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Frequently Asked Questions
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Yes. If the seller of domestically produced goods, etc. marks the country of origin of domestically produced goods, etc. exempt from the assessment of origin standards as Korea, it constitutes a prohibited act under the subparagraph of Article 33 (4) 1 of the Foreign Trade Act.
Under Article 33 (4) 1 of the Foreign Trade Act, the act of marking a false origin or labelling any misleading mark or origin is prohibited, and Article 35 (3) of the same Act prescribes that Articles 33 (4) 1 and 4 shall apply mutatis mutandis to sellers of domestically produced goods, etc. Also, under the same Act, it is not prescribed that the applicability of Article 33 (4) 1 shall be decided based on whether domestically produced goods are subject to assessment of origin standards or not. In this regard, it can be said that marking the country of origin of domestically produced goods, etc. exempt from assessment of origin standards as Korea constitutes an act prohibited by Article 33 (4) 1 of the Foreign Trade Act, such as the act of marking a false origin or labelling any misleading mark or origin.
Also, the marking of origin scheme prescribed by Article 33 of the Foreign Trade Act, etc. was introduced to protect domestic consumers and to establish fair trade order as the false marking of the origin of imported goods as Korea caused harm to consumers. Also, with the partial amendment of the Foreign Trade Act into Act no. 18885 on June 10, 2022, Article 35 (3) was newly inserted to establish the order in trade of domestically produced goods using imported material by clarifying the legal basis for restricting violations against the rules on marking of origin. In this regard, when the country of origin of domestically produced goods, etc. exempt from assessment of origin standards is marked as Korea, it shall be appropriate to interpret that Article 33 (4) 1 of the Foreign Trade Act shall apply.
Therefore, the act of marking the country of origin of domestically produced goods, etc. exempt from assessment of origin standards as Korea constitutes an act prohibited under Article 33 (4) 1 of the Foreign Trade Act. -
No. A special purpose company for urban development project that is the implementer of an urban development project cannot lease or sell land it acquired through an urban development project to a foreign-invested company, etc. by a negotiated contract pursuant to Article 13 (1) or Article 13-3 (1) of the Foreign Investment Promotion Act.
Under Article 13 (1) or Article 13-3 (1) of the Foreign Investment Promotion Act, the entities that can lease or sell land, etc. owned by the State, etc. to a foreign-invested company by a negotiated contract are restrictively listed as the Minister of Economy and Finance, the head of a central government agency that manages state property, the head of a local government, the head of a public institution, or the head of a local public enterprise under the Local Public Enterprises Act, and a special purpose company for urban development project is not included. In this regard, it is clear pursuant to the legal text that a special purpose company for an urban development project cannot be an entity that can lease or sell land to a foreign-invested company, etc. by a negotiated contract pursuant to the Foreign Investment Promotion Act. Also, the scope of the entities that can enter into a negotiated contract pursuant to Article 13 (1) and Article 13-3 (1) of the Foreign Investment Promotion Act should be interpreted strictly, so it is not appropriate to interpret that a special purpose company for an urban development project can lease or sell such land by a negotiated contract without a clause that specifically prescribes so.
Therefore, a special purpose company that is the implementer of an urban development project cannot lease or sell land acquired through an urban development project to a foreign-invested company, etc. by a negotiated contract pursuant to Article 13 (1) or Article 13-3 (1) of the Foreign Investment Promotion Act. -
In a place of work that implements a selective work hour system, if a pregnant employee works in excess of the work hours prescribed by Article 50 (2) of the Labor Standards Act (eight hours per day) on a specific day, it is deemed “overtime work” prohibited for pregnant employees in accordance with Article 74 (5) of the same Act.
Under Article 74 (5) of the Labor Standards Act, it is prescribed that no employer shall order a female employee in pregnancy to engage in overtime work. It is considered that the purpose of this is to restrict excessive work placing physical and mental burden on the health of the pregnant employee and her fetus. Considering the fact that the regulation prohibits the overtime work of pregnant workers while not providing any exceptions, it should be deemed that prohibition of overtime work for pregnant employees shall apply identically to all pregnant employees regardless of the personal circumstances or intention of pregnant employees. Also, Article 74 (5) of the Labor Standards Act should be regarded as prohibiting work hours exceeding the statutory work hours (eight hours per day, 40 hours per week) regardless of whether or not contractual work hours or selective work hour system applies.
Also, the selective work hour system and the regulations on maternity protection are separate regulations with different legislative purposes. And in addition, if it is assumed that a pregnant employee in a place of business implementing selective work hours is permitted to work long and irregular hours, it shall be in violation of the legislative purpose of the regulation for protection of maternity which is to protect the health of the pregnant employees and her fetus. Considering such points, “overtime work” should be deemed “work in excess of the statutory work hours according to Article 50 (1) and (2) of the Act” regardless of whether the selective work hour system applies.
Therefore, if a pregnant employee in a place of work implementing the selective work hour system works in excess of the work hours prescribed by Article 50 (2) of the Labor Standards Act (eight hours per day) on a specific day, it constitutes “overtime work” prohibited for pregnant employees pursuant to Article 74 (5) of the same Act. -
Where an approval for change was obtained after obtaining an initial approval pursuant to the main sentence of Article 13 (1) of the Industrial Cluster Act, “the day on which four years have passed since obtaining approval for factory establishment, etc.” shall be deemed “the day on which four years have passed since obtaining approval for change”.
Under the main sentence of Article 13 (1) of the Industrial Cluster Act, a person who intends to construct a new factory or extend one or to alter the type of industry or a factory (hereafter “factory establishment, etc.), the construction area of which is at least 500 m2 shall obtain approval from the head of a Si/Gun/Gu, as prescribed by Presidential Decree, and the same shall also apply where he or she intends to alter any approved matters.
In addition, in the main sentence of Article 13-5 of the Act excluding its subparagraphs and in subparagraph 3 of the same Article, it is prescribed that the mayor, etc. may order the revocation of approval of factory establishment, etc. where it is deemed difficult to implement a project for the reason that a person who obtained approval for factory establishment, etc. pursuant to Article 13 of the same Act has not completed report (hereafter “report of completion of factory establishment, etc.”) pursuant to Article 15 (1) of the same Act until the date on which four years have passed. In the main sentence of Article 13 (1) and Article 13-2 (1) of the Industrial Cluster Act, it is prescribed that the “approval” of the mayor, etc. is needed when intending to establish a factory and when intending to change the approved matters, and it does not distinguish the concept of “initial approval” and “approval for change”, and also, it is prescribed that “when approving factory establishment, etc.”, it shall be deemed that matters that the mayor, etc. negotiated with the head of the relevant administrative agency shall be deemed to have obtained approval or permission (deemed approval and permission). In this regard, deemed approval and permission also applies to “approval for change” in which approved matters are changed, in addition to “initial approval” of factory establishment, etc. Another point is that Article 15 (1) of the same Act prescribes that a person who obtained “factory establishment approval, etc. pursuant to Article 13 (1)” should report completion of factory establishment, etc. when he/she completed factory construction. As such, when “approval for change” was obtained after obtaining “initial approval”, the time when factory construction was completed shall mean “when factory construction is completed according to the matters reflecting the approval for change”. Considering such points, it will be conforming to the regulations of the Industrial Cluster Act to conclude that “approval of factory establishment, etc.” includes “approval for change”.
The main sentence of Article 13-5 of the Act excluding its subparagraphs prescribes that revocation of the approval of factory establishment, etc. is possible when the person who obtained approval for factory establishment, etc. deems it difficult to implement the project due to any of the causes under its subparagraphs, and does not limit the meaning of “factory establishment, etc.” to “initial approval”. So such as in this case, where approval for change was obtained after obtaining initial approval, it shall be reasonable to deem that “the day on which four years have passed since obtaining approval for factory establishment, etc.” shall be the day on which four years have passed since obtaining the “approval for change”, not the “initial approval”.
Therefore, if approval for change was obtained after initial approval was obtained pursuant to the main sentence of Article 13 (1) of the Industrial Cluster Act, “the day on which four years have passed after obtaining approval of factory establishment, etc.” shall be “the day on which four years have passed after obtaining approval for change”. -
Because a dormitory in this case falls under a dormitory under subparagraph 2 (d) of attached Table 1 of the Enforcement Decree of the Building Act, it is subject to application of the dormitory construction standards designated and publicly notified by the Minister of Land, Infrastructure and Transport as delegated by the same subparagraph.
According to Article 2 (2) of the Building Act and Article 3-5 of the Enforcement Decree of the same Act and subparagraph 2 (d) 1 of its attached Table 1, dormitories are classified as a sub-category of a multi-family housing according to its use, and “general dormitories”, which is a sub-category of dormitories, is defined as a building used for the students or employees of a school or factory, etc. with the units using the dormitory’s shared cooking facilities accounting for at least 50% of the total units. Also, the building standards for dormitories are prescribed under the “building standards for dormitories (Public notice of the Ministry of Land, Infrastructure and Transport no. 2023-151)”. In this regard, if a dormitory in this case falls under a dormitory under subparagraph 2 (d) of attached Table 1 of the Enforcement Decree of the Building Act, it should comply with the “building standards for dormitories”
According to related laws such as the Industrial Cluster Development and Factory Establishment Act (hereafter “Industrial Cluster Act”), dormitories built inside a factory site for the welfare of manufacturing employees are prescribed as one of the ancillary facilities included in the scope of a factory. And dormitories as ancillary facilities included in the scope of a factory pursuant to the Industrial Cluster Act fall are used for “subsidiary use” under subparagraph 13 (d) of Article 2 of the Enforcement Decree of the Building Act, and subparagraph 2 (d) 1 of attached Table 1 of the same Enforcement Decree prescribes general dormitories as “building used for the employees of a factory, etc.” regardless of whether its use is for the main use of the building or the subsidiary use of a building. Consequently, since dormitories in this case fall under general dormitories under subparagraph 2 (d) 1 of attached Table 1 of the Enforcement Decree of the building Act, it can be said that the “building standards for dormitories” prescribed and publicly notified by the Minister of Land, Transport and Infrastructure as delegated by the same subparagraph shall apply to the structure and size of the space.
The Building Act prescribes that dormitories should meet the “building standards for dormitories” in order to reflect the characteristics of dormitories and make them comply with the building standards necessary for safety, hygiene and fire prevention so that the pleasant and safe living environment can be provided for dormitory users. Also, the Industrial Cluster Act prescribes that dormitories built inside a manufacturing factory site for the welfare of employees shall be included in the scope of a factory so that a dormitory can be built within the factory site as an ancillary facility to a factory under the same Act for the welfare of employees, and it is not for the purpose of excluding the application of the regulations on the structure and facility standards and use. Therefore, it is fair to conclude that dormitories in this case, which are general dormitories under the Building Act, are subject to subparagraph 2 (d) of attached Table 1 of the Enforcement Decree of the Building Act, and the “building standards for dormitories” as delegated under the same subparagraph also apply.
In conclusion, dormitories in this case are dormitories under subparagraph 2 (d) of attached Table 1 of the Enforcement Decree of the Building Act, and are subject to the “building standards for dormitories” prescribed and publicly notified by the Minister of Land, Transport and Industry as delegated by the same subparagraph. -
No. Parts and raw materials for military aircraft are not excluded from the scope of goods for which customs duties are reduced or exempted pursuant to Article 89 (6) 1 of the Customs Act
Article 89 of the Customs Act prescribes the matters related to the reduction and exemption of customs duties for resolving uneven tariff rates in order to support the manufacture of products subject to relatively low tariff rates for finished products and high tariff rates for parts and raw materials. In the same Article, customs duties reduction and exemption for “parts and raw materials” used for the manufacture or repair of “aircraft” apply differently depending on whether they are used by a “small or medium enterprise” (paragraph 1) or “a person who is not a small or medium enterprise” (paragraph 6). And under paragraph 6 of the same Article, “parts and raw materials” used to manufacture or repair goods referred to in paragraph (1) 1 are eligible for customs duties reduction or exemption, and the goods are prescribed as “aircraft” under paragraph (1) 1 of the same Article. In addition, Article 35 (1) 1 of the Enforcement Rules of the same Act delegated by the parts excluding the subparagraphs of paragraph 1 of the same Article stipulates that “parts and raw materials” imported by an aircraft manufacturer or repairer for the manufacture or repair of “aircraft” are eligible for customs duties reduction or exemption. As such, “aircrafts” are not limited to ”civil aircrafts” for which “parts and raw materials” are used.
If so, it can be said that “goods under paragraph (1) 1” in the parts excluding the subparagraphs of Article 89 (6) of the Customs Act which prescribes matters on the reduction or exemption of customs duties for goods subject to uneven tariff rates means “all aircraft including military aircraft”, so the parts excluding the subparagraphs of the paragraph of the same Article means that “customs duties shall be reduced or exempted as prescribed by each subparagraph of the same paragraph for “parts and raw materials” used to manufacture or repair all aircraft including military aircraft at a designated factory by a person who is not a small or medium enterprise, and subparagraph 1 of the same paragraph stipulates the scope of “parts and raw materials” as “goods prescribed by Ordinance of the Ministry of Economy and Finance among goods subject to the Annex 4 Agreement on Trade in Civil Aircraft of the Marrakesh Agreement Establishing the World Trade Organization”. Also, Attached Table 1 of the Enforcement Rules of the same Act which was delegated by the Act only states the list of the specific product names of “parts and raw materials” used to manufacture or repair aircraft and does not restrict the scope of “aircraft” for which parts and raw materials are used. In this regard, it will be reasonable to interpret that parts and raw materials for military aircraft are included in “goods prescribed by Ordinance of the Ministry of Economy and Finance among goods subject to the Annex 4 Agreement on Trade in Civil Aircraft of the Marrakesh Agreement Establishing the World Trade Organization” which are eligible for reduction or exemption of customs duties pursuant to Article 89 (6) 1 of the same Act. Therefore, it can be concluded that parts and raw materials for military aircraft are considered goods for which customs duties are reduced or exempted pursuant to Article 89 (6) 1 of the Customs Act. -
Robot work under Item d (36) of paragraph 1 of attached Table 5 of the Enforcement Rules of the Occupational Safety and Health Act is not limited to work using “industrial robots”.
In the Occupational Safety and Health Act, the definition or scope of “robot” is not prescribed. But under the Korea Industrial Standards (KS) classification of KS B ISO 8373, robots are categorized into industrial robots (3.6), service robots (3.7) and medical robots (3.8). Under the KS classification, the definition of robots encompasses industrial robots, service robots and medical robots, and under attached Table 5 of the Enforcement Rules of the Occupational Safety and Health Act, “robot work” is classified as a work subject to special education (Item d (36) of subparagraph 1), and “industrial robots” are categorized under equipment subject to functional test education (Item (k) of subparagraph 5) and the terms “robots” and “industrial robots” are separately classified in the Table. If so, as long as the work subject to “special education” which is to be additionally conducted when the business owner employs an employee for a harmful or dangerous work or replaces an existing job with such work is prescribed using the term “robot” instead of “industrial robot” (Item (d) 36 of subparagraph 1 of attached Table 5), “robot work” is not restricted to “industrial robots” among robots.
In addition, the scope of work subject to special education pursuant to Article 29 (3) of the Occupational Safety and Health Act should be interpreted in a manner that maintains and enhances the health and safety of the person providing labor. In this regard, work subject to special education is defined as “robot work” so that special education can be provided to workers employed for robot work or workers who changed their work to robot work without restricting or applying exceptions to the scope of robots, considering the fact that work using various robots other than industrial robots can be harmful or dangerous to the person providing labor, and such logic shall be in conformance with the legislative purpose of the same Act.
Therefore, robot work under Item d (36) of paragraph 1 of attached Table 5 of the Enforcement Rules of the Occupational Safety and Health Act is not limited to work using “industrial robots”. -
No, “where a small and medium entrepreneur that is a corporation creates a new small and medium enterprise that is another corporation and starts business” under Article 2 (1) 5 of the Enforcement Decree of the former Small and Medium Enterprise Establishment Act is not restricted to a case where “another small and medium enterprise that is another corporation is established and the same type of business as the existing business is started”
Under Article 2 (1) 5 of the Enforcement Decree of the former Small and Medium Enterprise Establishment Act, “where a small and medium entrepreneur that is a corporation creates a new small and medium enterprise that is another corporation that owns 30/100 or more of the total number of issued shares with voting rights and starts business” is excluded from the scope of “business startup”. However, under Article 2 (1) 4 of the Enforcement Decree, it is prescribed that “a small and medium entrepreneur that is an individual” who meets certain stock ownership requirements and runs “a business that is the same type as the existing business” is not included in the scope of “business startup”. On the other hand, “business startup” by a small and medium entrepreneur that is a corporation is prescribed as the startup of a business by creating a new small and medium enterprise that is another corporation that meets certain stock ownership requirements regardless of whether the business is the same type of business as the existing business. In this regard, if a small and medium entrepreneur starts a new business by establishing another small and medium enterprise that is a new corporation that satisfies certain stock ownership requirements, it does not qualify as a “business startup” regardless of whether the newly established small and medium enterprise starts a type of business that is different from that of its existing business. -
Yes, in this case, the “status as an aggregate extraction business” to be succeeded to the transferee of the business pursuant to Article 17 (2) of the Aggregate Extraction Act includes the rights and liabilities of the transferee following permission of aggregate extraction.
First of all, the purpose of the regulations on the succession of status is to recognize that the transferee has the same status as the transferor. While Article 17 (2) of the Aggregate Extraction Act stipulates that the transferee or the corporation established as a consequence of the merger or surviving the merger shall succeed the status that the transferor or the corporation existing before the merger held as an aggregate extraction business entity, it does not restrict the definition of “status” or the scope of “succession of status”. In this regard, succession of “the status as an aggregate extraction business” shall mean that all rights and liabilities of the transferor pursuant to registration as an aggregate extraction business, and for the business entity registered pursuant to Article 14 of the Act to actually operate the business, a permission to extract aggregates should be obtained and the selection and washing of aggregates should be reported. In this regard, if a transferor obtained permission to extract aggregates or reported the selection and washing of aggregates, the accompanying rights and liabilities shall be deemed as succeeded by the transferee in accordance with the regulations on succession of status.
Also, Article 45 of the Act states that dispositions and other actions made to an aggregate extraction business entity or an issue ordered under the Act shall also be effective to a successor to the aggregate extraction business entity, and permission to extract aggregate under Article 22 of the Act is ‘a disposition under the same Act’ and the permission to extract aggregate obtained by the transferor of the aggregate extraction business shall be effective also to the transferee who is the successor. Therefore, the transferor’s “status as an aggregate extraction business” to be succeeded by the transferee shall include the rights and liabilities following permission of aggregate extraction.
In conclusion, “status as an aggregate extraction business” to be succeeded to the transferee of the business pursuant to Article 17 (2) of the Act includes the rights and liabilities following permission of aggregate extraction obtained by the transferor. -
In this case, the regulations that apply mutatis mutandis to Article 57-8 (1) of the Enforcement Decree of the Local Public Enterprises Act do not include Article 33 of the Local Contract Act.
Under Articles 64-2 (4) and (6) of the Local Contract Act, it is prescribed that where a public corporation enters into a contract, it may restrict the eligibility of a bidder judged undoubtedly detrimental to fair competition and appropriate execution of a contract, within two years, and that the matters necessary for restrictions on the eligibility for bidding, etc. shall be prescribed by Presidential Decree. Accordingly, Article 57-8 (1) of the Enforcement Decree of the same Act prescribes that Articles 31 and 31-5 of the Local Contract Act and Articles 90 to 92, 93, and 94 to 97 of the Enforcement Decree of the same Act shall apply mutatis mutandis to matters such as restrictions on the eligibility for bidding, but Article 33 of the Act is not included in the list of clauses that shall apply mutatis mutandis.
However, under Article 31 (1) 8 of the Local Contract Act, which applies mutatis mutandis to the Local Public Enterprises Act, it is prescribed that the head of a local government shall restrict qualifications for participation of those tendering within two years, who fall under any of the cases as prescribed by Presidential Decree. In this regard, in regard to this question, the issue is whether Article 57-8 (1) of the Enforcement Decree of the Local Public Enterprises Act applies mutatis mutandis to Article 33 of the Local Contract Act as well in regard to contracts with local government-invested public corporations.
“Mutatis mutandis” is a legislative technique that applies a specific clause to another clause that is similar in nature while making necessary alterations, and mutatis mutandis application is permitted only when there are regulations that explicitly state as such. And when a certain Act specifically stipulates the clauses that are subject to mutatis mutandis application, it shall be deemed that application shall be limited only to the specified clauses.
In this case, Article 57-8 (1) of the Enforcement Decree of the Local Public Enterprises Act lists the clauses subject to mutatis mutandis application, which does not include Article 33 of the Local Contract Act. Also, the Local Public Enterprises Act does not have an explicit clause that mandates that Article 33 of the Local Contract Act should be applied mutatis mutandis to contracts to which a local government-invested public corporation is a party. Therefore, based on the clauses of the Local Public Enterprises Act and in consideration of the nature of the legislative technique of mutatis mutandis application, it cannot be said that Article 33 of the Local Contract Act applies mutatis mutandis to contracts to which a local government-invested public corporation is a party.
Moreover, because administrative regulations that form the grounds for punitive administrative acts should be interpreted and applied in a strict manner, such administrative acts should not be interpreted expansively or analogically in a way that is disadvantageous to the party subject to the administrative act. However. Article 33 of the Local Contract Act restricts the persons that can influence a contract to which a local government is a party from signing a contract, and persons who concluded a contract in violation of the same Act shall be restricted from participation in tendering within two years, pursuant to Article 31 (1) 8 of the same Act. Based on such facts, it cannot be said that Article 33 of the same Act can be extended and applied mutatis mutandis even to contracts to which a local government-invested public corporation is a party.
Thus, Article 33 of the Local Contract Act is not included in the scope of regulations subject to mutatis mutandis application of Article 57-8 (1) of the Enforcement Decree of the Local Public Enterprises Act.