Financial Bill Review... Will the 'LH Blackhole' Delay into the Second Half of the Year?

Key Issues of the Conflict of Interest Prevention Act in the Political Affairs Committee Resurface
Main Financial Bills like the Electronic Financial Transactions Act Pushed to Lower Priority
Political Schedule Remains Challenging After the March Extraordinary Session

[Asia Economy Reporter Kiho Sung] The National Assembly's Political Affairs Committee is set to begin full-scale bill review in line with the March extraordinary session schedule. However, due to the aftermath of the real estate speculation scandal involving employees of Korea Land and Housing Corporation (LH), the "Conflict of Interest Prevention Act" has emerged as a major issue, lowering the likelihood of passing key financial-related bills such as the Electronic Financial Transactions Act amendment (EFTA), the Social Solidarity Fund Act, and the People's Finance Act during this extraordinary session. Consequently, there are concerns both inside and outside the political sphere that, with a packed political schedule following this session, major financial bills may be delayed beyond the first half of this year.

According to sources from the financial and political sectors on the 17th, the Political Affairs Committee will hold a subcommittee on bill review in the afternoon and begin full-scale examination of bills. Originally, the committee planned to hold the subcommittee on the 15th, but it was postponed due to the focus on the Conflict of Interest Prevention Act following the LH scandal.

As the Conflict of Interest Prevention Act becomes a core contentious bill, the Political Affairs Committee's schedule is being continuously adjusted. The subcommittee meetings initially scheduled for the 15th and 22nd have been moved to the 17th, 18th, and 22nd. This is a consequence of the Fair Trade Commission meeting on the Conflict of Interest Prevention Act held on the morning of the 17th. Accordingly, the full committee meeting and the National Assembly plenary session originally planned for the 17th have been postponed to the 24th.

The problem is that with the Conflict of Interest Prevention Act discussions taking precedence due to the LH scandal, the handling of major financial bills remains uncertain. Since the plenary session on the 24th is primarily for supplementary budget approval, it is unlikely that financial bills will be submitted at that time.

In particular, the EFTA amendment, which is receiving the most attention, is scheduled for review by the subcommittee on the 22nd, but it is uncertain whether it will pass the Political Affairs Committee. Due to numerous contentious points and significant differences in opinions among various companies and sectors, it is difficult to guarantee swift processing.

A staff member from the opposition party's office in the Political Affairs Committee said, "Generally, ordinary bills are reviewed by the National Assembly after the ruling party has somewhat coordinated the issues, but in the case of the EFTA, the opposition is expected to organize the positions of the Financial Services Commission and the Bank of Korea," adding, "Considering the impact on the financial sector, an agreement between the FSC and the Bank of Korea must be reached first."

Moreover, with a series of political schedules ahead, there is speculation that if major financial bills are not passed during the March extraordinary session, they may be delayed beyond the first half of this year.

After the extraordinary session ends, both ruling and opposition parties will immediately begin preparations for the April 7 by-elections. Since these elections will select new mayors for Seoul and Busan, the losing party is expected to face severe turmoil depending on the election results. Therefore, it is highly likely that bill processing will be difficult around the election period. In May, party conventions are scheduled to elect new leaders for the Democratic Party of Korea and the People Power Party, whose terms have expired. In June, the National Assembly will conduct a 20-day audit of state affairs from the 10th to the 29th. The National Assembly announced this schedule on the 15th through the "2021 National Assembly Operation Basic Direction."

A Political Affairs Committee official stated, "With the Conflict of Interest Prevention Act emerging as a key bill, it is uncertain whether discussions on major financial bills such as the EFTA amendment will take place," adding, "Depending on the by-election results, a major political reshuffle is expected, making it difficult to predict the situation thereafter."

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