"'Overcoming Japan' Comprehensive Foundation to Build Industrial Competitiveness"…SoBuJang Special Act to Take Effect April 1

Complete Overhaul After 20 Years Triggered by Japan Export Incident
'Equipment' Added to Existing Law Covering 'Materials and Components'
Fostering Specialized Companies → Strengthening Competitiveness Across Industries
Synergy with R&D Tax Credits for Sobujang Companies

Minister of Trade, Industry and Energy Sung Yun-mo stated in this year's New Year's address, "We will achieve tangible results through stabilizing the supply of 100 core items in the materials, parts, and equipment industry, selecting specialized leading companies, and creating cooperation models between demand and supply companies." The special law, which has been completely revised for the first time in 20 years, will take effect on the 1st of next month. The photo shows Minister Sung delivering a congratulatory speech at the 47th Commerce Day ceremony held on the 18th at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Moon Chaeseok] The 'Special Measures Act for Strengthening Competitiveness of Materials, Parts, and Equipment Industry' (SoBuJang Special Act), which has been completely revised for the first time in 20 years following Japan's export restrictions, will be enforced from the 1st of next month. The government emphasized that a comprehensive institutional foundation to enhance industrial competitiveness has been fully established.

On the 24th, the Ministry of Trade, Industry and Energy announced that the SoBuJang Special Act will be enforced from the 1st of next month as scheduled when it was promulgated at the end of last month, after completing all procedures including the revision of subordinate statutes. The amendment to the enforcement decree of the SoBuJang Special Act was deliberated and approved at the Cabinet meeting on the same day after public notice and consultations with related ministries.

The SoBuJang Special Act has completely changed its scope, functions, and system for the first time in about 20 years since its enactment in 2001, and has been converted from a special act scheduled to expire in 2021 to a permanent law.

First, the policy scope was expanded. Equipment was added to the existing materials and parts. The industries subject to SoBuJang equipment are regulated in an integrated manner. Accordingly, the law, which previously focused on fostering specialized companies, has been elevated to a parent law that strengthens the competitiveness of the entire SoBuJang industry.

The special act stipulates detailed procedures for establishing basic and implementation plans to strengthen SoBuJang competitiveness, selection of core strategic technologies, and procedures related to the selection and management of specialized leading companies and strong small and medium enterprises.

The special act also includes provisions related to the establishment and operation of implementing agencies responsible for technology development, technology transfer and commercialization, and demonstration-based openness and utilization, as well as the formation and operation of the Convergence Innovation Support Group. The Convergence Innovation Support Group is a consultative body of 32 public research institutes, including government-funded research institutes, to support SoBuJang companies' technology.

Additionally, matters related to cooperation models between companies, specialized complexes, the composition and operation of the Competitiveness Enhancement Committee and the working-level promotion team, and the management and operation of special accounts are also included in the law.

The part of the special act that specifically regulates the selection procedures, disclosure of results, review, and institutions subject to information non-disclosure for core strategic technologies is expected to create a synergistic effect in connection with the tax credit benefits for research and development (R&D) expenses of SoBuJang companies announced earlier by the government.

On the 4th of last month, the government announced at the Cabinet meeting that it had approved an amendment to the enforcement decree annex of the Restriction of Special Taxation Act, which provides tax credits of 30-40% for SMEs (20-40% for large companies) on their expenses. This is a follow-up measure to last year's tax law revision, expanding the scope of new growth and source technologies, including SoBuJang fields such as high-purity alumina (advanced materials), high-precision bearings (advanced parts), and advanced machining centers (advanced equipment).

The Ministry of Trade, Industry and Energy stated, "With the full enforcement of the SoBuJang Special Act, the legal and institutional foundation to implement the strengthening of competitiveness of the SoBuJang industry, which has emerged as a national policy task, in the industrial field has been completed," and emphasized, "We plan to intensively invest policy resources and capabilities at the whole-of-government level to achieve the legislative intent, such as strengthening SoBuJang technological capabilities and building a healthy industrial ecosystem."

This content was produced with the assistance of AI translation services.