Planning and Finance Committee Holds Public Hearing on 'Strategic Export Finance Support Act'... Key Issues: Corporate Contributions and Execution Criteria

Ruling and Opposition Parties Clash Over Criteria and Methods for Corporate Contributions

The National Assembly is accelerating efforts to introduce a separate financial support system to back the export of strategic industries such as defense and nuclear power. The plan is for the state to directly support strategic sectors like K-Defense and to recover a portion of the profits from beneficiary companies as contributions, which would then be reinvested into the industrial ecosystem. However, there are significant disagreements over how the fund would be established, the criteria for imposing contributions, and the methods of execution.

On April 29, the National Assembly's Planning and Finance Committee held a general meeting and convened a public hearing on the "Strategic Export Finance Support Act." The two bills, sponsored by Assembly members Han Jeongae and An Dogeol, respectively, outline a structure in which the state provides financial support—such as long-term loans and guarantees—to strategic export companies and recoups part of their export profits as contributions to be used for the broader industry. While the current system, centered on Korea Eximbank and Korea Trade Insurance Corporation, provides support, it has revealed institutional limitations as exports have expanded. This is the legislative rationale for the new proposal.

On April 29, a public hearing on the enactment of the Strategic Export Finance Support Act is being held by the National Assembly's Committee on Budget and Economy Planning. 2026.4.29 Photo by Hyunmin Kim

The government has highlighted the need for dedicated funding, referencing the approximately 44 billion dollar defense contract signed with Poland in 2022. Under the current system, policy financial institutions can only extend credit up to 40% of their equity capital to a single company, which restricts support for mega-scale export orders.

The government and the ruling party argue that the rapid establishment of a "Strategic Export Finance Fund" is necessary to respond to intense competition for large-scale export orders. They insist that, given the collaborative structure between the government and private companies in the defense industry, some level of corporate contribution is unavoidable.

In contrast, the opposition party contends that imposing contributions could undermine the export competitiveness of defense companies. They argue that adjusting the credit limits of existing policy financial institutions would be sufficient. Additionally, they point to potential double burdens on companies due to overlap with the Defense Industry Development and Support Act, which is currently pending in the National Defense Committee.

Assemblyman Kim Younghwan of the Democratic Party of Korea stated, "Defense exports generate various opportunity costs during the government guarantee and funding process," and added, "An approach that considers invisible costs, such as the government's diplomatic and R&D support, is necessary." He argued that some degree of profit contribution from companies is warranted given the government's public support.

Assemblyman Park Sunghoon of the People Power Party pointed out, "The contributions described in the bill are, in effect, quasi-taxes," and emphasized, "There should be differentiated criteria based on the size and risk of beneficiary companies. The bill must clearly specify concrete contribution rates and factors reflecting individual circumstances."

The defense industry has raised concerns about a disconnect between the burden of contributions and the actual use of the funds. They argue that while the financial burden on the defense sector increases in proportion to sales, the scope of fund usage is defined as covering all 'strategic industries.'

Sangnam Ahn, Head of the Korea Defense Industry Promotion Association, said, "The use of the fund should be limited to the defense sector," and added, "Furthermore, rights regarding the contributions must be recognized to allow them to be used as collateral for financing." Attorney Inyong Park of Yulchon LLC remarked, "It is necessary either to specialize the use of contributions for the defense sector or to consider enacting a separate development law."

Professor Hunchul Kwon from the Department of Defense Economics at Korea National Defense University is speaking at the public hearing on the enactment of the Act on Strategic Export Finance Support held at the National Assembly's National Budget and Economy Committee on the 29th. From the right: Professor Hunchul Kwon of Korea National Defense University, lawyer Inyong Park of Yulchon LLC Defense and Aerospace Team, senior research fellow Changgyun Park of the Korea Capital Market Institute, and head Sangnam Ahn of the Korea Defense Industry Promotion Association. April 29, 2026. Photo by Hyunmin Kim.

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