of the Act, he/she or it may request a technology-holding organization to support technology together with an application for technology transfer. <Amended by Presidential Decree No. 22413, Oct. 1, 2010>
(5) If necessary for measures taken under any of the subparagraphs of Article 44 (3) of the Act, the Administrator of the Defense Acquisition Program Administration may request the head of the relevant administrative agency, etc. to take necessary measures. <Added by Presidential Decree No. 22413, Oct. 1, 2010>
 Article 59 (Transfer or Lease, etc. of State Assets)
(1) General assets that can be leased without consideration pursuant to Article 45 (1) of the Act shall be as follows: <Amended by Presidential Decree No. 21641, Jul. 27, 2009>
1. Information on national defense science and technology prescribed in Article 31 (1) of the Act;
2. Land, buildings, and structures provided directly for the transfer of defense facilities executed in accordance with an order pursuant to Article 49 (1) of the Act.
(2) Administrative assets that can be permitted for use without consideration pursuant to Article 45 (1) of the Act shall be as follows:
1. All kinds of test centers and laboratory facilities;
2. Explosives disposal sites;
3. Shooting ranges;
4. Other assets prescribed by Ministerial Decree of National Defense as necessary for the manufacture and testing of defense materials.
(3) Specialized equipment or goods that can be leased with or without consideration pursuant to Article 45 (2) of the Act shall be raw materials, equipment, jigs and fixtures, measuring instruments, inspection machinery and tools, or articles and parts thereof for performance test and inspection, which are used for the manufacture and research of defense materials or manufacture of prototypes.
(4) Specialized equipment or goods referred to in paragraph (3) that can be leased with or without consideration shall be as follows:
1. Where the repair of disorder takes a long time or is impossible, or where it is apprehended to incur setbacks to the manufacture of defense materials due to difficulties in domestic purchase or in import from overseas;
2. Where it is needed for the performance test or inspection of defense materials;
3. Where it is impossible to manufacture defense materials as the manufacturing facilities have been destroyed due to natural disaster or other accidents;
4. Where the lease thereof is stipulated as a condition in the procurement contract or in commissioning of research and development, etc. of defense materials.
(5) Specialized equipment or goods that can be transferred without consideration pursuant to Article 45 (2) of the Act shall be as follows:
1. Specialized equipment or goods that have been leased pursuant to Article 45 (2) of the Act, but that cannot be returned or the return thereof is inappropriate after use as they fall under paragraph (4) 2 or 3;
2. Munitions that are equipment determined by the military as useless or surplus articles, but that can be used after repair or recycled by defense contractors or specialized research institutes.
(6) In any of the following cases, the Government shall preferentially consider transferring or leasing a facility owned by the State for manufacturing defense materials or lending defense materials owned by the State, without consideration, granting permission for the use of such facility or defense materials, or exchanging such defense materials with defense materials owned by a defense contractor pursuant to Article 45 (4) of the Act: <Added by Presidential Decree No. 25003, Dec. 17, 2013>
1. Where a facility for manufacturing defense materials or defense materials become unusable because of aging or any other reason, and it is economically better to transfer such facility or defense materials without consideration, compared with the cost of shutdown or disposal;
2. Where the appropriate circulation cycle for the maintenance of quality or performance of defense materials is anticipated to elapse, and it is necessary to replace such defense materials with new ones;
3. Where it is anticipated to keep excessive quantity of certain defense materials in stock as a result of a decrease in the demand for the defense materials following a change in weapons systems, and it is necessary to replace such defense materials with other materials.
(7) Where a defense contractor or a specialized research institute intends to use, borrow, or acquire State assets pursuant to paragraphs (1) through (6), it shall apply therefor to the relevant management agency along with the following documents after receiving recommendation by the Administrator of the Defense Acquisition Program Administration: <Amended by Presidential Decree No. 25003, Dec. 17, 2013>
1. An application form;
2. A plan for utilization.
(8) Upon receipt of an application under paragraph (7), the management agency shall permit the use thereof, lease or transfer, except in extenuating circumstances. <Amended by Presidential Decree No. 25003, Dec. 17, 2013>
 Article 60 (Long-Term Contracts)
(1) The Administrator of the Defense Acquisition Program Administration may conclude a contract covering two or more fiscal years (hereinafter referred to as "long-term contract") pursuant to Article 46 (1) of the Act in any of the following cases: <Amended by Presidential Decree No. 21596, Jul. 1, 2009; Presidential Decree No. 22413, Oct. 1, 2010>
1. When it takes several years to execute the contract for conducting research or manufacture of prototypes pursuant to Article 18 (4) of the Act, or procuring defense materials designated pursuant to Article 34 of the Act;
2. When it is determined to be inefficient to conclude a contract that terminates within the fiscal year concerned in light of the relevant long-term procurement plan, repeated demand forecasted for a long time, economic circumstances, etc.
(2) Articles 8 (2), 37 (1), 50 (3), and 69 of the Enforcement of the Act on Contracts to which the State is a Party shall apply mutatis mutandis where a long-term contract for defense materials is concluded.
(3) Matters necessary for the conclusion, etc. of a long-term contract under paragraph (1) shall be prescribed by Ministerial Decree of National Defense. <Added by Presidential Decree No. 22413, Oct. 1, 2010>
 Article 61 (Types, Terms, Methods, etc. of Contracts)
(1) Contracts referred to in Article 46 (1) of the Act shall be concluded in accordance with the following classification: <Amended by Presidential Decree No. 21596, Jul. 1, 2009; Presidential Decree No. 22413, Oct. 1, 2010; Presidential Decree No. 25003, Dec. 17, 2013>
1. General conclusive contracts: Where the contract amount is agreed at the time of conclusion of the contract, and the agreed contract amount is to be paid to the party to the contract if the agreed contract terms are fulfilled;
2. Commodity price-coordinated unit price contract: Where it is intended to conclude a contract for an item, for which a contract has been concluded during the latest three years after determining an estimated price by the cost calculation method, at a price of not more than the maximum contract amount determined by the Administrator of the Defense Acquisition Program Administration by adjusting the latest contract unit price by fluctuation rate of the index specified by Ministerial Decree of National Defense, such as the price indexes collected and published by the Bank of Korea under Article 86 of the Bank of Korea Act, without re-calculating the cost;
3. Cost reduction compensation contract: Where the amount of cost reduction is deducted from the contract amount and the compensation within the extent of the cost reduction is intended, when there is new technology or development of engineering methods, business rationalization, etc. during the contract execution period after the conclusion of a contract;
4. Cost reduction incentive contract: Where cost reduction can be expected in the nature of a contract or it is necessary to encourage cost reduction for substituting imported products with domestically-manufactured products, the contract is concluded with a targeted cost or profit specified for the items or components of the cost, the level of which the opposite party to the contract can control, and an incentive shall be paid in addition to the contract amount according to the results of the actual cost, the achievement of the targeted profit, and the reduction of the targeted cost after performing the contract;
5. Ceiling amount contract: Where a ceiling amount is established in order to efficiently secure repair parts for main equipment and maintenance for the operation of weapons systems when a contract is concluded, and the repair parts and maintenance are to be requested from the contracting enterprise for a certain period within the scope of such ceiling amount;
6. Midway conclusive contract: Where the contract amount is to be determined in the course of execution of a contract as it is difficult to determine th contract amount at the time of conclusion of a contract in view of the nature of a contract;
7. Deleted; <by Presidential Decree No. 25003, Dec. 17, 2013>
8. Indeterminate item contract: Where it is difficult to determine the cost of certain items that constitute the contract amount when concluding a contract, it is intended to determine only the items which are possible to determine the cost, and part of the items that are difficult to determine are to be determined after the execution of a contract;
9. General approximation contract: Where the contract amount is to be determined after the execution of a contract as there is no cost data to determine the contract amount at the time of conclusion of a contract;
10. Performance-based contract: Where it is required to accomplish a certain performance objective at the time of conclusion of a contract and the consideration is to be paid commensurate with performance after the contract execution;
11. Long-term option contract: Where the period of a contract is specified, which shall not exceed five years, and the conditions of amendment with respect to the price for the estimated quantity of requirements, the period of a contract, the termination of a contract, etc. are stipulated, but a separate contract shall be concluded on the quantity that shall be purchased by enforcing the conditions of amendment;
12. Ceiling performance contract: Where a ceiling for the supply of parts is fixed for a specified period of a contract, which shall not exceed five years, at the time a contract for the supply of parts for the repair of a weapons systems is concluded, and then the supplier is required to supply parts for repair as necessary within the ceiling, and the price therefor may vary according to the performance of supply.
(2) Upon completion of the performance of a contract concluded under any of paragraph (1) 3 through 6, 8 through 10, and 12, the contractor shall obtain approval therefor from the Administrator of the Defense Acquisition Program Administration under Article 70 (3) of the Enforcement Decree of the Act on Contracts to which the State is a Party: Provided, That upon completion of the performance of a contract concluded for procurement by a military unit, the contractor shall obtain approval therefor from the competent Chief of Staff or the competent head of an agency under the direct control of the Ministry of National Defense, notwithstanding Article 70 (3) of the Enforcement Decree of the Act on Contracts to which the State is a Party. <Amended by Presidential Decree No. 21596, Jul. 1, 2009; Presidential Decree No. 25003, Dec. 17, 2013>
(3) Article 7 of the Act on Contracts to which the State is a Party shall apply to the method of a contract under the latter part of Article 46 (1) of the Act, and it may be concluded as a free contract in any of the following cases: <Added by Presidential Decree No. 21596, Jul. 1, 2009; Presidential Decree No. 25003, Dec. 17, 2013; Presidential Decree No. 25685, Nov. 4, 2014; Presidential Decree No. 26195, Apr. 14, 2015>
1. Where a contract for manufacturing (referring to manufacturing referred to in subparagraph 8 of Article 3 of the Act) and purchasing defense materials is concluded with a defense contractor;
2. Where a ceiling amount contract referred to in paragraph (1) 5 is concluded;
3. Where a performance-based contract referred to in paragraph (1) 10 is concluded;
4. Where a contract is concluded for a quantity purchased by enforcing the terms of amendment under a long-term option contract under paragraph (1) 11;
5. Where it is urgently required to procure commodities in order to respond to an invasion or provocation of the enemy;
6. Where a contract is concluded for the present contract partner to continue the research or production of prototype pursuant to Article 18 (4) of the Act until the stage of mass production in order to meet the effective research and development of weapons systems or the time of reinforcing military capability;
7. Where each of the following requirements is satisfied, where a contract is concluded for the research and development of the relevant core technology with a specialized research institute having submitted the subject of a research referred to in item (b):
(a) Where the specialized research institute shall have submitted a research task in accordance with procedures for research and development of core technology under Article 18 (8) of the Act with respect to the entrusted areas;
(b) Where the Administrator of the Defense Acquisition Program Administration shall have determined to advance the research and development of core technology with respect to the research task referred to in item (a).
(4) In cases of a contract that requires the production of a pilot product (including where the pilot product itself becomes military strength due to the characteristics of weapons systems, such as a naval vessel and a battlefield management system) in order to perform the research and development of weapons system and core technologies pursuant to Article 46 (1) of the Act, the limits to the total amount of liquidated damages which a party to the contract who causes a delay in the performance of the contract without just grounds should pay shall be the amount equivalent to ten percent of the contract price. <Added by Presidential Decree No. 27079, Mar. 31, 2016>
(5) Matters necessary for the conclusion of contracts, etc. referred to in paragraph (1) shall be prescribed by Ministerial Decree of National Defense. <Added by Presidential Decree No. 22413, Oct. 1, 2010>
 Article 61-2 (Option Contracts for Munitions)
(1) A person, who intends to be the partner of a contract under Article 46 (5) of the Act (hereinafter referred to as "option contract for munitions"), shall be qualified as a competitive bidder under Article 12 of the Enforcement Decree of the Act on Contracts to which the State is a Party: Provided, That a person who intends to be the partner of an option contract for munitions with respect to competitive products among small and medium companies referred to in Article 6 of the Act on Facilitation of Purchase of Small and Medium Enterprise-Manufactured Products and Support for Development of Their Markets shall be qualified as a competitive bidder among small and medium companies under Article 9 of Enforcement Decree of the same Act.
(2) The partner of an option contract for munitions shall be a successful bidder determined by the Administrator of the Defense Acquisition Program Administration by evaluating the performance of delivery, management condition, credit rating, etc. among persons qualified under paragraph (1).
(3) Except as otherwise expressly provided for in paragraphs (1) and (2), matters necessary for procedures for option contracts for munitions shall be prescribed by the Administrator of the Defense Acquisition Program Administration.
[This Article Added by Presidential Decree No. 25685, Nov. 4, 2014]
 Article 61-3 (Acknowledgment of Conscientious Performance of Research and Development)
(1) The Administrator of the Defense Acquisition Program Administration may acknowledge that a person has conscientiously performed research and technology pursuant to Article 46-2 (1) of the Act, based on the following standards:
1. Whether a task is a research and development task which has underwent test and evaluation conducted under Article 21 of the Act or underwent evaluation corresponding thereto;
2. Whether the person has failed to attain the goal because he/she established the goal ambitiously at the beginning;
3. Whether the person has failed to attain the goal because of external factors, such as environmental changes;
4. Whether the person has observed the methods and processes of research systematically and conscientiously.
(2) Where necessary for acknowledging that a person has conscientiously performed research and development pursuant to Article 46-2 (1) of the Act, the Administrator of the Defense Acquisition Program Administration may hear opinions from the president of Defense Agency for Technology and Quality.
(3) In addition to matters provided for in paragraphs (1) and (2), the Administrator of the Defense Acquisition Program Administration shall prescribe detailed matters necessary for acknowledging that a person has conscientiously performed research and development.
[This Article Added by Presidential Decree No. 28339, Sep. 22, 2017]
 Article 62 (Procedures for Revocation of Designation of Defense Contractors)
Where the Minister of Trade, Industry and Energy revokes designation of a defense contractor pursuant to Article 48 (1) of the Act, he/she shall notify the Administrator of the Defense Acquisition Program Administration and the relevant defense contractor thereof by specifying the grounds therefor, and retrieve the certificate of designation of the defense contractor. <Amended by Presidential Decree No. 20675, Feb. 29, 2008; Presidential Decree No. 24413, Mar. 23, 2013>
 Article 63 (Termination of Commission of Specialized Research Institutes)
(1) The Administrator of the Defense Acquisition Program Administration may terminate the commission where a specialized research institute falls under any of the following subparagraphs:
1. Where it fails to meet the requirements for security pursuant to Article 44;
2. Where it refuses or fails to execute the commission for research and development of defense materials or manufacturing of prototypes, etc. without justifiable grounds;
3. Where the Administrator of the Defense Acquisition Program Administration deems that there is no need to retain it as a specialized research institute due to the insufficiency of research facilities or the level of technology, etc.
(2) Where the Administrator of the Defense Acquisition Program Administration intends to terminate the commission of a specialized research institute, he/she shall clearly notify the specialized research institute and the supervisory organization in charge thereof with the grounds therefor and retrieve the certificate of designation of the specialized research institute.
(3) Where the Administrator of the Defense Acquisition Program Administration intends to terminate the commission of specialized research institute pursuant to paragraph (1), he/she shall hold a hearing.
 Article 64 (Revocation of Designation of Defense Materials)
(1) The Administrator of the Defense Acquisition Program Administration shall examine all defense materials every three years to determine whether to continue or revoke the designation thereof, and take measures subsequent thereto.
(2) The Administrator of the Defense Acquisition Program Administration may analyze Korean technology level in the field of each defense industry and whether there are manufacturers that may manufacture respective defense materials for examination under paragraph (1). <Added by Presidential Decree No. 27079, Mar. 31, 2016>
(3) Where the Administrator of the Defense Acquisition Program Administration intends to revoke the designation of defense materials, he/she shall notify the Minister of Trade, Industry and Energy and the relevant defense contractor thereof by specifying the reasons. <Amended by Presidential Decree No. 21214, Dec. 31, 2008; Presidential Decree No. 24413, Mar. 23, 2013>
 Article 64-2 (Approval for Participation in National Strategic Arms Projects, etc.)
(1) The Administrator of the Defense Acquisition Program Administration shall determine and publicly announce types of projects subject to approval referred to in Article 50-2 (1) of the Act, among the projects researching and developing strategically valuable arms pursuant to Article 18 of the Act.
(2) Any enterprise which a foreign enterprise or a foreigner who intends to obtain approval to participate in a national strategic arms project or a project corresponding thereto (hereinafter referred to as "strategic arms project") substantially acquires control over management of (hereinafter referred to as "enterprise subject to approval") pursuant to Article 50-2 (1) of the Act shall submit an application for approval prescribed by Ministerial Decree of National Defense to the Administrator of the Defense Acquisition Program Administration with documents referred to in the following subparagraphs attached thereto:
1. The articles of association, balance sheets, and statements of profit and loss for the last three years of a foreign enterprise (hereinafter referred to as "foreign investing enterprise") which has substantially acquired control over management of an enterprise subject to approval and the enterprise subject to approval;
2. Record of mergers and acquisitions of a foreign investing enterprise and an enterprise subject to approval for the last five years;
3. Management structure and the current status of subsidiaries of a foreign investing enterprise and an enterprise subject to approval;
4. Record of investments and a plan for investment of a foreign investing enterprise (including subsidiaries) in an enterprise subject to approval;
5. The current status of exchange of human resources (including dispatch and education) between a foreign investing enterprise (including subsidiaries) and an enterprise subject to approval for the last three years;
6. Materials referred to in the following items related to security of an enterprise subject to approval:
(a) Security measures for the area where the relevant facilities may be fully protected and for the facilities;
(b) Security measures for the personnel engaged in an enterprise subject to approval;
(c) Security measures for handling, keeping and management of confidential documents;
(d) Measures to protect manufactured goods and raw materials;
(e) Measures to protect equipment and facilities;
(f) Security measures for communications facilities and means of communications;
(g) Measures to protect the process of information processing of various materials and to protect data resulting from information processing;
(h) Means of organic communications with the relevant information agency against any security accident.
(3) If the Administrator of the Defense Acquisition Program Administration receives an application for approval pursuant to paragraph (2), he/she shall decide whether he/she approves within 60 days from the date he/she receives such an application and notify the applicant concerned thereof, and when he/she has approved, he/she shall issue an applicant a letter of approval prescribed by Ministerial Decree of National Defense.
(4) When an enterprise subject to approval submits a proposal to participate in a strategic arms project, it shall submit a letter of approval pursuant to paragraph (3).
(5) The criteria for the substantial acquisition of control over management pursuant to Article 50-2 (2) of the Act shall be any of the following cases:
1. Where stocks, etc. (including stakes or all the other property rights; hereinafter the same shall apply) of an enterprise are traded, exchanged or merged between enterprises, a security right thereof is exercised, payment in substitutes thereof is received, or are acquired in a lump by other methods;
2. Where a new corporation is incorporated by separating part of an enterprise therefrom, a separated part is traded, exchanged, or merged between enterprises, a security right thereof is exercised, payment in substitutes thereof is received, or is acquired in whole by other methods;
3. Where the same person holds not less than 50/100 of the stocks, etc. of an enterprise, alone or jointly with any person (hereinafter referred to as "person who has relation with the same person") under any of the following items (including cases where the same person becomes the largest stockholder, as cases where he/she holds less than 50/100, and becomes able to exercise a dominant influence over the appointment of executives of an enterprise or management thereof for himself/herself or through a person who has relation with the same person):
(a) A spouse, a blood relative within the eighth degree, a relative by marriage within the fourth degree;
(b) A firm which the same person exercises a dominant influence over the principal decision-making, such as change in organization of the relevant firm or investment in new business, or the management of business for himself/herself or through a person referred to in item (a) or (c);
(c) A firm which the same person may appoint or dismiss the representative director of the relevant firm or appoint not less than 50/100 of the executives by contract or agreement with other major stockholders.
4. Where an enterprise is managed by means of the acquisition by transfer or lease of the whole or important part of business thereof, or acceptance of entrustment of the management thereof.
[This Article Added by Presidential Decree No. 22413, Oct. 1, 2010]
CHAPTER VII SUPPLEMENTARY PROVISIONS
 Article 65 (Consultation, etc. on Manufacture and Sales Contracts for Defense Materials)
(1) Where a person other than a government agency intends to obtain approval for conclusion of a contract for manufacturing and selling defense materials with a defense contractor in accordance with Article 51 of the Act, he/she shall submit an application for approval on the conclusion of a contract for manufacturing and selling defense materials to the Administrator of the Defense Acquisition Program Administration.
(2) Where the Administrator of the Defense Acquisition Program Administration has received an application for approval pursuant to paragraph (1), he/she shall determine within three months whether to grant approval in consideration of the requirements of the military, and notify the applicant and defense contractor thereof.
 Article 66 (Requirements, etc. for Permission to Manufacture Military Firearms, Swords, Explosives, etc.)
(1) Cases where it is required to obtain permission from the Administrator of the Defense Acquisition Program Administration for military firearms, swords, explosives, etc. (hereinafter referred to as "military firearms, etc.") pursuant to Article 53 (1) of the Act shall be as follows:
1. Where a person intends to engage in manufacturing military firearms, etc.;
2. Where a person intends to add manufacturing items of military firearms, etc.;
3. Where a person intends to newly build or enlarge manufacturing facilities of military firearms, etc.;
4. Where a person intends to use manufacturing facilities of military firearms, etc. which have been newly built or enlarged;
5. Where a person intends to export or import military firearms, etc.;
6. Where a person intends to transfer or acquire military firearms, etc., except in the following cases:
(a) Where a person has consulted on and obtained approval for a sales contract of defense materials pursuant to Article 51 (2) of the Act;
(b) Where military firearms, etc. are to be delivered to armed forces according to a procurement contract;
7. Where a person intends to carry military firearms, etc., except the following cases:
(a) Where a person carries military firearms, etc. manufactured by a person who has obtained permission for manufacturing pursuant to subparagraph 1 within manufacturing facilities;
(b) Where a person, who has obtained permission for export and import pursuant to subparagraph 5, permission for transfer and acquisition pursuant to subparagraph 6 (including where he/she may transfer or acquire without permission for transfer or acquisition), permission for storage pursuant to subparagraph 8, permission for transport (including where he/she may transport without permission for transport) pursuant to subparagraph 9, permission for disuse (including where he/she may disuse without permission for disuse) pursuant to subparagraph 10, carries military firearms, etc.;
8. Where a person intends to store military firearms, etc. in a place, other than manufacturing facilities permitted for use pursuant to subparagraph 4;
9. Where a person intends to transport military firearms, etc., except in the following cases:
(a) Where he/she transports military firearms, etc. inside of manufacturing facilities permitted for use pursuant to subparagraph 4;
(b) Where he/she transports military firearms, etc. under development by the Agency for Defense Development;
(c) Where he/she intends to transport military firearms, etc. less than a quantity set by the Administrator of the Defense Acquisition Program Administration;
10. Where a person intends to disuse military firearms, etc., except in the following cases:
(a) Where he/she disuses military firearms, etc. wherein defects are detected in the manufacturing process in the manufacturing facilities permitted for pursuant to subparagraph 4;
(b) Where he/she disuses military firearms, etc. less than a quantity set by the Administrator of the Defense Acquisition Program Administration.
(2) A person, who intends to obtain permission pursuant to paragraph (1), shall file an application for permission with the Administrator of the Defense Acquisition Program Administration, as prescribed by Ministerial Decree of National Defense. In such cases, where he/she intends to obtain permission to use manufacturing facilities of military firearms, etc. pursuant to paragraph (1) 4, he/she shall file an application within 20 days from the date the new construction or enlargement of manufacturing facilities is completed.
(3) Where the Administrator of the Defense Acquisition Program Administration grants permission (only applicable to permission falling under paragraph (1) 1 through 4 and 8) pursuant to an application for permission under paragraph (2), he/she shall determine whether to grant such permission in consideration of the following requirements. In such cases, he/she shall require the president of the Agency for Defense Development to conduct a safety inspection of the manufacturing facilities and storage facilities of military firearms, etc. (hereafter referred to as "manufacturing facilities" in this paragraph) and shall reflect the result therein:
1. To secure a safety distance between manufacturing facilities, and to the adjacent residential area;
2. To secure safety in the structure of manufacturing facilities and their incidental facilities;
3. To secure safety in protection of manufacturing facilities;
4. To secure maintenance of appropriate supply and quality assurance according to the demand of armed forces.
(4) Detailed matters concerning procedures for permission of military firearms, etc. under paragraph (1) and requirements for permission, etc. referred to in paragraph (3) shall be prescribed by Ministerial Decree of National Defense.
(5) In cases of a national emergency, or where security is deemed necessary, the Administrator of the Defense Acquisition Program Administration may request the commander of a military unit designated by the Minister of National Defense to escort the transport of military firearms, etc.
[This Article Wholly Amended by Presidential Decree No. 21596, Jul. 1, 2009]
 Article 67 (Reserving of Raw Materials)
(1) The kind and quantity of raw materials that the defense contractor must reserve pursuant to Article 55 of the Act and other necessary matters shall be prescribed by the Administrator of the Defense Acquisition Program Administration.
(2) The Administrator of the Defense Acquisition Program Administration may notify the relevant defense contractors of the details of raw materials that they must reserve pursuant to paragraph (1), and order them to reserve raw materials accordingly.
(3) A defense contractor, in receipt of the order referred to in paragraph (2), shall reserve raw materials within one year from the date it is ordered to do so, and if it fails to reserve raw materials within the prescribed period, it shall notify the Administrator of the Defense Acquisition Program Administration of the reason and the expected date of reserving.
 Article 68 (Permission for Exportation, etc.)
(1) A person, who intends to engage in exportation or intermediation business pursuant to Article 57 (1) of the Act, shall submit a report on exportation or intermediation business to the Administrator of the Defense Acquisition Program Administration, along with the documents prescribed by Ministerial Decree of National Defense. <Amended by Presidential Decree No. 22413, Oct. 1, 2010>
(2) The Administrator of the Defense Acquisition Program Administration, in receipt of a report submitted under paragraph (1), shall issue a certificate of reporting exportation or intermediation business to the relevant reporting person. <Amended by Presidential Decree No. 22413, Oct. 1, 2010>
(3) A person, who intends to obtain permission for exporting defense materials and national defense science and technology or intermediating the trade thereof pursuant to the main sentence of Article 57 (2) of the Act, shall submit a written application to obtain permission for exportation or trade intermediation prescribed by Ministerial Decree of National Defense, to the Administrator of the Defense Acquisition Program Administration, along with the documents prescribed by Ministerial Decree of National Defense. ＜Amended by Presidential Decree No. 26538, Sep. 22, 2015; Presidential Decree No. 28117, Jun. 20, 2017>
(4) The scope of defense materials and national defense science and technology permitted to be exported pursuant to Article 57 of the Act shall be prescribed by the Administrator of the Defense Acquisition Program Administration.
(5) Where the guarantee of the performance of contracts and of quality is requested from the government of the purchasing country when exporting defense materials and national defense science and technology pursuant to paragraph (4), the Administrator of the Defense Acquisition Program Administration may comply therewith. <Amended by Presidential Decree No. 20675, Feb. 29, 2008; Presidential Decree No. 24413, Mar. 23, 2013; Presidential Decree No. 26538, Sep. 22, 2015>
(6) The Administrator of the Defense Acquisition Program Administration may restrict exportation or order coordination of major defense materials and national defense science and technology referred to in Article 34 (1) of the Act, pursuant to Article 57 (4) of the Act, in each of the following cases: <Amended by Presidential Decree No. 21596, Jul. 1, 2009; Presidential Decree No. 22413, Oct. 1, 2010; Presidential Decree No. 26538, Sep. 22, 2015>
1. Where it is necessary for international peace, maintenance of safety, and national security;
2. Where diplomatic friction is likely to occur, as a result of exporting major defense materials and national defense science and technology;
3. Where it is necessary to comply with agreements concluded between governments regarding an agreement for importation of technology with a foreign country or export control of strategic materials;
4. Where it is apprehended that national interests might be damaged due to excessive competition between domestic enterprises that export major defense materials and national defense science and technology;
5. Where items, the quality of which has not been guaranteed, are exported, or where disqualified items are exported;
6. Where it is apprehended that assistance in subsequent supplies of war following the exportation of defense materials might be hindered;
7. Where a person breaches a contract for technology transfer referred to in Article 36 (3).
(7) "Cases prescribed by Presidential Decree, such as the provision to Republic of Korea Armed Forces dispatched overseas" in the proviso to Article 57 (2) of the Act means any of the following cases＜Added by Presidential Decree No. 26538, Sep. 22, 2015; Presidential Decree No. 28117, Jun. 20, 2017>
1. Where the major defense materials and national defense science and technology are supplied for the use of the national army dispatched overseas;
2. Where the major defense materials and national defense science and technology are supplied for the use of embassies and legations abroad;
3. Where the major defense materials and national defense science and technology are supplied for the emergency repair use for the security of fleet or military aircraft of Korea.
(8) Deleted. ＜by Presidential Decree No. 28117, Jun. 20, 2017>
 Article 68-2 (Registration of Munitions Sales Agency)
(1) Any person who intends to register munitions sales agency pursuant to Article 57-2 (1) of the Act shall submit an application for registration of munitions sales agency (including an application for registration in an electronic form) prescribed by Ministerial Decree of National Defense to the Administrator of the Defense Acquisition Program Administration along with the following documents (including electronic documents):
1. Resumes of its representative and executive officers;
2. Current status of employment, such as the total number of employees, the number of employees related to defense acquisition programs, and the names thereof;
3. A pledge of integrity under Article 6 (1) of the Act;
4. A pledge of security prescribed by Ministerial Decree of National Defense.
(2) The Administrator of the Defense Acquisition Program Administration, in receipt of an application submitted pursuant to paragraph (1), shall confirm the following documents through the joint use of administrative information under Article 36 (1) of the Electronic Government Act: Provided, That where an applicant does not consent to confirmation under subparagraphs 2 and 3, he/she shall submit the relevant documents (in cases of a business registration certificate, referring to its copy):
1. In cases of a corporation, a certificate of corporation registration entries;
2. In cases of an individual, a transcript of his/her resident registration card;
3. A business registration certificate.
(3) Where the Administrator of the Defense Acquisition Program Administration receives an application for registration of munitions sales agency pursuant to paragraph (1), he/she shall issue a registration certificate to an applicant within 30 days from the date he/she receives the application after checking whether matters in the application fall under any subparagraph of Article 57-2 (1) of the Act, and the relevant facts.
(4) Where it is necessary to verify the relevant facts under paragraph (3), the Administrator of the Defense Acquisition Program Administration may extend the period required for issuance of a registration certificate within 15 days, and notify an applicant of reasons for the extension thereof and the extended period.
[This Article Added by Presidential Decree No. 27618, Nov. 29, 2016]
 Article 68-3 (Registration, etc. of Alterations of Munitions Sales Agency)
(1) "Important matters prescribed by Presidential Decree" in Article 57-2 (2) of the Act means the following:
1. Representative and executive officers;
2. Firm name;
3. Location of a place of business and contact details.
(2) Where a person intends to register any alterations of munitions sales agency pursuant to Article 57-2 (2) of the Act, he/she shall submit an application for registration of alterations of munitions sales agency (including an application for registration of alterations in an electronic form) prescribed by Ministerial Decree of National Defense within 30 days from the date such alterations are made to the Administrator of the Defense Acquisition Program Administration along with the following:
1. A document proving altered matters;
2. A registration certificate (only applicable to cases where items stated in the registration certificate are altered).
(3) The provisions of Article 68-2 (2) through (4) shall apply mutatis mutandis to procedures for examining documents relating to registration of alterations and issuing a registration certificate.
(4) Where a munitions sale agent intends to continuously conduct munitions sales agency even after the period of validity of registration under Article 57-2 (4) of the Act, he/she may file an application for renewal of registration with the Administrator of the Defense Acquisition Program Administration from three months before the expiration date of the period of validity to one month before the expiration date thereof. In such cases, Article 68-2 shall apply mutatis mutandis to procedures for applying for renewal of registration and the issuance of a registration certificate.
(5) The Administrator of the Defense Acquisition Program Administration shall pre-notify the relevant munitions sales agent of procedures for renewal of registration and the fact that the period of validity will expire unless he/she applies for renewal within the period by text messaging, email, fax, telephone, etc. no later than three months prior to the expiration date of the period of validity of registration.
[This Article Added by Presidential Decree No. 27618, Nov. 29, 2016]
 Article 68-4 (Hearings)
Where the Administrator of the Defense Acquisition Program Administration intends to revoke registration of munitions sales agency pursuant to Article 57-3 (1) of the Act, he/she shall hold a hearing.
[This Article Added by Presidential Decree No. 27618, Nov. 29, 2016]
 Article 68-5 (Reporting of Sales Commission)
(1) "Project of at least the size prescribed by Presidential Decree" in Article 57-4 (1) of the Act means a project whose budget for a contract which the Administrator of the Defense Acquisition Program Administration intends to enter into is at least two million US dollars.
(2) Where the Administrator of the Defense Acquisition Program Administration invites competitive tenders for a project (hereinafter referred to as "project subject to reporting of a sales commission") in which case he/she should report remuneration, such as a commission, (hereinafter referred to as "sales commission") under Article 57-4 (1) of the Act, he/she shall specify that the project is subject to reporting of a sales commission in an invitation to tender, and where he/she enters into a private contract, he/she shall notify the other party to a contract or a munitions sales agent who intermediates or represents the relevant contract of the fact that the project is subject to reporting of a sales commission before he/she enters into the contract.
(3) Any person who intends to report a sales commission pursuant to Article 57-4 (1) of the Act shall submit a report mentioning a party to the contract concerning a sales commission, the sales commission, etc. to the Administrator of the Defense Acquisition Program Administration by the deadline for submitting a tender (in cases of a contract concluded through negotiations prescribed in Article 43 of the Enforcement Decree of the Act on Contracts to Which the State Is a Party, referring to a proposal) in cases of competitive tenders, and by the date he/she enters into the contract in cases of a private contract: Provided, That where he/she enters into a contract concerning a sales commission after the deadline for submitting a tender or proposal or the date he/she enters into a private contract, he/she shall submit the report to the Administrator of the Defense Acquisition Program Administration within 30 days after he/she enters into a contract for the relevant sales commission.
(4) Any person who intends to alter matters reported pursuant to Article 57-4 (2) of the Act shall submit a report on alterations to the Administrator of the Defense Acquisition Program Administration within 30 days after he/she alters such matters.
[This Article Added by Presidential Decree No. 28117, Jun. 20, 2017]
 Article 69 (Recovery of Fraudulent Gains, etc.)
(1) Where the Administrator of the Defense Acquisition Program Administration intends to recover fraudulent gains and additional levies (hereinafter referred to as "fraudulent gains, etc.") pursuant to Article 58 (1) of the Act, he/she shall serve a written notification for payment by clearly stating the fact of fraudulent gains, amount of fraudulent gains, etc., deadline for payment, and the methods of and period for, etc. raising objections. <Amended by Presidential Decree No. 28117, Jun. 20, 2017>
(2) A person who has been notified pursuant to paragraph (1) shall pay the fraudulent gains, etc. to an organization appointed by the Administrator of the Defense Acquisition Program Administration within 30 days from the date of such notification.
(3) The basis and methods for calculation of additional charges prescribed in Article 58 of the Act shall be as specified in the Appendix 1. <Added by Presidential Decree No. 28117, Jun. 20, 2017>
 Article 70 (Restrictions, etc. on Qualifications for Participation in Bidding)
(1) Where the representative or an executive of an enterprise or research institute falls under any of the following cases by violating the pledge of integrity pursuant to Article 59 of the Act, the Administrator of the Defense Acquisition Program Administration may restrict his/her qualification for participation in bidding for not less than one month nor more than five years, as prescribed by Ministerial Decree of National Defense, and revoke or terminate a contract, if any, in relation to such violation: <Amended by Presidential Decree No. 22413, Oct. 1, 2010; Presidential Decree No. 27079, Mar. 31, 2016; Presidential Decree No. 28117, Jun. 20, 2017>
1. Where an agreement was concluded to give or he/she has given money or articles, entertainment, etc. to the relevant public officials (including the members of the Committee, a subcommittee and working committee, and the specialized members pursuant to Article 16) in connection with decision making, bidding, successful bidding, or conclusion or execution of a contract relating to defense acquisition programs;
2. Where he/she has requested offering of specific information regarding defense acquisition programs or such information has been requested;
3. Where he/she has arbitrarily provided a third party with specific information, such as results of research, which he/she has learned in the course of the execution of a contract, or divulged such specific information to a third party;
4. Where he/she has received money or articles from a subcontractor, or has committed any unjust or unfair act, by taking advantage of his/her dominant position as a prime contractor when he/she enters into or performs a subcontract related to a national defense project.
(2) Matters not prescribed by this Decree concerning the restriction of qualifications for participation in bidding on the grounds of violation of a pledge of integrity shall be governed by the Enforcement Decree of the Act on Contracts to which the State is a Party.
(3) The restricted period for qualifications for participation in bidding pursuant to paragraph (1) and other necessary matters shall be prescribed by Ministerial Decree of National Defense. <Added by Presidential Decree No. 22413, Oct. 1, 2010>
 Article 71 (Entrustment of Authority)
(1) The Administrator of the Defense Acquisition Program Administration shall entrust the following duties to the President of the Agency for Defense Development pursuant to Article 61 of the Act: <Amended by Presidential Decree No. 21596, Jul. 1, 2009; Presidential Decree No. 25003, Dec. 17, 2013; Presidential Decree No. 28904, May 28, 2018>
1. Public announcement necessary for selecting a host institution of research and development of core technology and receipt of proposals for the projects for research and development prescribed in Article 18 (3) of the Act;
1-2. Selection and management of manufacturers of prototypes in connection with research and development projects prescribed in Article 18 (4) of the Act (limited to research and development projects implemented by the Agency for Defense Development prescribed in Article 24 (3) 3);
2. Conclusion and management of contracts for research and development of core technology prescribed in Article 18 of the Act;
3. Safety inspections on manufacturing facilities and storage facilities of military firearms, etc. prescribed in the latter part of Article 66 (3).
(2) The Administrator of the Defense Acquisition Program Administration shall entrust the following affairs to the President of the Defense Agency for Technology and Quality pursuant to Article 61 of the Act: <Amended by Presidential Decree No. 21596, Jul. 1, 2009; Presidential Decree No. 25685, Nov. 4, 2014; Presidential Decree No. 27079, Mar. 31, 2016; Presidential Decree No. 27344, Jul. 19, 2016; Presidential Decree No. 28117, Jun. 20, 2017; Presidential Decree No. 28339, Sep. 22, 2017>
1. Selecting, contracting, and managing a research institute or an enterprise that conducts investigations or analysis related to prior research prescribed in Article 37 (1), and managing data from the outcomes of prior research among affairs concerning prior research prescribed in Article 17 (1) of the Act;
2. Following affairs among the affairs regarding administration of form and shape prescribed in Article 26 (3) of the Act and Article 32 (1) of this Decree:
(a) Technical assistance related to administration of form and shape, including research and development, and an inspection on completed parts in the mass production and operation and maintenance phase of ship weapons systems, such as battleships;
(b) Controlling the details of shape regarding design errors, corrections, etc. which do not have an influence on the required operational capability of munitions (limited to those subject to the issuance of inspection reports made under subparagraph 3), the schedule of and expenses incurred in enhancing military strength in the mass production and operation and maintenance phase among affairs regarding the control of the details of shape prescribed in Article 32 (1) 3 of this Decree;
3. Following affairs among the affairs regarding quality assurance prescribed in Article 28 of the Act:
(a) Technical assistance related to quality assurance, including research and development, and an inspection on completed parts in the mass production and operation and maintenance phase of ship weapons systems, such as battleship;
(b) Issuing inspection reports regarding weapons systems and military strength support systems designated by the Administrator of the Defense Acquisition Program Administration;
4. Receipt, examination, renewal and examination of the post management of an application for certification of the quality management system prescribed in Article 29-2 of the Act;
5. Conducting tests regarding a test and evaluation prescribed in Article 44 (3) 3 of the Act;
6. Supervising the transportation and disuse of military firearms, etc. prescribed in Article 53 (1) of the Act;
7. Assistance in surveys and analysis of overseas markets, discovery of promising export items and technology development prescribed in Article 58 (2) 4;
8. Verifying types and quantities of raw materials to be reserved by defense contractors prescribed in Article 67.
 Article 72 (Criteria for Imposition of Administrative Fines)
Criteria for the imposition of administrative fines prescribed in Article 64 (1) of the Act shall be as specified in Appendix 2.
[This Article Added by Presidential Decree No. 28117, Jun. 20, 2017]
ADDENDA
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Repeal of other Statutes)
(1) The Enforcement Decree of the Act on Special Measures for Defense Industry shall be repealed.
(2) The Regulations of National Defense Investment Project Promotion Committee shall be repealed.
Article 3 (Transitional Measures concerning Specialized Enterprises and Systematized Enterprises, etc.)
The provisions of the former Enforcement Decree of the Act on Special Measures for Defense Industry shall apply to enterprises and materials that have been specialized and systematized pursuant to the provisions of the former Enforcement Decree of the Act on Special Measures for Defense Industry at the time this Decree enters into force from the date this Decree enters into force until December 31, 2008. In such cases, the Minister of National Defense shall be deemed the Administrator of the Defense Acquisition Program Administration.
Article 4 Omitted.
Article 5 (Relationship to other Statutes)
Where the provisions of the former Enforcement Decree of the Act on Special Measures for Defense Industry are cited in other statutes at the time this Decree enters into force and provisions corresponding thereto exist in this Decree, this Decree or the relevant provisions of this Decree shall be deemed to have been cited in place of the former provisions.
ADDENDUM <Presidential Decree No. 19507, Jun. 12, 2006>
This Decree shall enter into force on the date of its promulgation.
ADDENDUM <Presidential Decree No. 20120, Jun. 28, 2007>
This Decree shall enter into force on July 4, 2007.
ADDENDA <Presidential Decree No. 20675, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Articles 2 through 4 Omitted.
ADDENDA <Presidential Decree No. 21087, Oct. 20, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 4 Omitted.
ADDENDA <Presidential Decree No. 21214, Dec. 31, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 5 Omitted.
ADDENDUM <Presidential Decree No. 21255, Jan. 7, 2009>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 21351, Mar. 18, 2009>
Article 1 (Enforcement Date)
This Decree shall enter into force on April 1, 2009.
Article 2 Omitted.
ADDENDA <Presidential Decree No. 21596, Jul. 1, 2009>
Article 1 (Enforcement Date)
This Decree shall enter into force on July 2, 2009: Provided, That the amended provisions of Article 66 shall enter into force on January 1, 2010.
Article 2 (Transitional Measures concerning Recommendation of Loaning)
Any enterprise which has obtained a recommendation of loaning from the Minister of Knowledge Economy pursuant to the previous provisions as at the time this Decree enters into force shall be deemed to have obtained a recommendation of loaning from the Administrator of the Defense Acquisition Program Administration pursuant to the amended provisions of Article 51 (2).
Article 3 (Transitional Measures concerning Permission of Military Firearms, etc.)
Any person who has obtained permission for manufacture, export, import, transfer, takeover, possession, storage, transport, and disuse of military firearms, etc. pursuant to the previous provisions as at the time the amended provisions of Article 66 enter into force under the proviso to Article 1 of Addenda shall be deemed to have obtained permission pursuant to the amended provisions of Article 66.
ADDENDA <Presidential Decree No. 21641, Jul. 27, 2009>
Article 1 (Enforcement Date)
This Decree shall enter into force on July 31, 2009. (Proviso Omitted.)
Articles 2 through 15 Omitted.
ADDENDA <Presidential Decree No. 22151, May 4, 2010>
Article 1 (Enforcement Date)
This Decree shall enter into force on May 5, 2010.
Articles 2 through 4 Omitted.
ADDENDA <Presidential Decree No. 22328, Aug. 11, 2010>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 10 Omitted.
ADDENDA <Presidential Decree No. 22413, Oct. 1, 2010>
Article 1 (Enforcement Date)
This Decree shall enter into force on October 1, 2010.
Article 2 (Applicability to Reappointment of Members)
The amended provisions of Article 13 (2) shall apply beginning with the first member appointed after this Decree enters into force.
Article 3 (Applicability to Restrictions on Qualifications for Participation in Tender of Unjust Business Operators)
The amended provisions of Article 70 (1) 3 and 4 shall apply beginning with cases where such a reason for restriction arises after this Decree enters into force.
ADDENDUM <Presidential Decree No. 22467, Nov. 2, 2010>
This Decree shall enter into force on the date of its promulgation.
ADDENDUM <Presidential Decree No. 22510, Dec. 7, 2010>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 23036, Jul. 19, 2011>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 and 3 Omitted.
ADDENDA <Presidential Decree No. 24413, Mar. 23, 2013>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 and 3 Omitted.
ADDENDA <Presidential Decree No. 24474, Mar. 23, 2013>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 Omitted.
ADDENDA <Presidential Decree No. 25003, Dec. 17, 2013>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability to Approval for Contracts where Performance is Complete)
The amended provisions of Article 61 (2) shall apply also to cases where a contract has been concluded before this Decree enters into force, but the period of contract will expire after this Decree enters into force.
Article 3 (Transitional Measures concerning Conclusive Incentive Contracts and Cost Settlement Incentive Contracts)
Conclusive incentive contracts and cost settlement incentive contracts that have been concluded under the former provisions of Article 61 (1) 4 and 7 before this Decree enters into force, but will expire after this Decree enters into force shall be deemed cost reduction incentive contracts under the amended provisions of Article 61 (1) 4.
ADDENDA <Presidential Decree No. 25685, Nov. 4, 2014>
Article 1 (Enforcement Date)
This Decree shall enter into force on November 10, 2014.
Article 2 (Transitional Measures concerning Decisions on Requirements)
A written proposal of capabilities submitted to the Chairman of the Joint Chiefs of Staff by the agencies proposing capabilities pursuant to the former provisions as at the time this Act enters into force shall be deemed a written proposal of requirements referred to in the amended provisions of Article 22 (1); a written proposal of requirements prepared by the Chairman of the Joint Chiefs of Staff shall be deemed a requirement proposal referred to in the amended provisions of Article 22 (2).
ADDENDA <Presidential Decree No. 26195, Apr. 14, 2015>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability to Free Contracts)
The amended provisions of Article 61 (3) 7 shall begin to apply from the contract concluded after this Decree enters into force, as a research task submitted after January 1, 2015.
ADDENDUM <Presidential Decree No. 26538, Sep. 22, 2015>
This Decree shall enter into force on September 28, 2015.
ADDENDUM <Presidential Decree No. 26997, Feb. 29, 2016>
This Decree shall enter into force on March 2, 2016.
ADDENDA <Presidential Decree No. 27079, Mar. 31, 2016>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability to Limits of Imposition of Liquidated Damages)
The amended provisions of Article 61 (4) shall begin to apply from the first contract in which liquidated damages occur because the contract period expires after this Decree enters into force.
Article 3 (Transitional Measures concerning Restrictions on Qualification for Participation in Bidding)
Where the representative or an executive officer of an enterprise or a research institute falls under any subparagraph of Article 70 (1) because he/she violates a pledge of integrity before this Decree enters into force, notwithstanding the amended provisions of the main sentence of Article 70 (1), the former provisions thereof shall apply to such cases.
ADDENDA <Presidential Decree No. 27344, Jul. 19, 2016>
Article 1 (Enforcement Date)
This Decree shall enter into force on July 20, 2016.
Article 2 (Applicability to Presentation of Pledge of Integrity)
The amended provisions of Article 4 (4) and (5) shall begin to apply from the first defense acquisition program for which a call for tenders is public announced after this Decree enters into force.
ADDENDUM <Presidential Decree No. 27618, Nov. 29, 2016>
This Decree shall enter into force on November 30, 2016.
ADDENDA <Presidential Decree No. 28117, Jun. 20, 2017>
Article 1 (Enforcement Date)
This Decree shall enter into force on June 21, 2017.
Article 2 (Transitional Measures concerning Additional Charges)
The imposition of fraudulent gains and additional charges on profiteering before this Decree enters into force shall not be included in the number of times of profiteering under Article 69 and the amended provisions of Appendix 1.
ADDENDA <Presidential Decree No. 28211, Jul. 26, 2017>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation: Provided, That among Presidential Decrees amended pursuant to Article 8 of Addenda, amendments to Presidential Decrees which were promulgated before this Decree enters into force, the enforcement dates of which have not arrived, shall enter into force on the date when the relevant Presidential Decree enters into force, respectively.
Articles 2 through 8 Omitted.
ADDENDUM <Presidential Decree No. 28339, Sep. 22, 2017>
This Decree shall enter into force on September 22, 2017.
ADDENDA <Presidential Decree No. 28799, Apr. 17, 2018>
Article 1 (Enforcement Date)
This Decree shall enter into force on April 17, 2018.
Articles 2 through 7 Omitted.
ADDENDUM <Presidential Decree No. 28904, May 28, 2018>
This Decree shall enter into force on May 29, 2018.