CHAPTER I GENERAL PROVISIONS
The purpose of this Act is to create a foundation for the development of the materials, components, and equipment industry, to strengthen the competitiveness of such industry, such as the accumulation of industrial technology capabilities, to stabilize its supply chain, and to build a sound ecosystem for the industry, thereby contributing to national security and the sustainable growth of the national economy. <Amended on Jun. 13, 2023>
The terms used in this Act are defined as follows: <Amended on Jun. 13, 2023>
| 1. | The term "materials and components" means raw materials or intermediate products used in the manufacture of goods, as prescribed by Presidential Decree; |
| 2. | The term "equipment" means a device or facility that produces materials and components or produces products using materials and components, as prescribed by Presidential Decree; |
| 3. | The term "core strategic technology" means a technology selected pursuant to Article 12 out of materials, components, and equipment that performs a key function in the industrial value chain for smooth production and investment activities; |
| 4. | The term "specialized leading enterprise" means an enterprise selected pursuant to Article 13 which has technological capabilities and production capacity related to core strategic technologies or has a promising growth potential; |
| 5. | The term "specialized enterprise" means an enterprise whose main business is the development and manufacture of materials, components, or equipment, and which has been confirmed pursuant to Article 14; |
| 6. | The term "specialized investment association" means an association registered pursuant to Article 18 whose main purpose is to invest in specialized leading enterprise and distribute the results thereof; |
| 7. | The term "reliability" means that the quality, performance, etc. of materials, components, and equipment are at the required level for a certain period of time under certain conditions; |
| 8. | The term "demonstration base" means the facility and equipment base necessary for demonstration testing, reliability assessment, performance testing, etc. of materials, components, and equipment; |
| 9. | The term "cooperation model" means a cooperation system established for mutual benefit between participating enterprises, such as horizontal cooperation between demanding enterprises or between supplying enterprises and vertical cooperation between demanding and supplying enterprises in the field of materials, components, and equipment; |
| 10. | The term "win-win model" means a division of a labor cooperation system established for mutual benefit between large enterprises and small and medium enterprises among the cooperation models under subparagraph 9; |
| 11. | The term "supply chain stability items for the materials, components, and equipment industry" (hereinafter referred to as "supply chain stability items") means items selected pursuant to Article 12-2 that are highly dependent on imports from certain foreign countries or have a significant impact on the domestic economy; |
| 12. | The term "supply chain stability project for the materials, components, and equipment industry" (hereinafter referred to as "supply chain stability project") means a project that an enterprise pursues for the purpose of stabilizing the supply chain of supply chain stability items. |
| Article 3 (Responsibilities of the State and Local Governments) |
| (1) | The State and local governments shall be responsible for creating a foundation for the materials, components, and equipment industry, strengthening the competitiveness of such industry, stabilizing its supply chain, and securing core strategic technologies, and shall prepare policy measures for administrative, financial, and technical support necessary therefor. <Amended on Jun. 13, 2023> |
| (2) | Business entities in the materials, components, and equipment industry shall strive to strengthen the competitiveness of the materials, components, and equipment industry, stabilize its supply chain, and contribute to industrial development through the development, manufacture, etc. of innovative materials, components, and equipment. <Amended on Jun. 13, 2023> |
| Article 4 (Relationship to Other Statutes) |
This Act shall take precedence over other statutes with respect to regulatory exceptions for the materials, components, and equipment industry: Provided, That if other statutes contain provisions that are more relaxed than the regulatory exceptions under this Act, the provisions of those statutes shall apply.
CHAPTER II FORMULATION OF MASTER PLAN FOR STRENGTHENING COMPETITIVENESS OF MATERIALS, COMPONENTS, AND EQUIPMENT INDUSTRY
| Article 5 (Formulation of Master Plans for Strengthening Competitiveness of Materials, Components, and Equipment Industry) |
| (1) | The Government shall formulate and implement a master plan for strengthening the competitiveness of the materials, components, and equipment industry (hereinafter referred to as "master plan") to present the development direction of the materials, components, and equipment industry, create a development foundation for the field of materials, components, and equipment, strengthen competitiveness, and stabilize the supply chain. <Amended on Jun. 13, 2023> |
| (2) | The Minister of Trade, Industry and Energy shall formulate a master plan after combining the opinions of relevant central administrative agencies (including those under the jurisdiction of the President; hereinafter the same shall apply) and shall finalize such master plan after deliberation by the Materials, Components, and Equipment Competitiveness Reinforcement Committee under Article 8. <Amended on Jun. 13, 2023> |
| (3) | A master plan shall include the following: <Amended on Jun. 13, 2023> |
| 1. | Basic directions for strengthening the competitiveness of materials, components, and equipment and supply chain stabilization; |
| 2. | Prospects for the development in the field of materials, components, and equipment; |
| 3. | Trends in the global trade and domestic supply and demand in the field of materials, components, and equipment; |
| 4. | Matters related to the improvement of technological capabilities, such as securing technology in the field of materials, components, and equipment; |
| 5. | Matters related to the training of technical personnel through industry-academia-research cooperation in the field of materials, components, and equipment; |
| 6. | Matters related to the creation of infrastructure, such as improving reliability and expanding investment in facilities; |
| 7. | Matters related to the advancement of information resources for technological innovation in the field of materials, components, and equipment; |
| 8. | Matters related to the reform and improvement of laws and systems to revitalize the materials, components, and equipment industry; |
| 9. | Matters related to securing and managing necessary financial resources; |
| 10. | Other matters deemed necessary to strengthen competitiveness and stabilize the supply chain in the field of materials, components, and equipment. |
| (4) | When finalizing a master plan pursuant to paragraph (2), the Minister of Trade, Industry and Energy shall report such fact to the relevant standing committee of the National Assembly. |
| Article 6 (Formulation of Implementation Plans for Strengthening Competitiveness of Materials, Components, and Equipment Industry) |
| (1) | The heads of relevant central administrative agencies shall formulate and execute an implementation plan for strengthening the competitiveness of the materials, components, and equipment industry (hereinafter referred to as "implementation plan") for their respective jurisdictions every year in accordance with the master plan. |
| (2) | The heads of relevant central administrative agencies shall report the outcomes of executing the previous year's implementation plan to the Materials, Components, and Equipment Competitiveness Reinforcement Committee under Article 8, and submit the following year's implementation plan for deliberation. |
| (3) | Matters necessary for the formulation and execution of implementation plans shall be prescribed by Presidential Decree. |
| Article 7 (Compilation of Statistics on Materials, Components, and Equipment) |
| (1) | The Government may compile and manage statistics on the field of materials, components, and equipment for the efficient formulation of master plans and implementation plans. |
| (2) | The Statistics Act shall apply mutatis mutandis to the compilation of statistics under paragraph (1). |
| (3) | The scope of statistics to be compiled under paragraph (1), the subjects to be surveyed, etc. shall be prescribed by Presidential Decree. |
CHAPTER III MATERIALS, COMPONENTS, AND EQUIPMENT COMPETITIVENESS REINFORCEMENT COMMITTEE
| Article 8 (Materials, Components, and Equipment Competitiveness Reinforcement Committee) |
| (1) | A Materials, Components, and Equipment Competitiveness Reinforcement Committee (hereinafter referred to as the "Competitiveness Committee") shall be established under the President to deliberate on and coordinate the following issues related to the competitiveness of the materials, components, and equipment industry: <Amended on Jun. 13, 2023> |
| 1. | Formulation of a master plan under Article 5; |
| 2. | Formulation of an implementation plan under Article 6 and evaluation of the outcomes of execution of such plan; |
| 3. | Analysis of mid- and long-term prospects for materials, components, and equipment and establishment of a national vision; |
| 4. | Measures to develop and supply materials, components, and equipment for large-scale projects that generate demand for new materials, components, and equipment; |
| 5. | Introduction and modification of systems related to competitive innovation in the field of materials, components, and equipment; |
| 6. | Coordination of work among relevant central administrative agencies on development policy measures in the field of materials, components, and equipment; |
| 7. | Review and approval of cooperation models among enterprises related to materials, components, and equipment; |
| 8. | Stabilization of supply and demand, and support for demonstration, performance testing, and production related to materials, components, and equipment; |
| 9. | Establishment of inter-ministerial coordination and comprehensive strategies for improving regulations and systems, including technology, budget, funding, human resources, and location for materials, components, and equipment; |
| 10. | Selection and management of core strategic technologies for materials, components, and equipment; |
| 11. | Establishing strategies to stimulate investment in the materials, components, and equipment industry and coordination among relevant administrative agencies; |
| 11-2. | Review of regulatory improvements, etc. under Article 23-4 (4); |
| 11-3. | Basic directions for selecting supply chain stability items; |
| 12. | Other matters related to strengthening the competitiveness of the materials, components, and equipment industry that the chairperson deems necessary. |
| (2) | The Competitiveness Committee shall be comprised of up to 30 members, including one chairperson and one vice chairperson. |
| (3) | The Minister of Economy and Finance shall serve as the chairperson; the Minister of Trade, Industry and Energy shall serve as the vice chairperson; and the following persons shall serve as members of the Competitiveness Committee: |
| 1. | The heads of relevant central administrative agencies and other persons prescribed by Presidential Decree; |
| 2. | Persons commissioned by the chairperson from among those prescribed by Presidential Decree, such as persons who have extensive knowledge of and experience in strengthening the competitiveness of the materials, components, and equipment industry (including the chairperson of the Win-Win Council for Large Enterprises and SMEs under paragraph (5)). |
| (4) | The Competitiveness Committee may establish an expert committee for each field comprised of members of the Competitiveness Committee or outside experts, if necessary to perform its duties professionally, and may establish the following special committees comprised of members of the Competitiveness Committee or outside experts, if necessary to discuss specific issues related to a policy for strengthening the competitiveness of materials, components, and equipment: <Amended on Jun. 13, 2023> |
| 1. | Special Committee for Supply Chain Crisis Response; |
| 2. | Other special committees deemed necessary by the chairperson. |
| (5) | The Competitiveness Committee may hear opinions on strengthening the competitiveness of materials, components, and equipment and proposals for win-win models from a council comprised of members representing large enterprises and small and medium enterprises (hereinafter referred to as the "Win-Win Council for Large Enterprises and SMEs"), and may, if necessary to perform its duties, hear the opinions of relevant experts with specialized knowledge and experience or request relevant central administrative agencies and local governments, public institutions, research institutes, or other institutions, organizations, etc. to provide cooperation, such as submitting data or presenting opinions. |
| (6) | The Competitiveness Committee may, if necessary for the performance of its duties, request the dispatch or concurrent assignment of public officials of central administrative agencies and local governments and executive officers or employees of public institutions, research institutes, and related institutions, organizations, associations, and enterprises, and may appoint experts in related fields as public officials in fixed term position, within the budget. |
| (7) | Matters necessary for the composition and operation of the Competitiveness Committee, expert committees, and special committees under paragraph (4), and the Win-Win Council for Large Enterprises and SMEs shall be prescribed by Presidential Decree. |
| Article 9 (Working Group) |
| (1) | A Working Group (hereinafter referred to as the "Working Group") shall be established in the Ministry of Trade, Industry and Energy to support the operation of the Competitiveness Committee and to efficiently carry out the tasks under Articles 49 through 52. |
| (2) | If urgent support is needed for the supply of and demand for materials, components, and equipment, the Working Group may establish a supply and demand response support center. |
| (3) | Except as provided in paragraphs (1) and (2), matters necessary for the establishment and operation of the Working Group shall be prescribed by Presidential Decree. |
| Article 10 (Adjustment for Emergency Supply and Demand Stabilization) |
| (1) | When natural disasters, rapid changes in international trade conditions, etc. disrupt the stable supply of and demand for core strategic technology-related items and the smooth functioning of the industrial supply chain, and the economic activities of the public are likely to be significantly undermined, the Government may make any of the following adjustments for emergency supply and demand stabilization (hereinafter referred to as "supply and demand stabilization adjustment") for a period of up to five months, as prescribed by Presidential Decree, to business entities or consumers of the relevant core strategic technology-related items or supply chain stability items, persons whose business is import, export, transportation, or storage, or public institutions under Article 4 of the Act on the Management of Public Institutions (hereafter in this Chapter referred to as "business entities, etc."): <Amended on Jun. 13, 2023> |
| 1. | Formulating, implementing, and changing production plans; |
| 2. | Formulating, implementing, and changing supply plans, such as preferential domestic supply; |
| 3. | Transportation, storage, stockpiling, or transfer; |
| 4. | Reforming logistics and distribution structures for supply and demand and improving and expanding related facilities; |
| 5. | Demonstration and performance testing of substitute items; |
| 6. | Other matters deemed necessary by the Competitiveness Committee through its deliberation. |
| (2) | If intending to make supply and demand stabilization adjustments pursuant to paragraph (1), the Government shall have them deliberated upon by the Competitiveness Committee and the State Council. When the Government recognizes that the reason for the supply and demand stabilization adjustments ceases to exist, it shall cancel the adjustments without delay. |
| (3) | The Government may provide necessary administrative and financial support for the implementation of supply and demand stabilization adjustments. <Newly Inserted on Jun. 13, 2023> |
| Article 11 (Request for Submission of Data on Materials, Components, and Equipment) |
| (1) | If necessary under supply and demand stabilization adjustments, the Government may request the head of a local government, a business entity, etc. to submit data, express opinions, consult, etc. on the supply and demand stabilization adjustments. |
| (2) | A person who receives a request pursuant to paragraph (1) shall comply with the request unless there is good cause, such as matters requiring confidentiality for national defense or national security. |
| (3) | If national security or the development of the national economy is likely to be undermine or if it is necessary to protect the business activities of an enterprise, including trade secrets, the Government, a public institution under Article 4 of the Act on the Management of Public Institutions, and other institutions prescribed by Presidential Decree need not disclose information regarding the data under paragraph (1). |
| (4) | No person shall engage in any of the following acts with respect to the data or information acquired pursuant to paragraph (1): |
| 1. | Acquiring, using, or disclosing data or information by improper means (including disclosing such data or information to a person in confidence; hereinafter the same shall apply); |
| 2. | Leaking data or information for the purpose of gaining illegal profits or causing damage to related enterprises and target institutions, using or disclosing the leaked data or information, or causing it to be used by a third party; |
| 3. | Acquiring, using, or disclosing data or information knowing that acts falling under subparagraph 1 or 2 are involved; |
| 4. | Acquiring, using, or disclosing data or information without knowing, by gross negligence, that acts falling under subparagraph 1 or 2 are involved; |
| 5. | An act of a person who has received data or information through legitimate channels prescribed by Presidential Decree, such as related lawsuits, using or disclosing the data or information for a purpose other than the purpose for which it was provided. |
| (5) | Matters necessary for the methods and procedures for submitting data pursuant to paragraph (1) shall be prescribed by Presidential Decree. |
CHAPTER IV FOSTERING MATERIALS, COMPONENTS, AND EQUIPMENT ENTERPRISES
| Article 12 (Selection of Core Strategic Technologies) |
| (1) | The Minister of Trade, Industry and Energy may select core strategic technologies in the field of materials, components, and equipment after consultation with relevant ministries and deliberation by the Competitiveness Committee through research and analysis of the value chain of the materials, components, and equipment industry. |
| (2) | When selecting core strategic technologies, the following criteria shall be considered: |
| 1. | Strategic and security importance in relation to national and industrial activities; |
| 2. | Domestic technology level and industrialization level, such as patent holdings; |
| 3. | Trade volumes and international division of labor; |
| 4. | Impacts on production and investment by industry; |
| 5. | Future prospects, including market growth projections; |
| 6. | Other matters deemed necessary to strengthen the competitiveness of the materials, components, and equipment industry. |
| (3) | The Minister of Trade, Industry and Energy may review the core strategic technologies selected under paragraph (1) and exclude them from the core strategic technologies after consultation with relevant ministries and deliberation by the Competitiveness Committee if they do not meet the criteria under paragraph (2). |
| (4) | In connection with paragraph (1), the Minister of Trade, Industry and Energy may request the head of the relevant central administrative agency, the head of a local government, and the head of a public institution under Article 4 of the Act on the Management of Public Institutions to submit necessary data. In such cases, the head of the institution requested to submit data shall comply therewith unless there is a compelling reason not to do so. |
| (5) | If national security or the development of the national economy is likely to be undermined or if it is necessary to protect the business activities of an enterprise, including trade secrets, the Government, a public institution under Article 4 of the Act on the Management of Public Institutions, and other institutions prescribed by Presidential Decree need not disclose data and information related to the selection under paragraph (1). |
| (6) | Except as provided in paragraphs (1) through (5), matters necessary for the criteria and procedures for selecting core strategic technologies, review, and submission and disclosure of data shall be prescribed by Presidential Decree. |
| Article 12-2 (Selection of Supply Chain Stability Items) |
| (1) | The Minister of Trade, Industry and Energy may select supply chain stability items in consultation with the heads of relevant central administrative agencies. |
| (2) | When selecting supply chain stability items under paragraph (1), the following criteria shall be considered: |
| 1. | Impacts on the research, development, and commercialization of core strategic technologies or on the production, demand, and supply of items related to core strategic technologies; |
| 2. | Trade volumes and international division of labor; |
| 3. | Percentage of imports from specific regions or countries abroad; |
| 4. | Medium- to long-term supply and demand outlook; |
| 5. | Impacts on the national economy and security; |
| 6. | Other matters deemed necessary to stabilize the supply chain of the materials, components, and equipment industry. |
| (3) | The supply chain stability items selected under paragraph (1) shall not be disclosed: Provided, That if national security and the development of the national economy is deemed unlikely to be undermined, they may be disclosed as prescribed by Presidential Decree. |
| (4) | Except as provided in paragraphs (1) through (3), matters necessary for procedures for the selection of supply chain stability items shall be prescribed by Presidential Decree. |
[This Article Newly Inserted on Jun. 13, 2023]
| Article 13 (Selection of Specialized Leading Enterprises) |
| (1) | The Minister of Trade, Industry and Energy may select specialized leading enterprises by comprehensively considering the following; in such cases, the Minister of Trade, Industry and Energy shall collect the opinions of relevant ministries: <Amended on Dec. 28, 2021> |
| 1. | The proportion of sales of materials, components, and equipment in total sales and the proportion of research and development expenditures related to core strategic technologies in total sales; |
| 2. | The proportion of sales of materials, components, and equipment in total sales and the status of possession of intellectual property rights or specialized research personnel related to core strategic technologies; |
| 3. | Investments received from investors designated by Presidential Decree, such as specialized investment associations, and investment associations for the establishment of small and medium enterprises under the Venture Investment Promotion Act; |
| 4. | Other matters prescribed by Presidential Decree with regard to core strategic technologies. |
| (2) | The Minister of Trade, Industry and Energy may issue a certificate of selection as a specialized leading enterprise with a validity period as prescribed by Presidential Decree to an enterprise selected pursuant to paragraph (1). |
| (3) | Matters necessary for the criteria and procedures for selecting specialized leading enterprises under paragraphs (1) and (2), investigation for the selection, follow-up management, etc. shall be prescribed by Presidential Decree. |
| Article 14 (Confirmation of Specialized Enterprise) |
| (1) | An enterprise that wishes to be confirmed as a specialized enterprise may apply for confirmation to the Minister of Trade, Industry and Energy, with all of the following requirements fulfilled: <Amended on Dec. 29, 2020> |
| 1. | An enterprise whose sales of materials, components, and equipment as a proportion of total sales meet the criteria prescribed by Presidential Decree; |
| 2. | An enterprise that does not belong to a business group subject to limitations on cross shareholding under Article 31 (1) of the Monopoly Regulation and Fair Trade Act, or an enterprise that belongs to a business group subject to limitations on cross shareholding that meets the criteria prescribed by Presidential Decree. |
| (2) | The Minister of Trade, Industry and Energy shall issue a certificate of a specialized enterprise with a validity period as prescribed by Presidential Decree when an enterprise that has applied pursuant to paragraph (1) qualifies for a specialized enterprise. |
| (3) | Matters necessary for the procedures for confirmation of specialized enterprises under paragraphs (1) and (2), investigation for the confirmation, follow-up management, etc. shall be prescribed by Presidential Decree. |
| Article 15 (Selection of Materials, Components, and Equipment Hidden Champions and Startups) |
| (1) | The Minister of SMEs and Startups may select hidden champions and startups in the field of materials, components, and equipment in consultation with relevant central administrative agencies based on the criteria prescribed by Presidential Decree, such as growth potential and prospects, and may provide necessary support. |
| (2) | The Minister of SMEs and Startups may issue a certificate of selection as a materials, components, and equipment hidden champion or startup with a validity period as prescribed by Presidential Decree to enterprises selected pursuant to paragraph (1). |
| (3) | Matters necessary for the criteria, procedures, support, etc. for hidden champions or startups under paragraph (1) and the issuance of selection certificates under paragraph (2) shall be prescribed by Presidential Decree. |
| Article 16 (Support for Specialized Leading Enterprises) |
| (1) | The Government may provide support to specialized leading enterprises, specialized enterprises, and hidden champions and startups under Article 15 (hereinafter referred to as "specialized leading enterprises, etc.") with respect to the following: |
| 1. | Supporting the formulation of strategies to promote growth and mid- to long-term development, etc.; |
| 2. | Administrative, technical, and financial support, such as fiscal and financial support; |
| 3. | Support for research and development, human resources training, and projects to establish a foundation; |
| 4. | Dispatching and recommending experts in areas such as technology, human resources, finance, business management, and location; |
| 5. | Provision of information for technological innovation, such as patents and technology trends; |
| 6. | Guidance, advice, etc. on overseas expansion strategies; |
| 7. | Other matters necessary for facilitating growth to become a specialized leading enterprise, etc. |
| (2) | Matters necessary for the details of and procedures for support under paragraph (1) shall be prescribed by Presidential Decree. |
| Article 17 (Revocation of Selection or Confirmation as Specialized Leading Enterprise) |
| (1) | In any of the following cases, the Minister of Trade, Industry and Energy or the Minister of SMEs and Startups need not issue a selection certificate under Articles 13 and 15 or a confirmation certificate under Article 14, or may revoke the selection or confirmation, after consultation with relevant central administrative agencies: Provided, That in cases falling under subparagraph 1, the selection or confirmation shall be revoked: |
| 1. | Where the selection or confirmation is obtained by fraud or other improper means; |
| 2. | Where the requirements for a specialized leading enterprise, etc. are no longer met; |
| 3. | Where it is determined that business activities cannot be continued due to bankruptcy, closure of business, suspension of business, etc.; |
| 4. | Other cases where revocation is unavoidable due to significant violations of other statutes, etc.; |
| 5. | Where an accident occurs by intention or negligence, causing harm to human health, property, or the environment. |
| (2) | If the selection or confirmation is to be revoked pursuant to paragraph (1), a notification shall be given to the relevant enterprise to hear its opinion. |
| (3) | Except as provided in paragraphs (1) and (2), matters necessary for revoking the selection or confirmation shall be prescribed by Presidential Decree. |
| Article 18 (Specialized Investment Association for Materials, Components, and Equipment) |
| (1) | When any of the following persons intends to form a specialized investment association for the purpose of investing in specialized leading companies, etc. with persons other than those specified in each subparagraph, he or she shall file for registration with the Minister of Trade, Industry and Energy satisfying the registration requirements prescribed by Presidential Decree with respect to the total amount of investment, the ratio of the portion of investment of general partners, the duration of existence, etc.: Provided, That the person under subparagraph 1 shall file for registration with the Ministry of SMEs and Startups: <Amended on Dec. 28, 2021; Jun. 20, 2023> |
| 5. | Others prescribed by Presidential Decree, such as institutions engaged in investment business or enterprises requiring materials, components, and equipment. |
| (2) | When intending to form a specialized investment association, those under the subparagraphs of paragraph (1) shall submit a plan for the formation of the association containing the following matters to the Minister of Trade, Industry and Energy: Provided, That those under paragraph (1) 1 shall submit it to the Minister of SMEs and Startups: |
| 3. | A profit distribution plan; |
| 4. | Other matters prescribed by Presidential Decree. |
| (3) | A specialized investment association shall use an amount equal to or greater than the percentage prescribed by Presidential Decree for investment projects in specialized leading enterprises, etc. to the extent that exceeds 50/100 of its investment amount. |
| (4) | Those under the subparagraphs of paragraph (1) shall manage the funds invested in a specialized investment association for the benefit of its investors with the reasonable care of a good manager, and shall not borrow funds, guarantee payment, or provide collateral in the execution of the specialized investment association's business. |
| (5) | Except as provided in this Act, the provisions of the Commercial Act relating to limited partnerships shall apply mutatis mutandis to specialized investment associations. |
| (6) | Matters necessary for the formation and operation of specialized investment associations shall be prescribed by Presidential Decree. |
| Article 19 (Investment of Fund in Specialized Leading Enterprises) |
| (1) | A person who manages any of the following funds (hereinafter referred to as "fund management entity") may invest in specialized leading enterprises, etc. or invest in specialized investment associations in accordance with the relevant fund management plan: |
| 1. | A fund established pursuant to the statutes set forth in attached Table 2 of the National Finance Act, as prescribed by Presidential Decree; |
| 2. | Other funds whose purpose of establishment is equivalent to that of the fund under subparagraph 1, as prescribed by Presidential Decree. |
| (2) | The head of a local government may authorize the person managing the fund established pursuant to Article 159 of the Local Autonomy Act to invest in a specialized investment association. <Amended on Jan. 12, 2021> |
| Article 20 (Support for Mergers and Acquisitions of Materials, Components, and Equipment Enterprises) |
| (1) | When an enterprise in the field of materials, components, and equipment, such as a specialized leading enterprise, etc., undergoes a merger, merger after splitting, or split (including a physical split) under the Commercial Act, acquires all or part of the materials, components, and equipment business of a domestic or foreign enterprise, acquires stocks or investment shares, or introduces technology (hereinafter referred to as "merger, acquisition, etc.") in order to strengthen its competitiveness, such as by specializing or expanding, and to stabilize its supply chain, the Government may provide necessary support. <Amended on Jun. 13, 2023> |
| (2) | If an enterprise wishes to receive support pursuant to paragraph (1), it may request confirmation from the Government regarding mergers, acquisitions, etc., and matters necessary for the requirements for support and confirmation procedures shall be prescribed by Presidential Decree. |
| (3) | In making the confirmation under paragraph (2), the Government shall examine in advance whether the relevant merger, acquisition, etc. will help strengthen the competitiveness of the relevant industry and stabilize the supply chain. <Amended on Jun. 13, 2023> |
| Article 21 (Facilitation of Mergers and Acquisitions) |
| (1) | In order to facilitate mergers, acquisitions, etc. in the field of materials, components, and equipment under Article 20, the Government may require an institution prescribed by Presidential Decree to carry out the following projects: |
| 1. | Collecting and providing information for mergers, acquisitions, etc.; |
| 2. | Support for arrangement, brokerage, and consulting for mergers, acquisitions, etc.; |
| 3. | Raising funds necessary for mergers, acquisitions, etc.; |
| 4. | Support for commercialization of technologies acquired through mergers, acquisitions, etc.; |
| 5. | Support for funding necessary for mergers, acquisitions, etc.; |
| 6. | Providing subsidies to cover the expenses incurred in a project for supporting acquisition and merger; |
| 7. | Other projects to facilitate mergers, acquisitions, etc., as prescribed by Presidential Decree. |
| (2) | The Government may support projects under paragraph (1) if enterprises in the field of materials, components, and equipment, such as specialized leading companies, etc., wish to engage in mergers, acquisitions, etc. with domestic and foreign enterprises related to core strategic technologies and supply chain stability items. <Amended on Jun. 13, 2023> |
| Article 21-2 (Order to Bring in Overseas Produced Items in Case of Emergency) |
| (1) | If the stable supply of and demand for core strategic technology-related items and supply chain stability items are likely to be significantly disrupted, the Government may order an enterprise that has received support under Article 20 (1) or 23-5 (1) 4 and 5 to bring all or part of the items that the enterprise is producing overseas into the Republic of Korea under appropriate and reasonable conditions. |
| (2) | An enterprise that receives the order under paragraph (1) shall bring overseas produced items into the Republic of Korea in accordance with the order in the absence of good cause. |
| (3) | If an enterprise that has failed to fulfill the obligation to bring in under paragraph (2) without good cause receives financial support pursuant to Article 20 (1) or 23-5 (1) 4 and 5, the Government shall recover all or part of the amount equivalent to the support. |
| (4) | The procedures for the order to bring in overseas produced items under paragraph (1) and for recovering subsidies under paragraph (3) shall be prescribed by Presidential Decree. |
[This Article Newly Inserted on Jun. 13, 2023]
| Article 22 (Materials, Components, and Equipment Investment Association) |
| (1) | Those under the subparagraphs of Article 18 (1) and institutions prescribed by Presidential Decree may establish and operate a Materials, Components, and Equipment Investment Association to promote investment in the field of materials, components, and equipment. |
| (2) | Matters necessary for the establishment and operation of the Investment Association under paragraph (1) shall be prescribed by Presidential Decree. |
| Article 23 (Reduction of and Exemption from Taxes and Charges) |
In order to create a foundation for the development of the materials, components, and equipment industry and promote its competitiveness, the Government may provide necessary tax support in accordance with tax-related statutes.
CHAPTER IV-II STABILIZING SUPPLY CHAINS IN MATERIALS, COMPONENTS, AND EQUIPMENT INDUSTRY
| Article 23-2 (Operation of Early Warning System for Materials, Components, and Equipment Supply Chain) |
| (1) | The Minister of Trade, Industry and Energy may establish and operate a supply chain early warning system to quickly identify supply chain crises of supply chain stability items. |
| (2) | If necessary for the operation of the supply chain early warning system under paragraph (1), the Minister of Trade, Industry and Energy may request the head of the relevant central administrative agency, the head of a local government, the head of a public institution under Article 4 of the Act on the Management of Public Institutions, a business organization established pursuant to Article 32 of the Civil Act, and related business entities to submit information on supply chain stability items. In such cases, those who are requested to submit the information shall comply therewith in the absence of good cause. |
| (3) | In case of detection of signs of a supply chain crisis, the Minister of Trade, Industry and Energy shall issue a crisis alert as prescribed by Ordinance of the Ministry of Trade, Industry and Energy, such as the necessity of issuing a crisis alert, the stage of issuance, and the scope of issuance. |
[This Article Newly Inserted on Jun. 13, 2023]
| Article 23-3 (Designation of Supply Chain Center for Materials, Components, and Equipment Industry) |
| (1) | In order to systematically collect and analyze information related to the supply chain of the materials, components, and equipment industry and to support projects necessary to stabilize the supply chain, the Minister of Trade, Industry and Energy shall designate an entity that meets all of the following requirements as a Materials, Components, and Equipment Industry Supply Chain Center (hereinafter referred to as the "Supply Chain Center"): |
| 1. | It shall be any of the following institutions or corporations: |
| 2. | It shall have a dedicated organization and dedicated personnel necessary to carry out the business under paragraph (2). |
| (2) | The Supply Chain Center shall perform the following business: |
| 1. | Collecting and analyzing supply chain information for the materials, components, and equipment industry; |
| 2. | Establishment and operation of supply chain information systems for the materials, components, and equipment industry; |
| 3. | Policy support for surveys, etc. of trends in domestic and international policies, systems, and research and development related to the supply chain of materials, components, and equipment; |
| 4. | Provision of supply chain-related information and advising on management for materials, components, and equipment enterprises; |
| 5. | Other business prescribed by Ordinance of the Ministry of Trade, Industry and Energy to stabilize the supply chain of materials, components, and equipment. |
| (3) | The Minister of Trade, Industry and Energy may, within the budget, make contributions or grant subsidies to help the Supply Chain Center cover the expenses incurred in operating institutions and carry out its business under paragraph (2). |
| (4) | If the Supply Chain Center designated under paragraph (1) falls under any of the following cases, the Minister of Trade, Industry and Energy may revoke the designation: Provided, That the designation shall be revoked in cases falling under subparagraph 1: |
| 1. | Where the designation is obtained by fraud or other improper means; |
| 2. | Where the requirements for designation under paragraph (1) are no longer met. |
| (5) | When designating the Supply Chain Center or revoking the designation pursuant to paragraph (1) or (4), the Minister of Trade, Industry and Energy shall publicly announce the fact on its website. |
| (6) | Other matters necessary for the operation of the Supply Chain Center and the criteria and procedures for revoking the designation thereof shall be prescribed by Presidential Decree. |
[This Article Newly Inserted on Jun. 13, 2023]
| Article 23-4 (Selection of Supply Chain Stability Projects) |
| (1) | The Minister of Trade, Industry and Energy may select and support supply chain stability projects. |
| (2) | An enterprise that wishes to implement a supply chain stability project shall prepare a plan containing the following matters and apply for such project to the Minister of Trade, Industry and Energy: |
| 2. | An action plan for supply chain stability; |
| 3. | The need for Government support; |
| 4. | Matters related to necessary support, regulatory improvements, etc. |
| (3) | In order to support supply chain stability projects, the Minister of Trade, Industry and Energy may provide administrative, technical, and financial support for matters related to the following subparagraphs: |
| 1. | Technology Development; |
| 2. | Building domestic and international production facilities; |
| 3. | Providing information, consulting, domestic performance testing, certification, and demonstration to mitigate import risks; |
| 6. | International cooperation; |
| 7. | Other projects prescribed by Presidential Decree as necessary for the effective implementation of supply chain stability projects. |
| (4) | When applying for regulatory improvements under Article 51 and selecting and supporting supply chain stability projects that include special cases under Articles 64 through 67, the Minister of Trade, Industry and Energy shall consult with the head of the relevant central administrative agency in advance and have the Competitiveness Committee deliberate thereon. |
| (5) | Matters necessary for the methods and procedures for selecting supply chain stability projects under paragraphs (1) through (4) shall be prescribed by Presidential Decree. |
[This Article Newly Inserted on Jun. 13, 2023]
| Article 23-5 (Support for Mitigating Import Risks) |
| (1) | The Minister of Trade, Industry and Energy may promote the following projects to mitigate the risk of importing supply chain stability items: |
| 1. | Collecting and providing information on overseas production of supply chain stability items; |
| 2. | Trade transaction arrangement and brokerage, and consulting support; |
| 3. | Support for domestic performance testing, certification, and demonstration of supply chain stability items; |
| 4. | Support for the acquisition of all or part of a foreign enterprise's materials, components, and equipment business, and the acquisition of its stocks or investment shares, to reduce dependence on imports from certain countries; |
| 5. | Providing information, financing, etc. where domestic enterprises relocate their overseas places of business to neighboring countries to reduce dependence on imports from certain countries; |
| 6. | Other projects prescribed by Presidential Decree to mitigate import risks. |
| (2) | In order to improve the capability of the enterprises that import supply chain stability items to respond to supply chain crises and establish a public and private cooperation system, the Minister of Trade, Industry and Energy may hear opinions from a council related to the supply chain of materials, components, and equipment, comprised of enterprises, institutions, organizations, etc. |
| (3) | If an enterprise in the field of materials, components, and equipment wishes to diversify its import channels for supply chain stability items, the Korea Trade Insurance Corporation established under the Trade Insurance Act may provide preferential credit guarantees, preferential terms for guarantees and overseas investment insurance, etc. |
| (4) | Matters necessary for support under paragraphs (1) through (3) shall be prescribed by Presidential Decree. |
[This Article Newly Inserted on Jun. 13, 2023]
| Article 23-6 (Recommendation to Expand Inventory) |
| (1) | If deemed necessary based on a comprehensive review of the criteria prescribed by Presidential Decree, such as the total domestic inventory of supply chain stability items, international price changes, and supply and demand outlook, the Minister of Trade, Industry and Energy may recommend that enterprises expand their inventory of supply chain stability items. |
| (2) | If an enterprise wishes to expand its inventory of supply chain stability items in accordance with the recommendation under paragraph (1), the Minister of Trade, Industry and Energy may subsidize the enterprise to cover all or part of the expenses incurred in purchasing, maintaining, and managing such items or establishing or expanding storage facilities. |
| (3) | Matters necessary for the target enterprises and methods of the recommendation under paragraphs (1) and (2) shall be prescribed by Presidential Decree. |
[This Article Newly Inserted on Jun. 13, 2023]
| Article 23-7 (Support for Establishing Domestic Production Facilities) |
| (1) | If an enterprise wishes to establish a domestic production facility for supply chain stability items and the Government recognizes the need for financial support, the Government may grant or loan part of the funds or provide technical assistance. |
| (2) | If an enterprise in the field of materials, components, and equipment wishes to establish a domestic production facility for supply chain stability items, the Korea Credit Guarantee Fund under the Korea Credit Guarantee Fund Act and the Korea Technology Finance Corporation under the Korea Technology Finance Corporation Act may provide preferential credit guarantees, preferential guarantee conditions, etc. |
[This Article Newly Inserted on Jun. 13, 2023]
CHAPTER V DEVELOPMENT AND COMMERCIALIZATION OF TECHNOLOGY FOR MATERIALS, COMPONENTS, AND EQUIPMENT
| Article 24 (Execution of Projects to Develop Technology for Materials, Components, and Equipment) |
| (1) | In order to secure technologies for materials, components, and equipment, strengthen competitiveness, and stabilize the supply chain, the Government may promote the following projects for technology development related to materials, components, and equipment (hereinafter referred to as "technology development projects"): <Amended on Jun. 13, 2023> |
| 1. | Research and development projects in the field of materials, components, and equipment; |
| 2. | Strategic research and analysis of intellectual property rights, such as domestic and foreign patents, for efficient technology development; |
| 3. | Joint research and development projects among enterprises, universities and colleges, research institutes, and related institutions and organizations; |
| 4. | Other matters prescribed by Presidential Decree to strengthen the technological competitiveness of materials, components, and equipment. |
| (2) | The Government may require any of the following institutions, organizations, or business entities to conduct technology development projects: |
| 1. | Materials, components, and equipment enterprises, such as specialized leading enterprises, etc.; |
| 2. | National or public research institutes; |
| 4. | Universities and colleges (referring to universities, colleges, industrial colleges, junior colleges, and technical colleges under subparagraphs 1, 2, 4, and 6 of Article 2 of the Higher Education Act; hereinafter the same shall apply); |
| 6. | Other institutions, organizations, or business entities related to materials, components, and equipment which are prescribed by Presidential Decree. |
| (3) | The lead organization carrying out a technology development project under paragraph (1) may conduct strategic research and analysis on intellectual property rights such as patents under paragraph (1) 2. |
| (4) | The Government shall give priority to projects or tasks related to core strategic technologies in the implementation of technology development projects under paragraph (1), and may give preference to the following enterprises when conducting technology development projects: |
| 1. | Enterprises participating in joint research and development projects under paragraph (1) 3; |
| 2. | Specialized leading enterprises, etc.; |
| 3. | Materials, components, and equipment enterprises participating in the cooperation model selected under Article 49 and related technology development; |
| 4. | Other enterprises participating in projects prescribed by Presidential Decree that are deemed necessary to strengthen the competitiveness of the materials, components, and equipment industry. |
| (5) | The Government may make contributions to institutions that promote technology development projects under paragraph (1). |
| (6) | Matters necessary for the scope, methods, and procedures of support, and payment, use, and management of contributions under paragraphs (1) through (5) shall be prescribed by Presidential Decree. |
| Article 25 (International Cooperation Projects) |
| (1) | The Government shall prepare policy measures to encourage the Government, enterprises, universities and colleges, research institutes, organizations, etc. to cooperate with international organizations, or foreign governments, enterprises, universities and colleges, research institutes, organizations, etc. on materials, components, and equipment. |
| (2) | To promote international cooperation on materials, components, and equipment, the Government may implement the following projects: <Amended on Jun. 13, 2023> |
| 1. | Surveys and research for international cooperation; |
| 2. | Exchange of specialized personnel and information; |
| 3. | Building a cooperation system with foreign support organizations, etc.; |
| 4. | Promoting the introduction of foreign technologies and joint technology development; |
| 5. | Support for the establishment of joint ventures or mergers, acquisitions, etc. under Article 21 between domestic and foreign enterprises; |
| 6. | Finding overseas markets and technical support; |
| 6-2. | Building a cooperation system to stabilize the supply chain; |
| 7. | Other projects prescribed by Presidential Decree to promote international cooperation. |
| (3) | Matters necessary for the policy measures under paragraph (1) and the implementation of projects under paragraph (2) shall be prescribed by Presidential Decree. |
| Article 26 (Facilitation of Transfer and Commercialization of Technology) |
| (1) | The Government may formulate administrative, technical, and financial support policy measures to facilitate the transfer, sharing, and utilization of technologies, such as intellectual property in the field of materials, components, and equipment held by the following institutions, and the commercialization of technology development results: |
| 1. | Government-funded research institutes; |
| 3. | Research institutes specializing in manufacturing technology; |
| 4. | Universities and colleges, etc. that possess research outcomes in the field of materials, components, and equipment through performing research and development projects of the State; |
| 5. | Other institutions prescribed by Presidential Decree. |
| (2) | In connection with paragraph (1), the Government may provide the following support: |
| 1. | Financial support, such as contributions, investments, and loans necessary for the manufacture of prototypes and capital investment; |
| 2. | Matters relating to the application, registration, transfer, and utilization of intellectual property rights (including matters relating to the entrustment of such work and payment therefor); |
| 3. | Other matters necessary to promote technology transfer and commercialization. |
| Article 27 (Standardization Projects) |
| (1) | The Government may promote standardization research and dissemination initiatives in the materials, components, and equipment industry. |
| (2) | The Government may provide necessary support so that materials, components, equipment or related technologies developed or under development in the Republic of Korea can be established as international standards defined in subparagraph 2 of Article 3 of the Framework Act on National Standards. |
| (3) | The Government may promote relevant research and support policy measures to evaluate whether materials, components, equipment, or related technologies meet national or international standards, etc. |
| Article 28 (Korean Research Alliance in Supportfor Technological Innovation in Materials, Components, and Equipment) |
| (1) | The Government may establish and operate a Korean Research Alliance in Supportfor Technological Innovation in Materials, Components, and Equipment (hereinafter referred to as "KASTI") as a council of research institutes whose members include the following institutions to efficiently support the improvement of technological capabilities in the field of materials, components, and equipment: |
| 3. | Research institutes specializing in manufacturing technology designated by the Minister of Trade, Industry and Energy; |
| 5. | Other institutions or organizations designated by the Minister of Trade, Industry and Energy in consultation with the head of the relevant central administrative agency from among institutions and organizations necessary to support the technology, human resources, management, etc. of the materials, components, and equipment industry. |
| (2) | Matters necessary for the composition and operation of KASTI shall be prescribed by Presidential Decree. |
| Article 29 (Support Projects of KASTI) |
| (1) | Materials, components, and equipment enterprises, such as specialized leading enterprises, etc., may request the following support from KASTI for the implementation of technology development projects, etc.: |
| 1. | Dispatch of researchers belonging to a member of KASTI and dispatch of and arrangements for experts in the relevant field belonging to institutions or organizations that are not a member of KASTI; |
| 2. | Use of research equipment and facilities of the members of KASTI and provision of information; |
| 3. | Technical guidance and advice; |
| 4. | Other matters prescribed by Presidential Decree as necessary to improve the technological capabilities of the materials, components, and equipment industry. |
| (2) | Upon receipt of a request for support under paragraph (1), KASTI shall determine the support institution, support details, and other necessary matters and notify the person requesting support and the members of KASTI thereof. In such cases, the head of a member of KASTI who is notified shall comply therewith unless there is a compelling reason not to do so. |
| (3) | The head of a member of KASTI shall not impose status and salary disadvantages on researchers based on the fact that they are dispatched to materials, components, and equipment enterprises such as specialized leading enterprises, etc. pursuant to paragraph (2). |
| (4) | The Minister of Trade, Industry and Energy may request the heads of relevant central administrative agencies prescribed by Presidential Decree and the Minister of Economy and Finance to comprehensively evaluate the performance of the members of KASTI in providing technical support to materials, components, and equipment enterprises such as specialized leading enterprises, etc. every year, and to provide preferential treatment to the members of KASTI in budget allocation and institutional evaluation based on the evaluation results. |
| (5) | The Government may subsidize the members of KASTI to cover the expenses incurred in providing the support notified pursuant to paragraph (2), as prescribed by Ordinance of the Ministry of Trade, Industry and Energy. |
CHAPTER VI EXPANDING AND UTILIZING DEMONSTRATION BASE OF MATERIALS, COMPONENTS, AND EQUIPMENT
| Article 30 (Opening and Utilization of Demonstration Base) |
| (1) | In order to facilitate demonstration testing, reliability assessment, performance testing, etc. of materials, components, and equipment, the Government may allow the demonstration and production-related facilities held by the following institutions to be opened to and be used by materials, components, and equipment enterprises: |
| 2. | Government-funded research institutes; |
| 3. | Research institutes specializing in manufacturing technology; |
| 4. | Other institutions prescribed by Presidential Decree. |
| (2) | Institutions under the subparagraphs of paragraph (1) shall submit to the Minister of Trade, Industry and Energy the performance of opening and utilizing demonstration and production-related facilities. |
| (4) | Matters related to the procedures, etc. for opening and utilizing demonstration and production facilities pursuant to paragraphs (1) through (3) shall be prescribed by Presidential Decree. |
| Article 31 (Expansion of Demonstration Base) |
| (1) | If a demanding enterprise and a supplying enterprise intend to cooperate to establish a demonstration base pursuant to Article 49, the Government may provide financial, administrative, and technical support, including necessary expenses, after deliberation by the Competitiveness Committee. |
| (2) | If a demanding enterprise fulfills the matters prescribed by Presidential Decree, such as the opening of and operation plan for the relevant facility and the intention to purchase, in connection with paragraph (1), support under Article 32 (2) may be provided. |
| (3) | The Government may lend or transfer State-owned or public facilities, equipment, machinery, devices, and intellectual property, with or without charge, to demanding enterprises that open their facilities for demonstration testing, performance testing, etc. pursuant to Article 32 (2), or allow such enterprises to use or profit from them, notwithstanding the State Property Act and the Public Property and Commodity Management Act. |
| (4) | Matters related to the details of and procedures for support under paragraphs (1) through (3) shall be prescribed by Presidential Decree. |
| Article 32 (Facilitation of and Support for Demonstration Testing and Performance Testing) |
| (1) | To facilitate the demonstration testing and performance testing of technologies developed by or transferred between demanding and supplying enterprises in the field of materials, components, and equipment, the Government may implement projects including the following matters: |
| 1. | Establishment and operation of facilities needed for demonstration testing, performance testing, etc.; |
| 2. | Support for enterprises that provide facilities or equipment needed for demonstration testing, performance testing, etc.; |
| 3. | Encouragement of corporate participation by reducing technology fees, easing financial burden ratios, etc.; |
| 4. | Other matters prescribed by Presidential Decree to facilitate demonstration testing, performance testing, etc. |
| (2) | If a demanding enterprise supports demonstration testing, performance testing, etc. of materials, components, and equipment technologies developed by a supplying enterprise, the Government may support the projects under the subparagraphs of paragraph (1) for the relevant enterprise. |
| (3) | Matters related to the projects and support procedures under paragraphs (1) and (2) shall be prescribed by Presidential Decree. |
| Article 33 (Projects to Build Foundation for Improving Reliability) |
| (1) | In order to improve the reliability of materials, components, and equipment, the Government shall implement the following projects (hereinafter referred to as “projects to build the foundation for improving reliability"): |
| 1. | Development and expansion of reliability assessment equipment and facilities; |
| 2. | Development and dissemination of reliability assessment criteria; |
| 3. | Training of human resources specializing in reliability assessment; |
| 4. | Efficient utilization of reliability assessment equipment, facilities, and information; |
| 5. | Other projects to build the foundation for improving reliability. |
| (2) | The Government may designate the following institutions as implementing institutions for the projects to build the foundation for improving reliability, and necessary matters shall be prescribed by Presidential Decree: |
| 1. | National or public research institutes; |
| 2. | Government-funded research institutes; |
| 3. | Universities and colleges; |
| 4. | Research institutes specializing in manufacturing technology; |
| 5. | Other institutions or organizations prescribed by Presidential Decree. |
| (3) | An implementing institution for the projects to build the foundation for improving reliability designated under paragraph (2) (hereinafter referred to as “implementing institution”) may provide the following support to enterprises that develop and produce materials, components, and equipment: |
| 1. | Using reliability assessment equipment and facilities established by the projects to build the foundation for improving reliability and providing information, etc.; |
| 2. | Conducting reliability assessments and analyzing the assessment results; |
| 3. | Providing technical support and advice to improve the reliability of materials, components, and equipment; |
| 4. | Developing and disseminating assessment criteria and methods for reliability assessment; |
| 5. | Other projects to build the foundation for improving reliability and to support reliability technology, as prescribed by Presidential Decree. |
| (4) | An implementing institution shall promote the following projects to ensure that the projects to build the foundation for improving reliability are efficiently accomplished: |
| 1. | Securing a dedicated space for the projects to build the foundation for improving reliability and establishing and operating a dedicated organization; |
| 2. | Building a cooperative system among implementing institutions to prevent duplication of investment in reliability assessment equipment, facilities, etc.; |
| 3. | Other matters prescribed by Presidential Decree as necessary for the efficient utilization of reliability assessment equipment, facilities, information, etc. |
| (5) | When implementing the projects to build the foundation for improving reliability pursuant to paragraph (1), the Government may give preference to any of the following enterprises: |
| 1. | Specialized leading enterprises, etc.; |
| 2. | Materials, components, and equipment enterprises participating in the cooperation model selected under Article 49 and related technology development. |
| (6) | Matters necessary for the requirements and procedures for the designation of implementing institutions shall be prescribed by Presidential Decree. |
| Article 34 (Designation of Reliability Certification Institutions) |
| (1) | The Government may designate an institution that conducts reliability certification (hereinafter referred to as "reliability certification institution") to improve the reliability of materials, components, and equipment. |
| (2) | The Government shall revoke the designation of a reliability certification institution under paragraph (1) in any of the following cases: |
| 1. | Where certification or verification is obtained by fraud or improper means; |
| 2. | Where certification is deemed unsuitable due to a significant flaw. |
| (3) | Matters necessary for the designation and revocation of the designation of a reliability certification institution and the procedures for reliability certification under paragraphs (1) and (2) shall be prescribed by Presidential Decree. |
| Article 35 (Implementation of Reliability Assurance Project) |
| (1) | Specialized leading enterprises, etc. and implementing institutions may enter into a mutual aid or purchase insurance provided by any of the following entities to cover damage that may be suffered by demanding enterprises due to materials, components, and equipment: Provided, That the mutual aid shall be entered into and the insurance shall be purchased, if necessary, as prescribed by Presidential Decree: |
| 5. | Other institutions prescribed by Presidential Decree. |
| (2) | Matters regarding the details and operation of a mutual aid or insurance business under paragraph (1) and other necessary matters shall be prescribed by Presidential Decree. |
| Article 36 (Systematic Production and Management of Materials, Components, and Equipment Information) |
| (1) | In order to systematically produce, manage, distribute, and utilize information on technology, trade, production, and supply and demand markets in the field of materials, components, and equipment (hereinafter referred to as "materials, components, and equipment information"), the Government shall implement the following projects: |
| 1. | Collecting, analyzing, and processing materials, components, and equipment information and building databases; |
| 2. | Maintaining and expanding materials, components, and equipment information distribution system; |
| 3. | Providing information on relevant researchers and specialized leading enterprises, etc.; |
| 4. | Building an artificial intelligence-based analysis system using materials, components, and equipment information; |
| 5. | Other projects prescribed by Presidential Decree. |
| (2) | The Government may have any of the following institutions carry out the projects under paragraph (1) and make contributions for the expenses incurred in such projects: |
| 1. | Government-funded research institutes; |
| 2. | Research institutes specializing in manufacturing technology; |
| 6. | Other institutions, organizations, or business entities prescribed by Presidential Decree as necessary for facilitating the efficient use of materials, components, and equipment information. |
| (3) | The Government may require the institutions under the subparagraphs of paragraph (2) to establish and operate a materials, components, and equipment information council if necessary to efficiently implement the projects under paragraph (1). |
| (4) | Matters necessary for the payment, use, and management of contributions under paragraph (2) and the establishment and operation of the council under paragraph (3) shall be prescribed by Presidential Decree. |
| Article 37 (Measures for Facilitation of Development of Materials) |
| (1) | In order to efficiently develop materials and facilitate the commercialization of developed materials, the Government may authorize an institution under the subparagraphs of Article 36 (2) that meets the criteria prescribed by Ordinance of the Ministry of Trade, Industry and Energy for research results, performance, etc. in the field of materials (hereinafter referred to as a "institution specializing in materials") to carry out the following projects: |
| 1. | Collection, analysis, and processing of information on materials and establishment of databases; |
| 2. | Improvement and expansion of a system for distribution of information on materials; |
| 3. | Provision of information to enterprises, universities and colleges, research institutes, etc.; |
| 4. | Technical support for the development and commercialization of materials; |
| 5. | Training of human resources for research and development of materials; |
| 6. | Establishment of a cooperation system with relevant universities and colleges, research institutes, etc. to efficiently implement projects under subparagraphs 1 through 5. |
| (2) | The Minister of Trade, Industry and Energy may require any of the following persons who conducts materials-related research to submit research outcomes prescribed by Ordinance of the Ministry of Trade, Industry and Energy, such as research reports obtained upon conducting the relevant research projects (hereinafter referred to as "research outcomes"), to an institution specializing in materials designated by the Minister of Trade, Industry and Energy: |
| 1. | A person who conducts a technology development project pursuant to Article 24 (limited to a business entity designated by the Minister of Trade, Industry and Energy); |
| 2. | A person who conducts projects to build the foundation for improving reliability pursuant to Article 33; |
| 4. | The head of a main research institute that conducts other projects prescribed by Presidential Decree. |
| (3) | The head of an institution specializing in materials in receipt of research outcomes pursuant to paragraph (2) shall consult with each person who has submitted the research outcomes on the timing for disclosure of the research outcomes to the public. |
| (4) | Matters regarding the procedures and methods for submitting research outcomes pursuant to paragraphs (1) and (2) shall be prescribed by Ordinance of the Ministry of Trade, Industry and Energy. |
| Article 37-2 (Formulation of Policy Measures to Strengthen Competitiveness of Rare Metal Industry) |
| (1) | The Government shall formulate policy measures to strengthen the competitiveness of the rare metal industry every five years, including the following matters, taking into account the national security aspects of rare metals as prescribed by Ordinance of the Ministry of Trade, Industry and Energy: |
| 1. | Cooperation with rare metal supply and demand countries to ensure a stable supply chain for rare metals; |
| 2. | A rare metal stockpiling system; |
| 3. | Recycling of waste materials containing rare metals; |
| 4. | Support for enterprises specializing in rare metals to become more competitive; |
| 5. | Research and development to stably secure rare metals, such as environmentally-friendly production of rare metals, adding value, and development of alternative materials; |
| 6. | A fact-finding survey, such as on production, supply, and inventory of rare metals; |
| 7. | Human resources training, standardization, a statistical system, international cooperation, etc. necessary for laying the foundation for the development of the rare metal industry; |
| 8. | Other matters needed to strengthen the competitiveness of the rare metal industry. |
| (2) | The Minister of Trade, Industry and Energy may request the head of a relevant central administrative agency or the head of a relevant institution or organization to submit data and provide information in order to conduct a fact-finding survey and establish statistics on the status of rare metals in connection with the formulation of policy measures under paragraph (1). In such cases, the head of the relevant central administrative agency or the head of the relevant institution or organization requested to submit data and provide information shall comply therewith unless there is a compelling reason not to do so. |
[This Article Newly Inserted on Jun. 13, 2023]
| Article 37-3 (Designation and Operation of National Rare Metal Center) |
| (1) | To efficiently perform the affairs relating to strengthening the competitiveness of the rare metal industry, stabilizing the supply chain of rare metals, etc., the Minister of Trade, Industry and Energy may designate any of the following institutes as a National Rare Metal Center (hereinafter referred to as the "Center"): |
| 2. | Any other institution that satisfies the requirements for professional human resources, facilities, etc. as prescribed by Presidential Decree. |
| (2) | The Center shall perform the following duties: |
| 1. | Support for research on rare metals, such as environment-friendly production, adding value, and development of substitute materials; |
| 2. | Advanced research and development related to the rare metal industry; |
| 3. | Technical support for enterprises specializing in rare metals, etc.; |
| 4. | Building and operating a comprehensive information system for the rare metal industry; |
| 5. | Analysis of the ecosystem of the rare metal industry and provision of information; |
| 6. | Interaction with institutions and enterprises in partner countries related to rare metals; |
| 7. | Other duties prescribed by Ordinance of the Ministry of Trade, Industry and Energy to strengthen the competitiveness of the rare metal industry or to stably secure rare metals. |
| (3) | The Minister of Trade, Industry and Energy may contribute funds necessary to operate the Center, and grant contributions or subsidies to cover expenses incurred in performing duties under paragraph (2). |
| (4) | If the Center designated under paragraph (1) falls under any of the following cases, the Minister of Trade, Industry and Energy may revoke the designation: Provided, That the designation shall be revoked in cases falling under subparagraph 1: |
| 1. | Where it obtains designation by fraud or other improper means; |
| 2. | Where it no longer meets the requirements for designation under paragraph (1) 2. |
| (3) | Matters necessary for the procedures for the designation and operation of the Center shall be prescribed by Ordinance of the Ministry of Trade, Industry and Energy. |
[This Article Newly Inserted on Jun. 13, 2023]
| Article 38 (Creation of Demand for Materials, Components, and Equipment) |
| (1) | To create demand for technology-development products developed by materials, components, and equipment enterprises, the Government may prepare necessary support policy measures, such as prioritizing the purchase of such products. |
| (2) | The Minister of Trade, Industry and Energy or the head of the relevant central administrative agency may request those under the following subparagraphs to take necessary measures, such as formulating a priority purchase plan, to increase the purchase of technology-development products developed by materials, components, and equipment enterprises: |
| 1. | State agencies, including the Public Procurement Service; |
| 3. | Corporations established under statutes, which are prescribed by Presidential Decree; |
| 7. | Others prescribed by Presidential Decree. |
| (3) | Those who receive a request pursuant to paragraph (2) shall formulate and implement a priority purchase plan, and, if unable to take action due to any unavoidable reason, shall notify such reason to the Minister of Trade, Industry and Energy and the head of the relevant central administrative agency within the period prescribed by Presidential Decree. |
| (4) | Matters necessary for the procedures under paragraphs (1) through (3) shall be prescribed by Presidential Decree. |
CHAPTER VII TRAINING OF TECHNICAL HUMAN RESOURCES SPECIALIZING IN MATERIALS, COMPONENTS, AND EQUIPMENT
| Article 39 (Survey on Trends in Supply of and Demand for Technical Human Resources for Materials, Components, and Equipment) |
| (1) | The Government may conduct a survey on trends in the supply of and demand for technical human resources in the materials, components, and equipment industry. |
| (2) | The Government may request the following institutions to provide data necessary for a survey on trends in the supply of and demand for technical human resources under paragraph (1): |
| 1. | Business entities or trade associations related to materials, components, and equipment; |
| 2. | Educational and research institutions related to materials, components, and equipment; |
| 4. | Other related institutions necessary for surveys on trends in the supply of and demand for technical human resources. |
| (3) | Those who are requested to provide data under paragraph (2) shall comply with such request, unless there is a compelling reason not to do so. |
| (4) | The Government shall publish the results of a survey on trends in the supply of and demand for technical human resources, and educational institutions such as universities and colleges may use them for student quota management, etc. |
| Article 40 (Training of Technical Human Resources Specializing in Materials, Components, and Equipment) |
| (1) | The Government may implement the following programs in cooperation with industry, universities and colleges, research institutes, etc., in order to facilitate the supply of technical human resources specializing in materials, components, and equipment, taking into account a survey on trends in the supply of and demand for technical human resources under Article 39: |
| 1. | Human resources training programs through educational institutions such as universities and colleges, and specialized high schools; |
| 2. | On-site training programs for unemployed human resources at materials, components, and equipment enterprises; |
| 3. | Programs to develop the capabilities of employees of materials, components, and equipment enterprises; |
| 4. | Establishment of education courses and job placement programs linked to the needs of materials, components, and equipment enterprises; |
| 5. | Expansion of research facilities and equipment needed to train technical human resources specializing in materials, components, and equipment; |
| 6. | Human resources training programs through industry-academia cooperation; |
| 7. | Utilization of the national technical qualification system related to core strategic technologies; |
| 8. | Development of human resources specializing in reliability technology; |
| 9. | Other programs prescribed by Presidential Decree as necessary for the training of specialized technical human resources. |
| (2) | The Government may give preferential treatment to specialized leading enterprises, etc. in the implementation of the programs under paragraph (1). |
| (3) | The Government may request the submission of necessary data and cooperation from relevant central administrative agencies, research institutes, universities and colleges, enterprises, etc. in connection with the programs under paragraph (1). |
| Article 41 (Support for Establishment of Vocational Education and Training Courses by Agreement) |
| (3) | If agreement departments, etc. related to the materials, components, and equipment industry are in operation or the Government intends to establish agreement departments, etc. pursuant to paragraph (1), the Government may support part of the industrial contributions and part of the student tuitions as prescribed by Presidential Decree. |
| Article 42 (Joint Educational and Training Facilities for Enterprises in Field of Materials, Components, and Equipment) |
| (1) | The Government may provide necessary support for the establishment and operation of joint educational and training facilities for materials, components, and equipment enterprises to promote the implementation of vocational skills development training for materials, components, and equipment small and medium enterprise. |
| (2) | Matters necessary for the support recipients and procedures under paragraph (1) shall be prescribed by Presidential Decree. |
| Article 43 (Designation of Institutions for Training Specialized Human Resources) |
| (1) | The Government may designate an institution that falls under any of the following subparagraphs as an education and training institution for human resources specializing in core strategic technologies: |
| 3. | Government-funded research institutes; |
| 5. | Other education and training institutions in the field of materials, components, and equipment that are prescribed by Presidential Decree. |
| (2) | The Government may make contributions for the expenses incurred by those designated under paragraph (1) in conducting a specialized human resources training project. |
| (4) | Matters necessary for the requirements and procedures for designation and the payment, use, and management of contributions under paragraphs (1) and (2) shall be prescribed by Presidential Decree. |
| Article 44 (Discovering and Attracting Excellent Overseas Human Resources) |
| (1) | The Government may pursue the following policy measures to discover and attract excellent overseas human resources related to materials, components, and equipment: |
| 1. | Research and analysis of specialized human resources from overseas universities and colleges, research institutes, and enterprises related to core strategic technologies; |
| 2. | Support for providing and utilizing information on excellent overseas human resources; |
| 3. | Support for building international networks and participating in international events to attract overseas human resources; |
| 4. | Relaxation of administrative procedures such as employment and immigration procedures for excellent overseas human resources; |
| 5. | Improving the working conditions and treatment of excellent overseas human resources; |
| 6. | Other matters prescribed by Presidential Decree for discovering and attracting excellent overseas human resources. |
| (2) | The Government may provide support for the expenses incurred in performing the projects under paragraph (1). |
CHAPTER VIII DESIGNATION OF AND SUPPORT FOR SPECIALIZED COMPLEXES FOR MATERIALS, COMPONENTS, AND EQUIPMENT
| Article 45 (Designation of Specialized Complexes for Materials, Components, and Equipment Industry) |
| (1) | For the promotion of the materials, components, and equipment industry, the Minister of Trade, Industry and Energy may designate an area where materials, components, and equipment enterprises and their supporting facilities are located or are to be located as a specialized complex for materials, components, and equipment (hereinafter referred to as "specialized complex"), if necessary. |
| (2) | The Minister of Trade, Industry and Energy shall designate specialized complexes upon application as prescribed by Presidential Decree. In such cases, the Minister shall consult with the heads of relevant central administrative agencies and the heads of local governments. |
| (3) | The requirements for the designation of a specialized complex and other matters necessary for the designation of a specialized complex shall be prescribed by Presidential Decree. |
| Article 46 (Cancellation of Designation of Specialized Complexes) |
The Minister of Trade, Industry and Energy may cancel the designation of a specialized complex as prescribed by Presidential Decree in consultation with the head of the relevant central administrative agency in any of the following cases:
| 1. | Where it no longer meets the requirements for designation under Article 45 (3); |
| 2. | Where the subsidy under the subparagraphs of Article 48 (1) is used for purposes other than the original purpose; |
| 3. | Where it is deemed impossible to achieve the purpose of designating the specialized complex; |
| 4. | Where the competent Special Metropolitan City Mayor, Metropolitan City Mayor, Special Self-Governing City Mayor, Do Governor, or Special Self-Governing Province Governor (hereinafter referred to as "Mayor/Do Governor") requests cancellation. |
| Article 47 (Measures to Foster Specialized Complexes) |
| (1) | The Government may implement policy measures to foster specialized complexes (hereinafter referred to as "policy measures to foster specialized complexes") to strengthen the competitiveness of the materials, components, and equipment industry. |
| (2) | The measures to foster specialized complexes shall include the following matters: |
| 1. | Basic directions for developing specialized complexes; |
| 2. | Support for research and development activities of universities and colleges, research institutes, and enterprises in specialized complexes; |
| 3. | Facilitation of the commercialization of research and development results from universities and colleges, research institutes, and enterprises in specialty complexes; |
| 4. | Facilitation of the establishment and attraction of high-tech enterprises related to the materials, components, and equipment industry; |
| 5. | Training of research and development experts and commercialization support personnel at universities and colleges, research institutes, and enterprises in specialized complexes; |
| 6. | Facilitation of exchanges and cooperation among universities and colleges, research institutes, and enterprises in specialized complexes; |
| 7. | Creation of a foundation for strengthening the competitiveness of the materials, components, and equipment industry; |
| 8. | Establishment of demonstration facilities, performance testing bases, etc. for materials, components, and equipment products; |
| 9. | Dissemination of the achievements of operating specialized complexes; |
| 10. | Plans to establish an integrated support system for universities and colleges, research institutes, and enterprises in specialized complexes; |
| 11. | Plans to expand and fund specialized complexes; |
| 12. | Systematic development of specialized complexes; |
| 13. | Other matters prescribed by Presidential Decree for fostering specialized complexes. |
| (3) | When establishing or changing policy measures to foster specialized complexes, consultation with the heads of relevant central administrative agencies and the relevant Mayor/Do Governor is required. |
| (4) | The relevant Mayor/Do Governor shall prepare relevant support measures such as location, taxation, finance, and administration for the efficient implementation of policy measures to foster specialized complexes. |
| Article 48 (Support for Specialized Complexes) |
| (1) | The Government may implement the following projects in specialized complexes and may provide support for the expenses incurred therein: |
| 1. | Installation and operation of industrial infrastructure and joint research and development infrastructure; |
| 2. | Other projects necessary to develop areas in which specialized complexes are located. |
| (2) | The State and local governments may provide support to enterprises and research institutes moving into specialized complexes for the expenses incurred in site preparation, rent reduction, and installation of various amenities such as medical facilities, educational facilities, and housing. |
| (3) | The State and local governments may grant reduction of or exemption from rents for State property and public property to enterprises and research institutes moving into specialized complexes, as prescribed by Presidential Decree, notwithstanding the provisions of the State Property Act, the Public Property and Commodity Management Act, and other statutes. |
| (5) | Except as provided in paragraphs (1) through (4), matters necessary for support for specialized complexes shall be prescribed by Presidential Decree. |
CHAPTER IX FACILITATION OF MUTUAL DEVELOPMENT COOPERATION AMONG MATERIALS, COMPONENTS, AND EQUIPMENT ENTERPRISES
| Article 49 (Discovery of Cooperation Model) |
| (1) | The Government may discover and support cooperation models. |
| (2) | The Competitiveness Committee may recommend and arrange for mutual cooperation among enterprises, and may receive applications with competitiveness reinforcement plans that include the following matters from enterprises that intend to cooperate with each other, and deliberate on the selection of cooperation models: |
| 1. | Objectives for each item; |
| 2. | Details of cooperation among enterprises; |
| 3. | Research and development, test and evaluation, verification, production, or investment plans; |
| 4. | Matters related to necessary support, regulatory improvements, etc. |
| (3) | Matters related to the methods and procedures for the discovery and selection of cooperation models under paragraphs (1) and (2) shall be prescribed by Presidential Decree. |
| Article 50 (Support for Cooperation Models) |
| (1) | The State and local governments may provide administrative, technical, and financial support to facilitate mutual cooperation among enterprises or to support cooperation models that have been deliberated on by the Competitiveness Committee in relation to the following: |
| 1. | Joint technology development; |
| 2. | Joint construction of infrastructure, and logistics and storage; |
| 3. | Investment for technology transfer, research and development, production, etc.; |
| 4. | Conformity assessment, such as reliability assessment and performance testing; |
| 5. | Creating a prototype and expanding equipment; |
| 6. | Reliability assurance; |
| 8. | Other projects similar to those specified in subparagraphs 1 through 7 as prescribed by Presidential Decree. |
| (2) | The head of an institution that receives a request pursuant to Article 38 (2) may give preference to the technology development items of the cooperation model when formulating a priority purchase plan, etc. |
| (3) | Matters necessary for support and preferential treatment under paragraphs (1) and (2) shall be prescribed by Presidential Decree. |
| Article 51 (Application for Regulatory Improvements) |
| (1) | Enterprises participating in a cooperation model under Article 49 and a supply chain stability project under Article 23-4 may apply to the Competitiveness Committee for regulatory improvements (hereafter in this Chapter referred to as "regulatory improvements") necessary for their activities related to research and development, test and evaluation, verification, and production in the field of materials, components, and equipment in order to achieve the purposes of the cooperation model and the supply chain stability project. <Amended on Jun. 13, 2023> |
| (2) | Upon receipt of an application under paragraph (1), the Minister of Trade, Industry and Energy shall notify the head of a relevant administrative agency of the details of the application, and the head of the relevant administrative agency shall examine such details and reply in writing to the Minister of Trade, Industry and Energy with the results of the examination within 15 days. In such cases, the head of the relevant administrative agency shall actively process applications that do not require improvement of statutes or regulations. |
| (3) | If the head of the relevant administrative agency requests the applicant enterprise to supplement the data in order to examine whether to make regulatory improvements, the period of time taken to supplement the relevant data shall not be counted toward the reply period under paragraph (2): Provided, That even in such cases, the reply stating the results of examination shall be served within 45 days, and where replying as such is impracticable, a one-time extension of up to 30 days may be requested. |
| (4) | The Competitiveness Committee shall deliberate on the details of the application under paragraph (1), the examination by the relevant administrative agencies, the results of the processing of the application, whether to improve regulations, etc. In such cases, the Competitiveness Committee may request the head of the relevant administrative agency to attend the Competitiveness Committee. |
| (5) | The Minister of Trade, Industry and Energy may notify the heads of relevant administrative agencies of the results of deliberation under paragraph (4) and may file a request for regulatory improvements, and the heads of relevant administrative agencies may respect the deliberation results of the Competitiveness Committee and improve the regulations, unless there is a compelling reason not to do so. |
| (6) | If, upon deliberation under paragraph (4), there is a need to revise statutes and regulations, the head of the relevant administrative agency shall consider whether to revise them and shall promptly proceed with the revision of the relevant statutes and regulations. |
| (7) | If, upon the Competitiveness Committee's deliberation under paragraph (4), a regulatory exception is deemed necessary for demonstration, such as research and development, test and evaluation, and verification, exceptions to relevant regulations may be granted in accordance with the procedures under Article 10-3 of the Industrial Convergence Promotion Act, Article 38-2 of the Special Act on Promotion of Information and Communications Technology and Vitalization of Convergence Thereof, and Article 86 of the Act on Special Cases concerning the Regulation of Regulation-Free Special Zones and Special Economic Zones for Specialized Regional Development: Provided, That with respect to exceptions granted under Article 86 of the Act on Special Cases concerning the Regulation of Regulation-Free Special Zones and Special Economic Zones for Specialized Regional Development, the competent Mayor/Do Governor shall be notified of the results of deliberation by the Competitiveness Committee, and the Mayor/Do Governor shall review the results of deliberation and may file an application for the matters related to the exceptions to regulations with the Minister of SMEs and Startups pursuant to Articles 72 and 81 of that Act. |
| (8) | Details related to paragraphs (1) through (7) and matters necessary for the standards, procedures, and methods for reviewing regulatory improvements shall be prescribed by Presidential Decree. |
| Article 52 (Management and Supervision of Regulatory Improvements) |
| (1) | The head of a relevant administrative agency shall manage and supervise projects, etc. that are implemented with regulatory improvements under Article 51. |
| (2) | If there is no intention or gross negligence in his or her conduct, a person shall not be held responsible for the results of actively handling the regulatory improvement work under Article 51 and shall not be subject to a request for disciplinary action or reprimand under the Act on Public Sector Audits. |
| (3) | If a person granted regulatory improvements falls under any of the following cases, the head of the relevant administrative agency may revoke the application of the regulatory improvements or order the person to take corrective measures: Provided, That in cases falling under subparagraph 1, the application shall be revoked: |
| 1. | Where the regulatory improvements are applied by fraud or other improper means; |
| 2. | Where the person no longer meets the standards for review under Article 51 (8); |
| 3. | Where it is clearly deemed impossible to achieve the purpose of the regulatory improvements; |
| 4. | Where an accident occurs by intention or negligence, causing harm to human health, property, or the environment. |
| (4) | Details related to paragraphs (1) through (3), matters regarding the procedures for revoking the application of regulatory improvements, etc. shall be prescribed by Presidential Decree. |
CHAPTER X SPECIAL CASES CONCERNING SPECIALIZED LEADING ENTERPRISES AND CORE STRATEGIC TECHNOLOGIES
| Article 53 (Special Cases concerning Contributions by Foreigners) |
| (3) | Notwithstanding paragraph (2), the acquisition of shares of specialized leading enterprises, etc. by foreigners or foreign corporations may be restricted by the articles of incorporation of the specialized leading enterprises, etc. |
| Article 54 (Special Cases concerning Publicly Offered Specialized Investment Associations) |
| (1) | Articles 30 through 32, 34 through 43, 48, 50 through 53, 56, 58, 60 through 65, and 80 through 83, subparagraphs 2, 3 and 6 through 8 of Article 85, Articles 86 through 95, 181 through 183, 184 (1), (2), and (5) through (7), 185 through 187, 218 through 223, and 229 through 253 of the Financial Investment Services and Capital Markets Act and the Act on Corporate Governance of Financial Companies (excluding Articles 24 through 26) shall not apply to publicly offered specialized investment associations (referring to the specialized investment associations that are not classified into private equity funds under Article 9 (19) of the Financial Investment Services and Capital Markets Act; hereinafter the same shall apply) and general partners of such associations. |
| (2) | Where registering an association incorporated through public offering pursuant to Article 18 (1), the Minister of Trade, Industry, and Energy shall consult with the Financial Services Commission in advance. |
| (3) | If necessary for protecting public interests or partners of publicly offered specialized investment associations, the Financial Services Commission may order the publicly offered specialized investment associations to submit data or report on their business and may also authorize the Governor of the Financial Supervisory Service to conduct an inspection on their business. |
| (4) | If a publicly offered specialized investment association violates this Act or any order or disposition issued or made pursuant to this Act, the Financial Investment Services and Capital Markets Act or any order or disposition issued or made pursuant to that Act, or the Act on Corporate Governance of Financial Companies (limited to Articles 24 through 26), the Financial Services Commission may request the Minister of Trade, Industry and Energy to revoke the registration of the specialized investment association or to take other measures necessary for protecting partners of the association, and the Minister of Trade, Industry and Energy shall comply with such request, unless there is a compelling reason not to do so. In such cases, the Minister of Trade, Industry and Energy shall notify the Financial Services Commission of the details of the measures taken. |
| Article 55 (Special Cases concerning Procedures for Merger of Specialized Leading Enterprises) |
| Article 56 (Special Cases concerning Stock Options) |
In addition to the persons stipulated by the Commercial Act and other relevant statutes and regulations, specialized leading enterprises, etc. which are stock companies may grant stock options to any of the following persons by special resolution under Article 434 of the Commercial Act, who have contributed or have the ability to contribute to innovation in technology and management, etc. of the relevant enterprise: | 2. | Researchers dispatched pursuant to Article 29 (2) or experts in relevant areas who belong to any institution or organization other than the members of KASTI; |
| Article 57 (Special Cases concerning Leave of Absence of Educational Officials) |
| 1. | University or college faculty members (including a researcher of a research institute affiliated with a university or college; hereinafter the same shall apply); |
| (3) | Where faculty members or researchers of a university or college or a national or public research institute take a leave of absence for six months or longer pursuant to paragraph (1), the relevant university or college or national or public research institute is deemed to have an additional prescribed number of faculty members or researchers corresponding to the number of the faculty members or researchers taking such leave of absence from the date of the leave of absence to the expiration date thereof. |
| Article 58 (Special Cases concerning Holding Concurrent Office or Position by Educational Officials) |
| (1) | An educational official, etc. or a researcher of a government-funded research institute or a specific research institute under Article 2 of the Specific Research Institutes Support Act may concurrently hold the office or position of the representative, executive, or employee of a specialized leading enterprise, etc., subject to permission from the head of the institution to which he or she belongs. In such cases, the permission may be granted only if the concurrent office or position is not likely to impede the efficiency of his or her performance of duties. |
| Article 59 (Special Cases concerning Support for Vocational Skills Development for Business Owners or Organizations of Business Owners) |
The Minister of Employment and Labor may give preference to business owners, organizations of business owners, organizations of employees, or their alliances that provide vocational skills development training for occupations related to core strategic technologies, such as specialized leading enterprises, etc., when providing support or financing for vocational skills development training for employees pursuant to Article 20 (1) 1 of the National Lifelong Vocational Skills Development Act. <Amended on Aug. 17, 2021>
| Article 60 (Special Cases concerning Facilitation of Joint Technology Innovation by Large, Small and Medium, and Middle-Standing Enterprises) |
In determining matters concerning the selection of and agreement on the tasks of national research and development projects pursuant to Article 11 (3) of the Framework Act on Science and Technology, the head of a central administrative agency may determine different Government support standards and cash contribution ratio for enterprises participating in technology development related to core strategic technologies or demanding enterprises participating in joint technology development with supplying enterprises, notwithstanding other regulations related to such projects.
| Article 61 (Special Cases concerning Preliminary Feasibility Study) |
The Minister of Economy and Finance and the Minister of Science and ICT shall process the preliminary feasibility study under Article 38 (1) of the National Finance Act within a shortest period possible where a specific project plan that includes the project purpose, scale, and implementation plan has been formulated to strengthen the competitiveness of the materials, components, and equipment industry, such as the development of core strategic technologies, and deliberated and resolved on by the Competitiveness Committee.
| Article 62 (Special Cases concerning the Industrial Cluster Development and Factory Establishment Act) |
| (1) | Notwithstanding Article 38-2 (1) of the Industrial Cluster Development and Factory Establishment Act, a specialized leading enterprise, etc. located in a specialized complex may enter into an occupancy agreement with the management agency to lease industrial land, factories, etc. even if it has not reported on the completion of factory establishment, etc. pursuant to Article 15 (1) of that Act or on business commencement pursuant to Article 15 (2) of that Act: Provided, That those who intend to engage in leasing business shall operate the business by which they have been selected or confirmed as a specialized leading enterprise, etc. in parallel. |
| (2) | Article 39 of the Industrial Cluster Development and Factory Establishment Act shall not apply to the disposal of industrial land, factories, buildings, and other facilities in connection with the development and manufacture of core strategic technologies or supply and demand stabilization adjustments by specialized leading enterprises, etc. located in specialized complexes: Provided, That in the case of transferring industrial land, factories, etc., such transfer shall be reported to the management agency, and at least a certain amount of the transfer proceeds prescribed by Presidential Decree shall be used for purposes related to core strategic technologies. |
| Article 63 (Special Cases concerning Moving into Lease-Only Industrial Complexes) |
| Article 64 (Special Cases concerning the Chemical Substances Control Act) |
If a person who intends to install and operate a facility that handles hazardous chemical substances corresponding to core strategic technologies selected under Article 12 or supply chain stability items prepares and submits an off-site consequence analysis pursuant to Article 23 (1) of the Chemical Substances Control Act, the Minister of Environment shall promptly review the submitted off-site consequence analysis pursuant to Article 23 (2) of that Act and notify the risk level and suitability of the facility for handling such hazardous chemical substances. <Amended on Jun. 13, 2023>
| Article 65 (Special Cases concerning the Act on Registration and Evaluation of Chemical Substances) |
| Article 66 (Special Cases concerning the Occupational Safety and Health Act) |
If a person who intends to manufacture or import a non-phase-in substance that corresponds to core strategic technologies selected under Article 12 or supply chain stability items submits an investigative report on hazards and dangers pursuant to Article 108 of the Occupational Safety and Health Act, the Minister of Employment and Labor shall promptly process it. <Amended on Jun. 13, 2023>
| Article 67 (Special Cases concerning Review of Process-Safety Reports) |
If the business owner of a workplace with harmful or dangerous facilities submits a process-safety report on the new construction, expansion, or relocation of facilities related to core strategic technologies or supply chain stability items, the Minister of Employment and Labor shall promptly review the process-safety report under Article 45 (1) of the Occupational Safety and Health Act. <Amended on Jun. 13, 2023>
CHAPTER XI SPECIAL ACCOUNTS
| Article 68 (Establishment of Special Account for Strengthening Competitiveness of Materials, Components, and Equipment) |
In order to secure financial resources for the stable implementation of a master plan for strengthening the competitiveness of the materials, components, and equipment industry and to efficiently implement related projects, a special account for strengthening the competitiveness of materials, components, and equipment (hereinafter referred to as the "Account") shall be established.
[The amended provisions of Article 68 of Act No. 16859 (Dec. 31, 2019) shall be valid until December 31, 2024 pursuant to Article 2 of the Addenda to that Act]
| Article 69 (Operation and Management of Account) |
| (1) | The Account shall be managed and operated by the Minister of Trade, Industry and Energy. |
| (2) | A separate budget for the Account may be set up for each organization in central administrative agencies. |
| (3) | Matters necessary for the allocation of the budget of expenditures, fund operation and settlement, and other accounting management and operations shall be prescribed by Presidential Decree. |
[The amended provisions of Article 69 of Act No. 16859 (Dec. 31, 2019) shall be valid until December 31, 2024 pursuant to Article 2 of the Addenda to that Act]
| Article 70 (Revenues and Expenditures) |
| (1) | The revenues of the Account shall be as follows: |
| 1. | Transfers from general accounts (based on 10/100 of the amount of customs duties collected in the immediately preceding fiscal year); |
| 2. | Transfers and deposits from other accounts or other funds; |
| 5. | Income from sale or management of assets held by the Account; |
| 6. | Revenue from principal of deposits in the Account and interest accrued thereon; |
| 7. | Revenue other than those under subparagraphs 1 through 6. |
| (2) | The expenditures from the Account shall be as follows: |
| 1. | Contributing to, investing in, subsidizing, or financing any of the following: |
| (a) | Projects for developing technology and disseminating the achievements of technology development; |
| (b) | Support and foundation building projects for reliability improvement, demonstration, and performance testing; |
| (c) | Projects to develop human resources and subsidize institutions for human resources development; |
| (d) | Financial support, such as fund investment and investments, to foster related enterprises; |
| (e) | Projects related to mergers and acquisitions, technology partnerships, and technology introduction to diversify technology development; |
| (f) | Projects for technology transfer of public and private research institutes and strengthening technical support; |
| (g) | Projects necessary to facilitate international cooperation; |
| (h) | Support for the operation of equipment, investment in facilities, etc.; |
| (i) | Other projects necessary to strengthen the competitiveness of the materials, components, and equipment industry; |
| 2. | Contributions to or investments in corporations, institutions, or organizations engaged in business related to strengthening the competitiveness of the materials, components, and equipment industry; |
| 3. | Repayment of the principal of, and payment of interest on, loans and deposits; |
| 4. | Expenses for operation and management. |
[The amended provisions of Article 70 of Act No. 16859 (Dec. 31, 2019) shall be valid until December 31, 2024 pursuant to Article 2 of the Addenda to that Act]
| Article 71 (Transfers from General Accounts or Other Special Accounts and Funds) |
| (1) | If the revenues of the Account are insufficient to meet all of the expenses of the Account, all or part of the deficiency may be covered by transfers from the general account or other special accounts and funds. |
| (2) | To cover unforeseeable unbudgeted expenditures or expenditures that exceed the budget, the Account may establish a reserve fund in the budget for expenditures. |
| (3) | The Account may borrow temporarily when there is a temporary shortage of funds, in which case the amount required to repay the borrowed funds may be transferred from the general account in the next fiscal year's budget. |
[The amended provisions of Article 71 of Act No. 16859 (Dec. 31, 2019) shall be valid until December 31, 2024 pursuant to Article 2 of the Addenda to that Act]
| Article 72 (Carryover of Budget) |
| (1) | Notwithstanding Article 48 (1) of the National Finance Act, the Account may carry over any budget for expenditures that is not spent within the fiscal year concerned due to unavoidable reasons to the following fiscal year within the scope not exceeding the total amount of the budget for expenditures of the Account for each relevant Ministry, as prescribed by Presidential Decree: Provided, That the carryover is not allowed in excess of two fiscal years from the fiscal year concerned. |
| (2) | When carrying over the budget for expenditures pursuant to paragraph (1), the Minister of Trade, Industry and Energy shall use the carryover as of December 31 of the relevant year, and shall prepare a statement of carryover and send it to the Minister of Economy and Finance and the Board of Audit and Inspection by January 31 of the following year. |
| (3) | Any surplus remaining after the closing of the Account shall be appropriated as the revenues of the following year. |
[The amended provisions of Article 72 of Act No. 16859 (Dec. 31, 2019) shall be valid until December 31, 2024 pursuant to Article 2 of the Addenda to that Act]
| Article 73 (Entrustment of Accounting) |
| (1) | The head of a central administrative agency may entrust some of the duties under Article 70 to a bank under the Banking Act or to a corporation prescribed by Presidential Decree, as prescribed by Presidential Decree. |
| (2) | When the head of a central administrative agency entrusts duties pursuant to paragraph (1), he or she may pay handling fees and other necessary expenses as determined through consultation with the Minister of Trade, Industry and Energy. |
| (3) | When the head of a central administrative agency entrusts duties pursuant to paragraph (1), he or she may appoint an accounting-related employee to carry out such duties from among the executives and employees of the entrusted corporation. |
[The amended provisions of Article 73 of Act No. 16859 (Dec. 31, 2019) shall be valid until December 31, 2024 pursuant to Article 2 of the Addenda to that Act]
CHAPTER XII SUPPLEMENTARY PROVISIONS
| Article 74 (Submission of Data and Inspection) |
| (1) | If necessary for supervision, the Government may order specialized leading enterprises, etc., specialized investment associations, enterprises subject to special cases under this Act, and institutions, corporations, and organizations related to materials, components, and equipment (hereafter in this Article referred to as "enterprises, etc. related to materials, components, and equipment") to submit reports or data on their duties. |
| (2) | Information regarding the data in paragraph (1) need not be disclosed if such information is likely to undermine national security or the development of the national economy or if it is necessary to protect the business activities of enterprises such as trade secrets. |
| (3) | If necessary for supervision, the Government may take necessary measures, such as having its public officials enter the offices, workplaces, manufacturing facilities, and other places of enterprises, etc. related to materials, components, and equipment to inspect relevant documents and ask questions of relevant persons. |
| (4) | A public official conducting an entry inspection pursuant to paragraph (3) shall carry identification verifying his or her authority and shall produce it to the relevant parties. |
| (1) | Any member of KASTI or an institution that implements projects to build the foundation for improving reliability may collect necessary fees from the enterprises receiving support, as prescribed by Presidential Decree. |
| Article 76 (Delegation and Entrustment of Authority) |
| (1) | Part of the authority of the Minister of Trade, Industry and Energy or the head of a central administrative agency under in this Act may be delegated or entrusted to the head of its affiliated agency, the Special Metropolitan City Mayor, a Metropolitan City Mayor, a Do Governor, or a Special Self-Governing Province Governor, as prescribed by Presidential Decree. |
| (2) | Among the authority vested to the Minister of Trade, Industry and Energy pursuant to this Act, authority over the following matters may be entrusted to the heads of relevant administrative agencies and other corporations or organizations prescribed by Presidential Decree, as prescribed by Presidential Decree: <Amended on Jun. 13, 2023> |
| 1. | Compilation of statistics under Article 7; |
| 2. | Registration of specialized investment associations; |
| 3-2. | Establishing and operating a supply chain early warning system under Article 23-2; |
| 4. | Part of other authority prescribed by Presidential Decree. |
| (3) | A person who performed or is performing duties entrusted pursuant to paragraph (2) shall neither divulge secrets learned in the course of performing such duties nor use them for purposes other than the purposes of the duties. <Newly Inserted on Jun. 13, 2023> |
| Article 77 (Legal Fiction as Public Officials for Purposes of Applying Penalty Provisions) |
Members of the Competitiveness Committee who are not public officials, executives and employees of corporations and organizations engaged in duties entrusted to them by the Minister of Trade, Industry and Energy pursuant to Article 76, and executives and employees of the Supply Chain Center under Article 23-3 shall be deemed public officials for purposes of applying Articles 127 and 129 through 132 of the Criminal Act. <Amended on Jun. 13, 2023> [Enforcement Date: Jun. 13, 2023] Article 77 (Limited to the provisions concerning executives and employees of the Supply Chain Center)
ADDENDA <Act No. 16859, Dec. 31, 2019>
Article 1 (Enforcement Date)
This Act shall enter into force three months after date of its promulgation: Provided, That the amended provisions of Articles 68 through and 73 shall enter into force on January 1, 2020. Article 2 (Effective Period of Special Accounts)
The amended provisions of Articles 68 through 73 shall remain in force until December 31, 2024. Article 3 (General Transitional Measures)
Article 4 (Transitional Measure concerning Issuance of Certificates of Enterprises Specialized in Materials, Components, and Equipment)
A person who has obtained a certificate of an enterprise specialized in materials, components, and equipment under the previous Article 5-2 at the time when this Act enters into force shall be deemed to have obtained a specialized enterprise certificate under the amended provisions of Article 15. Article 5 (Transitional Measures concerning Specialized Materials and Components Investment Association)
Specialized materials and components investment associations under the previous Article 6, effective as at the time this Act enters into force, shall be deemed specialized investment associations under the amended provisions of Article 18. Article 6 (Transitional Measures concerning Joint Research Group for Materials and Components)
A joint research group for materials and components pursuant to the previous Article 9 as at the time this Act enters into force shall be deemed a materials, components, and equipment convergence innovation support group under the amended provisions of Article 28. Article 7 (Transitional Measures concerning Education and Training Institutions for Training Specialized Human Resources and Improving Skills)
An institution designated as an education and training institution under the previous Article 12 as at the time this Act enters into force shall be deemed designated as an institution for training specialized personnel under this Act pursuant to the amended provisions of Article 43. Article 8 (Transitional Measures concerning Korea Core Industrial Technology Investment Association)
The Korea Core Industrial Technology Investment Association under the previous Article 21 as at the time this Act enters into force shall be deemed Korea Core Industrial Technology Investment Association under the amended provisions of Article 22. Article 9 Omitted.
Article 10 (Relationship to Other Statutes and Regulations)
ADDENDA <Act No. 17112, Mar. 24, 2020>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 13 Omitted.
ADDENDA <Act No. 17799, Dec. 29, 2020>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 26 Omitted.
ADDENDA <Act No. 17893, Jan. 12, 2021>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 23 Omitted.
ADDENDA <Act No. 18425, Aug. 17, 2021>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 and 3 Omitted.
ADDENDA <Act No. 18661, Dec. 28, 2021>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 8 Omitted.
ADDENDA <Act No. 19438, Jun. 13, 2023>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation: Provided, That the amended provisions of Articles 23-3 and 77 (limited to the parts related to the executives and employees of the Supply Chain Center) shall enter into force on the date of its promulgation. Article 2 Omitted.
ADDENDA <Act No. 19504, Jun. 20, 2023>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 7 Omitted.