'From Designation to Performance Creation'... Advancement of Regulatory Free Zones

The 14th Regulatory Sandbox Committee Meeting Held

The government announced on the 24th that the 'Regulatory Free Zone Committee' was held in writing. At this committee meeting, measures to improve the efficiency of the operation of regulatory free zones, the evaluation results of the 2023 operation performance of regulatory free zones, follow-up plans for regulatory free zones in 2024, and significant changes to previously designated zones were deliberated and resolved.

First, the Ministry of SMEs and Startups prepared measures to improve the efficiency of zone operations and enhance performance at the point when zones end after five years since the introduction of the regulatory free zone system. Regulatory free zones are divided into government-funded competitive zones and non-government-funded zones without financial support. Non-government-funded zones operate mainly through regulatory exemptions and have procedures shortened by about one year compared to government-funded zones. The purpose of government-funded zones is to increase the efficiency of government financial expenditures, while non-government-funded zones aim to more rapidly demonstrate regional innovative technologies. Additionally, in demonstrating new technologies, the zones plan to provide phased support and management throughout the entire process from joint public-private regulatory discovery to post-demonstration, minimizing the burden on companies.

The committee also deliberated and resolved the evaluation results of each zone’s policy goals and achievement of performance indicators, as well as the utilization of regulatory exemptions. The evaluation was conducted based on Article 83 of the 'Regional Special Zones Act' and targeted 23 zones from the 3rd to 8th rounds that had passed more than six months since designation. The results showed that all 23 zones under evaluation are progressing normally.

For the 30 demonstration projects scheduled to end this year, follow-up measures such as zone termination, granting or extension of temporary permits, and extension of demonstration exemptions will be implemented depending on whether regulatory improvements have been made. Zones that will be terminated due to regulatory improvements include four zones: Sejong Autonomous Driving Zone, Daegu Mobile Collaborative Robot Zone, and Chungnam Carbon Reduction Construction Materials Zone.

Temporary permits will be granted to a total of seven zones, including Gangwon Liquefied Hydrogen Industry Zone, Gyeongnam 5G Smart Factory Zone, Gyeongbuk Industrial Hemp Zone, Busan Blockchain Zone, Ulsan Genome Service Zone, Jeonbuk Carbon Convergence Zone, and Chungnam Hydrogen Energy Transition Zone, considering the need for regulatory law amendments or continued application of regulatory exemptions.

In particular, zones approved at this committee meeting, such as the Sejong Zone allowing autonomous outdoor robots to enter urban parks, the Daegu Zone permitting mobile collaborative robots to operate while moving in industrial sites, and the Chungnam Zone recycling carbonates produced from industrial waste as construction materials, have improved regulations and are poised for commercialization and full-scale market entry of new technologies and products.

Changes in zone operators were also approved for five regional zones, including Ulsan Genome Service Industry, Gangwon AI Healthcare, and Jeonnam Direct Current Industry Zones. The Gangwon and Jeonnam Global Innovation Zones significantly expanded their operator scale with the addition of 21 and 5 companies, respectively.

Minister Oh Young-joo of the Ministry of SMEs and Startups stated, “The core mission of regulatory free zones is to improve the regulatory system through flexible application of regulations and safety verification of new technologies, and to foster regional strategic industries,” adding, “We must ensure that regulatory free zones achieve their original purpose while continuously generating results even after their termination.”

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