Ask a Lawyer is a regular column written by attorneys at Yoon & Yang LLC on various legal aspects of the Korean life or business. The content provided here is general legal information, not legal advice on a specific situation. -- Ed.


Q: What trade measures are there in Korea that directly affect businesses?

Nowadays, domestic industries of many countries actively utilize trade measures, such as antidumping, countervailing and safeguard actions, in order to defeat imports and protect their own interests. 

In Korea, the government authority responsible for these investigations is the Korea Trade Commission, and the result of the investigations is subject to approval by the Ministry of Finance and Strategy. 

Until now, the KTC has conducted antidumping duty investigations quite actively and has imposed additional duties on top of the basic duty due when foreign goods enter the Korean market, yet it never has conducted countervailing duty investigations. 

However, there is a movement within the KTC indicating that it is preparing for countervailing duty investigations as well. In addition to these three measures, the KTC also conducts so-called unfair trade practice investigations, the purpose of which is to prevent import and export of goods that violates Korean regulations. 

As a result of the foregoing investigations, the KTC may issue corrective measures, such as import bans, destruction orders, and administrative fines. In the past, the unfair trade practice investigations were not commonly triggered. 

However, more and more applications are being filed, especially in relation to infringements on intellectual property rights and origin marking violations. 

Unlike other countries, Korea may issue corrective measures and impose administrative fines not only against imported goods but also against exported goods. Thus, foreign intellectual property rights holders may ask the KTC to conduct investigations on Korean goods that infringe their rights and prevent exports of such infringing goods.


Q: Can companies make legal arguments on the basis of international trade agreements in court proceedings in Korea?

Although the trade measures in Korea have their roots in the World Trade Organization Agreement, the Korean courts have rejected claims raised by individuals on the basis of international trade agreements. 

An example is the Shanghai ASA Ceramic Co., Ltd v. Ministry of Strategy and Finance, for which the Supreme Court delivered its decision on Jan. 30, 2009. 

In this case, the plaintiff claimed that the Korea’s imposition of an antidumping duty was inconsistent with the WTO Agreement. 

However, the court clearly indicated that individuals have no standing to argue whether the Korean government’s measure in question is in compliance with the WTO Agreement. 

The court stated in the Shanghai ASA decision that the WTO Agreement is designed to regulate relationships between the WTO member states. 

Therefore, when confronted with antidumping duties, countervailing duties, safeguards or unfair trade practice investigations, keep in mind that it is important to come up with good strategies under the domestic laws and regulations of Korea.

Individual companies cannot refer to international agreements during the court proceedings. They may, however, make requests to the administrative bodies based on international agreements, and this could be a useful tool for companies looking to thrive in the Korean market.


By Lee Sungbum
Attorney and partner of law firm Yoon & Yang LLC