KCCI Urges U.S. Treasury to Clarify Guidelines on Investment Restrictions in China's Advanced Industries

U.S. Government's Restrictions on Chinese Advanced Technology Investments
KCCI Voices Industry Concerns for the First Time

For the first time, our industry has expressed concerns about the U.S. government's policy restricting investments in China's advanced technology sector. Although the scope of application is limited to U.S. persons or U.S. entities, and thus our companies are not directly affected, the regulation could potentially impact Korean companies connected to both the U.S. and China.

Korea Chamber of Commerce and Industry

According to the U.S. Department of the Treasury on the 16th, the Korea Chamber of Commerce and Industry (KCCI) stated in a comment letter submitted to the Treasury on the 4th (local time) that "there is concern about whether penalties will be imposed if non-U.S. persons violate the regulations."

Lee Sung-woo, head of the International Trade Division at KCCI, said in the letter, "Since the regulation inevitably involves potential extraterritorial effects, this should be clarified," and requested "clear compliance guidelines for foreign companies and others."

He also proposed limiting the regulation's scope to cases where "a U.S. person or entity holds more than 50% of equity or board voting rights," expressing concern that foreign companies receiving U.S. investment might be unable to invest in China.

Lee added, "If the regulation's scope extends to foreigners and others, it could suppress investments that U.S. persons can execute," and emphasized, "Third-country companies should not be considered as regulated countries of concern."

In August last year, U.S. President Joe Biden announced regulations restricting U.S. capital investments in three sectors in China: advanced semiconductors, quantum computing, and artificial intelligence (AI).

The U.S. Department of the Treasury announced a proposed rule (implementation rule) detailing this in June and recently collected opinions from related countries, including South Korea.

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