Overseas Order Financial Support Sparks Intensified Proxy Battle Between 'KEXIM-KSURE' Unions

Conflict Between Two Agencies Halts Detailed Talks on 'Expanding Korea Eximbank's Overseas Debt Guarantee Capacity'
Concerns Over Confusion in 'Corporate Overseas Order Strategies'

[Sejong=Asia Economy Reporter Joo Sang-don] Since the government decided at the end of last year to expand the Korea Eximbank's overseas debt guarantee capacity under the pretext of enhancing corporate order competitiveness, the dispute between Korea Trade Insurance Corporation (K-sure) and Korea Eximbank has intensified, spreading into a proxy war between the two agencies' labor unions. As a result, detailed consultations for revising the Korea Eximbank Act enforcement decree have been halted for over a month as of the 18th. Due to the conflict between the two agencies, there is also a possibility that the overseas order strategies of companies that should receive support may become confused.

According to K-sure and Korea Eximbank on the day, the K-sure labor union is considering criminally prosecuting a Korea Eximbank employee who prepared the report forming the basis of the Korea Eximbank Act amendment bill. This follows a request for audits submitted last month to the Korea Eximbank Audit Office and the Board of Audit and Inspection, with additional actions anticipated. Lee Yeon-su, chairman of the K-sure labor union, stated, "If the Board of Audit and Inspection does not proceed with the audit, we will criminally prosecute the relevant Korea Eximbank employee."

The amendment to the Korea Eximbank Act enforcement decree mainly aims to raise Korea Eximbank's overseas debt guarantee ratio, currently limited to 35% of the insurance underwriting amount for the relevant year, to 50%, and to change the performance standard to the average of the previous three years. For example, if K-sure's underwriting amount is 10 billion KRW, Korea Eximbank can currently guarantee up to 3.5 billion KRW in overseas debt, but this amount would increase to 5 billion KRW. Last month, the government announced at the Foreign Economic Ministers' Meeting chaired by Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki that it would push forward with revising the Korea Eximbank Act enforcement decree.

However, the enforcement decree revision is at a standstill due to stronger-than-expected opposition from K-sure. Chairman Lee Yeon-su argued, "The government claimed based on the Korea Eximbank report that 'there have been at least four cases in the past four years where overseas orders were canceled due to the 35% limit on overseas debt guarantee ratio, amounting to 12.1 billion USD,' but this premise itself is false." He added, "When looking at the canceled cases, environmental issues and lack of project feasibility were major factors, but they analyzed it as due to Korea Eximbank's legal restrictions."

Korea Eximbank holds the position that K-sure is being obstinate regarding a matter decided through the government inter-agency consultative body, the Foreign Economic Ministers' Meeting. Shin Hyun-ho, chairman of the Korea Eximbank labor union, said, "We have refrained from responding as much as possible to avoid the public perceiving this as a turf war between agencies, but if our employees are sued, we will countersue for defamation or obstruction of business."

Concerns are also emerging that prolonged disputes between Korea Eximbank and K-sure could negatively impact Korean companies' overseas order activities. Korea Eximbank stated, "If the enforcement decree revision is delayed, Korea Eximbank's financial support will also decrease, creating blind spots in the financial support necessary for our companies." K-sure countered that there are currently no issues.

The Ministry of Economy and Finance and the Ministry of Trade, Industry and Energy, the supervising ministries of the two agencies, are remaining passive. However, the Ministry of Trade, Industry and Energy has taken the stance of waiting for the audit results requested by K-sure. A ministry official said, "The enforcement decree revision aims to expand the order base through financial support. However, since the two agencies are showing conflict over this, we hope the conflict will be resolved quickly through the most amicable consultations possible."

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