CHAPTER I GENERAL PROVISIONS
The purpose of this Act is to achieve national competitiveness, improve the lives of people, and contribute to the sound and sustainable development of the national economy by providing matters necessary for software promotion and thereby strengthening national software capabilities, and laying a foundation for the development of the software industry.
The terms used in this Act are defined as follows:
| 1. | The term "software" means a collection of instructions and commands (including audio and video information) designed to cause a computer, communication equipment or automatic data processing equipment, or its peripheral devices to perform functions that include the command, control, input, processing, storage, output and interaction, as well as statements or related data to make such instructions and commands; |
| 2. | The term "software industry" means the industry that develops, produces, publishes, distributes, operates, maintains and manages software, and provides other software-related services; |
| 3. | The term "software project" means any economic activity relating to the software industry; |
| 4. | The term "software business entity" means any person engaged in a software project; |
| 5. | The term "software process" means a set of methods, procedures and activities for developing, maintaining and managing software; |
| 6. | The term "software convergence" means creative and innovative activities and phenomena that generate new social and market value through the combination or integration of technologies or services between software and different fields; |
| 7. | The term "software development security" means a series of security activities to minimize the security vulnerabilities of software in the process of software development or change; |
| 8. | The term "software safety" means the level of confidence that there is adequate preparation for any danger to human life or body caused by an accident that may occur due to an internal malfunction or an inadequate safety function (referring to a function that prevents danger through prior risk analysis, etc.) of software in the absence of external intrusions; |
| 9. | The term "software education" means any form of education aimed at fostering creative problem-solving abilities, recognizing the value of software, and proliferate the culture of appropriate use of software through the use and implementation of software; |
| 10. | The term "software engineer" means a person described as follows: |
| (b) | A person with educational background or experience prescribed by Presidential Decree in the field of software; |
| 11. | The term "commercial software" means any software developed for commercial purposes, and sold and provided in a completed form; |
| 12. | The term "contract" means a contract under which, regardless of its name, such as a prime contract, subcontract and consignment, one contracting party promises to complete a software project and the other contracting party commits itself to make payments for the results of the project; |
| 13. | The term "subcontract" means a contract which a contractor enters into with another software business entity to outsource the software project contracted to it; |
| 14. | The term "contractor" means a software business entity awarded a contract for software project by a project owner; |
| 15. | The term "subcontractor" means a software business entity awarded a subcontract for software project by a contractor. |
| Article 3 (Responsibilities of the State and Local Governments) |
The State and local governments shall develop and implement various policies necessary to promote the software industry and strengthen the software capabilities of the country.
| Article 4 (Relationship to Other Statutes) |
This Act shall govern matters relating to software, unless otherwise provided in other statutes.
CHAPTER II POLICY MEASURES FOR PROMOTING SOFTWARE
| Article 5 (Formulation of Master Plan) |
| (1) | The Minister of Science and ICT shall formulate and implement a master plan for software promotion (hereinafter referred to as "master plan") in consultation with the heads of the relevant central administrative agencies. |
| (2) | The master plan shall include the following information: |
| 1. | Basic policy directions for promoting the software industry; |
| 2. | Promotion policies for each of the software industry sectors; |
| 3. | Laying a foundation for the software industry; |
| 4. | Software education and human resources development; |
| 5. | Research, development and dissemination of software technology; |
| 6. | Facilitating the use and distribution of software; |
| 7. | Startup support for early stage companies for a software project or software convergence project (hereinafter referred to as "software startups"); |
| 8. | International cooperation and overseas expansion of the software industry; |
| 9. | Activating software asset management; |
| 10. | Facilitating software convergence; |
| 11. | Promotion of the software industry based on regional characteristics and promotion of convergence with regional industries; |
| 12. | Software safety management; |
| 13. | Other matters necessary for the promotion of software. |
| (2) | The Minister of Science and ICT shall formulate and implement an implementation plan for software promotion (hereinafter referred to as "implementation plan") according to the master plan. |
| (3) | Except as provided in paragraphs (1) through (3), matters necessary to formulate the master plan and the implementation plan shall be prescribed by Presidential Decree. |
| Article 6 (Investigation of Actual Conditions) |
| (1) | The Minister of Science and ICT may investigate the actual conditions of software engineers and software business entities as well as the current status of the software industry and software convergence (hereinafter referred to as "software industry information") for the efficient formulation and promotion of the master plan and the implementation plan, and publish the results of the investigation. |
| (2) | The Minister of Science and ICT may, if necessary for an investigation under paragraph (1), request that a software business entity, a software convergence business entity, a software-related trade association (referring to an organization consisting of two or more software business entities or software convergence business entities; hereinafter referred to as "trade association") or the Korea Software Financial Cooperative established under Article 61 submit necessary data. |
| (3) | A person receiving a request under paragraph (2) shall comply with it unless there is a compelling reason not to do so: Provided, That this shall not apply if the requested data falls under either of the following categories: |
| 1. | Matters pertaining to the national security; |
| (4) | Matters necessary for submitting data under paragraph (2) shall be prescribed by Presidential Decree. |
| Article 7 (Management of Software Industry Information) |
The Minister of Science and ICT may comprehensively manage and disclose software industry information, as prescribed by Presidential Decree.
CHAPTER III PREPARATION OF FOUNDATIONS FOR SOFTWARE INDUSTRY
SECTION 1 Support for Software Industry
| Article 8 (Agency Responsible for Promotion of Software Industry) |
| (2) | The Minister of Science and ICT may operate a software policy research institute (hereinafter referred to as "research institute") to efficiently support research on software. |
| (3) | The research institute shall perform the following activities: |
| 1. | Research on software policy; |
| 2. | Analysis, provision and sharing of statistics and information relating to the software industry; |
| 3. | Seeking and planning new business opportunities for the software industry; |
| 4. | Other functions prescribed by Presidential Decree. |
| (4) | The Government may provide money necessary to pay the expenses to operate the research institute within the budget. |
| Article 9 (Promotion of Regional Software Industry) |
| (1) | The Minister of Science and ICT shall provide support for the promotion of the software industry based on regional characteristics and facilitate convergence with regional industries. |
| (2) | The Minister of Science and ICT shall designate an agency that meets the requirements prescribed by Presidential Decree as a regional software industry promotion agency (hereafter referred to as "regional industry promotion agency" in this Article) to carry out the functions assigned to the Minister. |
| (3) | If a regional industry promotion agency designated under paragraph (2) falls under any of the following cases, the Minister of Science and ICT may revoke its designation: Provided, That in the case of subparagraph 1, the Minister shall revoke its designation: |
| 1. | If it obtains designation by fraud or other improper means; |
| 2. | If it fails to meet the designation requirements of paragraph (2) for a continuous period of three months or more; |
| 3. | If the Minister of Science and ICT otherwise acknowledges its significant lack of competency to perform the entrusted functions. |
| (4) | Except as provided in paragraphs (1) through (3), matters necessary for the designation of regional industry promotion agencies and the performance of entrusted functions shall be prescribed by Presidential Decree. |
| Article 10 (Korea Software Industry Association) |
| (1) | Software business entities may establish a Korea Software Industry Association (hereafter referred to as the "Association" in this Article) to promote the sound development of the software industry and collectively pursue their common interests. |
| (2) | The Association shall be a corporation. |
| (3) | The Association shall perform the following functions: |
| 1. | Investigation of the current situation of the software industry and relevant statistics; |
| 2. | Research on the software industry promotion systems and suggestions for improvement; |
| 3. | Collection, analysis and provision of software technology and market information; |
| 4. | Research on appropriate payment standards for a software project; |
| 5. | Facilitation of software distribution and user support; |
| 6. | Support for intellectual property protection activities of software business entities; |
| 7. | Other functions necessary to achieve the purpose of the Association. |
| (4) | Except as provided in this Act, the provisions of the Civil Act governing associations shall apply mutatis mutandis to the Association. |
| Article 11 (Designation of Software Promotion Facilities) |
| (1) | The Minister of Science and ICT may designate a facility meeting the requirements prescribed by Presidential Decree as a software promotion facility (hereinafter referred to as "promotion facility") to support the business activities of software business entities by clustering software business entities and ancillary supporting facilities. |
| (2) | Any person seeking to obtain designation as a promotion facility (including local governments) shall meet the requirements of paragraph (1) and apply to the Minister of Science and ICT in accordance with the procedures prescribed by Presidential Decree. |
| (3) | Upon receipt of an application for designation under paragraph (2), the Minister of Science and ICT shall designate the relevant facility as a promotion facility, except for the following cases: |
| 1. | If it fails to meet the designation requirements of paragraph (1); |
| 2. | If it violates any restrictions placed under other statutes or regulations. |
| (4) | Prior to designating a promotion facility under paragraphs (1) and (3), the Minister of Science and ICT may attach conditions necessary to develop the promotion facility. In such cases, the conditions shall be the minimum necessary to promote the public interest, and shall not impose any undue obligations. |
| (6) | If a promotion facility designated under paragraphs (1) and (3) falls under any of the following cases, the Minister of Science and ICT may revoke its designation, as prescribed by Presidential Decree: Provided, That in the case of subparagraph 1, the Minister shall revoke its designation: |
| 1. | If it obtains designation by fraud or other improper means; |
| 2. | If it fails to meet the designation requirements of paragraph (1); |
| 3. | If it violates any restrictions placed under other statutes or regulations; |
| 4. | If it fails to fulfill the conditions imposed under paragraph (4). |
| Article 12 (Designation and Creation of Software Promotion Complexes) |
| (1) | The Minister of Science and ICT may designate an area meeting the requirements prescribed by Presidential Decree as a software promotion complex (hereinafter referred to as "promotion complex"), or directly create such complex and designate it as a promotion complex, to support the business activities of software business entities by clustering software business entities and ancillary supporting facilities. |
| (2) | Any person seeking to obtain designation as a promotion complex (including local governments) shall meet the requirements of paragraph (1) and apply to the Minister of Science and ICT in accordance with the procedures prescribed by Presidential Decree. |
| (3) | Prior to designating a promotion complex under paragraph (1), the Minister of Science and ICT may attach conditions necessary to develop the promotion complex. In such cases, the conditions shall be the minimum necessary to promote the public interest, and shall not impose any undue obligations upon the person who has obtained the promotion complex designation. |
| (4) | If a promotion complex falls under any of the following cases, the Minister of Science and ICT may revoke its designation, as prescribed by Presidential Decree: Provided, That in the case of subparagraph 1, the Minister shall revoke its designation: |
| 1. | If it obtains designation by fraud or other improper means; |
| 2. | If it fails to meet the designation requirements under paragraph (1); |
| 3. | If it violates any restrictions placed under other statutes or regulations; |
| 4. | If it fails to fulfill the conditions imposed under paragraph (3). |
| Article 13 (Support for Promotion Facilities) |
| (1) | The Minister of Science and ICT may develop policies necessary to support promotion facilities or promotion complexes. |
| (2) | The Minister of Science and ICT may provide funds, facilities, etc. to promotion facilities or promotion complexes. |
| (3) | A local government may make a contribution to or investment in a person seeking to obtain designation as a promotion facility or promotion complex, if necessary for the promotion of the software industry. |
| Article 14 (Encouraging Software Startups) |
| (1) | The Minister of Science and ICT may promote the following projects for encouraging software startups and the growth and development of software entrepreneurs: |
| 1. | Supporting commercialization of excellent technologies held by software human resources under Article 22; |
| 2. | Valuation of and financial support for software technology; |
| 3. | Facilitating mergers and acquisitions of software companies; |
| 4. | Other projects necessary to encourage software startups. |
| (2) | Local governments may contribute to or invest in public organizations, etc. that support software startups. |
| Article 15 (Gratuitous Use of State-Owned Property) |
Notwithstanding Article 30 (2) of the State Property Act, the Minister of Science and ICT may cause a public organization that has obtained permission to use state-owned property free of charge in accordance with Article 34 (1) 3 of the same Act to lend such state property to be used by software startup entrepreneurs or other persons determined by Presidential Decree, to promote software startup activities.
| Article 16 (Support for International Cooperation and Overseas Advancement) |
The Government may support the following projects to promote international cooperation and overseas expansion of the software industry:
| 1. | Technical cooperation and exchange of human resources inside and outside of the country; |
| 2. | Participation in international exhibitions; |
| 3. | International standardization related to software; |
| 4. | International joint research and development of software; |
| 5. | Localization of software for international markets; |
| 6. | Other projects necessary for international cooperation and overseas expansion. |
| Article 17 (Protection of Intellectual Property Rights in Software) |
| (1) | The Government shall develop an intellectual property protection policy for software to protect and foster software and related service industries. |
| (2) | The Minister of Science and ICT may request cooperation from the heads of relevant central administrative agencies for improvement of related systems and their rationalization, etc., if necessary to protect intellectual property rights in software. |
| Article 18 (Tax Incentives) |
| (1) | The Government shall devise tax, financial and other administrative measures necessary to promote the software industry. |
| (2) | The State and local governments may reduce or exempt income tax, corporate tax, acquisition tax, property tax, registration and license tax, etc. as provided for in the Restriction of Special Taxation Act, the Restriction of Special Local Taxation Ac and other relevant statutes, for the promotion of the software industry. |
SECTION 2 Standardization and Certification
| Article 19 (Promotion of Software Standardization) |
The Minister of Science and ICT may promote software standardization and recommend it to software business entities to ensure efficient development, quality improvement, and compatibility of software.
| Article 20 (Software Quality Certification) |
| (1) | The Minister of Science and ICT may grant a software quality certification for quality assurance and promotion for distribution of software. |
| (2) | The Minister of Science and ICT may designate an institution that meets the designation requirements prescribed by Presidential Decree as a certification institution to carry out the functions assigned to the Minister for the granting of software quality certification, and may provide all or part of the money necessary to pay the expenses within the budget. |
| (3) | A certification institution designated under paragraph (2) shall, upon receiving an application for software quality certification, grant the certification if it acknowledges that the applicant meets the certification requirements prescribed by Presidential Decree. |
| (5) | If a person designated as a certification institution under paragraph (2) falls under any of the following cases, the Minister of Science and ICT may revoke its designation: Provided, That in the case of subparagraph 1, the Minister shall revoke its designation: |
| 1. | If it obtains designation by fraud or other improper means; |
| 2. | If it fails to meet the designation requirements of paragraph (2) for a continuous period of three months or more; |
| 3. | If it grants a software quality certification for any software that does not fulfill the certification requirements of paragraph (3). |
| (6) | Except as provided in paragraphs (1) through (5), matters necessary for software quality certification, such as procedure for software quality certification shall be prescribed by Presidential Decree. |
| Article 21 (Software Process Quality Certification) |
| (1) | The Minister of Science and ICT may grant a software process quality certification to improve the quality of and offer reliability assurance as to software development, maintenance, and management activities. |
| (2) | The Minister of Science and ICT may designate an institution that meets the designation requirements prescribed by Presidential Decree as a certification institution to carry out the functions assigned to the Minister for the granting of software process quality certification, and may provide all or part of the money necessary to pay the expenses within the budget. |
| (3) | A certification institution designated under paragraph (2) shall, upon receiving an application for software process quality certification, grant the certification if it acknowledges that the applicant meets the certification requirements prescribed by Presidential Decree. |
| (4) | The head of a state agency, local government, or an institution prescribed by Presidential Decree which is a corporation, organization, etc. invested or contributed by the State or a local government (hereinafter referred to as “state agency, etc.”) may give preferential treatment to a person that has obtained software process quality certification as prescribed by Presidential Decree, to improve the quality of software products in the process of implementing any software project. |
| (5) | If a person designated as a certification institution under paragraph (2) falls under any of the following cases, the Minister of Science and ICT may revoke its designation: Provided, That in the case of subparagraph 1, the Minister shall revoke its designation: |
| 1. | If it obtains designation by fraud or other improper means; |
| 2. | If it fails to meet the designation requirements of paragraph (2) for a continuous period of three months or more; |
| 3. | If it grants a software process quality certification for any software process that does not fulfill the certification requirements of paragraph (3). |
| (6) | Except as provided in paragraphs (1) through (5), matters necessary for software process quality certification, such as procedure for software process quality certification shall be prescribed by Presidential Decree. |
SECTION 3 Human Resources Development and Technology Improvements
| Article 22 (Development of Software Human Resources) |
| (1) | The Minister of Science and ICT may formulate and implement policies for the following matters in order to develop human resources with professional skills and knowledge relating to software and software convergence (hereinafter referred to as “software human resources”) and to support continuous enhancement of their competencies: |
| 1. | Education and training (including re-training) for the development of software human resources; |
| 2. | Strengthening industry-academia-research cooperation to develop software human resources; |
| 3. | Support for career development of software human resources; |
| 4. | Analysis of the supply and demand of human resources in the software industry and expansion of employment opportunities for software human resources in related businesses; |
| 5. | Other matters necessary to develop software human resources. |
| (2) | The Minister of Science and ICT may designate a person who meets the requirements prescribed by Presidential Decree, among schools, research institutes, and other institutions or organizations, as a software human resources training institution and provide budgetary support that it needs. |
| (3) | If a person designated as a software human resources training institution under paragraph (2) falls under any of the following cases, the Minister of Science and ICT may revoke its designation: Provided, That in the case of subparagraph 1, the Minister shall revoke its designation: |
| 1. | If it obtains designation by fraud or other improper means; |
| 2. | If it fails to meet the designation requirements of paragraph (2) for a continuous period of three months or more; |
| 3. | If it treats a person who has not completed education and training under paragraph (1) 1 as having completed. |
| (4) | Except as provided in paragraphs (1) through (3), matters necessary to develop software human resources shall be prescribed by Presidential Decree. |
| Article 23 (Establishment and Operation of Specialized Software Educational Institutions) |
| (1) | The Minister of Science and ICT may establish and operate a specialized software educational institution that provides systematic hands-on software training programs and performs the duties necessary to develop software human resources. |
| (2) | Matters necessary to operate specialized educational institutions under paragraph (1) shall be prescribed by Presidential Decree. |
| Article 24 (Verification of Work Experience of Software Engineers) |
| (1) | The Minister of Science and ICT may manage and keep records of the workplaces, work experiences, educational backgrounds, and qualifications of software engineers (hereinafter referred to as “work experience, etc.”) to support their career management. |
| (2) | A software engineer who intends to use the career management services as provided in paragraph (1) shall submit a record of his or her work experience, etc. to the Minister of Science and ICT. |
| (3) | Upon application by a software engineer who has submitted his or her record under paragraph (2), the Minister of Science and ICT shall issue a certificate of work experience, etc. for the software engineer (hereinafter referred to as “software engineer’s certificate of work experience”). |
| (4) | When issuing (which includes re-issuing) a software engineer’s certificate of work experience under paragraph (3), the Minister of Science and ICT may receive a fee not exceeding the actual cost of the issuance from the applicant. |
| (5) | If necessary to ensure the truth and accuracy of a record received under paragraph (2), the Minister of Science and ICT may require that the head of a state agency, etc. or the head of a company or organization relating to the software engineer to submit data prescribed by Presidential Decree. In such cases, the head of a company or organization receiving such a request shall comply with it unless there is a compelling reason not to do so. |
| (6) | If a software engineer falsely submits his or her work experience, etc., the Minister of Science and ICT shall take necessary measures, such as deleting the experience, etc. |
| (7) | Matters necessary for the procedure for the submission of work experience, etc. procedure for the issuance of a software engineer’s certificate of work experience, calculation of fees, etc. under paragraphs (2) through (4) shall be prescribed by Ordinance of the Ministry of Science and ICT. |
| Article 25 (Facilitating Research and Technological Development of Software) |
| (1) | The Government shall encourage basic research in the software field for the purpose of strengthening the competitiveness of software technology. |
| (2) | When conducting national research and development projects in the software field, the Government shall endeavor to facilitate software research and development activities in the following ways: |
| 1. | Adopt a development method that discloses the source code of the software so that those other than the software developer can participate in the process of developing, maintaining, and managing the software; |
| 2. | Distribute the results of national research and development projects as open-source software (referring to software in which source code is released under a license in which the copyright holder grants users the rights to use, copy, modify and redistribute the software). |
| (3) | The Government may contribute or subsidize some or all of the necessary funds to software business entities engaged in technology development projects to facilitate the development of software-related technologies. |
| Article 26 (Support for Research Activities) |
| (1) | In order to activate research in the software field, the Minister of Science and ICT may select a person who is eligible to receive aid for research activities from among the following persons and award the aid: |
| 1. | Any faculty member or researcher employed by a school as defined in any subparagraph of Article 2 of the Higher Education Act (except for subparagraph 7) or a research institution equivalent thereto prescribed by Presidential Decree; |
| 2. | Any other person acknowledged by the Minister of Science and ICT as having research capabilities equivalent to a faculty member or researcher specified in subparagraph 1. |
| (2) | The Minister of Science and ICT may provide research project funds to conduct research activities to the beneficiaries of the aid for research activities selected in accordance with paragraph (1), and may sign an agreement if necessary. |
| (3) | A person who is selected as the beneficiary of the aid for research activities under paragraph (1) shall faithfully conduct the research activities and report the result thereof to the Minister of Science and ICT. In such cases, the Minister of Science and ICT may evaluate the reported result, and refer to such result for future selection of beneficiaries of aid for research activities. |
| (4) | Matters necessary for the selection of persons to receive aid for research activities under paragraph (1), provision of research project funds and signing of an agreement under paragraph (2), and the procedures and methods of reporting and evaluation of research activities under paragraph (3), shall be prescribed by Presidential Decree. |
| Article 27 (Research and Development of Software Engineering Technology) |
| (1) | The Minister of Science and ICT shall endeavor to develop and disseminate software engineering technology to increase the productivity of software business entities and strengthen their quality competitiveness. |
| (2) | The Minister of Science and ICT may conduct pilot projects on research and development, utilization and distribution of software engineering technology, and provide support for software engineer education. |
CHAPTER IV SOFTWARE CONVERGENCE AND SOFTWARE EDUCATION
SECTION 1 Promotion of Software Convergence and Assuring Software Safety
| Article 28 (Facilitation of Software Convergence) |
| (1) | The Government shall strive to promote innovation in other industries and strengthen their competitiveness by activating software convergence in accordance with relevant statutes and regulations. |
| (2) | The Minister of Science and ICT may conduct pilot projects or support research and development activities, exports, etc. to promote software convergence. |
| Article 29 (Promotion of Software Development Security) |
The Minister of Science and ICT may promote the following projects in furtherance of the field of software development security:
| 1. | Laying a foundation for technology research and human resources development for software development security; |
| 3. | Other projects prescribed by Presidential Decree to enhance software development security. |
| Article 30 (Assuring Software Safety) |
| (1) | The Government may develop policies for assuring software safety. |
| (2) | The Minister of Science and ICT shall determine, and give public notice of, guidelines for assuring software safety that include the following: |
| 1. | Analysis of software safety hazards; |
| 2. | Design and implementation methods to assure software safety; |
| 3. | Methods of software safety verification; |
| 4. | Plans to assure software safety at the operating stage; |
| 5. | Other matters deemed necessary to assure software safety. |
| (3) | The head of a central administrative agency shall consider guidelines as stipulated in paragraph (2) or international standards, etc. in establishing technical standards for software safety in the relevant field. |
| Article 31 (Promotion of Software Safety Industry) |
The Minister of Science and ICT may promote the following projects in furtherance of the software safety industry and assure software safety throughout the country:
| 1. | Research on software safety technology; |
| 2. | Development of software safety human resources; |
| 3. | Laying a foundation for the software safety industry; |
| 4. | Support for software safety management and response to a safety-related incident; |
| 5. | Compilation and use of information on software safety; |
| 6. | Other projects prescribed by Presidential Decree. |
SECTION 2 Software Education and Creation of Culture for Software
| Article 32 (Encouraging Software Education) |
The Minister of Science and ICT may promote the following projects related to software education to enhance the public understanding of software and to proliferate the use of software:
| 1. | Research on the contents and methods of software education; |
| 2. | Development of software education contents; |
| 3. | Encouragement of software education by region; |
| 4. | Proliferation of the culture of appropriate use of software; |
| 5. | International cooperation on software education; |
| 6. | Training and support for software instructors, etc.; |
| 7. | Other projects necessary to encourage software education. |
| Article 33 (Promotion of Software Education in Elementary and Secondary Schools) |
| (2) | The State and local governments may, within the budget, provide all or part of the money necessary for relevant corporations or organizations to pay the expenses, for the promotion of software education in elementary and secondary schools. |
| Article 34 (Finding and Nurturing Software Talents) |
In order to discover and systematically foster persons with talents in the field of software, the Minister of Science and ICT shall establish a plan for finding and nurturing software talents and develop necessary measures.
| Article 35 (Software Competency Tests) |
| (1) | The Minister of Science and ICT may test software competencies in order to increase people's interest in software and foster creative problem-solving skills using software. |
| (2) | Necessary matters regarding the method, procedure, contents, targets, and timing of a software competency test under paragraph (1) shall be prescribed by Presidential Decree. |
| Article 36 (Creation of Culture for Software) |
| (1) | The State and local governments shall enhance people’s understanding and knowledge of software and endeavor to improve its accessibility in people's lives and all of society. |
| (2) | The Minister of Science and ICT shall make efforts to disseminate a software development culture based on openness, sharing and cooperation. |
| Article 37 (Preferential Treatment for Software Engineers) |
The Government shall endeavor to promote the morale of software engineers by creating a social atmosphere in which software engineers are respected and treated with civility, and providing conditions for stable software development.
CHAPTER V ADVANCEMENT OF SOFTWARE PROJECTS
SECTION 1 General Provisions
| Article 38 (Doctrine of Fair Contracts) |
| (1) | The parties to a contract for software project (including a subcontract and a re-subcontract: hereafter the same shall apply in this Article) shall enter into the contract fairly on an arm's-length basis by mutual agreement, and fulfill the contract in good faith. |
| (2) | The parties to a contract for software project shall, when entering into the contract, clearly write in the contract the purpose and scope of the contract, the contract period, and other matters prescribed by Presidential Decree, and affix their signatures (including digital signatures as defined in subparagraph 2 of Article 2 of the Digital Signature Act) thereto or exchange and keep the signed and sealed contract. |
| (3) | If any terms or conditions of a contract for software project are remarkably unfair to either party and falls under any of the following cases, the contract shall be invalidated only for such terms or conditions: |
| 1. | If either party does not accept any modification of the contract amount or the contract period caused by changes to the assigned tasks or changes in economic conditions after the conclusion of the contract without good cause, or transfers the relevant burden to the other party; |
| 2. | If either party transfers responsibility to the other party for any matters that are difficult to predict at the time of signing the contract, in light of all related circumstances including the terms and conditions of the contract; |
| 3. | If the specific terms and conditions of the contract are not determined or, in the event of a disagreement between the parties, the terms or conditions of the contract are determined at the sole discretion of either party, which thereby prejudices the legal interests of the other party; |
| 4. | If either party's liability for damages resulting from its non-performance of the contract is excessively reduced or augmented, which thereby prejudices the legal interests of the other party; |
| 5. | If the rights of the other party acknowledged by the Civil Act and other applicable statutes or regulations are excluded or restricted without good cause. |
| (4) | The Minister of Science and ICT shall prepare a standard contract for software project in consultation with the Minister of the Interior and Safety, the Minister of Culture, Sports and Tourism, and the Chairperson of the Fair Trade Commission, and recommend its use to establish a fair trade order in conducting software projects. |
| Article 39 (Prohibition against Unfavorable Treatment) |
| (1) | A project owner shall not restrict a contractor’s opportunity to receive orders, suspend its transactions, or give it other disadvantages (hereafter referred to as "unfavorable treatment, etc." in this Article) because the contractor has reported a violation of this Act by the project owner. |
| (2) | A contractor may report the unfavorable treatment, etc. of a project owner to the Minister of Science and ICT, as prescribed by Presidential Decree. |
| (3) | Paragraphs (1) and (2) shall apply mutatis mutandis to a contractor’s unfavorable treatment, etc. of a subcontractor and a subcontractor’s unfavorable treatment, etc. of a re-subcontractor. |
| Article 40 (Software Projects for Public-Private Partnership) |
| (1) | The head of a state agency, etc., may promote a software project that brings the public and private sectors together by using private capital and technology in furtherance of the convenience of people's life. |
| (2) | Necessary matters regarding the requirements of a project under paragraph (1) and method for its promotion shall be prescribed by Presidential Decree. |
| Article 41 (Forecast of Demand for Software Projects) |
| (1) | The head of a state agency, etc., shall submit purchasing demand information of its affiliated agencies for commercial software and the plan for implementation of software projects to the Minister of Science and ICT at least twice a year. |
| (2) | The Minister of Science and ICT shall disclose to software business entities the purchasing demand information for commercial software and the software project implementation plan submitted under paragraph (1) at least twice a year. |
| (3) | Necessary matters regarding the specific number, timing, method and procedure of submission and disclosure under paragraphs (1) and (2) shall be prescribed by Presidential Decree. |
| Article 42 (Technical Assistance for Order Placing) |
| (1) | The Government shall formulate and implement measures to offer technical assistance that project owners have no difficulty in implementing software projects. |
| (2) | The Government may develop and implement necessary training courses such as training for order placing technology to improve the competencies of project owners. |
| (3) | The Government may request necessary data from software business entities, software convergence business entities, trade associations, or other organizations, etc. for the efficient promotion of affairs as described in paragraphs (1) and (2). |
SECTION 2 Promotion of Software Projects
| Article 43 (Software Project Impact Assessments) |
| (1) | When promoting a software project, the head of a state agency, etc. shall assess the impact of the software project on the private software market before publishing an advertisement for bids: Provided, That this shall not apply to the promotion of a software project prescribed by Presidential Decree, such as purchase of commercial software. |
| (2) | The head of a state agency, etc., shall publish the results of a software project impact assessment under paragraph (1): Provided, That he or she may not publish such results in the case of a project pertaining to national security. |
| (3) | If a software business entity is not satisfied as to the results of the software business impact assessment published by the head of a state agency, etc., it may request a re-assessment. In such cases, the head of a state agency, etc., shall conduct the re-assessment and publish the results if there is no reason prescribed by Presidential Decree. |
| (4) | Matters necessary for the standards and procedures of a software project impact assessment, method of publication, and procedures of re-assessment under paragraphs (1) through (3) shall be prescribed by Presidential Decree. |
| Article 44 (Scope of Tasks for Software Projects) |
| (1) | When preparing a plan and budget for a software project, the head of a state agency, etc. shall clarify the content and scope of the tasks for the project according to the standards publicly notified by the Minister of Science and ICT in consultation with the Minister of the Interior and Safety |
| (2) | When placing an order for a software project, the head of a state agency, etc. shall prepare and disclose the detailed requirements according to the standards publicly notified by the Minister of Science and ICT in consultation with the Minister of the Interior and Safety so that the software business entity can estimate the scope of the assigned tasks. |
| (3) | The head of a state agency, etc. may request an independent specialized agency, etc. to prepare the detailed requirements mentioned in paragraph (2), or separately place an order for analysis or design projects therefor. |
| Article 45 (Determination of Adequate Project Period) |
| (1) | When promoting a software project, the head of a state agency, etc. shall determine the adequate project period necessary for the undertaking of the project according to the standards publicly notified by the Minister of Science and ICT in consultation with the Minister of the Interior and Safety, and reflect the details thereof in the contract. |
| Article 46 (Payment of Appropriate Price) |
| (1) | When a state agency, etc. enters into a contract for a software project, it shall endeavor to find an appropriate level of pricing that would allow the development of the software industry and quality assurance of software. |
| (2) | In order to help the heads of state agencies, etc. pay an appropriate price under paragraph (1), the Minister of Science and ICT shall collect and analyze the software project information described below and provide it to the state agencies, etc.: |
| 1. | Business environment for undertaking software projects; |
| 2. | Tools for undertaking software projects; |
| 3. | Cost, schedule and scale of software projects; |
| 4. | Information on quality characteristics of software projects; |
| 5. | Other information necessary to determine the pricing standards for software projects. |
| (3) | In order to comprehensively manage the software project information described in paragraph (2), the Minister of Science and ICT may request the head of a state agency, etc. to submit necessary data according to the procedures prescribed by Presidential Decree In such cases, the head of a state agency, etc. shall cooperate therewith unless there is a compelling reason not to do so. |
| (4) | Necessary matters concerning the guidelines for payments for personnel expenses of software engineers to pay an appropriate price under paragraph (1) shall be prescribed by Presidential Decree. |
| Article 47 (Prior Consultation When Promoting Software Projects) |
| (1) | The head of a state agency, etc. shall consult in advance with the head of the central agency responsible for administrative affairs as defined in subparagraph 4 of Article 2 of the Electronic Government Act, when promoting the following software projects: Provided, That if the head of a Si/Gun/Gu (referring to the head of an autonomous Gu) promotes the following software projects, they shall have prior consultations with the the Special Metropolitan City Mayor, Metropolitan City Mayor or Do Governor: |
| 2. | Other projects meeting the requirements prescribed by Presidential Decree. |
| (2) | The head of the central agency responsible for administrative affairs or the Special Metropolitan City Mayor, Metropolitan City Mayor or Do Governor shall, when having a prior consultation under paragraph (1), place the following matters on the agenda for the prior consultation: |
| 1. | Whether the level of requirements for the software project conforms to Article 44 (1) and (2); |
| 2. | Whether the determined project period conforms to Article 45 (1). |
| Article 48 (Support for Small and Medium Business Entities’ Involvement in Projects) |
| (1) | The Government shall adopt measures to expand the participation of small and medium-sized software business entities prescribed by Presidential Decree in software projects ordered by state agencies, etc. for the sound development of the software industry through fostering small and medium-sized software business entities. |
| (2) | When placing an order for a software project, the head of a state agency, etc. shall restrict the participation of a software business entity categorized as a large company (hereafter referred to as “large company” in this Article) prescribed by Presidential Decree (including participation of a software business entity which is a large company, as a subcontractor or a re-subcontractor; hereafter the same shall apply in this Article) for projects of which price is less than the project price determined and publicly notified by the Minister of Science and ICT. In such cases, the project price refers to the lower of each project price in case of batch ordering of two or more software projects, and the average annual price for the relevant contract period when the software maintenance and management business is under a long-term contract of one year or longer. |
| (3) | In any of the following cases, the head of a state agency, etc. may involve a software business entity categorized as a large company (a large company which is the relevant public institution, in the case of subparagraph 5), notwithstanding the former part of paragraph (2): |
| 1. | In the case of re-placement of an order due to failure to select a software business entity. This shall be limited to the placing of an order for the state agency, etc. by the Public Procurement Service in accordance with the Government Procurement Act; |
| 2. | In the case of a project related to national defense, diplomacy, public order, electricity, or other national security, etc., acknowledged and publicly notified by the Minister of Science and ICT that the participation of a software business entity categorized as a large company is inevitable; |
| 4. | In the case of a software project for public-private partnership under Article 40, which is acknowledged and publicly notified by the Minister of Science and ICT; |
| 5. | In the case of a project falling within the business scope determined and publicly notified by the Minister of Science and ICT, which is undertaken by a large company that is a public institution (referring to a public institution as defined in Article 4 of the Act on the Management of Public Institutions) determined and publicly notified by the Minister of Science and ICT. |
| (4) | Notwithstanding paragraph (2), the head of a state agency, etc. shall restrict the participation of companies belonging to a business group subject to limitations on cross shareholding designated under Article 14 of the Monopoly Regulation and Fair Trade Act in the bidding process, regardless of the project price: Provided, That their participation is allowable in a case described in any subparagraph of paragraph (3). |
| (5) | If the head of a state agency, etc. fails to apply the main clause of paragraph (2) or (4) due to an unavoidable reason when placing an order for a software project, he or she shall notify the Minister of Science and ICT of the reason in advance. In such cases, the Minister of Science and ICT shall evaluate the appropriateness of the reason and, if deemed inappropriate, request the head of a state agency, etc. to correct it. |
| Article 49 (Contracts for Software Projects by State Agencies) |
| (2) | The Minister of Science and ICT may determine and publicly notify the guidelines for evaluating the technological competencies of software business entities, and recommend that the head of a state agency, etc. apply such guidelines in the evaluation of the technological competencies of a software business entity when signing a contract. |
| (3) | When placing an order for a software project except for software maintenance and management, the head of a state agency, etc. shall allow the software business entity to suggest a project performance site. In such cases, the head of a state agency, etc. may set forth the requirements for the project performance site, such as matters relating to information security. |
| (4) | Detailed procedures and standards for signing contracts for software projects under paragraphs (1) and (3) shall be determined and publicly notified by the Minister of Science and ICT. |
| Article 50 (Software Project Task Deliberation Committee) |
| (1) | The head of a state agency, etc. shall establish a software project task deliberation committee (hereinafter referred to as “task deliberation committee”) to deliberate on the following matters relating to the promotion of a software project: |
| 1. | Confirmation of task details for the project; |
| 2. | Confirmation of changes in task details, and adjustment of the contract price and contract period ensuing therefrom. |
| (2) | In the absence of extraordinary circumstances, the head of a state agency, etc. shall reflect the results of deliberation under paragraph (1) in the contract, etc. |
| (3) | A business entity that has entered into a contract for software project with the head of a state agency, etc. may request the head of a state agency, etc. to hold a task deliberation committee meeting, if it is necessary to modify any terms or conditions of the contract due to a change in the task details. In such cases, the head of a state agency, etc. shall accept the request in the absence of extraordinary circumstances. |
| (4) | Necessary matters concerning the composition and operation of the task deliberation committee, procedures for confirming and changing the task details, and requesting the holding of a meeting under paragraphs (1) and (3), shall be prescribed by Presidential Decree. |
| Article 51 (Restrictions on Subcontracting) |
| (1) | If a software business entity enters into a contract for software project with the head of a state agency, etc., it shall not subcontract the work covered by more than 50/100 of the project price excluding the purchase price of goods (including commercial software; hereinafter the same shall apply). |
| (2) | Notwithstanding paragraph (1), if the amount required for any of the following works in the software project price exceeds 50/100 of the project price excluding the purchase price of goods, it is possible to subcontract the following works, to the extent that the the entire software project is not to be subcontracted: |
| 1. | Installation, maintenance and management of goods; |
| 2. | Any work that requires new or specialized technologies prescribed by Presidential Decree. |
| (3) | A software business entity that has received a subcontract under paragraph (1) or (2) shall not re-subcontract its work: Provided, That in either of the following cases, such re-subcontracting is allowable as prescribed by Presidential Decree: |
| 1. | In cases where new technology or specialized technology is required, as prescribed by Presidential Decree; |
| 2. | Other cases necessary for implementing a subcontracted project, as prescribed by Presidential Decree. |
| (4) | A software business entity that has received a re-subcontract under any subparagaph of proviso of paragraph (3) shall not re-subcontract its work. |
| (5) | A software business entity who intends to subcontract its work under paragraph (1) or (2) or to re-subcontract its work under any subparagaph of proviso of paragraph (3), shall obtain approval from the head of a state agency, etc. in advance. |
| (6) | If the ratio of the value of the work a bidder intends to subcontract to the total price of the software project is equal to or exceeds the ratio of the project price prescribed by Presidential Decree, the head of a state agency, etc. may request the bidder to participate as a joint contractor with its subcontractor, unless there is any compelling reason not to do so. |
| (7) | The head of a state agency, etc. shall continue to manage and supervise compliance with the subcontracting restrictions and request correction from a software business entity that violates any provision of paragraphs (1) through (5). |
| (8) | Necessary matters regarding the methods and procedures for approval of subcontracting and methods of management and supervision of subcontracting under paragraphs (5) and (7), shall be prescribed by Ordinance of the Ministry of Science and ICT. |
| Article 52 (Compensation for Software Project Proposals) |
| (1) | When promoting a software project, the head of a state agency, etc. may compensate a portion of the cost of making a proposal to any bidder who has won an excellent evaluation in the evaluation of proposals, among those not determined as a successful bidder, within the budget. |
| (2) | Necessary matters regarding the criteria and procedures for compensation for proposals under paragraph (1) shall be determined and publicly notified by the Minister of Science and ICT. |
SECTION 3 Facilitating the Use of Commercial Software
| Article 53 (Activating Distribution of Commercial Software) |
| (1) | The Government shall endeavor to facilitate the distribution of commercial software for the promotion of the software industry. |
| (2) | The Minister of Science and ICT may engage in the following projects to facilitate the distribution of commercial software and support the determination of the appropriate price therefor: |
| 1. | Collection, analysis and publication of product information relating to commercial software; |
| 2. | Quality verification and technical support to promote the use of commercial software; |
| 3. | Comparative quality performance assessments for commercial software; |
| 4. | Technology development and standardization support for commercial software; |
| 5. | Furnishing of test equipment and facilities for commercial software; |
| 6. | Other projects necessary to facilitate the distribution of commercial software. |
| (3) | In order to comprehensively manage product information relating to commercial software under paragraph (2) 1, the Minister of Science and ICT may request the heads of state agencies, etc. or software business entities to submit necessary data. |
| Article 54 (Purchase of Commercial Software by State Agencies) |
| (1) | The head of a state agency, etc. in its purchase of commercial software shall obtain approval of the budget request for purchasing licensed commercial software. In such cases, the head shall make efforts to prioritize appropriation of the sums for contracts to receive and use commercial software as a form of service. |
| (2) | When promoting a software project using commercial software, the head of a state agency, etc. shall directly purchase commercial software according to the guidelines publicly notified by the Minister of Science and ICT, and shall not enter into any unfair contract in relation to the purchase and use of commercial software. |
| Article 55 (Quality Performance Assessments for Commercial Software) |
| (1) | When directly purchasing commercial software under Article 54 (2), the head of a state agency, etc. may directly conduct the quality performance assessment or outsource the assessment to a testing institution designated by the Minister of Science and ICT, among institutions that fulfill the requirements prescribed by Presidential Decree, and shall reflect the results of the assessment in the purchase of the product. |
| (2) | A testing institution that conducts a quality performance assessment under an outsourcing agreement under paragraph (1) shall determine assessment criteria after seeking opinions from the head of a state agency, etc. as well as a person who intends to supply commercial software products, and conduct the quality performance assessment according to such assessment criteria. |
| (3) | When conducting a quality performance assessment under paragraph (1), the head of a state agency, etc. or a testing institution may require the person who intends to supply commercial software products to bear a portion of the cost. In such cases, matters regarding the cost apportionments shall be determined and publicly notified by the Minister of Science and ICT. |
| (4) | If a person designated as a testing institution under paragraph (1) falls under any of the following cases, the Minister of Science and ICT may revoke its designation: Provided, That in the case of subparagraph 1, the Minister shall revoke its designation: |
| 1. | If it obtains designation by fraud or other improper means; |
| 2. | If it fails to meet the designation requirements of paragraph (1) for a continuous period of three months or more; |
| 3. | If it produces an erroneous assessment result by intention or gross negligence. |
| (5) | Matters necessary to conduct quality performance assessments under paragraphs (1) and (2), such as the subjects of the assessments, designation requirements for the testing institutions, and the procedure for the outsourced assessments, shall be prescribed by Presidential Decree. |
SECTION 4 Management of Software Projects
| Article 56 (Quality Management of Software Projects) |
| (1) | When promoting a software project, the head of a state agency, etc. shall manage and supervise whether the project is making satisfactory progress based on the task details agreed between the contracting parties as well as the quality of software products, etc. |
| (2) | The head of a state agency, etc. shall annually disclose information prescribed by Presidential Decree, such as the list of all current contracts for software projects, and notify the Minister of Science and ICT thereof. |
| Article 57 (Management and Supervision of Software Projects and Improvement Recommendations) |
| (1) | The Minister of Science and ICT may check whether the head of a state agency, etc. complies with this Act or other applicable statutes and regulations in its promotion of a software project, and disclose the results thereof. |
| (2) | If a compliance check under paragraph (1) finds the head of a state agency, etc. has violated any provision of this Act or other applicable statutes or regulations, the Minister of Science and ICT may recommend for improvement. |
| (3) | When the head of a state agency, etc. receives a recommendation for improvement under paragraph (2), he or she shall notify the Minister of Science and ICT of the result of the action taken within one month from the date of receipt of the recommendation. |
| (4) | The Minister of Science and ICT may request that the head of a state agency, etc. submit data relating to a software project for a compliance check under paragraph (1). In such cases, the head of a state agency, etc. shall cooperate therewith unless there is a compelling reason not to do so. |
| (5) | The Minister of Science and ICT may determine and publicly notify the subjects, standards, and methods of a compliance check under paragraph (1) in consultation with the Minister of the Interior and Safety. |
| Article 58 (Management of Performance Records of Software Business Entities) |
| (1) | The Minister of Science and ICT may require software business entities to submit data relating to their technical human resources, project performance records, etc. for the purpose of promoting the software industry. |
| (2) | The Minister of Science and ICT shall manage and keep the data received under paragraph (1). |
| (3) | The Minister of Science and ICT may request the head of a state agency, etc. to submit data prescribed by Presidential Decree to ensure the truth and accuracy of the data received under paragraph (1), and the head of a state agency, etc. so requested shall cooperate therewith unless there is a compelling reason not to do so. |
| (4) | Necessary matters for the details and procedure of submission under paragraph (1) shall be prescribed by Ordinance of the Ministry of Science and ICT. |
| Article 59 (Guaranteeing the Right to Use Software Output) |
| (1) | The head of a state agency, etc. shall, if the other contracting party requests the release of the software output of a software project promoted with the contracting party to exercise its intellectual property rights, shall approve such request in the absence of any reason relating to the national security as prescribed by Presidential Decree. |
| (2) | Necessary matters regarding the items and procedures for a release under paragraph (1) shall be publicly notified by the Minister of Science and ICT in consultation with the Minister of the Interior and Safety. |
| Article 60 (Defect Warranty Obligations for Software Projects) |
| (1) | When a software business entity has entered into a contract for software project with a state agency, etc., it shall bear warranty obligations with respect to defects that occur within one year from the completion date of the project (referring to the date of delivery of the final software output after conducting tests and inspections on the project): Provided, That if a state agency, etc. has separately placed an order for a software project under Article 44 (3), the contracting parties may otherwise determine the defect warranty obligations. |
| (2) | Notwithstanding paragraph (1), a software business entity shall not bear warranty obligations with respect to defects caused by either of the following reasons: Provided, That this shall not apply if the software business entity does not inform the project owner of such fact, even though it is aware of the inappropriateness of the goods or instructions provided by the project owner: |
| 1. | When the quality, specifications, etc. of the goods provided by the project owner fails to meet the standards; |
| 2. | When the information system is established according to the order of the project owner. |
CHAPTER VI KOREA SOFTWARE FINANCIAL COOPERATIVE
| Article 61 (Establishment of the Korea Software Financial Cooperative) |
| (1) | In order to promote mutual cooperation and autonomous economic activities and to ensure the sound development of the software industry, software business entities may establish a Korea Software Financial Cooperative (hereinafter referred to as the “Financial Cooperative”) that provides various financial assistance such as loans and guarantees, with the authorization of the Minister of Science and ICT. |
| (2) | The Financial Cooperative shall be a corporation. |
| (3) | Matters necessary for the procedure for authorization of establishment of the Financial Cooperative, matters to be included in its articles of incorporation, and matters necessary for its operation and supervision, etc. shall be prescribed by Presidential Decree. |
| (4) | Notwithstanding Article 52 of the Civil Act, the registration of a change in the total amount of investments in the Financial Cooperative may be registered within three months after the end of each fiscal year, as of the end of each fiscal year. |
| (5) | Except as provided in this Act regarding the Financial Cooperative, the provisions on aggregate corporations in the Civil Act shall apply mutatis mutandis. |
| Article 62 (Programs of the Financial Cooperative) |
The Financial Cooperative shall engage in the following programs (hereinafter referred to as "mutual aid programs"):
| 1. | Loans and investment of funds necessary for software development, technology improvement, and management stability; |
| 2. | Guarantee of debts in case of borrowing funds necessary for software development, technology improvement, and management stability from financial institutions;2. Guarantee of debts in case of borrowing funds necessary for software development, technology improvement, and management stability from financial institutions; |
| 3. | Performance guarantee necessary for fulfillment of obligations in software projects; |
| 5. | Other programs prescribed by Presidential Decree. |
| Article 63 (Creation of Fundamental Property) |
| (1) | The fundamental property of the Financial Cooperative shall be created from the following sources for the efficient operation of the mutual aid programs, but the Government may contribute funds or provide subsidy funds within the budget: |
| 1. | Investments, premiums, deposits or contributions of its members; |
| 2. | Other financial resources prescribed by Presidential Decree. |
| (2) | Of the fundamental property created under paragraph (1), contributions shall be classified as capital for accounting purposes. |
| Article 64 (Mutual Aid Rules) |
| (1) | The Financial Cooperative shall promulgate rules for mutual aid in order to engage in mutual aid programs. |
| (2) | The mutual aid rules under paragraph (1) shall include the types and targets of mutual aid programs, premiums, reserves, and other necessary matters for the creation and operation of the fundamental property. |
| (3) | The Financial Cooperative shall obtain approval from the Minister of Science and ICT for the types and targets of mutual aid programs and other important matters prescribed by Presidential Decree, among those to be included in the mutual aid rules in accordance with paragraph (2). The same shall also apply to any modification of the approved matters. |
| Article 65 (Accumulation of Reserves for Losses) |
| (1) | In order to compensate for losses incurred in the operation of the mutual aid programs, the Financial Cooperative may require the members of the mutual aid programs to make payments for reserves for losses (hereafter referred to as “reserves” in this Article), which may be accumulated and operated in a separate reserve account. |
| (2) | Matters necessary for the accumulation and operation of reserves under paragraph (1) shall be prescribed by Presidential Decree. |
| Article 66 (Liability of the Financial Cooperative) |
| (1) | The Financial Cooperative shall pay a guaranty to the guaranty creditor upon the occurrence of the event triggering the payment of the guaranty as provided in statutes or regulations, contracts, etc. regarding the matters of which payment is guaranteed by the Financial Cooperative. |
| (2) | The right to a guaranty held by a guaranty creditor against the Financial Cooperative under paragraph (1) shall lapse upon completion of the prescription unless exercised for two years from the expiration of the guarantee period. |
| Article 67 (Transfer of Equity Interests) |
| (1) | A current or former member may transfer his or her equity interests to another member or to a person who intends to become a member, as prescribed by Presidential Decree. |
| (2) | The transferee of equity interests under paragraph (1) shall succeed the rights and obligations of the transferor regarding such equity interests. |
| (3) | Any transfer or pledge of equity interests shall be made in a manner of transfer or pledge of shares as provided in the Commercial Act. |
| (4) | No equity interests shall be used for security purposes, except when providing them to secure any debts to the Financial Cooperative. |
| (5) | Any attachment or seizure of equity interests in accordance with the procedures for civil execution or enforced collection action for national taxes, etc. shall be made in the same manner as attachment or seizure of debts payable to order under the Civil Execution Act is conducted. |
| Article 68 (Acquisition of Equity Interests by the Financial Cooperative) |
| (1) | The Financial Cooperative may acquire the equity interests of a current or former member only when any of the following events occurs: Provided, That in the case of subparagraph 1 or 3, it shall acquire the relevant equity interests: |
| 1. | If the Financial Cooperative intends to reduce its capital; |
| 2. | If it is necessary for the Financial Cooperative to enforce its security right as the right holder against a member; |
| 3. | If a member or a person who has been expelled or withdrawn from the Financial Cooperative requests that the Financial Cooperative acquire his or her equity interests in order to recover his or her investments. |
| (2) | When the Financial Cooperative has acquired equity interests under paragraph (1), it shall undertake the following measures without delay: |
| 1. | In case of acquisition due to an event specified in paragraph (1) 1: Take due process for reducing its capital; |
| 2. | In case of acquisition due to an event specified in paragraph (1) 2 or 3: Make disposal thereof to another member or a person who intends to become a member. |
| (3) | When the Financial Cooperative acquires equity interests under paragraph (1), the acquisition price shall not exceed the price of the relevant equity security. |
| Article 69 (Appointment of Agent) |
The Financial Cooperative may appoint an agent to perform all judicial or non-judicial acts relating to its business affairs, from among its executive officers or employees.
| Article 70 (Appropriation of Profits) |
| (1) | Any profits of the Financial Cooperative shall be appropriated for the following purposes in the order indicated: |
| 1. | Preservation of losses carried forward; |
| 2. | Accumulation of reserves for losses; |
| 3. | Accumulation of earned surplus reserves; |
| 4. | Accumulation of business reserves; |
| 5. | Distribution of profits. |
| (2) | In the event of dissolution of the Financial Cooperative, the remaining assets shall be disposed of in accordance with Article 80 of the Civil Act: Provided, That the members’ investments in the remaining assets shall be disposed of according to a resolution of the general meeting. |
| (3) | With respect to the distribution of profits under paragraph (1) 5, the provisions of the Commercial Act on the accounting of stock companies shall apply mutatis mutandis; and other necessary matters shall be determined by the articles of incorporation. |
| Article 71 (Liability for Compensation) |
| (1) | If an executive officer of the Financial Cooperative violates the statutes or regulations or its articles of incorporation, or neglects his or her duties and thereby inflicts damage to the Financial Cooperative, the executive officer shall be jointly and severally liable to the Financial Cooperative to compensate for the damage. |
| (2) | If a person engaged in the business affairs of the Financial Cooperative inflicts damage to the Financial Cooperative in relation to such business affairs, he or she shall be liable to compensate for the damage only if such damage is inflicted intentionally or by gross negligence. In such cases, the liability may be reduced, except for the intentional infliction of damage. |
CHAPTER VII SUPPLEMENTARY PROVISIONS
| Article 72 (Entrustment of Functions) |
If necessary for the furtherance of software, the Minister of Science and ICT may entrust part of the functions granted to him or her under this Act to a corporation or organization, as prescribed by Presidential Decree.
The Minister of Science and ICT shall hold a hearing in order to make any of the following dispositions:
| 1. | Revocation of designation as a regional software industry promotion agency under Article 9 (3); |
| 2. | Revocation of designation as a software promotion facility under Article 11 (6); |
| 3. | Revocation of designation as a software promotion complex under Article 12 (4); |
| 4. | Revocation of designation as a software quality certification institution under Article 20 (5); |
| 5. | Revocation of designation as a software process quality certification institution under Article 21 (5); |
| 6. | Revocation of designation as a software human resources training institution under Article 22 (3); |
| 7. | Revocation of designation as a testing institution for software quality performance assessment under Article 55 (4). |
| Article 74 (Restitution of Contributions) |
| (1) | If the contributions made for the following purposes are used for other purposes, the State or the head of a local government shall impose restitution for the entire amount concerned: |
| 1. | Support for promotion facilities and promotion complexes under Article 13 (3); |
| 2. | Support for public organizations, etc. that support software startups under Article 14 (2); |
| 3. | Funding to facilitate the development of software-related technologies under Article 25 (3); |
| 4. | Support for the operation of the Financial Cooperative under Article 63 (1). |
| (2) | When the State or the head of a local government decides to impose restitution for the contributions in accordance with paragraph (1), they shall notify the head of the relevant business entity, organization or institution thereof without delay. The person receiving the notification in this case shall pay the relevant amount to the State or the local government within 30 days from the date of receiving the notification. |
| (3) | The State or the head of a local government shall, when they restitute the contributions in accordance with paragraph (1), restitute them in cash. |
| (4) | The State or the head of a local government shall urge a person who has received a restitution order for the contributions in accordance with paragraph (1) to pay the restitution within a specified period of time, and may collect the restitution in the same manner as delinquent national taxes are collected, if the person fails to pay it within the specified period of time. |
| (5) | The State or the head of a local government may entrust the functions relating to the restitution of contributions under paragraphs (1) through (4) to a corporation or organization prescribed by Presidential Decree. |
| Article 75 (Legal Fiction as Public Officials in Application of Penalty Provisions) |
| 1. | A regional software industry promotion agency under Article 9 (2); |
| 3. | A person who has been designated as a promotion complex under Article 12 (1); |
| 4. | A software quality certification institution under Article 20 (2); |
| 5. | A software process quality certification institution under Article 21 (2); |
| 6. | A software human resources training institution under Article 22 (2); |
| 7. | A specialized software educational institution under Article 23 (1); |
| 8. | A task deliberation committee under Article 50 (1); |
| 9. | A testing institution for commercial software quality performance assessment under Article 55 (1); |
| 10. | An institution or organization to which the Minister of Science and ICT has entrusted part of his or her functions granted to him or her under this Act in accordance with Article 72; |
| 11. | An institution or organization to which the State or the head of a local government has entrusted its functions relating to the restitution of contributions in accordance with Article 74 (5). |
| Article 76 (Confidentiality) |
An executive officer, employee or member of any institution, corporation or organization specified in the subparagraphs of Article 75, or a person who served as an executive officer, employee or member of any such institution, etc. shall not divulge any secrets learned in the course of their duties.
CHAPTER VIII PENALTY PROVISIONS
| Article 77 (Penalty Provisions) |
| (1) | A person who violates Article 76 shall be punished by imprisonment with labor for not more than three years or by a fine not exceeding 30 million won. |
| (2) | A person who uses a certification mark or any similar mark without obtaining certification under Article 20 (3) or 21 (3) shall be punished by a fine not exceeding five million won. |
| Article 78 (Joint Penalty Provisions) |
If the representative of a corporation or organization, or an agent or employee of, or any other person employed by, the corporation or organization or an individual commits any violations described in Article 77 in performing the business affairs of the corporation, organization or individual, the corporation, organization or individual shall, in addition to punishing the violators accordingly, be punished by a fine prescribed in the relevant Article: Provided, That this shall not apply if such corporation, organization or individual has not been negligent in giving due attention to and supervision over the relevant affairs to prevent such violations.
ADDENDA <Act No. 17348, Jun. 9, 2020>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Article 2 (Applicability to Software Project Impact Assessments)
The amended provisions of Article 43 shall begin to apply to a project for which advertisement for bids is published on or after the date this Act enters into force. Article 3 (Applicability to Penalty Provisions)
The amended provisions of Articles 77 and 78 shall apply to an act committed after this Act enters into force. Article 4 (Transitional Measures concerning the Korea Software Industry Association)
The Korea Software Industry Association established under Article 26 of the previous Software Industry Promotion Act at the time this Act enters into force, shall be deemed the Korea Software Industry Association established under the amended provisions of Article 10. Article 5 (Transitional Measures concerning Promotion Facilities)
A promotion facility designated under Article 5 of the previous Software Industry Promotion Act at the time this Act enters into force, shall be deemed a promotion facility designated under the amended provisions of Article 11. Article 6 (Transitional Measures concerning Promotion Complexes)
A promotion complex designated or created under Article 6 of the previous Software Industry Promotion Act at the time this Act enters into force, shall be deemed a promotion complex designated or created under the amended provisions of Article 12. Article 7 (Transitional Measures concerning Software Quality Certification)
| (1) | Any software that has obtained a quality certification under Article 13 (1) of the previous Software Industry Promotion Act at the time this Act enters into force, shall be deemed to have obtained a quality certification under the amended provisions of Article 20 (1). |
| (2) | A software quality authentication institution designated under Article 13 (2) of the previous Software Industry Promotion Act at the time this Act enters into force, shall be deemed designated as a software quality certification institution under the amended provisions of Article 20 (2). |
Article 8 (Transitional Measures concerning Software Process Quality Certification)
| (1) | A person who has obtained a software process certification under Article 23 (1) of the previous Software Industry Promotion Act at the time this Act enters into force, shall be deemed to have obtained a software process quality certification under the amended provisions of Article 21 (1). |
| (2) | An institution designated as an authentication institution to award software process certification under Article 23 (2) of the previous Software Industry Promotion Act at the time this Act enters into force, shall be deemed designated as a software process quality certification institution under the amended provisions of Article 21 (2). |
Article 9 (Transitional Measures concerning Designation of Software Human Resources Training Institutions)
An institution for training and educating software specialists designated under Article 10 of the previous Software Industry Promotion Act at the time this Act enters into force, shall be deemed designated as a software human resources training institution under the amended provisions of Article 22 (2). Article 10 (Transitional Measures concerning Submission of Data Relating to Software Engineers)
| (1) | A software engineer who has filed a report under Article 24-3 (1) of the previous Software Industry Promotion Act at the time this Act enters into force, shall be deemed to have submitted a record of his or her work experience, academic background, qualifications, etc. under the amended provisions of Article 24 (2). |
| (2) | A certificate of software technical career issued under Article 24-3 (4) of the previous Software Industry Promotion Act at the time this Act enters into force, shall be deemed a software engineer’s certificate of work experience issued under the amended provisions of Article 24 (3). |
Article 11 (Transitional Measures concerning Designation of Software Human Resources Training Institutions)
A deliberative committee on task change established under Article 20-2 of the previous Software Industry Promotion Act at the time this Act enters into force, shall be deemed a task deliberation committee established under the amended provisions of Article 50. Article 12 (Transitional Measures concerning Restrictions on Subcontracting)
Notwithstanding the amended provisions of Article 51, any project for which advertisement for bids was published before the date this Act enters into force, shall be governed by Articles 20-3 and 20-4 of the previous Software Industry Promotion Act. Article 13 (Transitional Measures concerning Designation of Testing Institutions for Quality Performance Assessment)
A test agency to conduct benchmark tests designated under Article 13-2 of the previous Software Industry Promotion Act at the time this Act enters into force, shall be deemed designated as a testing institution for quality performance assessment under the amended provisions of Article 55 (1). Article 14 Omitted.
Article 15 (Relationships with other Acts)
Where the Engineering Technology Promotion Act or the relevant provisions thereof have been cited by other statues as at the time this Act enters into force, if provisions corresponding thereto exist in this Act, this Act or the corresponding provisions of this Act shall be deemed to have been cited in lieu of the former Engineering Technology Promotion Act or the relevant provisions thereof.