(1) Reasons for Proposal

In accordance with the amended Act on Prevention of Divulgence and Protection of Industrial Technology (Act no. 16476; promulgated on August 20, 2019; to be enforced on February 21, 2020), this Amendment prescribes additional protective measures to prevent the divulgence of national core technologies, adjusts the scope of matters subject to approval and declaration in the event of an overseas merger/acquisition by a foreign national, prescribes approval application and declaration procedures, and otherwise prescribes matters delegated by the Act and matters necessary for the enforcement thereof, while also addressing and improving upon a number of weaknesses that have emerged from the operation of the current system.

(2) Major Provisions

A. Prescribe that appointed members of the Industrial Technology Protection Committee and the specialized committees by area may serve consecutive terms (Article 5 and Article 7)

B. Prescribe that the scope of institutions that do not disclose information on national core technologies shall be universities and research institutes pursuant to Article 2 of the Industrial Technology Innovation Promotion Act (Article 13-1)

C. Classify specialists who handle national core technologies under protective measures for national core technologies, and specify that the specialists shall undergo security education (Article 14)

D. Adjust the scope of matters subject to approval and declaration in the event of an overseas merger/acquisition, joint investment or other foreign investment (Article 18-2)

1) Delete the requirement of the largest holder of stocks in cases where less than 50 percent of stocks is in possession

2) Reduce the scope of blood relatives whose equities are combined when a foreign national acquires stocks, etc., to the sixth degree of kinship

3) Add cases where a foreign national intends to manage an institution in possession by transferring or receiving the fixed operating assets of the institution in possession 

4) Include in the scope subject to approval and declaration cases where a foreign national becomes able to exercise a dominant influence over executive appointments, etc., by guaranteeing the debt of an institution in possession or trading assets, goods, services, etc., with an institution in possession in excess of a reasonable limit 

E. Prescribe approval application and declaration procedures for overseas mergers/acquisitions (Article 18-3, Article 18-4)

F. Prescribe that investigation procedures associated with an industrial technology infringement report shall be in accordance with the “Framework Act on Administrative Investigations.” Allow the heads of central administrative agencies and relevant institutions to request the submission of relevant information and other necessary cooperation where deemed necessary for relevant investigations and measures (Article 20)

G. Allow the Minister of Trade, Industry and Energy to request cooperation from an intelligence and investigation agency when conducting an investigation of actual conditions for protection of industrial technology (Article 22)