'Regulatory Sandbox' Temporary Approval Introduced... Preventing Business Suspension Even After Expiration

Partial Amendment to the Enforcement Decree of the Industrial Convergence Promotion Act Approved at Cabinet Meeting

[Sejong=Asia Economy Reporter Kwon Haeyoung] Companies granted regulatory sandbox exemptions or deferrals under the regulatory sandbox system will be able to continue their operations by obtaining temporary government approval if they prove safety and other factors, even after their business validity period expires.

The Ministry of Trade, Industry and Energy announced that the partial amendment to the "Industrial Convergence Promotion Act Enforcement Decree," which includes these provisions, was reviewed and approved at the Cabinet meeting on the 7th and will take effect from the 16th.

This amendment mainly focuses on the legal revision request system for demonstration exemption businesses and the transition to temporary approval. Since the regulatory sandbox system was implemented in 2019, the validity period of approved demonstration exemption projects has reached expiration, raising concerns that some projects might be halted due to insufficient legal revisions. Under current law, demonstration exemptions end after one extension (2+2 years).

The amendment establishes the grounds and procedures for converting demonstration exemption projects, which have proven safety and have initiated legal revisions, into temporary approvals. Temporary approval extends the validity period until legal revisions are completed if the laws are not revised within the validity period, thereby reducing concerns about project suspension.

Additionally, demonstration exemption businesses are required to request legal revisions related to demonstration exemptions from the Ministry of Trade, Industry and Energy and the heads of relevant administrative agencies (regulatory departments). During the legal revision decision process, the validity period of the demonstration exemption is considered not to have expired. The amendment also specifies the procedure for regulatory departments to determine the necessity of legal revisions based on the business operator’s request.

The Ministry of Trade, Industry and Energy plans to actively promote these institutional improvements to approved demonstration exemption companies so that the improvements can be smoothly implemented and more companies can benefit from them.

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