Government Emphasizes Need to Enact 'Supply Chain Basic Act' Ahead of Public Hearing

Public Hearing at the National Assembly on the 21st

[Asia Economy Sejong=Reporter Joo Sang-don] The government has emphasized the necessity of enacting the 'Basic Act on Supply Chain Stabilization Support for Economic Security,' ahead of the National Assembly public hearing scheduled for the 21st.

On the 14th, the Ministry of Economy and Finance announced through explanatory materials on the 'Need for Enacting the Basic Supply Chain Act' that the prompt enactment of the law is necessary.

The Basic Supply Chain Act was promoted following the nationwide shortage of urea solution in 2021, which highlighted the need for systematic supply chain management at the government-wide level. Subsequently, the Yoon Seok-yeol administration included the enactment of the Basic Supply Chain Act in its national agenda and announced institutionalization plans for supply chain management.

The bill was primarily proposed by Ryu Seong-gil, a member of the ruling People Power Party and the ranking member of the National Assembly's Planning and Finance Committee. It was submitted to the full Planning and Finance Committee meeting in December of the same year, discussed in a subcommittee, and a public hearing by the committee is scheduled for the 21st.

First, the Ministry of Economy and Finance explained the necessity of enacting the Basic Supply Chain Act by introducing overseas cases. According to the ministry, the United States has introduced key sector competitiveness enhancement laws such as the CHIPS Act and the Inflation Reduction Act (IRA), and has published supply chain reports covering ten major sectors including semiconductors, batteries, and minerals. The U.S. operates a Supply Chain Task Force as a control tower for supply chains.

The European Union (EU) announced a supply chain due diligence proposal in February last year and is currently promoting the introduction of single market emergency measures that allow export restrictions and stockpiling of essential goods and services during supply chain crises.

The government expects that the Basic Supply Chain Act will serve as an institutional foundation to turn risks arising from the global supply chain restructuring process into opportunities.

Once enacted, the Basic Supply Chain Act will establish the Supply Chain Stabilization Committee, which will serve as a control tower for supply chain stabilization, including overall coordination functions and crisis response.

The committee will be composed of heads of relevant central administrative agencies, with the Minister of Economy and Finance serving as the chairperson. The Ministry of Economy and Finance, as the department overseeing economic policy, will coordinate domestic and international economic policies and manage essential emergency supply adjustment measures (under the Price Stabilization Act), procurement, and customs systems necessary for supply chain management. The relevant ministries will utilize their expertise in individual projects to establish implementation plans for their respective fields and directly carry out supply chain stabilization measures.

A separate Supply Chain Stabilization Fund will be established to support private sector efforts in stabilizing supply chains. The government will secure fund resources by issuing government-guaranteed 'Supply Chain Stabilization Fund Bonds' and will provide support after comprehensively reviewing the relevance to economic security items and services, project feasibility, importance (such as overseas dependency), and urgency.

A Ministry of Economy and Finance official stated, "It is necessary to promptly enact the Basic Supply Chain Act to build a robust supply chain and effectively secure the status of a key partner in the global supply chain based on competitiveness in future growth sectors such as semiconductors, secondary batteries, and bio industries. The later the enactment of the Basic Act is delayed, the more the completion of Korea's system for supply chain stabilization will be postponed, which will inevitably weaken the supply chain competitiveness of our companies."

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