The Korea Herald


[Bills in Focus] Borrowers' relief, chip tax cuts and union transparency

By Korea Herald

Published : April 24, 2023 - 18:38

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A scenic view of the National Assembly (123rf) A scenic view of the National Assembly (123rf)

〈For the week of April 10-14〉

Proposed bill: Partial Amendment to the Banking Act

Proposed by Rep. Min Byoung-dug (Democratic Party of Korea)

● High interest rates have allowed banks to reap massive interest earnings while ordinary people and financial consumers have had to bear the brunt of the situation. However, banks have passed on the costs of various taxes, legal contributions, reserves and insurance premiums, by including them in their interest rates, aggravating the burden on borrowers. This has led to calls for the establishment of a loan rate calculation system that considers the banks’ social responsibility.

This amendment prohibits banks from unfairly passing on their legal costs, such as insurance premiums for deposits or contributions, via loan interest rates. It also requires banks to refund any unfairly received loan interest income received in the past five years.

Proposed bill: Partial Amendment to the Act on the Protection of Information and Communications Infrastructure

Proposed by Rep. Jung Pil-mo (Democratic Party of Korea)

● Following recent data breaches, there has been a growing need to reinforce the social responsibility and security measures of organizations responsible for critical information and communication infrastructure. Protection guidelines for such infrastructure exist but following them is not mandatory and they are insufficient to prevent data breaches.

This amendment aims to improve the protection of critical information and communications infrastructures and enhance the effectiveness of the data breach response system by making it mandatory for the heads of management organizations to comply with protection guidelines. This amendment also authorizes heads of relevant central administrative agencies or the minister of science and ICT to order protection measures in the event of a data breach at a critical piece of information and communications infrastructure, and imposes administrative fines on those who fail to implement such orders.

Pending bill: Partial Amendment to the Trade Union and Labor Relations Adjustment Act

Proposed by Rep. Kim Hyung-dong (People Power Party)

● The Trade Union and Labor Relations Adjustment Act has been updated to protect trade unions' independence and autonomy and reinforce workers' three fundamental rights. Trade unions have become an important part of society, but some engage in illegal or unfair practices that infringe on the rights of other unions and workers. Opaque accounting practices within unions also hinder transparency and development. However, the current act lacks measures to regulate such practices, which hinders the development of a rational labor-management relationship.

This amendment facilitates orderly labor-management relations on worksites by enabling trade unions to autonomously use a public disclosure system to disclose their bylaws, the number of members, and the settlement of accounts to improve the transparency of trade union accounting.

Promulgated bill: Act on Restriction of Special Taxation

Competent ministry: Ministry of Economy and Finance

● This amendment reintroduces the temporary investment tax deduction and increases the deduction rate for strategic technologies, such as semiconductors.

This amendment expands the tax deduction for investment in facilities and introduces a temporary investment tax deduction to strengthen the competitiveness of national strategic industries, such as the semiconductor industry. It newly establishes special taxes for high-yield, high-risk bond investment trusts and for interest income when possessing treasury bonds for a personal investment purposes. It also temporarily increases the tax deduction rate for money spent on public transportation out of the credit card usage amount, etc.

Administrative announcement: Partial Amendment to the Enforcement Decree of the Banking Act

Competent ministry: Financial Services Commission

● Following the amendment to the Banking Act, this change to the enforcement decree aims to specify the matters mandated by the amended act, as prescribed by the presidential decree. It also modifies relevant systems, such as the standards for determining partial businesses that need to obtain authorization from the Financial Services Commission in the event of transfer or acquisition.

This amendment requires banks to obtain authorization from the Financial Services Commission when they partially close, transfer or acquire a business of which asset amount and gross profits take more than 10 percent of their overall assets and gross profits.

The Korea Herald republishes a weekly legislative report by a local law firm DAERYOOK & AJU LLC to provide the latest information of bills approved, proposed, pending and set to be promulgated. --Ed.