Mercury Angry at Mubo's 'Mongni', Conflict Deepens Over Expansion of 'External Debt Guarantees' (Comprehensive)

Mubo Union Files Audit Request with Board of Audit and Inspection and Announces Criminal Charges
Sueun Union, Previously Unresponsive, Strikes Back... "Reviewing Legal Measures Internally"

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is delivering opening remarks at the '281st Ministerial Meeting on External Economic Affairs' held at the Government Seoul Office in Jongno-gu, Seoul, on the 14th. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Kim Jin-ho] The conflict between the Export-Import Bank of Korea (KEXIM) and the Korea Trade Insurance Corporation (K-SURE) over "external debt guarantees" is showing signs of intensifying. The K-SURE labor union is reportedly planning to file a petition for a national audit with the Board of Audit and Inspection (BAI) and criminal charges as early as this week, while the KEXIM labor union has also announced a countermeasure. This is interpreted as a refusal to tolerate any longer the sudden "stubbornness" of the K-SURE union regarding an issue on which government ministries have already reached an agreement.

On the 27th, Shin Hyun-ho, chairman of the KEXIM labor union, said, "If K-SURE proceeds with criminal charges against KEXIM employees following the BAI national petition, we are internally reviewing legal responses (from KEXIM) as well."

External debt guarantees are a system that guarantees debt when foreigners importing domestic goods borrow purchase funds from domestic or foreign financial institutions. Since 1992, when K-SURE separated from KEXIM, K-SURE has virtually been in charge of this system. According to the Enforcement Decree of the KEXIM Act, the total amount of KEXIM’s external debt guarantees cannot exceed 35% of K-SURE’s annual insurance underwriting amount.

The conflict between the two institutions erupted after the Foreign Economic Ministers’ Meeting on the 13th. The Ministry of Economy and Finance passed a proposal to amend the Enforcement Decree of the KEXIM Act to raise the total external debt guarantee limit ratio from 35% to 50%, which the K-SURE labor union opposed. At that time, the Ministry of Economy and Finance stated that there were at least four cases where overseas orders were canceled due to the restrictions of the KEXIM Enforcement Decree, estimated at $12.1 billion.

The K-SURE labor union issued a statement saying, "The report on the mentioned projects was falsely prepared," and "We will file a petition for audit and criminal charges against the KEXIM employees who prepared it."

Following a request for an employee audit to KEXIM’s audit office on the 22nd, the K-SURE labor union is also expected to proceed with a national audit petition to the BAI and criminal charges as early as this week. The K-SURE union’s position is that their unique work has been infringed upon by information falsely prepared by KEXIM employees.

The KEXIM labor union, which had maintained a non-response strategy until now, has also announced a counterattack. This is based on the judgment that the K-SURE union’s media play has gone too far. In particular, there are concerns about naming the employees who prepared the report and disclosing confidential information about companies whose overseas orders were canceled, which was discussed at the confidential Foreign Economic Ministers’ Meeting, to the outside.

Chairman Shin said, "I have felt burdened by the subordinate institutions showing proxy war patterns over matters agreed upon between government ministries," but added, "However, since they are greatly exaggerating false facts, misleading the public, mentioning employees’ real names, and threatening criminal charges based on that, the KEXIM labor union will also consider appropriate legal responses."

Meanwhile, in a statement on the 16th, the KEXIM labor union criticized, "The strict reality is that the limits and requirements on external debt guarantee support regulated by the KEXIM Act and others prevent us from fully responding to the financial needs of our companies," and "K-SURE and its labor union are evaluating KEXIM’s efforts to listen to corporate opinions as an infringement on their work area."

They added, "This will ultimately result in institutional selfishness and protectionism, damaging the national economy."

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