"Dual Nationals Also Added as Foreigners"... Strengthening Core Technology Export Screening

From now on, dual nationals holding both foreign and Korean citizenship must obtain approval for the export of national core technologies when acquiring or merging (M&A) Korean companies. This is to prevent cases where dual nationals acquire national core technologies and then leak them overseas.

On the 25th, the Ministry of Trade, Industry and Energy announced that the partial amendment bill to the "Act on the Prevention and Protection of Industrial Technology Leakage (Industrial Technology Protection Act)" was approved at the Cabinet meeting on the same day. This amendment bill is expected to be merged and reviewed with the Industrial Technology Protection Act bill currently pending in the National Assembly.

This amendment newly specifies "individuals holding foreign nationality," "corporations established under foreign laws," and "institutions acting on behalf of foreign governments' external economic cooperation affairs as designated by the President" as foreigners. Accordingly, even Korean nationals who also hold foreign nationality will be regarded as foreigners and subject to regulations under the Industrial Technology Protection Act when conducting M&A or investments involving national core technologies.

The amendment bill stipulates that "institutions possessing national core technologies developed with research and development funds supported by the state must obtain prior approval from the Minister of Trade, Industry and Energy jointly with the foreign counterpart when proceeding with foreign investments such as overseas M&A or joint ventures." In this case, the Minister of Trade, Industry and Energy shall review the impact on national security and the national economy, consult with heads of relevant central administrative agencies, and obtain approval through deliberation by the Industrial Technology Protection Committee.

The amendment also allows the committee to order suspension, prohibition, or restoration measures regarding M&A, etc., if it is judged that national core technologies could seriously affect national security. It also includes provisions to impose enforcement fines if restoration orders are not complied with.

Meanwhile, more than 20 amendment bills to the Industrial Technology Protection Act proposed by lawmakers are currently pending in the National Assembly. These bills mainly include ▲expansion of the elements of punishment (purpose → intent) ▲increasing statutory penalties (imprisonment, fines) for technology leakage crimes ▲adding infringement acts (technology leakage brokers, unauthorized leakage and use/disclosure for purposes other than intended) ▲introduction of notification system for adjudication requests and registration system for holding institutions ▲strengthening of actual condition surveys.

An official from the Ministry of Trade, Industry and Energy said, "To protect national core technologies, we will strive to have not only the government’s amendment bill but also the lawmakers’ bills discussed in the National Assembly so that the law can be amended promptly, and we also plan to start preparing amendment bills for enforcement ordinances."

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