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U.S. Department of State
1996 Korea Country Commercial Guide
Office of the Coordinator for Business Affairs
1996 COUNTRY COMMERCIAL GUIDE
KOREA
This Country Commercial Guide (CCG) presents a comprehensive look at the
Republic of Korea's commercial environment through economic, political
and market analyses.
The CCG's were established by recommendation of the Trade Promotion
Coordinating Committee (TPCC), a mutli-agency task force, to consolidate
various reporting documents prepared for the U.S. business community.
Country Commercial Guides are prepared annually at U.S. Embassies
through the combined efforts of several U.S. government agencies.
TABLE OF CONTENTS
Chapter I. Executive Summary
Chapter II. Economic Trends and Outlook
- Major Trends and Outlook
- Principal Growth Sectors
- Government Role in the Economy
- Balance of Payments Situation
- Infrastructure Situation
Chapter III. Political Environment
- Nature of Political Relationship with the U.S.A.
- Major Political Issues Affecting the Business Climate
- Brief Synopsis of the Political System
Chapter IV. Marketing U.S. Products and Services
- Distribution and Sales Channels
- Use of Agents and Distributors; Finding a Partner
- Franchising
- Direct Marketing
- Joint Ventures/Licensing
- Steps to Establishing an Office
- Selling Factors/Techniques
- Advertisng and Trade Promotion (including list
of major newpapers and business journals)
- Pricing a Product
- Sales Service/ Customer Support
- Selling to the Government
- Protecting your Products from IPR infringement
- Need for a Local Attorney
Chapter V. Leading Sectors for U.S. Exports and Investment
- Best Prospects for Manufactured Products
- Electrical Power Systems
- Aircraft and Parts
- Transportation Services
- Computer and Peripherals
- Telecommunications Equipment
- Education and Training
- Pollution Control Equipment
- Security and Safety Equipment
- Medical Equipment
- Computer Software
- Building Products
- Household Consumer Goods
- Drugs and Pharmaceuticals
- Telecommunications Service
- Architechtural/Construction/Engineering
- Best Prospects for Agricultural Products
- Beef
- Pork
- Fish and Seafood
- Dairy Products
- Nuts and Dried Fruits
- Citrus Fruits
- Poultry Meat and Products
- Fruit Juices
- Prepared Fruits, Vegetables
- Other Prepared Foods
- Significant Investment Opportunities (optional)
Chapter VI. Trade Regulations and Standards
- Trade Barriers (including tariffs, non-tariff barriers,
import taxes)
- Customs Valuation
- Import Licenses
- Export Controls
- Import/Export Documentation
- Temporary Entry
- Labeling, Marking Requirements
- Prohibited Imports
- Standards
- Free Trade Zones/ Warehouses
- Special Import Provisions
- Membership in Free Trade Arrangements
Chapter VII. Investment Climate
- Government Attitude towards Foreign Investment
- Openness to Foreign Investment
- Conversion and Transfer Policies
- Expropriation and Compensation
- Dispute Settlement
- Performance Requirements/ Incentives
- Right to Private Ownership and Establishment
- Protection of Property Rights
- Regulatory System: Laws and Procedures
- Capital Markets and Portfolio Investment
- Political Violence
- Bilateral Investment Agreements
- OPIC and Other Investment Insurance Programs
- Labor
- Foreign/Free Trade Zones
- Capital Outflow Policy
- Major Foreign Investors
Chapter VIII. Trade and Project Financing
- Brief Description of Banking System
- Foreign Exchange Controls Affecting Trading
- General Financing Availability
- How to Finance Exports/ Methods of Payment
- Types of Available Export Financing and Insurance
- Project Financing
- List of Major Korean and U.S. Banks in Korea
Chapter IX. Business Travel
- Business Customs
- Travel Advisory and Visas
- Holidays
- Business Infrastructure
Chapter X. Appendices
- Appendix A: Country Data
- Appendix B: Domestic Economy
- Appendix C: Trade
- Appendix D: Foreign Direct Investment Statistics
- Appendix E: US and Country Contacts
- Appendix F: Market Research
- Appendix G: Trade Event Schedule
CHAPTER I. EXECUTIVE SUMMARY
Long gone are the notions of Korea as a struggling, third world
developing country. The Korea of the 1990's is modern, cosmopolitan,
fast-paced, and dynamic with abundant business opportunities for savvy
American businesses. Since the devastation left behind from the Korean
War in the early 1950's, the Republic of Korea (ROK) has matured and
expanded into a bustling and thriving economy buttressed by political
and macro-economic stability.
The World Bank estimates that Korea was the twelfth largest economy in
the world in 1993, and preliminary data indicate that Korea's GNP now
exceeds that of Russia. Korea is the sixth largest market for U.S.
exports, and the eighth largest partner in two-way trade. Overall US
exports to Korea in 1994 totalled $21.6 billion, and are expected to
pass $30 billion in 1995. The fact that U.S. exports to Korea were
twice that to China with 22 times less the population illustrates the
importance of the Korean market.
While the American media tends to highlight issues such as student
demonstrations, construction accidents, the North Korean nuclear problem
and trade disputes, it is important to recognize that in fact the
domestic political situation has been stable enough to permit remarkable
growth over the last generation. While Americans planning to do
business in Korea should continue to follow developments involving North
Korea closely, they should realize that the North Korean threat has not
served as a brake on South Korea's economic growth. South Korea is an
open society with a free press and a robust if recent democratic
political system. Therefore, negative images from the evening news
shown in the United States should not obscure this important economic
and political success story.
U.S. manufactured goods related to infrastructure, high-tech goods, and
consumables are expected to do well in the coming years. Korea was the
fourth largest market for U.S. agricultural, fishery and forestry
products, importing $3.2 billion from the U.S. in 1994. The strongest
future growth in the agricultural category will occur in consumer-ready
food products.
Because of rapid expansion and great potential for continued U.S.
exports, the U.S. Department of Commerce recently designated Korea as
one of ten Big Emerging Markets (BEMs). The potential for businesses
especially in the major projects area is immense. The government of
Korea has estimated its investment over the next three years at $100
billion to improve its infrastructure system including a Seoul-Pusan
high-speed rail project ($15 billion), a new international airport near
Inchon ($4.7 billion), construction of additional nuclear and thermal
power plants ($3 billion per annum until 2000), subway construction in
five cities ($12 billion), seaport expansion ($10 to 20 billion), and an
integrated super highway construction by 2015 ($50 billion).
There are many opportunities in Korea, but problems still exist for
outside businesses. Korea has taken efforts to improve the protection
of intellectual property rights, yet pirated and counterfeited products
are still in the marketplace. Government regulations, and the
interpretation and enforcement of Korean laws sometimes seem arbitrary
and inconsistent. Korean "chaebol" conglomerates dominate the Korean
market making competition for foreigners difficult. Customs clearance
procedures and regulations in areas such as labelling, phytosanitary and
non-phytosanitary standards, and quarantine are cumbersome and often
serve as non-tariff barriers.
President KIM Young Sam, recognizing the importance of international
trade, has adopted a policy of globalization and liberalization. Korea
is a signatory to many international conventions including the Uruguay
Round and its subsidiary agreements (including the Trade Related Aspects
of Intellectual Property - TRIPs). The Kim administration is working to
liberalize historically restricted sectors. For example many of the
service sectors including distribution, telecommunications, banking and
insurance are on their way to incremental deregulation as soon as 1996.
Liberalization will also begin in the architectural, engineering, and
construction sectors in 1997.
The Organization of Economic Cooperation and Development (OECD) in its
1994 report commended ROK on its recent macro-economic policy. As an
indicator of Korea's industrialized status, Korean GNP in 1995 is
expected to surpass that of Russia and is already larger than the GNPs
of Australia and Mexico. Despite anticipated annual average growth in
excess of 8 percent in both 1994 and 1995, inflation is expected to
remain steady at around 5 to 6 percent. Consistent with the Korean
government's policy of "globalization," the ROKG recently asserted
confidence in its own industrial prowess by seeking membership in the
OECD, a designation bestowed only to the most advanced, liberalized, and
industrially developed nations.
Despite existing problems in the commercial environment, the level of
business activity in Korea is higher than ever before. As a potential
lucrative overseas export market, Korea should be considered among the
top choices by American businesses when looking to expand overseas.
CHAPTER II. ECONOMIC TRENDS AND OUTLOOK
MAJOR TRENDS AND OUTLOOK
The Korean economy is enjoying a period of sustained expansion and, as
of June 1995, no major risks for economic stability are on the horizon.
Real GDP rose an average 8.4 percent in 1994, and in the first quarter
of 1995 was up 9.5 percent from previous year levels. Industrial
production during January-April 1995 grew at an 18.9 percent seasonally-
adjusted annual rate. The expansion is investment-led, as the large
conglomerates implement ambitious plans to modernize and expand
facilities. Exports, aided by the strength of the yen, remain brisk in
1995, although imports, particularly of capital goods, are also booming.
Consumption spending, which accounts for over half of total GDP, is
growing along with optimism about the economy. The U.S. Embassy
predicts that real GDP growth will average 8.7 percent in 1995 and 6.5
percent in 1996.
Despite faster growth, inflation is expected to remain stable in the 5
to 6 percent range. In fact, consumer prices in the first quarter of
1995 were up only 4.6 percent from the same period of 1994. President
Kim wants to hold inflation to under 5 percent between December 1994
and 1995, and the Bank of Korea intends to gradually lower money supply
growth in 1995 in order to forestall overheating. The ROKG also plans
to tighten fiscal policy over the medium term.
PRINCIPAL GROWTH SECTORS
Within the context of a brightening macroeconomy, growth prospects vary
widely across sectors. Agriculture and mining are in sectoral decline,
dependent on government subsidies and trade protection for survival.
The energy sector, on the other hand, is booming, due to government
plans to expand electric power production - both thermal and nuclear -
and to diversify into imported LNG. The manufacturing sector presents a
mixed bag - heavy industries, such as chemicals, steel, autos, and
electronics, are boosting capacity to meet strong domestic and export
demand. However, light industries, including textiles and footwear,
have lost competitiveness due to past wage hikes. Output by light
manufacturing rose by only 3.1 percent in 1994, while that by
petrochemicals and heavy manufacturers jumped 13.9 percent. Even if the
output levels of the smaller producers rebound more strongly in 1996,
growth in the manufacturing sector will probably remain skewed toward
capital-intensive enterprises. The construction sector has
traditionally been sensitive to ROKG stabilization policies, but demand
for construction services will jump over the medium term due to a
government program to encourage infrastructure development.
The Korean service sector is growing more rapidly than the economy as a
whole, and this differential may widen further if the ROKG follows
through on its promises to deregulate the distribution,
telecommunications, and banking and insurance sectors. Overregulation
and oligopolistic practices have kept productivity and technical
innovation in most service categories low, so liberalization could spark
substantial catch-up growth. Value-added in the telecommunications
sector will be enhanced by the introduction of new carriers and heavy
hardware and software systems investment. The ROKG hopes to modernize a
distribution sector dominated by mom-and-pop style retailing
establishments before it is opened to foreigners in 1996.
Government role in the economy
ROKG macroeconomic policy was lauded in a 1994 OECD review of the Korean
economy. Government spending and taxes as a share of GNP, as well as
the fiscal deficit, are low by international standards. Moreover, the
quality of public expenditure is high, with an emphasis on education and
public works rather than transfer payments. The national savings rate
has climbed dramatically since the ROKG made inflation control a
priority in the early 1980s, and now roughly equals the gross investment
ratio at about one third of GNP.
At the microeconomic level, however, government intervention is
extensive and costly in terms of economic efficiency. The prices of
many products are de facto controlled. The ROKG allocates credit
according to firm size and must approve all bond and stock issuances.
Most overseas capital transactions are tightly controlled. Investment
and product safety regulations inhibit domestic competition and
discriminate against foreigners. ROKG task forces have been
commissioned to rid the economy of obstructive and redundant
regulations, but thus far progress has been marginal.
The ROKG itself plays a direct role in the economy because a total of
133 public enterprises account for about 10 percent of GNP. The
government admits that efficiency in the state sector is low, and a 1994
privatization plan calls for selling off 58 of these firms by 1998, and
closing another 10. But the program is off to a slow start, and will be
off grounds to foreigners who are prohibited from acquiring controlling
shares in Korean enterprises.
BALANCE OF PAYMENTS SITUATION
Due to surging imports, Korea's current account balance, which
registered a $385 million surplus in 1993, shifted to a $4.8 billion
deficit in 1994. In January-April 1995 the deficit reached $4.3
billion, compared to a $2.4 billion shortfall during the first four
months of the previous year. But the government is unperturbed by this
red ink, arguing that the deficit is the result of rapidly growing
capital goods and technology imports, which will improve competitiveness
over the long term. Moreover, the current account deficit as a share of
GDP is less than 2 percent.
Korea is a capital-importing country. The surplus on the capital
account was $8.9 billion in 1994, and $3.6 billion during the first four
months of 1995. As of the end of 1994 Korea's gross and net foreign
debts amounted to $57.2 and $10.7 billion respectively. Because net
foreign debt equals less than 3 percent of GDP, debt management is no
longer a significant issue for the ROKG. Foreign exchange reserves
totalled $27.3 billion at the end of April 1995.
TRADE AND INVESTMENT BARRIERS
As tariff rates and quantitative restrictions on imports have fallen in
Korea, nontariff barriers have become the chief concern of U.S. trade
policy. Importers commonly have difficulty with customs and quarantine
clearance procedures, particularly for products deemed to be luxury
goods. Sanitary regulations have been employed to impede the flow of
perishable imports - the Korean government's blocking of wheat and
sausage imports underline problems in this area. A major impediment to
trade is the limitation of deferred payment terms to imports with tariff
rates of 10 percent or less, which are generally raw materials and
capital goods.
Korea's average tariff rate of 8 percent in January 1994 is still high
compared to those of OECD nations. Moreover, tariff peaks are
significant in some sectors, like agriculture. Korea also uses so-
called adjustment and emergency tariffs to cushion liberalized sectors
like textiles.
Korea has a poor reputation for attracting foreign direct investment -
FDI flows as a share of GNP rank only ninth among Asian economies,
behind poorer nations such as Malaysia, Indonesia, and the Philippines.
Chronic complaints by U.S. firms operating in Korea involve restrictions
on their ability to finance offshore and to purchase land; arbitrary
treatment by Korean tax authorities; and violations of patents,
trademarks, and copyrights, although in this latter area the Koreans are
improving their legal regime and increasing enforcement. Foreign
investment through merger or acquisition is prohibited.
The ROKG announced in mid-June 1994 a new program to attract FDI, which
offers a one-stop approval service for prospective investors, expanded
land availability for factory sites, financing incentives for high
technology firms, and tax holidays. This program has many promising
elements, but the accelerated sectoral liberalizations promised under
the program are hedged by joint venture requirements or other
stipulations. Under the new program foreigners will still be blocked
from buying control of existing enterprises.
LABOR FORCE
Korea's well educated, 20 million-strong labor force is the nation's
chief developmental asset. Labor productivity in the manufacturing
sector has grown at over 10 percent per annum during the 1990s.
Unemployment has traditionally been low, and stood at only a 2.4 percent
rate in April 1995. The market is tight for skilled labor, and many
firms complain about applicant shortages for technical positions.
Wage demands are intensifying as the economy reaches full employment.
Manufacturing wages rose an average 15.5 percent in 1994, compared to a
10.9 percent advance in the previous year. The ROKG is urging that
large employers and unions forego outsized pay increases in 1995, but
many companies are resorting to bonus and incentive schemes in order to
circumvent government guidelines on basic pay. During the first half of
1995 illegal strike activity flared up at several large companies, but
for the most part labor-management relations are proceeding smoothly.
Major local and third country competitors in specific sectors
The dominant position of conglomerates in the Korean economy represents
a problem for foreign competitors. "Chaebol" companies will purchase
from "family" suppliers whenever possible. Also, the ROKG encourages
the "localization" of production and technology transfer when awarding
public procurement contracts. Therefore, successful marketing in Korea
generally requires products, services, or technologies that are
unavailable domestically. Competition based chiefly on price terms is
likely to prove disappointing.
Despite Korea's position as an exporting center, the domestic capital
goods industry is not world-class, resulting in a strong demand for U.S.
manufacturing and electrical equipment, process controls, and customized
machine tools. Japan is our main competitor as a capital goods
supplier, and regularly outsells the United States, despite a ROKG
"diversification" program directed against Japanese imports. U.S.
aircraft and parts face no serious domestic competition, but Airbus has
about a quarter of the civil aircraft market. Large-scale power
generation, both nuclear and thermal, is a U.S. success story in Korea,
despite strong Canadian and European competition. High tariffs, taxes
linked to engine size, and past threats of tax audits have relegated
U.S. and third country producers to a minuscule share of the booming
domestic auto market. The rapidly growing pharmaceutical market is
dominated by domestic firms, and industry association and ROKG rules
make foreign entry via direct sales or investment difficult. The
domestic chemical industry has greatly expanded its capacity in recent
years, pushing foreigners into niche, specialty markets. Korea Telecom
has a history of favoring domestic suppliers, but, thanks to bilateral
telecommunications agreements, the United States has made in-roads into
the central switching market.
Infrastructure situation regarding goods/services distribution
While Korea advanced as a manufacturing center over the last two
decades, its domestic infrastructure system remained relatively
underdeveloped. Korean industry now regards transportation and
distribution bottlenecks as a major impediment to competitiveness.
Ports, railroads, airports, and highways are stretched to capacity.
According to the Korea Chamber of Commerce, the shares of total sales
consumed by logistical and distribution expenses was 18 percent in Korea
in 1991, compared to corresponding ratios of 14.5 percent in Japan, and
12.4 percent in the United States. The retailing and wholesaling
network is inefficient and high cost due to regulations designed to
protect small shop owners. Modern retailing formats, such as discount
stores, wholesale clubs, or European-style hypermarkets, are either
unknown or new to Korea. Until January 1996 foreign-owned chain stores
will be prohibited, and foreign retailers will be limited to a maximum
of 20 outlets, with floor spaces under 3,000 square meters. An early
liberalization in 1995 was allowed for foreign car dealerships.
MAJOR INFRASTRUCTURE PROJECTS UNDERWAY
The ROKG is undertaking a massive program to upgrade the nation's
infrastructure, which could involve about $100 billion in investment
between 1993 and 1997. The National Assembly has passed a bill that
offers incentives for private investment in infrastructure development.
A sample of the estimated price tags on the major infrastructure
projects underway in Korea include: $15 billion for the Seoul-Pusan
high-speed rail project; $4.7 billion for the first phase of the new
international airport near Inchon; $3 billion per annum through the year
2,000 to build nuclear and thermal power plants; $1.2 billion to
construct LNG terminals and pipelines; $12 billion for subway
construction in five cities; $20 billion for new express highway
construction; and $10-$20 billion for seaport expansion.
CHAPTER III. POLITICAL ENVIRONMENT
NATURE OF BILATERAL RELATIONSHIP WITH THE U.S.
Korea's democratization, which began in 1987 with free presidential
elections, has led to a mature, bilateral relationship as friends,
partners and allies. Korea and the U.S. share common democratic values
and practices and are working together, both in the region and in the
rest of the world, to advance democratization and human rights.
The U.S. has a strong security relationship with Korea and is committed
to maintaining peace and stability on the Korean peninsula. The U.S. is
obligated under the 1954 U.S.-Korea Mutual Defense Treaty to help Korea
defend itself from external aggression. In support of that commitment,
the U.S. maintains about 37,000 uniformed men and women in the country,
commanded by a U.S. four-star general who is also commander of the
United Nations forces, including the Second Infantry Division and air
force squadrons.
MAJOR POLITICAL ISSUES AFFECTING THE BUSINESS CLIMATE
The major political issue affecting the business climate is President
Kim's push to globalize Korea in order to improve the country's
international economic competitiveness. The policy of globalization
includes some market liberalization, but there are parts of the
government bureaucracy that continue to significantly impede foreign
imports. In addition, there is nationalistic sentiment that colors
popular attitudes against imports and foreign companies in Korea.
BRIEF SYNOPSIS OF THE POLITICAL SYSTEM, SCHEDULE FOR ELECTIONS AND
ORIENTATION OF MAJOR POLITICAL PARTIES
Korea is governed by a directly elected President and a unicameral
National Assembly that is selected by both direct and proportional
elections. The President serves five years and can serve only one term.
National Assembly legislators are elected in a single election every
four years.
In February 1993, KIM Young Sam of the ruling Democratic Liberal Party
(DLP) was inaugurated as the country's first chief executive who did not
come from the military ranks in over three decades. In his first year
in office, President Kim, a former opposition leader, implemented
sweeping political and economic reforms, including an anti-corruption
drive, which represented a fundamental policy-break from the previous
administration and ended the political careers of a number of key
officials from that administration.
Local elections were held in 1995 for the first time in over 30 years.
Elections for the National Assembly's 299 seats will be held in 1996,
followed in the next year by a presidential election. Since 1990,
following the three-party merger which produced the ruling Democratic
Liberal party (DLP), Korea has essentially had a two-party political
system, although smaller parties are also represented in the National
Assembly. The 1990 three-party merger combined the conservative ruling
party with the party of the then opposition leader Kim, and a third
minor party.
The Democratic Party (DP) has been in the opposition since it was
formed. The DP holds, however, roughly a third of the seats in the
National Assembly. The party's main base of supporters are the people
of the southwestern Cholla provinces, many of whom have moved to the
Seoul-Inchon metropolitan area. Traditionally, Cholla citizens have
felt excluded from the country's power centers and discriminated
against. The opposition party's founder, KIM Dae Jung, declared at the
end of 1992 that he was retiring from politics, but he still plays an
active behind-the-scenes role. National Assemblyman LEE Ki Taek
currently is president of the DP party.
CHAPTER IV. MARKETING U.S. PRODUCTS AND SERVICES
DISTRIBUTION AND SALES CHANNELS
Local representation is essential for foreign firms hoping to be
successful in the Korean market. This is especially true in a market in
which business relationships are built upon personal ones, and in which
much of the major third-country competition is only a few hours flight
away.
Distribution methods and the number and functions of intermediaries vary
widely by product area and local conditions. The market for most
consumer products is concentrated in the major cities. Retail
distribution is accomplished through a highly complex network of
outlets, the majority of which are small family-run stores, stalls in
markets or street vendors. There are many large department stores in
Seoul and Pusan, which represent one of the best means to get foreign
products before consumers. Lately, retailing concepts such as the
general merchandising and CVS chain store, shopping centers and high-
volume discount stores ("hypermarkets") have been attracting interest.
Modernization of the distribution system is coming as a result of Korean
government deregulation and incentives for this sector as well as the
appreciation by the major conglomerates of the great promise which this
long-neglected sector holds. The current interest in this sector offers
not only the promise of a more efficient distribution system offering
greater accessibility to imports but also business opportunities in the
near term to U.S. wholesaler/retailers and those firms servicing the
distribution industry with logistics and automation technology.
USE OF AGENTS/DISTRIBUTORS; FINDING A PARTNER
The most common means of representation include: appointing a registered
commission (or "offer") agent on an exclusive or non-exclusive basis,
naming a registered trading firm as agent, and establishing a branch
sales office managed by home office personnel.
Only traders registered by the government are authorized to import goods
in their own names. Appointing a registered trader (rather than an
"offer agent") as agent has the advantage that such agents can handle
all the paperwork of importing and import for their own account. As the
registered traders tend to be larger firms and to split their business
between exports and imports, however, they may be less attentive to
building the U.S. supplier's business. Similarly, while the general
trading companies may be influential and well known in the market, they
also may not devote as much attention to a single principal as do
smaller firms.
A good place to begin for U.S. suppliers is with the screening of agent
candidates, offered for a fee through the district offices of the U.S.
Department of Commerce and carried out by the industry specialists of
FCS Seoul's local staff. Upon receipt of an annotated listing of
potentially qualified representatives, the next logical step is to plan
a visit to Korea, perhaps calling upon FCS Seoul to arrange market
briefings, a meeting schedule, an interpreter/secretary and office space
under the fee-based Korea Gold Key (or special Green Key program for
environment-related firms) service.
Another good resource is the Association of Foreign Trading Agents of
Korea (AFTAK), a 24-year old private trade association established under
government auspices as the only entity dedicated to increasing imports
into Korea. Under Korean law only companies who have registered with
AFTAK are allowed to present sell offers in Korea on behalf of foreign
suppliers. As of June 1994 8,600 Korean agents and distributors,
together representing some 11,000 American firms, were members of AFTAK.
On average AFTAK members account for about 82 percent of all of Korea's
imports. To fulfill its mission of promoting balanced trade, AFTAK
helps execute Korea's import diversification (away from Japanese
sources) plan, leads annual purchasing missions to the U.S., Latin
America and Europe, and holds monthly meetings between member agents and
foreign commercial officers (including FCS Seoul).
American businesses can contact AFTAK by sending their catalog with a
letter specifying the items for which they are seeking an agent or visit
the AFTAK office directly. Catalogs are displayed in the AFTAK library
and inquiries are published free of charge in the associations monthly,
AFTAK TRADE NEWS. Contact: AFTAK, Address: Dongjin Bldg., 218, Hangang-
ro 2-Ka, Yongsan-Ku, Seoul 140-012, Korea Tel: 82-2/792-1581 ext. 231,
Fax: 82-2/785-4373.
For American firms whose interests include sourcing Korean products for
import into the U.S., the Korea Trade Promotion Corporation (KOTRA), a
non-profit government-affiliated organization which functions as the
rough counterpart of the US&FCS, is a prime resource. In addition to
its headquarters in the Korea World Trade Center, KOTRA maintains seven
Korea Trade Centers in Chicago, Dallas, Los Angeles, Miami, New York,
San Francisco and New York. KOTRA's general referral number is: 1-800-
KOTRA-4-U.
FRANCHISING
The franchising industry is developing rapidly in Korea and is expected
to grow continuously with the full opening of the distribution market in
January 1996. Franchising businesses will increase due to growing
consumer demand for variety and well-known brands. Growing income
levels, a desire for convenience and luxury, and increased numbers of
the relatively wealthier older generation will be major factors
affecting the franchise service market in Korea. Best prospects in
franchising will be fast food/family restaurants, retailing, hotels,
automotive parts and service, travel, and amusement businesses.
Franchise agreements involving licensing and royalty payments are
considered as technology inducement under Korean law. Technology
inducement is regulated by the Foreign Capital Inducement Act and
requires report acceptance by the ministry responsible for the
particular industry. However, effective July 1, 1994 franchise
agreements involving solely foreign direct investment without royalty
payments need only report to any Korean commercial banks which deal with
foreign exchange.
DIRECT MARKETING
Door-to-door sales is a well established practice in Korea for
everything from books and cutlery to water purifiers and yoghurt drinks.
Catalog and mail order businesses are in their infancy.
The main problems in direct sales in Korea have centered upon
restrictions placed on multi-level sales (MLS). Over the past three
years Korean authorities have criticized MLS as an undesirable or
inappropriate business form for Korea, one which is prone to consumer
safety negligence, "excessive" profitability, or abuse of the tight
Korean social fabric through "pyramid schemes."
To check the rapid inroads by multi-level sellers, notably U.S. firms
active in the areas of health and cleaning products, the Korean Door-to-
Door Sales Act was implemented in late 1991. In addition to being
arguably the world's most restrictive laws on multi-level sales, certain
provisions were vague or contradictory and led to criminal charges being
brought against two American companies. MOTIE pushed to revise the law
in the fall of 1994 to bring it more in line with international norms.
As a result, a new Door-to-Door Sales Act went into effect July 1995.
This new law contains provisions that effect distribution and training
and compensation. For more information, please contact FCS Seoul
directly.
JOINT VENTURES/LICENSING
Approval of foreign investment is controlled by the Ministry of Finance
governed through the Foreign Capital Inducement Act (FCIA). Depending
on the nature of the investment, other Korean Ministries might also be
involved in the approval process.
Selecting the appropriate partner is one of the most difficult and
crucial aspects of initiating a joint venture in Korea. Although the
chaebols still exercise considerable influence, the Korean Government's
policy shift toward support of small and medium sized businesses means
that the participation of a chaebol in a joint venture could create
additional obstacles in terms of obtaining necessary approvals and local
financing. Also, the chaebol's tend to be insistent on operating a
joint venture in accordance with the overall policies and business
culture of the group, sometimes to the detriment of the foreign
shareholder's interest.
Compatibility of goals between the partners is a crucial element to the
joint venture's success. Conflicts often arise because of the conflict
between the foreign investor's goal of sending profit dividends offshore
and the Korean investor's goal of growth of the company in Korea.
Korean attitudes are rooted in social and cultural factors, such as an
aversion to excessive profits and a continuing family orientation on the
part of many companies. Seeking an agreement in advance on the joint
venture company's dividend policy is a way to help alleviate this
problem.
To Koreans, a contract represents the current understanding of a "deal."
The contract is viewed as a written expression of that understanding at
the time of its execution. If there are omissions or points that do not
accurately express the understanding of the original deal under changing
circumstances, then problems will arise. The same is true if the
contracting parties change. This has led many foreigners to believe
that Koreans do not place the same importance on a written contract as
we do. Therefore, contract negotiations with Koreans should be viewed
as a process of extensive dialogue with the objectives of (1) reaching a
common understanding on the deal and of each party; (2) putting that
detailed understanding on paper; and (3) being prepared to modify the
meanings of the terms afterwards as conditions change.
Management control must be evaluated on three levels: 1) shareholder
equity; 2) representation on the board of directors; and 3) active
management (Representative Director and subordinate management). Since
board meetings in Korea can only be legally held by a physical meeting
of a quorum of the directors, if a foreign investor intends to exercise
day-to-day management by appointing a Representative Director, that
individual must be expected to reside in Korea. Also, in order to carry
out the intentions of the foreign investor, the Representative Director
will need the support of key functional areas of the company which are
crucial to those intentions. Therefore, the detail of the internal
organization of a joint venture company should be settled and key
management appointments agreed upon in the early stages.
Certain terms of the commercial relationship between the joint venture
and the partners, such as technology transfer, raw material supply,
marketing and distribution, should be agreed upon in detail concurrently
with the negotiation of the joint venture agreement.
Under the Foreign Capital Inducement Act, the foreign investor need only
report a license agreement to the concerned ministry. However, the
Korean Government (particularly the Fair Trade Office) may require
changes in the terms of the agreement and may show interest with basic
commercial terms, such as the amount of royalties. Often these changes
are requested retroactively when a financial commitment has already been
made.
ESTABLISHING AN OFFICE
Land Purchase: The Korean Government has recently expanded the scope of
land that foreign investors can purchase, as well as streamlined the
land acquisition procedures. Land acquisition by foreigners is governed
by the Enforcement Decree of the Alien Land Acquisition and Management
Law. Administrative guidance is then given on the renting and use of
the purchased land. Under this law, foreign invested companies (more
than 50 percent foreign ownership is considered foreign) are also
required to obtain approval from the heads of local governments in order
to buy land. Land acquisition by foreign invested companies operating
manufacturing businesses are now only subject to notification instead of
approval. Finally, foreign invested firms can now purchase a maximum of
660 square meters of land for housing management and staff.
Rental Rates: The rental rates for office space in Seoul, by
comparison, are not as high as East Asian capitals such as Tokyo or Hong
Kong, but are generally higher than New York or San Francisco. The
American Chamber of Commerce in Korea maintains a referral list for real
estate and relocation firms in Seoul who can be consulted for current
rental rates. A recent spot survey indicated a range of rents in
popular Seoul commercial buildings from $44-$106 per pyong (equal to 3.3
square meters). These rates are inclusive of maintenance fees and based
upon gross floor area, which includes common areas. Another major cost
item is the substantial deposit payment (or "key money"), a one-time
charge which is refundable without interest upon termination of a lease,
required by almost all landlords. Deposits for the rentals quoted above
range from $313-$863 per pyong. Office parking is another scarce
commodity in Seoul, with monthly charges in the $31-$338 range.
Location: Foreign companies in Seoul tend to cluster in perhaps four
well-known districts: City Hall -- the old downtown where the U.S.
Embassy and a few Korean ministries can be found; Yoido -- the
"Manhattan Island" in the Han River where the financial firms and the
National Assembly are located; Kangnam -- the expansive, bustling, new
city center south of the river which also includes the World Trade
Center complex; and the Mapo district -- halfway between Yoido and City
Hall. While taxis and rush hour traffic are an ongoing source of
frustration and delay, Seoul has an excellent public transportation grid
such that newly arriving firms can freely consider various location
options.
Personnel: The complete dedication to the company by Korean workers is
slowly disappearing. Company loyalty does still exist but these
attributes and high productivity do not result automatically. The
employer, if foreign, must first earn the respect of his/her Korean
employees. Foreign managers have had success using recognition and
increased pay for increased productivity, but the more basic
requirements of earning loyalty, respect and friendship gained by the
foreigner's own personal efforts will pay greater dividends. Often,
Koreans view the long-term prospects of advancement in a smaller foreign
company less appealing than those in a larger permanent Korean company.
Attractive factors to local workers can include higher salary, higher
position earlier in one's career, opportunities for travel, the chance
to learn and use English, and the opportunity for transfer to the home
office or other foreign branch office. Korea also has a large pool of
conscientious, highly educated woman workers who usually cannot find
equivalent employment in Korean companies due to traditional cultural
attitudes towards women in the work force; where little opportunities
for professional advancement in Korean traditional companies exist,
Korean women, in general, would welcome a career opportunity should a
foreign firm make a good offer.
SELLING FACTORS/TECHNIQUES
Three practices are essential to success in the Korean market: adapting
products and procedures to Korean tastes and conditions, staying in
close communication with Korean business partners and customers, and
consistently exhibiting a firm commitment to the Korean market.
In selling to manufacturers, personal contact is important not only
because of the value placed on direct discussion and on building long-
term relationships but also because such contact brings the end-user in
touch with new processes and equipment. In light of the competition
offered by Japanese suppliers, who often visit potential and existing
customers throughout Korea, U.S. suppliers should consider (1) making
visits to Korea to augment the efforts of the local representative; (2)
bringing representatives back to the home office periodically to ensure
they are fully informed, motivated and up-to-date on the supplier and
its offerings; (3) holding more demonstrations, seminars and exhibitions
of their products in Korea, utilizing the facilitates at FCS Seoul; (4)
increasing the distribution of technical data and descriptive brochures
(the American Business Center can assist with catalog displays,
translations and mailings); and (5) improving the follow-up on initial
sales leads.
ADVERTISING AND TRADE PROMOTION
The Korean Government began a phased liberalization of its domestic
advertising industry in 1987. By 1991, the market was completely opened
to 100 percent foreign equity participation. As a result, a large
number of joint venture agreements between major international
advertising agencies and local Korean advertising firms were
established. Today, all the major international agencies are present in
Korea.
Total expenditures on advertising in Korea, which includes broadcasting,
print media, out-bound (overseas), outdoor advertising, sales promotion
and production, amounted to W2,816 billion in 1992, representing an
increase of 17.6 percent over 1991. Television advertising expenditures
were W836 billion, magazines W121 billion and newspapers W1,141 billion.
A shortage of television air time has contributed to a consistent
inability for advertisers to obtain sufficient time to advertise their
products. There are two established broadcast networks in Korea, KBS I
and KBS II, which are Korean government owned and operated. Two other
networks, MBC and SBS, are independent. All four networks' advertising
time is sold through the exclusive government selling organization,
Korea Broadcast Advertising Corporation (KOBACO). KOBACO controls
broadcasting advertising by designating official broadcasting
advertising agencies each year. KOBACO charges a 20% commission on all
broadcast advertising and rebates 11% to the approved agencies.
Under previous KOBACO regulations, any advertising time purchased prior
to January 1990 could be held indefinitely by the advertiser, or by an
advertising agency on behalf of its client. This is known as "Locked
Time" and is sold on 52 week basis irrespective of client or product
seasonality. In 1992, advertising expenditures in Korea broadcast media
represented 34% of total advertising expenditures; between 70% and 90%
of this time was still held under the Permanent Time category, with the
majority of this by large Korean advertisers. If an advertiser ever
relinquishes his Permanent Time, any new time can only be purchased on a
three-month maximum basis, known as temporary time.
In order to alleviate discrimination against new competitors, KOBACO has
eliminated locked time for "spot" or "short piece" advertisements as of
January 1, 1995. As a result, the ratio of locked time to total prime
and semi-prime advertising time was reduced to 45.8 percent as of
January 1, 1995.
KOBACO will continue to review further actions it will take so that by
the end of 1995 locked time will be eliminated for all television
stations as well as for all radio stations. Toward this end, KOBACO is
currently considering appropriate allocation systems to replace the
locked time system, and will decide this matter in the autumn of 1995.
However, Korean has taken, or will take, the following actions aimed at
alleviating the current excess demand for prime advertising time: (1)
Commercial time on television was increased from 8 percent to 10 percent
of total television broadcasting time as of October 15, 1994; (2) Cable
television service has been introduced as of March 1, 1995; and (3) Four
regional television stations will begin operating as of May 1995.
In the print media, newspapers and to a lesser extent magazines, operate
a cartel pressure system to ensure that all newspapers get a share of
advertisers' budgets irrespective of their efficiency. Lack of
circulation data has allowed newspapers to group themselves into major
and minor groups: advertisers are expected to utilize all newspaper
within a group and not to use one group to the exclusion of others.
In most cases, when a local advertiser selects its advertising agency,
the choice of local firm or multinational is usually pre-determined by
the characteristics of the product. Thus, the multinationals often
compete among themselves. In this business, cultural differences are
frequently mentioned as a limiting factor for multinationals. Also, the
strict censorship system in the local broadcast advertising field is
another difficulty in the Koreanization of multinational advertising.
The Korean Broadcasting Commission is the responsible governmental
authority. On the other hand, the Korea Advertising Review Board (KARB)
was established in 1991 under the control of the Korea Advertisers
Association as a self-control organization in order to protect
advertisers and ad agencies. The KARB, which is organized by
advertising associations, societies and industry associations, completed
work on advertising review regulations in 1991.
Payment practice in the advertising field is divided into two types: 1)
commission basis in the case of TV, radio, newspapers and magazines
advertising, and 2) fee basis in the case of advertising production.
Commissions generally range between 7 to 15 percent.
Seoul has a world-class trade resource known as the Korea World Trade
Center (KWTC). The KWTC consists of the 55 story Trade Tower and the
Korea Exhibition Center, popularly known as "KOEX," which contains two
large halls and an annex.
The Trade Tower houses the offices of the Korea Trade Promotion
Corporation (KOTRA), a wholly-owned corporation of the Korean Ministry
of Trade, Industry and Energy. KOTRA is the main trade promotion
organization of the Korean Government and has 81 offices throughout the
world. The Korean Foreign Traders Association (KFTA), Korea's largest
and most important trade association, are also located in the Trade
Tower.
KOEX is a profit-making, wholly-owned subsidiary of KFTA. It contains
over 335,000 square feet of usable space, making it the largest trade
show venue in Korea. The exhibition center hosts roughly 100 major
trade shows a year, one third of which are organized by KOEX. An even
larger exhibition hall is being constructed in Pusan and is scheduled
for completion in 1997. This new hall will more than double Korea's
trade exhibition capacity.
MAJOR NEWSPAPERS IN KOREA
Kuk Min Ilbo
(Korean newspaper)
Tel: 705-4815/6
Fax: 705-4814
Address: 371-16, Shinsa-dong
Mapo-ku, Seoul 121-110 Korea
Dong Ah Ilbo
(Korean newspaper)
Tel: 721-7755
Fax: 721-7787
Address: 139, Saechong-ro
Chomgro-ku, Seoul 110-050 Korea
Maeil Kyungjae
(Korean newspaper)
Tel: 295-8070
Fax:277-6445
Address: 1-51, Pil-dong
Chung-ku, Seoul 100-271 Korea
Chosun Ilbo
(Korean newspaper)
Tel: 724-5824
Fax: 724-5809
Address: 61, 1-ka, Taepyung-ro
Chung-ku, Seoul 100-75 Korea
Chungang Ilbo
(Korean newspaper)
Tel: 751-5156 Fax: 724-5809
Address: 7, Soonhwa-dong
Chung-ku, Seoul 100-130 Korea
Seoul Shinmun
(Korean newspaper)
Tel: 735-7288
Fax: 732-7557
Address: 1-25, 1-ka, Taepyung-ro
Chung-ku, Seoul 100-101 Korea
Hankuk Ilbo
(Korean newspaper)
Tel: 724-2802
Address: 14, Chunghak-dong
Chongro-ku, Seoul 110-150 Korea
Seoul Kyungjae Shinmun
(Korean newspaper)
Tel: 724-2858
Fax: 734-9009
Address: 19, Chunghak-dong
Chongro-ku, Seoul 110-150 Korea
Korea Times
(English newspaper)
Tel: 723-1623
Fax: 723-1623
Address: 14, Chunghak-dong
Chongro-ku, Seoul 110-150 Korea
The Daily Trade News
(English newspaper)
Tel: 551-1567
Fax: 551-5400
Address: Korea World Trade Center
159-1, Samsung-dong
Kangnam-ku, Seoul 135-757 Korea
Korea Herald
(English newspaper)
Tel: 756-7711
Fax: 773-8130
Address: 1-12, 3-ka, Hoehyun-dong
Chung-ku, Seoul 100-053 Korea
Sankyung Ilbo
(English newspaper)
Tel: 364-4924
Fax: 364-8880
Address: Seodaemun-ku, Bukahyun-dong 221-7
Baeksam Building 120-190
MAJOR BUSINESS MAGAZINES IN KOREA
Business Korea
(monthly magazine)
Tel: 744-4010
Fax: 745-3232
Address: 66-21 Wonnam-dong
Chongo-ku, Seoul 110-450 Korea
Korea Economic Daily
(daily newspaper)
Tel: 360-4114
Fax: 319-6016
Address: 441, Chunglin-dong
Chung-ku, Seoul 100-360 Korea
Korea Economic Report
(monthly magazine)
Tel: 783-5283
Fax: 780-1717
Address: Suit 603, Shinsong Bldg.
25-4 Yoido- dong, Youngdungpo-ku
Seoul 150-010 Korea
The Korea Economic Weekly
(weekly newspaper)
Tel: 360-4636
Fax: 392-8773
Address: Room 402, Soonwha Bldg.
Soonwha-dong, Choong-ku
Seoul, Korea
Korea Trade and Investment
(bi-monthly magazine)
Tel: 551-4262
Fax: 551-4290
Address: #1202 Korea World Trade Center
159 Samsung-dong Kangnam-ku
Seoul 135-729
Travel Trade Journal
Tel:744-4010
Fax:745-3232
Address: 66-21 Wonnam-dong
Chongro-ku, Seoul 110-450 Korea
PRICING PRODUCT
U.S. goods have a reputation among Korean buyers for quality and
performance; yet Koreans tend to be very price conscious and often
regard the U.S. label as too expensive. In an export-oriented economy
where finished products must be able to meet keen competition in the
world market, many local manufacturers believe that it is essential to
buy raw materials and equipment from the cheapest source. Goods from
Japan and elsewhere are frequently considered to be better buys, even
though their quality and durability may be acknowledged not to match
that of the American item. As Korea continues to move toward higher-end
and often manufacturer-branded exports -- as well as to combat
perceptions of poor quality control of certain Korean products in recent
years -- the precedence given to price as a buying factor may be
somewhat tempered. Another characteristic of Korean price
considerations is the tendency to bundle and often under-value the
"software" or engineering component, particularly in the procurement of
major systems.
U.S. exporters might consider (1) adapting their products to Korea by
marketing basic units; (2) taking into account in their price
quotations, as their competitors do, the repeat business generated by
the demand for spare parts and auxiliary equipment; and (3) emphasizing
and selling the idea that superior quality of U.S. products ultimately
results in lower production costs.
SALES SERVICE/CUSTOMER SUPPORT
Sales and after-sales service rank just after selection of the
appropriate product or service and in-country representation in
determining the success over time for U.S. suppliers to the Korean
market. Just after the Korean War, when foreign exchange was
exceedingly scarce, Korean plant operators learned to rely on their own
resources or on the many small machine shops to service machinery. The
tradition of self-reliance and improvisation remains, but, with heavy
competition among foreign suppliers in the Korean market, servicing has
become a much more important part of selling.
Japan's proximity to Korea (not to mention cultural affinities which
transcend deep political animosities) allow already stiff competitors
from that country to send teams of specialists at little cost to offer
skilled advice in installation, maintenance and repair. U.S. firms
should consider establishing regional servicing facilities that can
effectively service and support equipment sold in Korea. Short of that,
the emphasis given recently by some American firms on training
personnel, often through programs in the United States, has proved
beneficial.
Private traders and offer agents often have engineers available to
install equipment. For specialized installations, however, the best
sources of assistance include government laboratories and resident
foreign engineers whose services are available for contract.
SELLING TO THE GOVERNMENT
The Office of Supply, Republic of Korea (OSROK) supervises procurement
by government agencies and most of the state-owned firms in which the
government holds a majority share. (Korea Telecom and Korea Electric
Power Company are the two largest entities not covered by OSROK
procurement). OSROK covers roughly one-half of the total of Korean
government non-defense procurement, valued at estimated $8.25 billion
annually -- the eighth highest in the world.
Government procurement needs are formulated by the ministries and
agencies concerned, then screened by the Ministry of Trade and Industry
to determine if the needs can be met by local sources. If not, MOF
allocates the necessary foreign exchange. To encourage Korean firms to
develop the needed technologies, OSROK has been releasing three-year
forecasts of major requirements in April of each year. (In the past,
the "shopping list" was led by electronic switchboards, diesel
locomotives/railway cars, circuit breakers, and various types of cables
and electric wires). The system thus discriminates against all foreign
suppliers in cases where goods or services are available domestically.
However, foreign-invested companies manufacturing in Korea can qualify
as a "domestic sources." It is estimated that total foreign procurement
for 1994 was valued at about $950 million.
Foreign purchases are financed either by government-owned foreign
exchange (KFX) or by loan and credit funds from international financial
organizations and foreign aid programs (IBRD, ABD, OECF, etc.). The
invitation to bid specifies the source of financing. Worldwide bidding
under open, formal procedures is the norm, although occasionally OSROK
is obligated to purchase under negotiated contract, as in the case of
spare parts for specialized equipment. Specifications are drawn up by
the requesting agency, which frequently consults with the Korean
representatives of foreign suppliers. Thus, for American businesses to
effectively participate in the Korean Government market, it is very
useful to have a local representative.
Invitations for bids are announced every ten to fourteen days in the
local English-language newspapers and mailed to the Commercial Section
of the American Embassy in Seoul and OSROK's procurement officers
overseas. In the United States businesses may contact the Procurement
Officers located in the Korean Consulates General in San Francisco and
New York. They will also make available on request annual procurement
plans and bid forms and instructions. If an American firm wishes to bid
directly from the United States, the bid must be certified by the Korean
Consulate General or chamber of commerce located in the firm's area.
Further, American suppliers not bidding through an OSROK-listed agent
must register themselves with OSROK prior to completing the contract.
Generally, the deadline for receiving bids is 40 calendar days after the
invitation to bid is issued.
As a result of a series of U.S.-Korea telecommunications talks begun in
1992, the Korean government agreed to gradually open the procurement
market (OSROK, KT and MOC) for telecommunications goods and services
under the principles and procedures embodied in the GATT Government
Procurement Code.
Pressure for this special opening had built because Korea is not a
signatory to the GATT Government Procurement Code. However, Korea
applied for accession in May 1990 to a possible new, expanded code.
Accession would increase opportunities for American firms bidding on
Korean government projects and qualify Korean companies to bid on U.S.
Government-funded procurement covered under the Code.
NEED FOR A LOCAL ATTORNEY
Most experts advise engaging a local attorney before making major
business decisions in dealing with Korean companies. The legal advice
that Korean firms with international experience can provide can be very
important. In addition to advice on structuring deals or arranging
contracts, Korean firms are usually well plugged into the power
structure and have extensive contacts in the government ministries whose
approval often means life or death to the foreign company. A list of
well-known attorneys is maintained at the Embassy's Commercial Section.
Although it is important to have legal representation when your business
in Korea reaches even a modest level of complexity it is important to
remember two things. First, the Korean law firm's capabilities will go
well beyond strictly legal work and will likely include functions more
often performed by consultants or public relations firms in the United
States. Second, although major Korean firms have extensive and
excellent contacts with the Korean bureaucracy, for anyone planning long
term business involvement in Korea, it is often useful to establish
direct contacts with the officials who oversee any given industry.
CHAPTER V. LEADING SECTORS FOR U.S. EXPORTS
AND INVESTMENT
Best Propects for Manufactured Products
1. Rank of Sector: 1
Name of Sector: ELECTRICAL POWER SYSTEM
ITA Industry Code: ELP
2. Comments: Korea's large scale industrial expansion program and infra-
structure projects creates a continuous strong demand for electric
power, as does the growth of a consumer life-style which demands more
electric power consuming appliances. Although the state-owned power
company KEPCO plans to double electric power generation capacity from
30,000 MW to 60,000 MW over the next 10 years, increased construction of
power plants (nuclear, thermal, and combined cycle) is barely keeping
pace with the country's energy needs. The amount of power generation
equipment purchased by KEPCO will steadily increase as KEPCO constructs
34 planned power plants (6 nuclear, 12 thermal, 16 combined cycle).
The most promising subsectors:
Nuclear Power Generating Equipment
Thermal Power Generating Equipment
Transmission/Distribution Equipment
Turbines
3. Statistics (US$ millions)
1994 1995(E) 1996(E)
A. Total Market Size 3,955 6,255 5,205
B. Total Local Production 2,082 3,290 2,738
C. Total Exports 10 12 14
D. Total Imports 1,873 2,965 2,467
E. Imports from U.S. 1,100 2,075 1,727
F. Exchange Rates 780 803 800
* The above statistics are unofficial estimates. E=Estimated.
1. Rank of Sector: 2
Name of sector: AIRCRAFT AND PARTS
ITA Industry Code: AIR
2. Comments: Following the successful licensed production of UH-60 Black
Hawk helicopters and F-16 Fighters under the Korea Fighter Program
(KFP), Korea is now attempting to develop its aircraft industry through
a huge investment by major Korean conglomerates ("chaebol"). In
addition to this attempt to develop the aerospace industry as a key
industry for the next century, follow-up activities such as investment
in production facilities and expertise building in this industry have
also received heavy emphasis. Other factors for expanding the Korean
aircraft industry include: the New Seoul International Airport
development, a project for 100-seat passenger aircraft development with
China, local production plans for helicopters, and the opening of the
ground support/service market in 1996. The two national carriers,
Korean Air Lines (KAL) and Asiana Air (AAR), are implementing their
procurement plan for a total of 44 aircrafts. This procurement is
expected to start in 1996 and to be completed by 1999. The estimated
cost for this procurement is approximately USD 5,500 million. A recent
procurement contract for a total of 12 Boeing vessels, including 4 B777-
Stretches, is an example of the promising nature of the Korean market.
The most promising subsectors:
-General Aviation
-Aircraft Parts
-Helicopters
-Engines
3. Statistics (US$ millions)
1994 1995(E) 1996(E)
A. Total Market Size 3,087 3,989 4,707
B. Total Local Production 737 1,009 1,342
C. Total Exports 433 563 727
D. Total Imports 2,350 2,980 3,365
E. Imports from the U.S. 1,762 2,265 2,655
F. Exchange Rates 780 803 800
* The above statistics are unofficial estimates. E=Estimated.
1. Rank of Sector: 3
Name of sector: TRANSPORTATION SERVICES
ITA Industry Code: TRN
2. Comments: Due to the rapid increase in transportation volume in the
Korean market, the Korean transportation market has been growing at over
16 percent since 1990. This market reached USD 31 billion in 1993, USD
34 billion in 1994. Estimates put this year's market at approximately
USD 40 billion. The volume of container cargos for export/import
reached about 2.9 million TEU last year with a 15 percent growth over
the previous year. In accordance with the anticipated liberalization of
the Korean transportation market in 1996 (which includes inland trucking
service and airfreight forwarding service), the Korean government is
making huge investements in transportation facility projects. These
major projects include: the development of ports / airports / roads and
railways with a modernized cargo handling system, expansion of the
current cargo terminals at sea/airport terminals, construction of
Integrated Freight Terminals (IFT), and the establishment of Inland
Container Depots (ICD) in major Korean cities. Furthermore , the 24th
International Federation of Freight Forwarders Associations (FIATA)
World Congress will be held this Fall in Seoul. Along with this event,
it is expected that there will be more investments by foreign firms
expanding their transportation service business in the Korean market.
The most promising subsectors:
-Maritime service
-Aviation Service
-Port/Airport Service
-Light Electric Railway Service
3. Statistics (US$ millions)
1994 1995(E) 1996(E)
A. Total Sales 35,710 39,650 44,380
B. Sales by Local Firms 30,820 33,792 37,250
C. Foreign Sales by Local Firms 12,980 14,840 16,730
D. Sales by Foreign-owned Firms 4,890 5,858 7,130
E. Sales by U.S.-owned Firms 813 1,100 1,426
F. Exchange Rates 780 803 800
* The above statistics are unofficial estimates. E=Estimated.
1. Rank of sector: 4
Name of sector: COMPUTERS AND PERIPHERALS
ITA industry code : CPT
2. Comments: The Korean market for computers and peripherals will
continue to expand as modernization of information processing and
innovations in management continue in the principal facets of the
government, financial, and industrial sectors. Computer peripherals,
such as high-capacity hard disk drives (HDDs), CD-ROMs and high-speed
laser beam printers (LBPs), are also increasing in popularity with the
proliferation of high capacity engineering workstations (EWS) and
Pentium PCs. The trend toward networking and decentralization among
advanced private sector computer users will also spark significant
demand for other related peripherals for a wide rage of applications.
Improvements in the price/performance of PCs and the broadening base of
supporting technology around the client/server model of computing are
creating compelling alternatives to traditional mainframe solutions.
The U.S. is the principal supplier to Korea. The growing market,
however, has led to increased competition from third country suppliers,
mostly European and Japanese. Technology of local products is
relatively high, particularly in the PC subsector, but is not expected
to be any major challenge to foreign suppliers. U.S. suppliers should
continue to intensify their sales efforts now if they are to capture
Korean users' loyalty in anticipation of the eventual expansion of the
local market.
3. Statistics (US$ millions)
1994 1995(E) 1996(E)
A. Total market size 2,843.3 3,096.3 3,405.9
B. Total local production 4,410.9 4,852.0 5,337.2
C. Total exports 2,894.9 3,242.3 3,596.3
D. Total imports 1,327.3 1,486.6 1,665.0
E. Imports from the U.S. 570.6 684.7 782.6
F. Exchange Rates 804.0 762.0 762.0
Special notes: The above statistics are unofficial estimates.
E=estimated
1. Rank of sector: 5
Name of sector: TELECOMMUNICATIONS EQUIPMENT
ITA industry code : TEL
2. Comments: Korea is one of the fastest growing telecommunications
markets in the world. Opportunities will unfold over the next several
years for U.S. sales of communications equipment and systems as economic
restructuring and deregulation in the telecommunications sector
accelerate in Korea and the Korean government loosens its monopoly
control on the telecommunications sector. In addition, the Korean
government has recently lifted major technical barriers to imports of
all customer premises equipment to be attached to the public
telecommunications networks (PSTN and PSDN). Korea started broadcasting
its first CATV channels in April 1995. There will be one more cellular
telephone service provider by early 1996. Korea also plans to invest
approximately $50.0 billion to build an integrated information super
highway system by 2015. Sales prospects are bright, particularly for
cellular telecomm equipment, broadcast equipment including CATV
Equipment, and satellite communications equipment. Local producers have
captured the broad middle segment of the market for high demand/volume
types of products, while U.S. suppliers have maintained their dominant
technologically competitive postion in Korea, controlling the
specialized equipment market. U.S. firms can benefit from Korea's
rapidly growing telecom market, as Korea expands its telecom networks
and explores ISDN features. Since the technology of local product is
relatively high, the highest quality is expected from U.S. equipment.
3. Statistics (US$ Millions)
1994 1995(E) 1996(E)
A. Total market size 2,834.7 3,205.9 3,626.5
B. Total local production 3,362.2 3,765.6 4,217.5
C. Total exports 1,565.7 1,753.6 1,964.0
D. Total imports 1,038.2 1,193.9 1,373.0
E. Imports from the U.S. 498.3 585.0 686.5
F. Exchange Rates 803.0 762.0 762.0
Special notes: The above statistics are unofficial estimates.
E=Estimated.
1. Rank of sector: 6
Name of sector: EDUCATION & TRAINING
ITA industry code: EDS
2. Comments: The Korean educational and training market is promising.
Due to the opening of the Korean educational market on January 1, 1995,
143 kinds of vocational training courses have already been liberalized
or will be deregulated within five years. The Korean government will
unveil revolutionary educational reforms on June 1, 1995. The Korean
government will strengthen vocational and technical training systems
with which all students can enhance job possibilities. According to the
education reforms, the percentage of gross domestic product(GDP) devoted
to education will increase from the current 3.89 percent to 5 percent by
1998.
The number of Koreans who want to study abroad includes not only
students but also business people who are seeking career advancement.
The United States is the most popular educational destination for
Koreans with approximately 100,000 including 31,076 college students in
1994. Although American schools and institutes are competitive, other
countries are also vigorously promoting themselves as alternative
destinations for who are looking to study or train abroad.
The most promising subsectors (US $ millions):
- Language Institutes 200
- Vocational Training 150
-- 3. Statistics (US $ millions)
1994 1995(E) 1996(E)
A. Total sales 11,505 11,861 12,217
B. Total sales by local firms 10,704 10,980 11,248
C. Total foreign sales by local firms 801 881 969
D. Total sales by foreign-owned firms n/a 820 902
E. Total sales by U.S.-owned firms n/a 550 605
F. Exchange Rates 804 770 750
* The above statistics are unofficial estimates.
E=Estimated.
1. Rank of sector: 7
Name of sector: POLLUTION CONTROL EQUIPMENT
ITA industry code: POL
2. Comments: The Korean pollution control equipment market is still
young and there are plenty of opportunities for U.S. environmental
companies. Sales of many types of equipment or expertise, as well as
joint venture manufacturing and construction ventures are the most
promising avenues for participation.
A major portion of the rapidly growing market is supplied by local
manufactures with imports accounting for less than 40 percent of the
total market. However, as a result of increased regulation and greater
recognition of the necessity to invest in water protection, demand will
grow for more sophiscated equipment.
Best sales prospects are automatic strainers, aerators, screw-decanters,
and hydrasive screw/ultra-screen systems.
The most promising subsectors:
-Air pollution control equipment USD 512 million
-Water pollution control equipment USD 503 million
3. Statistics (US$ million)
1994 1995(E) 1996(E)
A. Total market size 1,083 1,567 1,960
B. Total local production 704 1,034 1,300
C. Total exports 70 104 130
D. Total imports 449 637 790
E. Imports from the U.S. 85 127 165
F. Exchange rates used 800 770 750
* The above statistics are unofficial estimates. E=Estimated.
1. Rank of Sector: 8
Name of sector: SECURITY AND SAFETY EQUIPMENT
ITA Industry Code: SEC
2. Comments: Recently with the rapid increase in the use of computers
and computerized information, demands for security systems are emerging
and energizing the Korean market. The industrial safety market also
appears to be growing faster than ever, as recent labor disputes and
accidents have raised awareness of the importance of industrial safety.
The Korean government plans to invest approximately USD 370 million in
industrial safety programs in the next three years. This includes
modernization of industrial equipment, supporting procurements for
safety equipment and providing safety related seminars and training. In
addition, the Korea government also plans to invest approximately USD
260 million to establish vessel traffic systems at major Korean ports
within several years. These developments should work to accelerate
growth in the Korean market for security and safety equipment in the
coming years.
The most promising subsectors:
-Access Control Systems
-Traffic Control/Safety Products
-Airport Security Equipment
-Law and Order Enforcement Equipment
3. Statistics (US$ millions)
1994 1995(E) 1996(E)
A. Total Market Size 430 608 906
B. Total Local Production 210 334 520
C. Total Exports 65 110 163
D. Total Imports 220 274 386
E. Imports from the U.S. 64 96 154
F. Exchange Rates 780 803 800
* The above statistics are unofficial estimates. E=Estimated.
1. Rank of Sector: 9
Name of Sector: MEDICAL EQUIPMENT
ITA Industry Code: MED
2. Comments: Imports have always dominated the Korean medical equipment
market. Strong economic growth and a rising standard of living have
spurred an increase in healthcare spending and demand for quality
healthcare service. In response, local healthcare providers are very
interested in upgrading their service quality. Accordingly, Korean
demand for sophisticated medical technology has been on the upswing and
is expected to continue to increase for the next several years.
U.S. medical devices maintain a strong position as the largest country
source supplying 40 percent of Korea's imports. European and Japanese
sources are also competing with the U.S sources. The market is
forecasted to expand at a rate of 10-15 percent annually for the next
three years. Korea is inherently a good import market for high-tech
medical devices. At its best, the market is too small justify large
investments by Korean small and medium size medical and dental firms.
Accordingly, imports of medical devices are expected to grow, matching
the growth of the entire market.
The most promising subsectors:
- Medical Sterilizers
- Rehabilitation Equipment
- Respiration Equipment
- Orthopedic Joints
- Diagnostic Ultrasound Scanners
- Magnetic Resonance Imaging Systems
- Patient Monitors
- Computer Tomography Scanners
- Catheters
- Artificial Kidney
- Syringes, Suture Needles
- General Surgical Instruments
- Operation Tables
5. Statistics (US$ millions)
1994 1995(E) 1996(E)
A. Total Market Size 779 856 942
B. Total Local Production 329 362 398
C. Total Exports 113 125 137
D. Total Imports 563 619 681
E. Imports from the U.S. 257 283 311
F. Exchange Rates 800 780 780
* The above statistics are unofficial estimates.
E=Estimated.
1. Rank of sector: 10
Name of sector: COMPUTER SOFTWARE
ITA industry code : CSF
2. Comments: As computerization progresses in almost all sectors of the
economy, the demand for software will rise, providing opportunities for
incremental sales of U.S. high technology, specialized computer
software. The Korean software development technology is still far
behind that of the U.S. and Japan, due to limited experience in the
computer industry, and an acute shortage of highly qualified software
specialists. Korea depends heavily on imports to meet its system
software and special-purpose applications software requirements. In the
past, inadequate legal protection for software adversely affected the
U.S. software industry's position, most evidently in PC software. In
the future, the Computer Program Protection Law (CPPL) will be more
strictly enforced to protect both domestic and foreign creators' rights.
Korea depends entirely on imports for systems software, but is quite
strong in developing applications software. There is a lack of a strong
infrastructure, resulting from the lack of accumulated technology and
experience. The U.S. is and will be the principal supplier to Korea,
enjoying the many advantages it has over third country suppliers,
resulting from the strength of its software project management and
marketing skills. U.S. suppliers' willingness to modify their software
slightly to meet specific user needs is an important factor in end-user
purchasing decisions.
3. Statistics (US$ millions)
1994 1995(E) 1996(E)
A. Total market size 484.9 552.7 629.9
B. Total local production 297.1 342.1 383.2
C. Total exports 5.5 6.2 7.0
D. Total imports 193.3 216.8 253.7
E. Imports from the U.S. 129.5 151.5 177.6
F. Exchange Rates 803.0 762.0 762.0
Special notes: The above statistics are unofficial estimates.
E = Estimated.
1. Rank of Sector: 11
Name of sector: BUILDING PRODUCTS
ITA Industry Code: BLD
2. Comments: The domestic market completely opened to foreign firms in
1995. U.S. companies will have a good opportunity to increase market
share. Korean builders would like to introduce and apply modern
building concepts to commercial/residential building construction. High
quality building materials and systems have been used for those multi-
purpose high rise building construction mainly built in large cities
where land space is limited and expensive.
In residential housing construction, Korean home builders are
identifying better and more comfortable environmental facilities. The
trend for single family residential housing in Korea is toward natural
building materials such as wood. Most single houses under construction
are mainly near large cities where natural building materials are
primarily used. Pre-fabricated building materials are becoming popular
in time and are labor-cost wise in the construction of single houses.
A slight modification of U.S. building products/systems will be key for
the Korean market.
The most promising subsectors:
- Log and lumber products: USD1,236 million
- Pre-fabricated house: USD2.1 million
3. Statistics (US$ millions)
1994 1995(E) 1996(E)
A. Total Market Size 16,954 17,293 18,460
B. Total Local Production 15,182 15,500 16,645
C. Total Exports 1,376 1,417 1,459
D. Total Imports 3,148 3,210 3,274
E. Imports from the U.S. 95 112 115
F. Exchange Rates 800 780 780
* The above statistics are unofficial estimates. Accurate statistical
data is not available on total market and local production because
reference books and information provided by associations related to
building products are unavailable. Statistical data are currently an
estimation.
1. Rank of Sector: 12
Name of sector: HOUSEHOLD CONSUMER GOODS
ITA Industry Code: HCG
2. Comments: Although it is not an easy task to characterize household
consumer goods into a single sector, major varieties include electrical
home appliances, kitchenware including cookware, china, glass and
decorative accessories, toiletries, residential and commercial
furnishings with upholstery fabrics, among many others. Gradual market
liberalization and recovery from an overall economic recession during
the past five years have been a major influence in recording recent
remarkable growth of imports and foreign investment. Local demand for
U.S. household products is steadily growing. Thus, many U.S. brands
have become well-established in the Korean market. A few European
countries such as Germany follow the U.S. into quality in the home
appliance market.
The most promising subsectors:
- Major electrical home appliances (refrigerators, washing machines and
dryers, gas oven/ranges, air conditioners, vacuum cleaners and
dishwashers): 2,430
- Housewares: N/A
3. Statistics (US$ millions)
1994 1995(E) 1996(E)
A. Total Market Size 6,850 7,200 7,560
B. Total Local Production 13,380 14,220 14,810
C. Total Exports 7,350 7,900 8,200
D. Total Imports 820 880 950
E. Imports from the U.S. 164 176 209
F. Exchange Rates 800 780 780
* The above statistics are unofficial estimates.
E=Estimated.
1. Rank of Sector: 13
Name of Sector: DRUGS AND PHARMACEUTICALS
ITA Industry Code: DRG
2. Comments: Korea's imports of foreign-made pharmaceuticals have
increased continually due to the rising demand for better quality
healthcare and the steadily improving business environment. The U.S.
pharmaceutical industry, representing one of the major suppliers with
Japan, Germany and Switzerland, has been active in the Korean market.
This year foreign pharmaceutical industries are expected to re-leap into
the Korean market because of new regulations actually banning copies of
new drugs by local manufacturers for a certain period time after their
initial introduction. This is expected to have an important impact on
the increase of imports in the long run.
The Korean pharmaceutical market is expected to grow at rates of 5-7
percent annually. Despite several important elements disadvantageous to
imported pharmaceuticals including insurance, import approvals and
pricing, the growth of imported pharmaceuticals has exceeded that of the
overall market in Korea and is expected to continue to do so for the
next several years. Recently, increase of consumer diagnostic kits has
been remarkable, and continued growth of this market is forecasted.
Steady expansion of OTC drugs is also anticipated.
3. Statistics (U$ millions)
1994 1995(E) 1996(E)
A. Total Market Size 6,900 7,260 7,624
B. Total Local Production 6,526 6,852 7,195
C. Total Exports 368 386 405
D. Total Imports 742 794 834
E. Imports from the U.S. 92 101 111
F. Exchange Rates 800 780 780
* The above statistics are unofficial estimates. E=Estimated.
1. Rank of sector: 14
Name of sector: TELECOMMUNICATIONS SERVICE
ITA industry code: TES
2. Comments: Opportunities will unfold over the next several years for
U.S. sales of communications services as economic restructuring and
deregulation in the telecom sector accelerate in Korea and the Korean
government loosens its monopoly control on the telecommunications sector
and certain newly emerging service sectors, such as value added services
(MHS, EDI, CRS, etc.) are also targeted for privatization. U.S.
suppliers enjoy a significant export advantage in communications and
other related systems and services; therefore they should benefit from
Korea's rapidly growing communications service market. Joint venture
and licensing agreements will be the key for the market.
3. Statistics (US$ millions)
1994 1995(E) 1996(E)
A. Total sales 6,451.6 7,935.5 9,760.7
B. Sales by local firms 6,424.7 7,900.5 9,715.2
C. Foreign sales by local firms - - -
D. Sales by foreign-owned firms 26.9 35.0 45.5
E. Sales by U.S.-owned firms 24.7 32.2 41.9
F. Exchange Rates 803.0 762.0 762.0
Special notes: The above statistics are unofficial estimates.
E = Estimated.
1. Rank of sector: Unranked
Name of sector: ARCHITECTURAL/CONSTRUCTION/ENGINEERING SERVICES
ITA industry code: ACE
2. Comments: The Korean government plans to open the domestic market of
architect, engineering and construction from 1997. Under the plan,
foreign firms specializing in design will be allowed to participate in
public construction projects each involving more than 5.5 billion Won
(USD 1.2 million) at an initial stage. The technical level of Korean
architect and engineering firms is evaluated at 60 percent of the
technical standard of foreign counterparts in advanced nations.
In 1995, a system of supervision over designs was introduced to prevent
substandard designs, and the system was initially applied for huge
government initiated projects such as construction of the New Seoul
International Airport and the Seoul-Pusan High Speed Railways.
The most promising subsectors:
-Engineering service USD 1,050 million
-Architectural service USD 250 million
3. Statistics (US$ million)
1994 1995(E) 1996(E)
A. Total sales 4,047 5,059 6,375
B. Total sales by local firms 3,491 4,363 5,498
C. Foreign sales by local firms 556 696 877
D. Sales by foreign firms N/A N/A N/A
E. Sales by U.S. firms N/A N/A N/A
F. Exchange rates 800 770 750
* The above statistics are unofficial estimates.
E=Estimated.
Best Prospects for Agricultural Products
(Volume: 1,000 Metric tons. In parentheses are values
in million U.S. dollars, where applicable)
1. Name of Best Prospect: BEEF
2. Commodity Code Number: HS 0201 and 0202
3. Statistics
1994 1995 1996
A. Total Market Size 289.5 310 330
B. Total Local Production 147.0 160 170
C. Total Exports 0.0 0 0
D. Total Imports 142.5 (429.5) 150 160
E. Total Imports from USA 61.8 (249.1) 70 80
* The above statistics are unofficial estimates.
4. Comments: Korea is already the fourth largest market for U.S. beef
and this market will continue to grow. Quotas are unrealistically small
but the increasing volume under SBS presents opportunities for high
quality U.S. products. Estimates of market size are difficult to make
because of the constraints imposed by the ROKG. Imports would increase
dramatically in a free market environment.
1. Name of Best Prospect: PORK
2. Commodity Code Number: HS 0203
3. Statistics
1994 1995 1996
A. Total Market Size 633.2 650 680
B. Total Local Production 621.0 640 670
C. Total Exports 11.2 (64.7) 15 20
D. Total Imports 23.4 (77.4) 25 30
E. Total Imports from USA 0.6 (1.8) 5 10
* The above statistics are unofficial estimates.
4. Comments: Pork imports will be liberalized July, 1 1997 but this
will be preceded by imports quotas of 21,930 tons in 1995 and 29,240
tons in 1996. Actual imports in 1995 will greatly exceed the quota as
the government tries to keep prices down. U.S. suppliers will face
stiff competition from the domestic industry and imports from Taiwan,
China and the EU.
1. Name of Best Prospect: FISH AND SEAFOOD
2. Commodity Code Number: HS 03, 1604 and 1605
3. Statistics
1994 1995 1996
A. Total Market Size 3,491.0 3,500 3,500
B. Total Local Production 3,476.0 3,400 3,350
C. Total Exports 310.0 (1,400) 300 300
D. Total Imports 325.0 (681) 400 450
E. Total Imports from USA 71.0 (131) 100 120
* The above statistics are unofficial estimates.
4. Comments: Korea is a huge seafood market with great potential. The
domestic fleet and catch are declining; incomes are increasing; per
capita consumption is very high; and most seafood products are
liberalized or will be by 1997. All these factors point to increasing
imports, both for consumption and for processing and re-export.
1. Name of Best Prospect: DAIRY PRODUCTS
2. Commodity Code Number: HS 0401-0406 and 2105
3. Statistics
1994 1995 1996
A. Total Market Size N/A N/A N/A
B. Total Local Production N/A N/A N/A
C. Total Exports 2.1 (4.1) 2 2
D. Total Imports 53.0 (72.0) 70 100
E. Total Imports from USA 7.9 (7.6) 20 30
* The above statistics are unofficial estimates.
4. Comments: Opportunities for U.S. companies will be in the high
value areas such as ice cream, frozen yogurt and cheese which are now
liberalized. Cheese was liberalized on January 1, 1995 and imports
already amounted to over $10 million during the first four months this
year. Most dairy products including milk powder and whey powder are
liberalized. But some of these liberalized dairy products come under a
tariff rate quota.
1. Name of Best Prospect: NUTS AND DRIED FRUITS
2. Commodity Code Number: HS 0801, 0802 and 0806
3. Statistics
1994 1995 1996
A. Total Market Size N/A N/A N/A
B. Total Local Production N/A N/A N/A
C. Total Exports 17.2 (135) 18 18
D. Total Imports 10.5 (37.5) 12 14
E. Total Imports from USA 8.6 (31.7) 10 12
* The above statistics are unofficial estimates.
4. Comments: Local production is stagnate with no production programs
in place. Exports consist of chestnuts and will be basically flat.
Imports will increase with the change in tastes, expansion of the bakery
and confectionery industries, increases in income and entry of walnuts
from the U.S. into the market. The U.S. will continue to dominate this
market but face stiff price competition from Iran and China. Almonds
will continue to be the largest import but expect larger imports of
walnuts, pistachios and hazelnuts. Dried fruit imports are mostly
raisins imports of which will trend upward. Other dried fruits are
relatively minor.
1. Name of Best Prospect: CITRUS FRUIT
2. Commodity Code Number: HS 0805
3. Statistics
1994 1995 1996
A. Total Market Size 560.4 564 569
B. Total Local Production 549.0 550 550
C. Total Exports 1.0 (1.1) 1 1
D. Total Imports 12.4 (11.7) 15 20
E. Total Imports from USA 12.4 (11.7) 15 20
* The above statistics are unofficial estimates.
4. Comments: Imports now consist of grapefruit and lemons, almost
exclusively from the United States. Orange imports will be liberalized
in 1997 but with import quotas of 15,000 tons in 1995, 20,000 tons in
1996 and 25,000 tons in 1997. Most of these are expected to come from
the United States. Imports under the 1995 quota were made in early
1995, all from the United States.
1. Name of Best Prospect: POULTRY MEAT
2. Commodity Code Number: HS 0207
3. Statistics
1994 1995 1996
A. Total Market Size 269.5 290 310
B. Total Local Production 245.0 250 255
C. Total Exports 0.0 0 0
D. Total Imports 24.5 (40.6) 40 55
E. Total Imports from USA 15.5 (26.9) 25 35
* The above statistics are unofficial estimates.
4. Comments: Present imports consist of turkey and duck meat. Chicken
meat will be liberalized in 1997 with a quota of 7,700 tons in 1995 and
10,400 tons in 1996. The United States should be a significant supplier
but will face competition from Thailand and China.
1. Name of Best Prospect: FRUIT JUICES
2. Commodity Code Number : HS 2009
3. Statistics
1994 1995 1996
A. Total Market Size N/A N/A N/A
B. Total Local Production N/A N/A N/A
C. Total Exports 9.0 (9) 10 10
D. Total Imports 77.3 (115.1) 85 100
E. Total Imports from USA 23.6 (40.9) 30 40
* The above statistics are unofficial estimates.
4. Comments: Orange juice is the major import and will be liberalized
on July 1, 1997 but during the interim period, Korea will provide access
quotas of 50,000 tons in 1995, and 55,000 tons in 1996 at a quota tariff
of 50 percent. Grape juice and Fruit juice beverages were liberalized
on January 1, 1995 at tariffs of 50 percent and 9.9 percent
respectively. Apple juice will also be liberalized in 1996. This
means that imports will increase rapidly and the U.S. is well positioned
as a major supplier. Brazil dominates the FCOJ market on price but the
United States will do very well in the high quality FCOJ sector and all
other categories.
1. Name of Best Prospect: PREPARED FRUITS, NUTS AND VEGETABLES
2. Commodity Code Number: HS 2001 - 2008
3. Statistics
1994 1995 1996
A. Total Market Size N/A N/A N/A
B. Total Local Production N/A N/A N/A
C. Total Exports 19.6 (64.8) 25 30
D. Total Imports 114.6 (114.7) 130 150
E. Total Imports from USA 66.8 (52.5) 80 100
* The above statistics are unofficial estimates.
4. Comments: This sector has shown very strong growth in the last few
years - with imports growing from $18.6 million in 1988 to $114.7
million in 1994. This growth is expected to continue.
1. Name of Best Prospect: OTHER PREPARED FOODS
2. Commodity Code Number: HS 2106
3. Statistics
1994 1995 1996
A. Total Market Size N/A N/A N/A
B. Total Local Production N/A N/A N/A
C. Total Exports 43.7 (49.9) 50 55
D. Total Imports 26.6 (115.7) 30 35
E. Total Imports from USA 5.2 (31.4) 8 10
* The above statistics are unofficial estimates.
4. Comments: This is a catch-all category that includes all consumer-
ready, high-value products that do not fit into other H.S. codes. It
has seen a dramatic growth, with imports going from $11.9 million in
1988 to $115.7 million in 1994, and is expected to continue.
CHAPTER VI. TRADE REGULATIONS AND STANDARDS
TARIFFS AND IMPORT TAXES
The average tariff rate on manufactured goods imported into Korea is
8.0%. However, tariffs on agricultural products range from 30-100%,
depending on the item. Korea has a flat 10% Value Added Tax on all
imports. Also, a special excise tax of 15% to 100% is levied on the
import of certain luxury items and durable consumer goods. There also
exist adjustment tariffs used for balance of payments purposes. Tariffs
and taxes are payable in Korean won before goods are permitted to clear
customs.
CUSTOMS VALUATION
Most duties are assessed on an ad valorem basis. Specific rates apply
to a few goods while both ad valorem and specific rates apply on a few
others. The dutiable value of imported goods is the normal c.i.f. price
at the time of import declaration. Software is presently assessed on
its retail value, not the value of the media.
Import duties are not assessed on capital goods and raw materials
imported in connection with foreign investment projects. Authorization
to import those items and supplies designated in a foreign investment
application on a duty-free basis usually accompanies the Ministry of
Finance's approval of a foreign investment project.
In addition, certain raw materials used in the production of export
goods are often exempt from duty, and certain machinery, materials, and
parts used in designed industries may enter Korea either duty free or at
reduced rates.
IMPORT LICENSES
An import license is required for every transaction and before a letter
of credit may be opened in favor of a foreign supplier. The license,
obtainable from the Korea Exchange Bank or from any one of the other 886
Class A foreign exchange banks and branches, is valid for up to 12
months. Under the system of licensing introduced in July 1967, all
commodities may be freely imported (i.e., applications for import
licenses will be approved automatically) unless they are included on a
negative list, which includes commodities that are either prohibited or
restricted. The negative list, known as the Export and Import Notice,
is published by the Ministry of Trade, Industry and Energy, and remains
effective until revised to meet changing economic conditions.
Applications for licenses for the import of items currently in the
restricted category are approved on a case-by-case after screening by
the government agencies concerned, or by the relevant manufacturers'
association.
All applications for import licenses must be accompanied by firm offers
issued by a foreign supplier, in most cases through the supplier's
qualified local agent. Only firms that are registered as foreign
traders are eligible to receive import licenses.
EXPORT CONTROLS
The Special Trade Division of the Ministry of Trade, Industry and Energy
and the Offices of Technology Cooperation at the Ministry of Science and
Technology and Ministry of National Defense have legal responsibility
for control of COCOM-related exports. Although not a member of COCOM,
COCOM licensing procedures were put into effect during 1993. Korea is
also a signatory to the Chemical Weapons Convention (CWC).
IMPORT/EXPORT DOCUMENTATION
Import Licenses (I/L) are issued by banks when firms place import
orders. An I/L is automatically issued based on a firm offer sheet and
proforma invoices by foreign exporters for items locally called
"automatic approval" (A/A) items. For non-A/A items the importer must
complete additional procedures specific to items prior to application
for the I/L. These include registration with government agencies,
recommendations, or reports to government-authorized organizations.
A/A items can clear customs with regular shipping documents. Most non-
A/A items, typically health or safety related products, require
additional testing or certification by previously registered or
recommended organizations before clearing customs.
Export licenses are issued by Korean customs at the time of export
clearance. Most items are approved on the basis of regular shipping
documents. Previous recommendation or report requirements similar to
that for import are imposed on a few items. Particularly export of
textile products, which are bound under export quotas, must be allotted
share before export.
TEMPORARY ENTRY
Pursuant to the Korean Customs Law, advertising material and samples of
merchandise are exempt from customs duties, provided that such items are
used solely for that purpose. Some U.S. firms, however, have reported
problems in receiving duty exemptions. In general, duty-free entry of
these items is left to the discretion of the customs officials at the
port of entry. Valuable samples may be admitted temporarily on a duty
free basis under deposit for the amount of the duty. Careful
documentation and handling of samples are essential to minimize
problems.
Korean customs also allows free customs entry of goods brought into
Korea hand-carried by foreign business persons (such as personal
computers) for use during their stay in Korea, by making a note on the
travelers' passport and allowing them to leave the country only when
accompanied by such goods.
Goods entering Korea for exhibition purposes must be stored in a bonded
area. The U.S. Trade Center at the U.S. Embassy in Seoul and the Korea
Exhibition Center (KOEX) are bonded areas. Exhibition goods will be
kept without charge at the KOEX during the exhibition period, after
which they must be either: 1) reshipped directly out of Korea without
payment of duty; 2) presented at Customs for payment of regular duty on
value declared at time of entry; or 3) transferred to the Seoul Customs
house bonded storage area for no more than 90 days from their entry into
Korea. Goods stored in a bonded warehouse can incur, if applicable,
storage costs, customs brokerage charges, local transportation costs and
moving equipment fees.
LABELING, MARKING REQUIREMENTS
Country of Origin labeling is required for commercial shipments entering
Korea. The Korean Customs Administration (KCA) publishes a list of the
country of origin labeling requirements by Harmonized System Code
number. Further labeling and marking requirements for specific
products, such as pharmaceutical and food products, are covered by
specific regulations from the Korean Government agencies responsible for
these items. Korean labels, except country of origin markings which
must be shown at the time of customs clearance, are allowed to be
locally attached on products either in the bonded area before clearance
or after clearance but before products are re-sold to the local market.
Local importers usually print Korean labels when imported quantities are
not large, and can consult with the KCA as to where they can be attached
to the product.
For example, all containers and packages of imported pharmaceutical must
be marked in a conspicuous place to show: 1) manufacturers' and
importers' names and addresses; 2) name of product; 3) date of
production and batch number; 4) names and weights of ingredients; 5)
quantity; 6) number of units; 7) storage method; 8) distribution
validity date; 9) instructions for use; 10) import license number; 11)
effectiveness; and 12) suggested retail price.
For imported food products, labels should be in Korean (stickers may be
used instead of Korean language labels but such stickers must be in
Korean and should not be easily removable), and should have the
following inscriptions printed in large enough letters to be readily
legible: 1) name of product; 2) name of the importer, address and
telephone number; 3) importer's business registration number; 4) date of
manufacturing or date of import (not mandatory); 5) shelf life (the
shelf life stipulated by the manufacturer must be shown, and must come
immediately under the date of manufacturing or date of import when it is
shown. For fresh fruits, this item may be omitted); 6) weight, volume or
number of pieces (if the number of pieces is shown, the weight or volume
must be shown in parentheses); 7) name and volume of ingredients (for
dairy and meat products, fish meal products, canned and bottled food
products, instant food, etc.). Names of more than five raw materials
must be listed in order of volume and of these, the quantities of at
least three major ingredients must be shown in percentages); 8)
addresses where products with defects may be returned or exchanged; and
9) cautions and standards for use or preservation (for products which
must be kept at a low temperature, such temperature should be shown).
PROHIBITED IMPORTS
All commodities may be freely imported into Korea unless they are
included on the negative list, which includes commodities that are
either prohibited or restricted. The negative list is published by the
Ministry of Trade, Industry and Energy as the Annual Trade Plan (Export
and Import Notice). Restricted items include firearms, illicit drugs,
endangered species, etc.
STANDARDS
The Korean Government adopted the ISO 9000 system as its official
standard system as of April 1992 and published related regulations in
September 1993. The Industrial Advancement Administration (IAA) is a
research, standards-making and regulatory administration under the
Ministry of Trade, Industry and Energy, established to promote Korea's
industrial technology and assure product quality. The IAA has
authorized five local laboratories to give ISO evaluations. As of the
end of May, approximately 507 Korean firms have been certified to fit
into ISO standards.
However, despite this progress, there are still concerns about the
implementation of the commitments Korea made when it signed the GATT
Agreement on Technical Barriers to Trade (the "Standards Code") in 1980.
The need to apply structured developing country standards and procedures
deviate substantially from international practices in both substance and
implementation. These requirements serve mainly to keep imported
products out of the existing market. Standards often only affect
imported goods and are not applied in an equal manner to domestic
products. In addition, the Korean Government often issues new
regulations without using public rule-making procedures. The absence of
a comment period and adequate time for industry to adjust is a
significant barrier to trade. Finally, implementation periods are
allocated in very short periods of time which gives the exporters
insufficient time to comply, this leads to unnecessary interruptions in
trade.
FREE TRADE AREAS/WAREHOUSES
The government has designated two free export zones for the bonded
processing of imported materials into finished goods for export. The
free export zones are specially established industrial areas where
foreign invested firms can manufacture, assemble, or process export
products using freely imported, tax-free raw materials or semifinished
goods. Tax incentives are provided for foreign invested firms.
The Masan Free Export Zone, established in 1971, is located near Pusan
at the southern end of the country. The Iri Free Export Zone opened in
1975 and is located near Gunsan on the western coast. Information on
these free export zones can be obtained from the Director, Regional
Industry Development Division, Ministry of Trade, Industry and Energy,
Unified Government Building, 1 Choongang-dong, Kwachon City, Kyunggi-Do,
Korea. Tel: 82-2-503-9494, Fax: 82-2-503-9462
A new industrial park, intended for the exclusive use of foreign-
invested high-technology firms, is being planned for Asan, a city about
two hours southwest of Seoul. It will provide essentially the same
services as do the Masan and Iri free export zones and is scheduled for
completion in 1996.
The bonded storage facilities in Korea are under the supervision of the
Collector of Customs. Korea has two kinds of bonded areas: 1)
designated bonded areas (designated storage sites and customs inspection
sites); and 2) licensed bonded areas (bonded storage sites, bonded
warehouses, bonded factories, bonded exhibition sites, bonded
construction sites, and bonded sales sites). Goods may be stored in
bonded warehouses for up to two years, and duties are payable only when
they are cleared through customs. Storage fees are high, and the use of
a bonded warehouse to maintain inventories is limited. Inquiries
regarding bonded facilities in Korea can be addressed to: Director,
Surveillance Division, Office of Customs Administration, 71, Nonhyun-
dong, Kangnam-Ku, Seoul. Tel: 82-2-512-2305, Fax: 82-2-518-4100
The two-year storage period does not apply to the storage of live
animals or plants, perishable merchandise, or other commodities that may
cause damage to other merchandise or to the warehouse. The Collector of
Customs bears no responsibility for goods while they are stored in
customs facilities.
With the permission of the Collector of Customs, goods stored in bonded
facilities may be repacked, stored, divided and combined, or repaired,
provided that the nature and quality of the goods are not changed in
doing so.
In principle, bonded warehouses are the only warehouses facilities
available in Korea to foreign companies where a U.S. exporter can store
shipped goods and still maintain title until they are cleared through
customs by normal import procedures. Korea's Customs law specifies that
any person who desires to establish a bonded warehouse shall obtain a
license from the Director of each Customs. Applications must include
the name of the bonded warehouse, location, structure, numbers and sizes
of buildings, storage capacity and types of products to be stored, and
where applicable, must be accompanied by articles of incorporation and
corporate register.
SPECIAL IMPORT PROVISIONS
Certain items are subject to special approval procedures if imported
from a country with which Korea has a large, unfavorable trade balance
of long standing. Japan has dominated this category for a number of
years do to its chronic trade surplus with Korea since 1965. In 1994,
Korea had a trade surplus with Japan which rounded out to be $11.9
million, compared to an overall trade deficit of $8.8 billion in 1991.
The list of items subject to special approval covers a wide array of
products, and can be added to or deleted from during occasional
revisions by the Ministry of Trade, Industry and Energy. Importers need
prior confirmation from the Association of Foreign Trading Agents of
Korea for licenses to import these items from Japan which, in fact,
places a de facto ban on imports.
CHAPTER VII. INVESTMENT CLIMATE
GOVERNMENT ATTITUDE TOWARDS FOREIGN INVESTMENT
In an effort to reverse Korea's reputation as a difficult environment
for foreign investment, the Korean government under President Kim has
announced an ambitious program of economic reforms designed to remove
unnecessary regulations and give more scope for decision making to the
private sector. In addition, US-Korea bilateral discussions begun in
1992 under the title of the President's Economic Initiative (PEI) and
continued under the Dialogue for Economic Cooperation in 1993-94, were
moderately successful in promoting a more open and transparent climate
for trade and investment flows between the two countries.
OPENNESS TO FOREIGN INVESTMENT
The Foreign Capital Inducement Act (FCIA) and related regulations
categorize business activities as either open, conditionally restricted,
or closed to foreign investment. Currently, Korea restricts foreign
investment in 150 categories, including 24 in the agricultural sector,
12 in the manufacturing sector and 114 in the services sector. Among
the 150 sectors in which foreign investment is restricted, 43 are
partially open to foreign investors who satisfy certain specified
conditions. In June 1993, the Ministry of Finance announced a schedule
by which all but 91 categories will open by the year 1997, and only
seven categories will limit foreign participation to joint venture
investment. Potential foreign investors need to closely monitor the
implementation of this schedule, however, since different categories
necessary for a particular investment or project may not open together,
and since the government may change category definitions to broaden
exclusion.
In open categories, applications for foreign investment must be notified
in advance to (in effect, requesting approval from) designated foreign
exchange banks, including branches of 40 authorized foreign banks.
Under new procedures announced in March 1994, applications for
notification will be processed within three hours. Applications may be
denied on a number of grounds, including national security, public order
and morals, international security obligations, and national health and
environment. Exceptions to the advance notification-approval system
exist for certain categories of projects that are subject to joint
venture requirements and certain projects in the distribution sector.
Investments not qualifying for application under notification procedures
(i.e., conditionally restricted projects) must be approved by the
Ministry of Finance and Economy. Most applications submitted under
approval procedures should be approved within five days, but in some
cases requiring consultation with another ministry, processing time can
take up to 25 days. Large foreign investments are no longer referred to
the Fair Trade Commission for review, and the prior review of
environmentally sensitive projects is no longer conducted by the
Ministry of the Environment.
A host of laws, regulations, and changing policies make for a
challenging business environment. For example, the Korean government's
procurement law generally favors domestic over foreign suppliers. (Some
joint ventures and wholly-owned foreign subsidiaries incorporated in
Korea do qualify as domestic suppliers, however.) In addition, a
variety of industry-specific laws in construction, insurance, combine
and tractor manufacture, and vegetable and alcoholic beverage products
restrict foreign investment. Foreign equity ownership limitations exist
for a number of sectors including petroleum product manufacturing,
fishing, seafood processing, game trapping, animal oils and fats, air
transport and air freight, ship brokerage and leasing of water transport
equipment, as well as wireless telephone and telegraph. Foreign
investment is prohibited in a number of sectors, notably education (pre-
primary through senior high school, and technical/vocational schools).
Korean law does not permit direct investment through merger with or
acquisition of an existing domestic firm. In general, foreign and
domestic investors are not permitted to acquire more than ten percent in
aggregate of the shares in a Korean firm listed on the Korean Stock
Exchange.
In general, the Korean public supports foreign investment as beneficial
to the national economy. There are no significant non-governmental
groups that oppose foreign investment. A number of consumer groups have
from time to time spoken out against imports, arguing that "luxury"
consumption encourages social unrest or that foreign agricultural
products are a threat to public health. However, these groups have not
opposed foreign investment per se, nor do they represent a serious
obstacle to foreign investment flows.
INVESTMENT INCENTIVES
Advanced technology transfer and investment in high technology services
may qualify for tax incentives from the Ministry of Finance and Economy.
Effective April 1, 1995, foreign investment in 261 categories of high
technology is eligible for an increased range of tax reductions and
other incentives. In addition, the scope of incentives was broadened to
include the waiver of certain taxes, including corporate taxes on
profits and dividends for the first five years the foreign-invested
project realizes profits, and a 50-percent reduction thereafter. New
incentives also include access to offshore commercial loans when the
funds are used to import needed capital equipment. Major categories of
high technology eligible for incentives include precision machinery and
advanced manufacturing processes; advanced materials fabrication and
processing; aerospace and transportation technology; and environmental
and energy technology. In addition, importers of 288 specified
technologies are not required to withhold otherwise applicable taxes on
royalty payments to foreign suppliers.
The Korean government has a number of programs to encourage research and
development by private sector organizations. Of these, the most
prominent is the Highly Advanced National (HAN) project, under which the
government seeks to raise Korea's R&D capability to OECD levels by the
year 2001. The program provides funding for projects carried out by
Korean institutes in partnership with foreign research bodies aimed at
developing new technology in a number of specified fields. In
principle, funding under the government's R&D programs is available to
foreign-owned firms; however, no foreigners have applied for the limited
funds available except through a venture with a Korean company,
university or research institute.
CONVERSION AND TRANSFER POLICIES
Proposed foreign remittances must be approved at the time investment
approval is sought. Once approved, remittances are guaranteed. When
higher royalties or payments over an extended period of time are
proposed as part of a technology licensing agreement, both the agreement
and projected royalties must be approved by a foreign exchange bank or
the Ministry of Finance. In most cases approval is automatic.
The Ministry of Finance and Economy strictly regulates the Korean
foreign exchange market under the Foreign Exchange Control Act (FECA)
and attendant regulations. The FECA governs all aspects of the foreign
exchange rate system, including foreign exchange transactions and
holdings. The Bank of Korea plays a secondary role. In 1991, Korea
replaced its "positive" system of foreign exchange controls with a
"negative" system, under which transactions are allowed to take place if
not specifically prohibited.
Recent changes have permitted limited short-term offshore financing,
short-term intracompany loans for high technology manufacturers, working
capital increases without FCIA (Foreign Capital Inducement Act)
restriction, and equity increases due to preferred stock issues and sale
of existing stock. An important step toward full liberalization of
foreign exchange transactions occurred in October 1993 when the
government raised the limit on import transactions that can be settled
in won, and eased underlying documentation requirements on certain
forward transactions in foreign exchange. In December 1994 the
government announced a package of reforms aimed at further
liberalization of the foreign exchange system, including the goal of
eliminating the requirement that foreign exchange be repatriated to
Korea. Despite the progress made in loosening foreign exchange
controls, serious restrictions remain in the areas of offshore financing
and deferred payments for imports.
Conversion of the national currency, the won, into foreign currencies
for certain international transactions such as the import of goods and
services is possible with the permission of the Bank of Korea or an
authorized foreign exchange bank. However, the Korean won is generally
not accepted outside of Korea. The external value of the won is managed
by the Bank of Korea, which allows it to float daily within a limited
band against a basket of hard currencies. As a reference price, the
Bank of Korea uses the previous day's weighted average of won-dollar
interbank transactions.
A foreign firm that invests under the terms of the Foreign Capital
Inducement Act (FCIA) is guaranteed unlimited remittances as long as a
foreign exchange bank confirms its ability to undertake the
transactions. An audited financial statement must be made available to
the foreign exchange bank. To withdraw capital, a stock valuation
report issued by a recognized securities company or the Korea Appraisal
Board must also be presented. Foreign companies not investing under the
FCIA must repatriate funds through authorized foreign exchange banks
after obtaining government approval.
EXPROPRIATION AND COMPENSATION
Korea follows generally accepted principles of international law with
respect to expropriation. The law protects all foreign-invested
enterprise property from expropriation or requisition. If private
property is expropriated, it can only be taken for a public purpose and,
then, in a non-discriminatory manner. Property owners are entitled to
prompt compensation at fair market value. In the last 40 years, there
have been no cases of expropriation of foreign-owned property.
DISPUTE SETTLEMENT
In 1967, Korea became a member of the International Center for the
Settlement of Investment Disputes. In 1973, it acceded to the New York
Convention (formally called the United Nations Convention on the
Recognition and Enforcement of Foreign Arbitral Awards). It is a member
of the International Commercial Arbitration Association and the
Multilateral Investment Guarantee Agency. Twenty-six countries have
bilateral investment agreements with Korea, including the United States.
Commercial disputes may be adjudicated in a civil court. A lawsuit,
however, is often considered a last resort, signaling the end of a
relationship. But for a number of reasons, foreign businessmen often
feel that civil court is not a practical means to resolve disputes. For
example, proceedings are conducted in the Korean language, often without
adequate translation. Foreign lawyers are banned from Korean courts.
Another disadvantage is that civil procedures common in the United
States, such as pretrial discovery, do not exist in Korea. Moreover,
legal proceedings are expensive and time-consuming, and even if
successful, enforcement is uncertain. During litigation of a dispute,
foreigners may be barred from leaving the country until a decision is
reached.
Commercial disputes may also be taken to the Korean Commercial
Arbitration Board (KCAB). The Korean Arbitration Act and its
implementing rules outline the following steps in the arbitration
process: (1) parties may request the KCAB to act as informal
intermediary to a settlement; (2) if unsuccessful, either or both
parties may request formal arbitration, in which case the KCAB appoints
a mediator to conduct conciliatory talks for 30 days; (3) if
unsuccessful, an arbitration panel consisting of one or three
arbitrators is assigned to decide the case. If one party is a not
resident in Korea, either may request an arbitrator from a neutral
country.
PERFORMANCE REQUIREMENTS/INCENTIVES
Korean authorities have ceased imposing performance requirements on new
foreign investment since July 1989, and eliminated preexisting
performance requirements in December 1992. But the Korean view of
performance requirements in this context relates only to local content
and export sales levels and to mandatory technology transfers. It does
not include such things as foreign equity ownership restrictions,
offshore financing restrictions, or work visa policies that force local
hires.
RIGHT TO PRIVATE OWNERSHIP AND ESTABLISHMENT
Korea fully recognizes rights of private ownership and has a well-
developed body of laws governing the establishment of corporate and
other business enterprises. Private entities may generally acquire and
dispose of interests in business enterprises in Korea. However, the
Securities and Exchange Act provides that no legal person (individual or
firm) may own more than ten percent of a listed corporation; the
Securities and Exchange Commission may require that any shares owned
above this limit be divested. In addition, Korean law contains several
provisions prohibiting cross-ownership between companies. The purpose
of these provisions is to prohibit a firm's directors from obtaining
undue influence by exercising voting rights in shares of the firm owned
by a second corporation. For example, the commercial code specifies
that shares in a corporation owned by a third company (either jointly
among a holding company, firm and subsidiary, or solely by a subsidiary
of that corporation) do not convey voting rights. The Fair Trade Act
also restricts cross ownership of shares in two or more firms if the
effect is to restrict competition in a particular industry.
Foreign access to real estate is strictly controlled through the Alien
Land Acquisition Act. As a result of amendments to the Act adopted in
late 1993, foreign-invested firms may purchase land for business
purposes, including staff housing. Other laws, however, require that
specified minimum ratios of the land be used for the investor's stated
purposes; failure to meet those requirements within a specified time can
result in a heavy tax or a requirement that the undeveloped land be
sold. Although foreign banks and insurance companies have the right to
acquire land through foreclosure, foreign-invested firms are generally
not permitted to purchase land for investment purposes.
PROTECTION OF PROPERTY RIGHTS
Korea's ineffective enforcement of its intellectual property rights laws
was the primary reason that in April 1993 Korea was designated as a
Priority Foreign Country under U.S. trade law. Beginning in February
1993, however, the Korean government announced a series of initiatives
to strengthen enforcement procedures; increase prosecutorial resources
and activities; and amend relevant customs, copyright, and computer
software laws. Rather than initiating action under U.S. trade law, U.S.
government and private sector representatives chose to work with the
Korean government to ensure that these initiatives effectively served
U.S. interests.
Until recently, the Korean government has routinely solicited
proprietary information from potential foreign investors during the
application process. This information was then shared with domestic
trade associations or illicitly made available to local competitors,
ostensibly for technical review. A number of U.S. companies have been
seriously harmed in this way.
The government of Korea has recently pledged to maintain the
confidentiality of all proprietary business information that it obtains
through the regulatory process. The Unfair Competition Prevention Law
was amended in late 1991 to extend protection to trade secrets and
strengthen protection against counterfeiting; infringement is punishable
by fines of up to 30 million won (US$37,500). The law also permits the
filing of civil suits for damages or injunctive relief. In November
1992, foreign investment regulations were amended to prohibit the
referral of investment applications to industry associations or to other
private sector organizations. Authorities also circulated instructions
to working level officials explaining the Korean government's
responsibility and commitment to maintaining the confidentiality of
investment information.
Korean patent law is fairly comprehensive on paper, extensively
protecting most products and technology. A patent may be granted to the
first applicant to file in Korea, notwithstanding proof of development
or international ownership. However, at 15 years calculated from the
date of publication, patent life falls short of the international
standard of 20 years from the date of application. Patent applicants
must request an examination of their application within five years of
filing.
Korea maintains a system for compulsory licensing of patents. If a
patent has not been worked continuously and substantially for a period
of three years, a second party may seek to work the patent by requesting
a non-exclusive license by the patent holder. If no license is granted,
the second party may request arbitration by the patent commissioner.
The patent commissioner may decide to grant a non-exclusive license.
The right of the patent holder may be canceled altogether if the patent
is not continuously worked for two or more years from the date on which
arbitration granted a non-exclusive license. Compulsory licenses may
also be issued by the patent commissioner if the invention is deemed
necessary for the national defense, for the public interest, or for the
protection of a dependent patent. Violators of patent rights are liable
under civil and criminal law.
The Universal Copyright Convention, to which Korea acceded in 1987,
obliges Korea to treat works from participating countries as it does its
own. Copyright protection is generally provided for under the Copyright
Law, but several other laws pertain to non-printed material. Korea's
Copyright Law protects both the economic and moral rights of the author.
Economic rights include the right to produce derivative work, reproduce,
distribute, broadcast, and publicly perform or display material. Moral
rights include the right to claim authorship, maintain identity, and of
release. Copyrights expire 50 years after the author's death and are
derived from the work itself; no registration is required. Copyrights on
performances, recordings, and broadcasts currently expire 20 years after
initial public display. However, the new copyright law amendments,
effective as of July 1, 1994, will extend the protection of neighboring
right to 50 years after initial public display. An impediment to the
effective enforcement of these laws has been the requirement that before
action can be taken against violators, the rights-holder must file a
formal complaint.
In a 1986 bilateral agreement with the U.S., Korea agreed to provide
retroactive protection to all computer software, audio recordings, and
video recordings copyrighted in the United States. The same treatment
was given to printed material copyrighted and published in the United
States within the 10 years prior to 1987. Until 1993, however,
enforcement of the provisions concerning non-printed material was
virtually non-existent. In 1993, the Korean government set up a review
system for licenses that has proved much more effective in enforcing the
claims of legitimate rights-holders.
In 1989, the Computer Program Protection Act (CPPA) was enacted to
extend copyright protection to computer software. Protection is
afforded for a period of 50 years, dating from authorship, and applies
only to computer programs written after the law went into effect (1989).
The 1994 revision of the Copyright Law, effective July 1, recognizes
data base compilations as copyrighted works. The revisions to the CPPA,
effective July 5, 1994, entitle the authors of computer programs to
authorize rentals of their works. Under the act, only civil remedies
are available in case of violations.
Legislation to protect semiconductor mask works was passed in 1991 and
took effect at the beginning of 1994. The law provides some downstream
protection. U.S. industry has expressed continuing concern over the
compulsory licensing provisions of the law. It is uncertain whether
such a law would qualify for reciprocal recognition by the United
States.
The Trademark Law extends protection only if registration has taken
place in Korea. This provision has worked to disadvantage U.S. rights
holders who attempt to enter the market relatively late but discover
that their marks have already been registered by Korean firms. The
U.S.-Korea 1986 bilateral agreement obligates the Korean Industrial
Property Office, to protect under administrative practice U.S.
trademarks not registered in Korea, whether or not they are considered
"well-known." However, the Korean government historically has not
enforced this provision and recently disputed this interpretation of the
bilateral agreement. Trademark infringement is punishable by
imprisonment of up to five years and by a fine of up to 20 million won
(US$25,000). A complaint by the registered trademark holder is not
necessary to initiate prosecution. As in other areas of intellectual
property rights protection, the Korean government began tough,
systematic enforcement of the trademark law only in 1993.
Trademark registration is good for 10 years and renewable in subsequent
10 year periods. To retain validity, trademarks must be used. 1990
revisions to the Trademark Law extended the period of non-use to three
years from the previous period of one year. Other revisions included the
possibility of partial trademark nullification in some cases and
authorization of sale or transfer of trademarks, apart from the sale of
the business.
Korea is a signatory to the World Intellectual Property Organization,
the Universal Copyright Convention, the Budapest Treaty on the
International Recognition of the Deposit of Microorganisms (March 1988),
the Paris Convention for the Protection of Industrial Property (May
1980), and the Patent Cooperation Treaty (August 1984).
REGULATORY SYSTEM: LAWS AND PROCEDURES
Difficult even for Korean firms, the Korean regulatory environment poses
an even greater challenge to foreign firms. Opportunities for
discrimination, inconsistent application, and corruption abound. Laws
and regulations are framed in general terms, and are subject to
different bureaucratic interpretations. Basic concepts of
administrative procedure are not well developed. Mid-level bureaucrats
rely on unpublished ministerial guidelines and unwritten administrative
advice for direction. No formal rule making procedure exists. Proposed
rules are often not published prior to promulgation, or are published
with insufficient time to permit public comment and industry adjustment.
After promulgation, rules are often applied retroactively.
The manner in which Korean standards and regulations are drafted,
promulgated, and implemented has been a long-standing issue with the
United States. In 1981, Korea acceded to the GATT Agreement on
Technical Barriers to Trade (the Standards Code), but implementation has
been slow and not transparent. President Kim has made deregulation one
of the cornerstones of his economic policy. It is hoped that
bureaucratic procedures will be improved and streamlined.
Laws exist that discourage monopolistic practices and unfair
competition, but their practical effect is limited by the long-standing
economic dominance of a few large business conglomerates, called
chaebols. Korea's Monopoly Regulation and Fair Trade Law was amended in
the mid-1980s to specifically address the issue of unwieldy chaebol
growth. Cross-equity investments were banned and equity limits set for
chaebol holdings in joint venture companies. Only drastic legal change,
however, is likely to significantly reduce chaebol economic power.
Chaebol domination of the Korean economy causes some practical business
problems for foreign investors. Small- and medium-sized suppliers, for
example, may be reluctant to deal with foreign firms for fear of
jeopardizing a prized chaebol relationship. Distribution channels may
be blocked by chaebol competitors who own or dominate distribution
channels. And, seeking credit may be complicated by the privileged
relationships competing chaebols enjoy with local banks.
CAPITAL MARKETS AND PORTFOLIO INVESTMENT
In January 1992, Korea's stock market was partially opened to foreign
investors. Still, foreign ownership in a listed company is restricted
to no more than 15 percent in the aggregate. For certain companies in
which foreign ownership existed prior to January 1992, foreigners may
continue to own up to 25 percent. However, purchases of the shares in
two government-chartered companies, the Korea Electric Power Company and
the Pohang Iron and Steel Company, are subject to strict limits. The
government has permitted stock purchases on margin since 1977; however,
transactions must be settled within three business days.
Although Korea does not routinely limit the repatriation of funds, it
reserves the right to do so in exceptional circumstances, such as
situations which may harm its international balance of payments, cause
excessive fluctuations in interest or exchange rates, or threaten the
stability of its domestic financial markets.
As noted above, Korea strictly limits foreign land acquisition and does
not permit portfolio investment in real estate. Foreigners may purchase
land for business purposes and for use as staff housing. Currently,
opening real estate to portfolio investment is not under consideration.
The government exercises tight control over its domestic credit markets,
often with the goal of channeling financing to priority sectors. In
some instances, banks have been carrying non-performing "policy loans"
on their books for years. Credit ceilings on loans to the 30 largest
business conglomerates are now in effect and banks are encouraged to
channel a specified percentage to small- and medium-sized businesses.
In June 1993, the Kim Young Sam administration announced a five-year
financial sector reform program. The program proposed loosening foreign
exchange and capital controls, eliminating government credit schemes,
and continuing the deregulation of interest rates. In keeping with this
proposal, the government in late 1993 announced continued deregulatory
foreign exchange reform to take place beginning October 1, 1993. In
November 1993, controls on interest rates on loans as well as time
deposits with maturities over two years were removed when the second
stage of a four-stage interest rate deregulation program was
implemented. The first stage was implemented in November 1991.
During his election campaign, President Kim said that he would implement
a "real-name" financial system, the purpose of which would be to combat
corruption, since fictitious names were being used by bank account
holders to evade taxes or shelter illicit funds. In August 1993, Kim
held true to his campaign pledge and announced that effective October
12, 1993, false names would no longer be used in financial transactions.
As a result of this change, bank accounts held under false names have
largely been eliminated, although accounts held under borrowed names are
still prevalent.
POLITICAL VIOLENCE
Korea is not prone to political violence in relation to foreign direct
investment. We are unaware of any politically motivated threats of
damage to foreign projects and/or installations of any sort.
Tensions on the Korean Peninsula have remained relatively high due to
the threat from North Korean conventional military forces and the
potential threat of North Korea's nuclear weapons development program.
In a U.S.-DPRK agreement signed in Geneva in October 1994, North Korea
agreed to freeze and eventually dismantle its nuclear weapons program in
return for improved relations with the U.S. and a program to provide
substitute energy in the form of heavy fuel oil and the construction of
light water reactors, which are less subject to use for weapons
development. It is hoped that this program, in conjunction with
improved inter-Korean relations starting in June 1995 with an ROK-DPRK
agreement to provide South Korean rice to the North, will ease the
DPRK's international isolation and reduce tensions on the peninsula.
BILATERAL INVESTMENT AGREEMENTS
The United States has a bilateral Treaty of Friendship, Commerce, and
Navigation with Korea which contains general provisions pertaining to
business relations and investment. Korea also maintains bilateral
investment protection agreements with 26 countries including Germany,
France, the United Kingdom, the Netherlands, Belgium, Switzerland,
Denmark, Hungary, Thailand, Bangladesh, Sri Lanka, Senegal, and Tunisia.
OPIC AND OTHER INVESTMENT INSURANCE PROGRAMS
Since a 1991 determination under the workers rights provisions (Section
23lA) of the Foreign Assistance act, the Overseas Private Investment
Corporation (OPIC) has refrained from writing policies under its
insurance programs for companies making new investments in Korea.
Coverage issued prior to this determination is still in force. Lack of
OPIC coverage is not regarded as a serious obstacle to U.S. investors,
since OPIC has never had to cover claims for expropriation, political
risk or currency inconvertibility.
Korea has been a member of the Multilateral Investment Guarantee Agency
since November 1987.
LABOR
Korea has a highly educated and hard-working work force. Although
labor-management relations can be contentious, they have improved in the
past five years with wages having increased more than two and a half
times over 1987 levels. Between 1987 and 1989, labor disputes numbered
in the thousands. There were 234 recorded in 1991, 235 in 1992, and 144
in 1993. Acts of violence are on the decline, but labor relations
remain highly emotional. Labor groups are quick to escalate disputes
and often resort to work slowdowns, abuse of leave, and disruption of
business by holding rallies, wearing casual clothes, or displaying
protest signs in the work environment. These tactics fall outside the
scope of Korea's labor law and usually do not lead to confrontations
with authorities. Sit-in strikes are common, and workers have on
occasion occupied company offices or factories.
Foreign-invested firms may be more vulnerable to labor disturbances than
wholly Korean owned enterprises. Employees at foreign-invested firms
tend to make greater demands on management. Disputes with foreign firms
have, at times, taken on an emotional, xenophobic tone in which
employees have made verbal threats against expatriate managers.
Although actions by striking employees may be illegal, unless violence
occurs, police are reluctant to enforce the law and arrest unionists at
foreign firms. Labor is quick to get its side of the story into the
local papers, often portraying the dispute as an issue of nationalism.
Since economic growth has slowed and a number of foreign firms have or
are planning to withdraw from Korea, labor is increasingly concerned
about reductions in force and issues of severance pay. Mechanisms for
peacefully resolving labor disputes remain inadequate. For some firms
such as banks and broadcasting companies whose activities are considered
to perform public services, the government has ordered binding
arbitration to solve labor disputes. In 1993, the government invoked
binding arbitration to resolve a labor dispute involving a U.S. bank,
the first time it had done so in the case of a foreign-owned firm.
In December 1991, following its admission to the United Nations, Korea
joined the International Labor Organization (ILO). It has not ratified,
however, the basic ILO conventions on workers rights (Convention No. 87
on the Freedom of Association, Convention No. 98 on the Right to
Organize and Collective Bargaining, and Convention No. 151 on public
service employees' right to organize). A number of international and
domestic labor groups have filed complaints against the Korean
government with the ILO's Committee on Freedom of Association, which
issued a report critical of Korean labor laws and practices and
recommended that Korea amend its Trade Union Law to allow workers to
form plural trade unions of their choice without restriction, to allow
public servants and teachers the right to organize trade unions and
engage in collective bargaining, to repeal the ban on third-party
intervention in the settlement of labor disputes, and to facilitate the
release of a number of imprisoned trade unionists.
FOREIGN/FREE TRADE ZONES
Although they have diminished in importance, Korea maintains two free
export zones at Masan and Iri (on the southern and western coasts) for
the exclusive use of foreign-invested firms to import raw materials and
semi-finished goods in-bond and duty-free for re-export as finished
goods. Other tax incentives are also available (see above). The zones
have good water and electricity supply, storage facilities, stevedoring
and packing services, machinery repair, telecommunications, and other
support services. Land for plant and warehousing is available at
relatively low prices.
A new industrial park, intended for the exclusive use of foreign-
invested high-technology firms, is being planned for Asan, a city about
two hours southwest of Seoul. It will provide essentially the same
services as do Masan and Iri and is scheduled for completion in 1996.
CAPITAL OUTLOW POLICY
Since liberalization in 1986, Korean foreign direct investment abroad
has been growing at an average annual rate of over 38 percent. By 1992,
it totaled more than $4.5 billion. Much of this has been recent
investment has gone to China and Southeast Asia in labor intensive
industries such as footwear and component assembly. Southeast Asia has
replaced the United States and Canada as the largest regional recipient
of Korean investment. Since the establishment of formal diplomatic
relations in 1992, Korean investors have been particularly active in
China's northern provinces, which have sizable ethnic Korean
populations.
On April 1, 1993, the Ministry of Finance announced several measures to
liberalize restrictions on overseas portfolio investments. Short-term
finance companies and pension funds may now invest in foreign stocks and
bonds. Korean industrial firms with trading volumes exceeding US$100
million may purchase up to use 100 million won in foreign securities.
And, individual investors may make indirect investments in foreign
securities by purchasing beneficiary certificates issued by one of three
investment trust companies. Prior to April 1993, only securities
companies, investment trust companies, and insurance firms were
permitted to invest in foreign securities. Portfolio investment in
foreign real estate is still prohibited.
MAJOR FOREIGN INVESTORS
The following is a list of major U.S. investments in Korea. For
information on other countries' investments, please refer to the section
on investment statistics.
Top 10 U.S. Investors in Korea and their Products:
Procter&Gamble Far East.: Household Products
Paper Products
E.I.Dupont De Nemours & Co: Photomasks for Semiconductors
Engineering Plastics
Titanium Dioxide
Paints
Ford Motor Company: Autos and Auto Parts
Caltex (Overseas) Ltd: Petroleum Refining
Bank of America NT: Banking
Carrier Corp.: Air Conditioners
H.J. Heinz Co.: Foods & Feeds
General Motors Corp.: Auto Parts
Caltex Petroleum Corp.: Petroleum Refining
Dupont Laboratories, Inc.: Photomasks for Semiconductor
The Comprehensive Assistance Center for foreign investment is a one-stop
shop for foreign investment in Korea and recently opened in the Myong-
dong area of Seoul. This office provides Korean government publications
on foreign investment as well as provides a consulting service for
foreigners. Contact: Mr. MOON, Jong Chul; Comprehensive Assistance
Center for Foreign Investment, 3rd Floor, Industrial Bank of Korea
Building 50, Eulji-ro 2-ka, Choong-ku, Seoul. Tel. 011-82-2-319-7314/5;
Fax 011-82-2-319-7318.
CHAPTER VIII. TRADE AND PROJECT FINANCING
BRIEF DESCRIPTION OF THE BANKING SYSTEM
The banking system in Korea comprises 15 commercial banks, 10 regional
banks (one in each of Korea's 10 provinces), 52 foreign bank branches,
23 foreign representative offices, and 5 "specialized" banks. Directed
and supervised by the government, the specialized banks were originally
created in the 1960s to provide funds to particular sectors where credit
was insufficient, but have since expanded into commercial banking.
Kookmin Bank (new name for the Citizens National Bank), formerly a
specialzed bank, became a commercial bank as of December 31, 1994, as
the Korean government abolished the Citizens National Bank Act in light
of privatization. The total assets of nationwide commercial banks (less
acceptances and guarantees) accounted to 185 trillion won (US$ 243
billion) as of end of 1994.
FOREIGN EXCHANGE CONTROLS AFFECTING TRADING
Proposed foreign remittances must be approved at the time investment
approval is sought. Once approved, remittances are guaranteed. When
higher royalties or payments over an extended period of time are
proposed as part of a technology licensing agreement, both the agreement
and projected royalties must be approved by a foreign exchange bank or
the Ministry of Finance and Economy. In most cases approval is
automatic.
In 1991, the Korean government replaced its "positive" system of foreign
exchange controls with a "negative" system, under which transactions are
allowed to take place if not specifically prohibited. Since then, the
government has introduced a number of measures to further ease foreign
exchange restrictions. These include steps to ease the underlying
documentation requirements for forward foreign exchange transactions,
raise the limits on the foreign exchange positions of banks, and allow
certain transactions to be paid in Korean won.
In its most recent foreign exchange reform plan announced in December
1994, the government outlined a five-year program to ease restrictions
on both current account and capital account transactions. According to
the plan, in 1995 import payment terms on a deferred basis will be
extended to 180 days (up from 150 days) in the case of imports intended
for re-export, and up to 90 days in the case of imports for domestic
consumption, up from the current term of 60 days. The government also
plans to reduce the documentation requirements for overseas payments,
and to eliminate the requirements totally for payments of less than
$5,000. It also plans to ease the restrictions on offshore commercial
borrowing: beginning in 1995, the government's reform plan calls for
widening the category of companies permitted to borrow offshore to
include firms engaged in infrastructure projects, small- and medium-
sized companies, and Korean-owned firms designated as high technology.
Currently, only foreign-invested firms designated to provide high
technology goods and services are permitted to borrow offshore. In any
event, borrowed funds must be used to import machinery and equipment and
are subject to specified limits. The government plans to eliminate most
restrictions on offshore borrowing by 1999.
Conversion of the national currency, the won, into foreign currencies
for international transactions such as the import of goods and services
is possible through a foreign exchange bank. Korean residents may now
remit up to $50,000 or its equivalent for donation to a foreign charity.
Also, a Korean traveler may purchase up to $10,000 to meet the expense
of foreign travel, plus an additional $10,000 for overseas stays longer
than one month. Korean residents are now authorized to purchase foreign
real estate of up to $300,000 per individual. Limits on purchases of
foreign securities have also been eased: Korean companies may now
purchase up to one billion won ($1,250,000), and individuals may buy up
to 500 million won ($625,000). The government eliminated limits on
foreign security purchases by institutional investors. In addition,
Korean residents are now permitted to hold deposits abroad of up to
$30,000 for individuals and $1 million for corporations.
A foreign firm that invests under the terms of the Foreign Capital
Inducement Act (FCIA) is guaranteed unlimited remittances as long as
foreign exchange bank confirms its ability to undertake the
transactions. An audited financial statement must be made available to
the foreign exchange bank. To withdraw capital, a stock valuation
report issued by a recognized securities company or the Korean Appraisal
Board must also be presented. Foreign companies not investing under the
FCIA must repatriate funds through authorized foreign exchange banks
after obtaining government approval.
Although Korea does not routinely limit the repatriation of funds, it
reserves the right to do so in exceptional circumstances, such as
situations which may harm its international balance of payments, cause
excessive fluctuations in interest or exchange rates, or threaten the
stability of its domestic financial markets.
The government recently announced simplified procedures for importing
high technology. Under new rules that went into effect on April 1,
1995, most contracts for importing high technology under license no
longer need to be reported in advance to the relevant ministry.
However, contracts with an effective period of at least one year or
more, or those whose repayment period is one year or more and which
involve technology related to equipment and parts used in the aerospace,
nuclear, or defense industries continue to be subject to the prior
notification requirement.
GENERAL FINANCING AVAILABILITY
The government exercises tight control over its domestic credit markets,
often with the goal of channeling funds to priority sectors. Beginning
in the 1970s, the government provided funds, called "policy loans,"
carrying subsidized interest rates to small business, the agriculture
sector, and other priority segments of the economy. In addition, credit
ceilings on loans to the 30 largest business conglomerates are in
effect, and banks are encouraged to channel a percentage of incremental
loans to small- and medium-sized businesses. Distortions in credit
allocation due to government controls have resulted in high levels of
non-performing loans in the banking system; according to official
statistics, such loans comprise about two percent of total bank loans),
although industry estimates place the percentage as high as ten percent.
Medium and short term credit is available from Korean as well as foreign
banks, and through the issuance of debentures. Credit, however, is
often in short supply, and foreign firms much compete with domestic
companies, which generally have better access to local funding. Foreign
banks also operate under government restrictions which limit their
access to won funding and therefore their ability to fill the credit
needs of their customers. Debentures are an alternate, albeit expensive
source of financing. Long term debt is available from the Korea
Development Bank and the Korea Long Term Credit Bank, but only for high
priority industries and funding is in short supply. Offshore loans are
generally not permitted. As noted above, however, certain categories of
firms including foreign-invested high tech companies may be eligible to
borrow funds offshore in order to finance imports of needed machinery
and equipment.
HOW TO FINANCE EXPORTS AND METHODS OF PAYMENT
For the reasons discussed above, the Korean financial system is
perennially hard-pressed to meet the demand for Korean won. Foreign
companies in a start-up operation with a Korean partner often invest
capital for the venture while their partner makes an investment in kind,
i.e., land or facilities, as the Korean equity. Joint venture companies
and foreign firms usually work with branches of foreign banks that have
special albeit limited funds designated for local currency financing of
such enterprises.
Potential sources of financing include the foreign and domestic
commercial banks, regional banks and specialized banks including the
Korea Development Bank (under the jurisdiction of the Ministry of
Finance and Economy, serving as an intermediary for channeling
government funds and foreign loans to industry), the Korea Long-Term
Credit Bank, the National Agricultural Cooperative Federation which
emphasizes service to the agricultural sector, the Industrial Bank of
Korea, Korea Housing Bank, and the Export-Import Bank of Korea.
For the most part, counter trade requirements are confined to the
defense industry sector. A company can freely repatriate capital and
profits if the Ministry of Finance and Economy (MOE) has approved its
investment application outlining the company's intent to do so. The
embassy is not aware of any problems or complaints from U.S. companies
operating in Korea in this regard.
There are three principal methods of importing with Korea's own foreign
exchange: (1) Letters of Credit, (2) Documents against Acceptance (D/A)
and (3) Documents against Payment (D/P). D/A is a form of extended
credit in which the importer makes no payment for the goods until the
date called for in the credit; however, they may clear the goods from
customs prior to payment. D/P is the same as D/A except that the
importer cannot clear the goods from customs prior to payment. The
methods used under Korea's foreign exchange control regulations follow
universal commercial practice.
Imports on deferred payment terms D/A and usance L/C terms of payments
are allowed only for (1) commodities that are not subject to specific
commercial duties having tariff rate of 10 percent or less, and (2)
crude oil, light oil, and heavy oil. Deferred payment terms are valid
only up to 60 days (120 days for export use). The only exceptions to
this limit are 30 days for procurement from nearby sources requiring
sailing times of not more than 10 days (i.e. Japan, Hong Kong, Taiwan,
and the Philippines).
Types of Available Export Financing and Insurance
Since a 1991 determination under the workers rights provisions (Section
231A) of the Foreign Assistance Act, the Overseas Private Investment
Corporation (OPIC) has refrained from writing policies under its
insurance programs for companies making new investments in Korea.
Coverage issued prior to this determination is still in force. As OPIC
has never had to cover claims for expropriation, political risk or
currency inconvertibility in Korea, lack of OPIC coverage is not
regarded as a serious obstacle to U.S. investments. Likewise, although
loans and guarantees are technically available from the Export-Import
Bank of the United States, they are not common. Since 1987, Korea has
been a member of the Multilateral Investment Guarantee Agency of the
World Bank Group.
MAJOR BANKS IN SEOUL:
American Banks in Seoul:
American Express Bank, LTD. (Seoul Branch): 17th Floor,
Kwangwhamoon Bldg., 64-8 Taipyungro 1-Ka, Chung-ku, Seoul.
Mailing address: KPO Box 1390, Seoul. Cable address: "AMBANK" SEOUL.
Telex: K24484. Tel: 399-2929, Fax: 399-2967
Bankers Trust Company (Seoul Branch): 10th Floor, 1 Center Bldg., #91-1,
Sokong-dong, Chung-ku, Seoul. Mailing address: CPO Box 7480, Seoul.
Cable address: "BANTRUSSEL". Telex K26390.
Tel: 3112-603/15, Fax: 756-2648
Bank of America (Seoul Branch): Hyonam Bldg. 9th Floor, #1 Jangkyo-
dong, Chungku, Seoul. Mailing address: CPO Box 3026, Seoul. Cable
address: "BANKAMERICA" SEOUL. Telex: K23294.
Tel: 729-4401/6, Fax: 738-0624
Chase Manhattan (Seoul Branch): #34-35 Jung dong, Chung-ku, Seoul.
Mailing address: CPO Box 2249, Seoul. Cable Adress: "CHAMANBANK" SEOUL.
Telex: K23249.
Tel: 7585-114, 7585-312/315 Fax: 758-5423
Chemical Bank (Seoul Branch). 11th Floor, Daewoo Bldg., #541
Namdaemoonro 5-ka, Chung-ku, Seoul. Mailing address: CPO Box 1240,
Seoul. Cable address: "CHEMICAL" SEOUL. Telex:K23736. Tel: 771-9922,
Fax: 318-1849
Citibank, N.A. (Seoul Branch): #89-29 Shinmoonro 2-ka,
Chongro-ku, Seoul. Mailing address: KPO Box 749, Seoul.
Cable address: "CITIBANK" Seoul. Telex: K23293.
Tel: 731-1114, 722-7800-0 Fax: 720-9712
First National Bank of Chicago (Seoul Branch): Oriental Chemical Bldg.
15th Floor, #50, Sodong-dong, Chung-ku, Seoul. Mailing address: CPO Box
7239, Seoul. Cable address: "FIRSTCHICAGO" SEOUL. Telex: K27534. Tel:
316-9700, Fax: 753-7917
Morgan Guarantee Trust Company of N.Y. (Seoul Branch): 22th Floor, Kobo
Bldg., #1-1, 1-ka, Chongro, Chongro-ku, Seoul. Mailing adress: CPO Box
7212, Seoul. Cable address: "MORGANBANK". Tel: 732-2300, Fax: 734-0148
Korean Banks in Seoul
Hanil Bank: 130 Namdaemoonro 2-ka, Choong-ku, Seoul.
Telephone: 752-9660 Fax: 753-7322
Korea First Bank: 100 Gongpyoung-dong, Chongno-ku, Seoul. Telephone:
736-8055 Fax: 736-8092
Chohung Bank: 14 Namdaemoonro 1-ka, Choong-ku, Seoul.
Telephone: 739-3493 Fax: 723-6475
The Commercial Bank of Korea: 111-1 Namdaemoonro 2-ka, Choong-ku,
Seoul. Telephone: 752-2141 Fax: 755-8039
Seoul Bank: 10-1 Namdaemoonro 2-ka, Choong-ku, Seoul.
Telephone: 3709-5618 Fax: 775-4983
Shinhan Bank: 120 Taepyoungro 2-ka, Choong-ku, Seoul. Telephone: 774-
7674 Fax: 774-7013
Koram Bank: 1 Gongpyoung-dong, Chongro-gu, Seoul.
Telephone: 731-8522 Fax:731-8939
Donghwa Bank: 66 Juksun-dong, Chongro-gu, Seoul.
Telephone: 733-8815 Fax: 720-7326
Dongnam Bank: 149 Seorin-dong, Chongro-gu, Seoul.
Telephone: 723-4112 Fax: 723-8503
Daedong Bank: 51-9 Pil-dong, Choong-ku, Seoul.
Telephone: 268-8568 Fax: 272-3675
Korea Exchange Bank: 181 Ulchiro 2-ka, Choong-ku, Seoul. Telephone:
729-8911 Fax: 754-9817
Hana Bank: 101-1 Ulchiro 1-ka, Choong-ku, Seoul.
Telephone: 775-6728 Fax: 756-6358
Boram Bank: 9-10 Ulchiro 2-ka, Choong-ku, Seoul.
Telephone: 771-5300 Fax: 757-0056
Peace Bank of Korea: 823-21 Yoksam-dong, Kangnam-ku, Seoul. Telephone:
222-2224 Fax: 564-8464
Kookmin Bank: 9-1 Namdaemoonro 2-ka, Choong-ku, Seoul.
Telephone: 317-2114 Fax: 776-5637
CHAPTER IX. BUSINESS TRAVEL
BUSINESS CUSTOMS
It is imperative that any American doing business in Korea realize that
Seoul is not Los Angeles. Every year Korea becomes more and more
modern, but it is important to recognize that modern does not equal
Western. Koreans will not expect you to be an expert on the nuances of
their culture, but they will appreciate a show of interest in matters
that are important to them.
For Koreans, relationships are all important; "cold calls" don't work --
introductions are crucial! Koreans want to do business with people with
whom they have formed a personal connection.
The exchange of business cards is very important and a means by which
Koreans learn about the name, position and status of the other person.
Always have your (preferably bilingual) business card at the ready and
treat the exchange and your counterpart's card with some respect. (It is
custom to receive and present items with both hands.)
Negotiating style is particularly important. Koreans can prove subtle
and effective negotiators, and a commitment to a rigid negotiating tact
early on may work to the American's disadvantage. Your offer may
include the best price, technology and profit potential but still get
turned downed because the Korean customer doesn't like your style.
An important point must be kept in mind concerning the nature of
reaching agreement with a Korean firm. Westerners attach great
importance to a written contract which specifies each detail of the
business relationship. Koreans, on the other hand, value a contract as
a loosely structured consensus statement that broadly defines what has
been negotiated, but leaves sufficient room to permit flexibility and
adjustment. The Korean Government has attempted to address this dual
perception by formulating "model" contracts for licensing technology and
other arrangements. Both parties must be assured the obligations
spelled out in a negotiated contract are fully understood.
Most Koreans have three names. These names usually follow the Chinese
pattern of a surname followed by two given names. In addressing
Koreans, foreigners should stick to the use of surnames (Mr. Kim; Ms.
Lee), using formal titles if possible (Dr. Yoo; Director Song).
TRAVEL ADVISORY
Travelers with questions or concerns about traveling to Korea should
check with the U.S. Department of State at Travel Advisory Service, 2201
C Street, N.W., Washington, D.C. 20520. For recorded travel advisory
information contact tel. 202-647-5225. For faxed travel advisory
information sent to your fax machine, contact tel. 202-647-3000.
Although Korea has not yet made its mark as a tourist destination, Seoul
has long been a well established business center. As an Asian business
center, Seoul has the selection of deluxe hotels one would expect.
These hotels cater to the needs of busy professionals with business
centers offering secretarial services, translation and interpretation,
courier service, printing and photocopying, telecommunications and
equipment rental.
It is relatively easy to get to Korea from the U.S. Flying time ranges
from 10-14 hours, depending on point of departure and season. Kimpo
International Airport, located 10 miles southwest of downtown Seoul, is
the primary gateway to South Korea. For information on Kimpo
operations, English speakers can telephone in Seoul, 660-2471/2 (foreign
airline terminal) or 660-2481/2 (Korean-owned airlines' international
terminal). Korean speakers can dial in Seoul, 660-2200 or 660-2114.
VISAS
Visas are not required for American visitors in transit through Korea,
or for tourists who do not remain in Korea for more than 15 days and
hold confirmed outbound tickets. However, since there are no extensions
and a substantial penalty at departure for those who exceed 15 days, it
is a good idea to get a visa from a Korean embassy or consulate prior to
coming to Korea, if you think your stay might approach two weeks.
On a business visa visitors may stay for up to 90 days. A business visa
requires a letter from an American company stating the purpose of travel
and photograph; no written invitation from a Korean firm is required.
Travelers wishing to exit and return to Korea within the period
specified by their visas need simply obtain a re-entry permit when
departing.
A long-term resident visa (beyond 90 days) is more difficult to obtain
than the business visa. Application must be made to the Ministry of
Justice from outside Korea. It requires considerable documentation,
including a letter of invitation from a Korean company and contractual
evidence of legal employment. Starting July 1, 1994, however, the
Justice Ministry will extend the long-term stay for foreigners from
three years to four years. They have also simplified the visa renewal
process, eliminating the 15-day, out-of-the-country wait period.
Renewals will be available at overseas Korean diplomatic missions by
filing out applications before leaving the U.S.
Also starting July 1, 1994, 43 automatic passport-reading machines have
been installed at Kimpo International Airport. This will help ease the
entry and exit procedures for foreigners, with only random checks to be
conducted.
For help with all matters pertaining to visas during your stay in Korea,
contact the nearest of the nation's 25 immigration offices under the
Korean Ministry of Justice in Seoul, Tel: 720-2817/2820 or 776-8984.
The ministry has recently announced improvements in services for non-
Korean speaking foreigners, including a new recorded information service
(dial 655-2103/6 and push #3 for information in English on alien
registration).
Upon arrival in Korea an immigration card and customs declaration (given
to you on the plane) should be completed before reaching the first floor
arrival processing area. No vaccination certificate is required for
entrance under Korean quarantine regulations. In clearing customs,
gifts with a value of up to $400 (which can include liquor up to one
liter (33.8 fl. oz.), 2 ounces of perfume and 200 cigarettes) may be
brought in duty-free by non-residents. Currency in excess of $10,000
must be declared.
For international departure from Kimpo there are two terminals: terminal
1 for 16 foreign carriers; and terminal 2 for the two Korean airlines
and 7 foreign ones. At check-in a passenger service charge of Won 8,000
($10.53) must be paid. Also, be aware that the Cultural Preservation
Properties Law prohibits the export of "significant" Korean cultural
properties.
Non-residents must declare in writing to Korean Customs all foreign
currency with a value in excess of $10,000 that they carry into or
acquire in Korea. This rule is enforced. When buying won in Korea be
sure to keep the receipt(s) because re-exchange is allowed up to the
amount specified; without receipts only $500 worth of won can be re-
converted to dollars. A maximum of $5,000 (about won 4,400,000) can be
exported. Americans living in Korea for over six months can convert up
to $5,000 into won at one time. For shorter stays the maximum is $500
at a time.
Visitors are allowed to bring in duty-free gifts with a value of up to
$100. For travelers within this limit no written declaration is
required. Additional gifts and other items which will remain in the
U.S. are dutied at a rate of 10% up to $1,000, and at variable rates
thereafter.
Returning U.S. residents can bring in articles totalling $400 in value
duty-free when the articles are for personal use. After the $400
exemption, the next $1,000 worth of personal or gift items are dutied at
a flat rate of 10%. Beyond $1,400, various duty rates apply according
to the item. Both residents and non-residents are limited to one carton
of cigarettes, 100 cigars and one liter of alcoholic beverage or 2
ounces of perfume for duty-free import. The duty-free limit is $50 for
bona fide gifts mailed to the U.S. All mail shipments must contain a
written declaration.
Foreign-made personal articles are dutiable each time they are brought
into the U.S., unless one can prove prior possession. Articles bought
in "duty free" shops in foreign countries are subject to U.S. customs
duty. Articles purchased in U.S. "duty free" shops are also subject to
U.S. duties if they are brought back into the U.S.
Visiting Americans should be aware of possible trademark and copyright
violations when purchasing articles in Korea. Makes such as Couch,
Reebok, LA Gear, Gucci, Polo, Rolex and Members Only, and computer
software and games are often counterfeit. Due to the high potential for
counterfeiting, items bearing the above-named trademarks (and several
others) cannot be legally mailed into the U.S. By attempting to take
counterfeit goods through U.S. Customs, one runs the risk of having them
confiscated. Possession of significant amounts of counterfeit goods can
lead to criminal prosecution. If you have any questions, contact the
U.S. Customs office at the Embassy in Seoul at 397-4644.
HOLIDAYS 1996
January 1 & 2: New Year Holidays
February 18,19 & 20: Lunar New Year Days
March 1: Independence Movement Day
April 5: Arbor Day
May 5: Children's Day
May 24: Buddha's Birthday
June 6: Memorial Day
July 17: Constitution Day
August 15: Independence Day
September 26, 27 & 28: Korean Thanksgiving Days
October 3: National Foundation Day
December 25: Christmas Day
Business infrastructure (e.g. transportation, language, communications,
housing, health, food)
When visiting Korea on business it is best to reserve your room well in
advance. This is doubly true for the last weeks in April and much of
October. Further, it is a good idea to confirm your hotel reservation
and any special requests by fax. Call the Korea National Tourism
Corporation at 011-82-2-757-0086 and ask for an English assistant for
help in finding a hotel outside of Seoul. By faxing the Seoul Tourist
Association on 011-82-2-757-9756 one can request a comprehensive listing
of Seoul hotels, inns and hostels.
Tipping is not customary, but a 10% service fee is charged at most
hotels, as is a 10% Value Added Tax. Many of the hotels offer
attractive corporate discounts, but they are usually not available if
you book through a travel agent. Finally, participants in official
programs (such as trade shows, "matchmakers" and other official trade
missions) sponsored by the Foreign Commercial Service of the American
Embassy or other entities of the U.S. government can often be accorded
the "Embassy rate" at certain hotels.
The public transportation system is very well organized. With timely
subways and city buses that service the whole city, the only real
problem is the traffic. The seemingly endless rush-hour traffic can be
a major hinderance, so early preparation, as well as lots of patience,
is required.
Thanks to the new non-stop limousine bus service commissioned by the
government and operated by Korean Air, travel to the major hotels is
quite easy. The fare is won 3,500 ($4.50), one-way and won 2,000 for
ages between 6-12. As an added convenience the buses are equipped with
pay phones and tourist information.
Seoul boasts a world-class trade resource known as the Korea World Trade
Center (KWTC). Included at this site are the Trade Tower, the Korea
Exhibition Center (KOEX), the City Air Terminal, a convention center and
the Seoul Intercontinental Hotel.
Most private office are open from 8:30 a.m. to 6:00 p.m. weekdays and
from 9:00 a.m. to 1:00 p.m. on Saturdays. Korean Government offices
keep similar hours, except for a 5:00 p.m. closing from November through
February. Banking hours are from 9:30 a.m. to 4:30 p.m. weekdays and
9:30 a.m. to 1:30 p.m. Saturdays.
The U.S. Embassy is open from 8:30 a.m. to 5:00 p.m. weekdays and closed
on Saturdays and Sundays.
CHAPTER X. APPENDICES
ECONOMIC/TRADE & INVESTMENT DATA
Appendix A: Country Data
- Population: 44.5 million (1994)
- Population growth rate: 0.9 percent
- Religions: Buddhist (28%); Christian (24%); Other (4%);
No affiliation (44%); strong confucian traditions.
- Government system: Representative democracy with a populary-elected
President, who is Chief of State and Head of Government, and a
unicameral National Assembly.
- Languages: Korean, with English widely taught in schools.
- Work Week: Monday to Saturday; Average work week of 47.5
hours.
Appendix B: Domestic Economy
(In million U.S. Dollars unless otherwise noted)
1994 1995 1996
GDP 379.5 451.6 501.3
GDP growth rate (1990 prices) 8.4 8.7 6.5
GDP per capita (USD) 8,528.0 10,058.0 11,066.0
Government Spending as % of GDP 17.3 17.2 17.8
Inflation rate 6.2 5.2 5.4
Foreign Exchange Reserves 25,679.0 31,000.0 35,000.0
Average Exchange Rate USD 1 803.4 765.0 760.5
Foreign Debt 57,268.0 65,000.0 72,000.0
Debt Service Ratio 9.3 10.5 10.8
U.S. Mil./Econ. Asst. 0.0 0.0 0.0
Appendix C: Trade
Total ROK Exports 96,013 124,820 136,050
Total ROK Imports 102,348 135,100 143,180
ROK Exports to U.S. 20,550 23,632 25,640
ROK Imports from U.S. 21,580 30,200 32,600
U.S. Share of ROK Imports 21.1 22.4 22.7
(percentage)
Appendix D: Foreign Direct Investment Statistics
Table I: SUMMARY OF FOREIGN EQUITY INVESTMENT NOTIFICATIONS
(US$ millions)
New/Additional Cumulative Approvals
1962-66 47.4 (39) 47.4 (42)
1967-71 218.6 (350) 226.0 (392)
1972-76 879.4 (851) 1,145.4 (1,243)
1977-81 720.6 (244) 1,866.0 (1,487)
1982-86 1,767.7 (565) 3,633.7 (2,052)
1987 1,060.2 (363) 4,693.9 (2,415)
1988 1,282.7 (342) 5,976.6 (2,757)
1989 1,090.3 (336) 7,066.9 (3,093)
1990 802.5 (295) 7,869.4 (3,399)
1991 1,396.0 (286) 9,265.5 (3,696)
1992 894.5 (233) 10,163.4 (3,905)
1993 1,044.3 (274) 11,208.5 (4,178)
1994 1,316.5 (414) 12,525.1 (4,592)
Notes:
- On an approval or notification acceptance basis.
- Figures in parenthesis indicate number of new projects.
Source: The Ministry of Finance and Economy (MOFE).
Table 2: NOTIFICATIONS/APPROVALS OF FOREIGN EQUITY INVESTMENT
BY MAJOR COUNTRIES, 1962-94 (US$ million)
Total U.S. Japan EC/EU Others
1962-76 1,145.4 255.3 725.1 58.7 106.3
(1,266) (188) (985) (35) (58)
1977-81 720.6 235.7 300.9 64.2 119.8
(251) (67) (132) (26) (26)
1982-86 1,767.7 581.6 876.2 117.7 192.2
(579) (168) (276) (58) (77)
1987 1,063.3 255.1 497.0 149.6 161.6
(372) (93) (206) (31) (42)
1988 1,282.7 284.4 696.2 217.0 85.1
(352) (104) (177) (45) (26)
1989 1,090.3 328.8 461.5 160.1 139.9
(349) (97) (145) (59) (48)
1990 802.5 317.5 235.8 177.9 71.3
(306) (84) (145) (39) (38)
1991 1,396.0 296.3 266.2 733.3 100.3
(297) (86) (112) (51) (48)
1992 894.5 379.2 155.2 231.6 128.5
(233) (70) (72) (42) (49)
1993 1,044.3 340.7 285.9 295.3 122.4
(274) (69) (85) (42) (78)
1994 1,316.5 310.9 424.4 226.7 354.5
(414) (115) (132) (50) (117)
TOTAL 12,525.1 3,570.1 4,894.1 2,443.3 1,617.6
(4,592) (1,139) (2,470) (480) (503)
Notes:
- On an approval or notification acceptance basis.
- Figures in parenthesis indicate number of new projects.
Source: The Ministry of Finance and Economy (MOFE).
Table 3: NOTIFICATIONS AND APPROVALS OF FOREIGN EQUITY INVESTMENT BY
INDUSTRY, 1993-94 (US$ millions)
Cumulative 1962 Thru 1994 1993 1994
Agriculture/Fishery 24.3 (82) 0.1 (1) --
Agriculture 16.4 (45) 0.1 (1) --
Fishery 7.9 (37) -- --
Mining 17.9 (45) -- 0.3 (1)
Manufacturing 7,795.9 (3,098) 526.8 (80) 401.7 (136)
Food Processing 489.7 (188) 39.4 (4) 17.8 (13)
Textiles/Clothing 317.5 (263) 4.6 (6) 6.1 (14)
Wood/Paper 168.9 (65) 1.6 (3) 7.2 (6)
Chemicals 1,965.4 (401) 241.2 (13) 106.9 (9)
Fertilizers 50.0 (7) 1.2 (-) --
Pharmaceuticals 412.3 (90) 22.7 (1) 38.0 (5)
Petroleum 683.2 (16) 20.7 (-) 8.2 (3)
Ceramics 206.3 (90) 29.1 (1) 27.7 (3)
Metals 226.7 (205) 15.1 (4) 7.5 (9)
Machinery 727.7 (588) 49.8 (28) 48.7 (43)
Electronics 1,502.7 (642) 45.2 (8) 63.1 (14)
Transport Equipment 918.4 (153) 44.1 (4) 66.2 (10)
Others 127.1 (390) 12.2 (8) 4.3 (7)
Services 4,687.1(1,484) 517.3 (192) 914.5 (277)
Electricity & Gas 26.0 (1) 26.0 (1) --
Construction 64.8 (20) 1.1 (2) 6.8 (5)
Wholesale/Retail 150.7 (73) 63.5 (8) 21.7 (18)
Foreign Trade 444.4 (640) 92.2 (110) 101.4 (130)
Restaurants 70.2 (64) 35.1 (11) 4.3 (14)
Hotels 2,166.2 (95) 102.7 (4) 293.1 (9)
Transport/Warehouse 59.2 (65) 0.6 (4) 8.1 (17)
Banking 977.0 (108) 57.0 (6) 293.8 (9)
Insurance 202.1 (15) 8.7 (1) 8.0 (-)
Others 526.5 (403) 156.5 (46) 151.4 (74)
TOTAL 12,525.1 (4,709) 1,044.3 (273) 1,316.5 (414)
Notes:
- On an approval or notification acceptance basis.
- Figures in parenthesis indicate number of new projects.
Source: The Ministry of Finance and Economy (MOFE).
APPENDIX E: US AND COUNTRY CONTACTS
NON-US GOVERNMENT CONTACTS
Mr. Hak-Do Kim
Commercial Attache
Embassy of the Republic of Korea
2450 Massachusetts Ave., NW
Washington DC 20008
Tel. 202-939-5670, Fax. 202-939-5669
Mr. Young-Soo Rhee, Manager
Korea Foreign Trade Association (KFTA)
1800 K Street, NW Suite 700
Washington, DC 20006
Tel. 202-828-4400, Fax. 202-828-4404
Mr. Yoon Hong Choi, Director
Korea Trade Center (KOTRA)
1129 20th Street, NW #410
Washington, DC 20036
Tel. 202-857-7929/21, Fax. 202-857-7923
US GOVERNMENT CONTACTS
Jeffrey Donius/William Golike (policy)
Dan Duvall (counselling)
Desk Officer for Korea
US Department of Commerce
14th and Constitution Avenue, NW
Washington, DC 20230
Tel. 202-482-4390, Fax. 202-482-3316
Ann Kambara/Dan Hutchens, Desk Officer for Korea
US Department of State
2201 C Street, N.W
Washington DC 20520
Tel. 202-647-7717, Fax. 202-647-7350.
Mr. Todd Schneider, International Economist
Office of Asian and Near East Nations
U.S. Department of the Treasury
1500 Pennsylvania Ave., NW
Rm 5221
Washington, DC 20220
Tel. 202-622-0335, Fax. 202-622-0349
Export Counseling Division
Office of Export Services
Bureau of Export Administration
U.S. Department of Commerce
14th & Constitution Ave., NW
Rm 1099D
Tel. 202-482-4811, Fax. 202-482-3617
Christina Lund
Director for Korean Affairs
Office of the United States Trade Representative
Winder Bldg., 600 17th Street, N.W.
Washington, D.C. 20506
Tel. 202-395-4755, Fax. 202-395-3911
Trade Assistance & Promotion Office
U.S.Department of Agriculture/Foreign Agricultural Service
Room 4930 South
12th & Independence
Washington DC 20250-1052
Tel. 202-720-7420, Fax. 202-690-4374
Regional Director-Asia/Pacific
U.S. Trade and Development Agency
SA-16-Room 309
Washington, DC 20523-1602
Tel. 703-875-4278, Fax. 703-875-4009
International Business Development Office
Export-Import Bank of the United States (Eximbank)
811 Vermont Ave., NW
Washington, DC 20571
Tel. 202-565-3920, Fax. 202-565-3931
Robert Connan, Minister-Counselor for Commercial Affairs
Jerry Mitchell, Minister-Counselor for Commercial Affairs (As of August,
1995)
US&FCS, American Embassy in Seoul
Unit 15550
APO AP 96205-0001
Tel. 82-2-397-4535, Fax. 82-2-739-1628
Barbara Griffiths, Minister-Counselor for Economic Affairs
Economic Section, American Embassy in Seoul
Unit 15550
APO AP 96205-0001
Tel. 82-2-397-4400, Fax. 82-2-722-1429
Frederick Crosher, Counselor for Scientific & Technological Affairs
Science & Technology Affairs, American Embassy in Seoul
Unit 15550
APO AP 96205-0001
Tel. 82-2-397-4159, Fax. 82-2-722-1429
Mark Minton, Minister-Counselor for Political Affairs
Political Section, American Embassy in Seoul
Unit 15550
APO AP 96205-0001
Tel. 82-2-397-4210, Fax. 82-2-733-4791
Mr. David Schoonover, Minister-Counselor for Agricultural Affairs
Agricultural Affairs Office (AGAFF)
American Embassy in Seoul
Unit #15550
APO AP 96205-0001
Tel. 82-2-397-4297, Fax. 82-2-738-7147
Mr. Phillip Shull, Director
Agricultural Trade Office (ATO)
Room 303, Leema Building
146-1, Soosong-dong, Chongro-ku
Seoul, Korea
Tel. 82-2-397-4188, Fax. 82-2-720-7921
William Maurer, Minister-Counselor for Public Affairs
U.S. Information Service, American Embassy in Seoul
Unit 15550
APO AP 96205-0001
Tel. 82-2-397-4436, Fax. 82-2-794-2889
Reginald Duncan, Customs Attache
U.S. Customs Service, American Embassy in Seoul
Unit 15550
APO AP 96205-0001
Tel. 82-2-397-4644, Fax. 82-2-736-6850
MINISTRY OF FINANCE AND ECONOMY
1, Joongang-dong, Kwacheon, Kyunggi-do 427-760
Deputy Prime Min. & Min. of Finance & Economy, HONG Jae Hyong, 503-9001
Vice Minister, LEE Suk Chae, 503-9006
Public Information Officer,BAE Young Shik, 503-9019
Assistant Minister I, CHANG Seung Woo, 503-9018
Assistant Minister II, SHIN Myung Ho, 503-9204
Planning & Management Office, AHN Byung Woo, 503-9013
Budget Office:
LEE Young Tak, 503-9015
Director General for Budget Coordination, CHUNG Dong Soo, 500-5111
Director General for Budget, BYEON Yang Kyoon, 500-5112
Director General for Budget II, YOON Young Dae, 500-5113
Director General for Budget III, CHANG Suk June, 500-5182
Tax & Customs Office:
KANG Man Soo, 503-0711
Director General for Tax Affairs, NAM Koong Hoon, 503-9207
Director General for Tax Affairs II, LEE Kun Kyong, 503-9220
Director General for Customs & Tarriff, HAN Taek Soo, 503-9230
Financial Policy Office:
KIM Yong Sup, 503-9206
Director General for Financial Policy, YOON Jeung Hyun, 503-9240
Director General for Banking & Insurance, LEE Yoon Jae, 503-9253
Director Gen. for Int'l Finance & Securities, YON Won Young, 503-9266
Treasury Bureau, MAENG Jung Ju, 503-9279
Economic Policy Bureau, CHOI Jong Chan, 503-9044
Int'l Economic Policy Bureau, CHUNG Duck Koo, 503-9134
Welfare & Consumer Policy Bureau, KIM Ho Shik, 503-9057
Korean Customs Service:
71 Nonhyun-dong, Kangnam-ku, 135-702
Commissioner, LEE Hwan Kyun, 543-8245
National Tax Administration:
108-4, Soosung-dong, Chongro-ku, Seoul, 110-140
Commissioner, CHOO Kyung Suk, 720-28ll
MINISTRY OF FOREIGN AFFAIRS
77, Sejong-ro, Chongro-ku, Seoul 110-760
Minister, GONG Ro Myung, 720-2301
Vice Minister, LEE See Young, 720-2305
Public Information Officer, RYU Kwang Sok, 720-2687
Assistant Minister for Political Affairs, LEE Jai Chun, 732-2306
Assistant Minister for Economic Affairs, SUN Joun Yung, 720-2352
Office of Planning and Management:
Assistant Minister for Planning & Management, KIM Hang Kyung, 720-2314
Senior Coord. for Planning & Management I, MOON Byung Rok, 730-5911
Senior Coordinator for Planning & Management II, SUNG Rak Min, 733-4609
Office of Policy Planning:
Assistant Minister for Policy Planning, BAN Ki Moon, 720-3379
Senior Coordinator for Policy Developmt., JU Chul Ki, 720-2358
Director, Regional Policy Div., KIM Euy Taek, 720-4022
Senior Coordinator for Security Affairs, SONG Young Oh, 720-2655
Director,, CHOI Won Sun, 720-9212
Security Policy Division
Senior Coord. for Regional Political Affairs, JEON Bu Guan, 735-2165
Director,, LEE Soo Taek, 720-4503
Special Political Affairs Division
Sr. Coord. for Intelligence Evaluation & Mngmt., SEO Hyun Seop, 720-3185
Director,, SEOK Tong Youn, 720-2340
Intelligence Analysis Division
American Affairs Bureau:
Director General, YIM Sung Joon, 720-2320
Deputy Director General, CHO Yong Ha, 738-1140
Director, North America Division I, KIM Sook, 720-2321
Director, North America Division II, KIM Wook, 720-2239
Director, Central America & Caribbean Division, KIM Byung Kwon, 720-2326
Director, South America Division, JUNG Kwang Kyun, 720-2249
United Nations System Bureau:
Director General, HAHM Myung Chul, 720-2333
Deputy Director General, SUH Dae Won, 720-4571
Director, U.N. Policy Division, OH Joon, 720-2334
Director, Disarmament & Nuclear Energy Div., PARK In Kook, 720-3969
Director, U.N. Economic Affairs Division, KIM Sang Yoon, 720-2336
Director, Human Rights & Social Affairs, LIM Jae Hong, 723-8934
Treaties Bureau:
Director General, OH Yoon Kyung, 725-1015
Deputy Director General, CHOI Seung Ho, 720-45721
Director, Treaties Division I, PARK Yong Kyu, 720-2337
Director, Treaties Division II, CHANG Dong Hee, 725-0766
Director, Intl. Legal Affairs Div., CHUNG Hae Woong, 720-4045
International Economic Affairs Bureau:
Director General, CHOI Young Jin, 720-2045
Deputy Director General, AHN Hyo Seung, 720-2434
Director, Economic Cooperation Division I, SHIN Yeon Sung, 720-2330
Director, Economic Cooperation Division II, KIM Bong Joo, 720-4537
Director, Environment Cooperation Division, KIM Young Suk, 720-2328
Director, Int'l Environment Organiz. Div., PARK Heung Shin, 725-0789
Director, Science and Resources Division, SHIN Kil Soo, 720-2329
Cultural Affairs Bureau:
Director General, KIM Young Ki, 725-7602
Deputy Director General, LEE Suk Jo, 725-7603
Director, Cultural Affairs, CHUNG Soon Suk, 725-7604
Director, Public Relations Div., KIM Jong Hae, 725-7606
Director, Diplomatic Archives Division, LEE Chung Kee, 571-1097
Overseas Residents and Consular Affairs Bureau:
Director General, KIM Sung Young, 720-2343
Deputy Director General for Passport, BAE Yeong Jin, 720-2727
Director, Overseas Residents Division, LEE Choong Seok, 720-2728
Director, Consular Division, HUR Duck Haeng, 720-2346
Institute of Foreign Affairs and National Security (IFANS):
1376-2, Seocho 2-dong, Seocho-ku, Seoul 137-072
Chancellor, LEE Joung Binn, 571-1011
MINISTRY OF JUSTICE
1, Joongang-dong, Kwacheon, Kyunggi-do 427-760
Minister, AHN Woo Mahn, 503-7001
Vice Minister, KIM Jong Koo, 503-7003
Public Information Officer, LEE Sang Hyung, 503-7011
Planning & Management Office, CHOI Byung Kook, 503-7005
Legal Affairs Office, KIM Soo Jang, 503-7006
Prosecution Bureau, CHOI Hwan, 503-7007
Correction Bureau, WON Jong Il, 503-7008
Social Protection & Rehabilitation Bureau, KIM Byung Hak, 503-7009
Immigration Control Bureau, HONG Seok Jong, 503-7010
Public Prosecutions Administration:
138, Seosomoon-dong, Choong-ku, Seoul 110-701
Prosecutor General, KIM Do Eun, 752-0505
Chief, Seoul High Prosecutor's Office, KIM KI Soo, 536-3201
Chief, Seoul District Prosecutor's Office, CHOI Young Kwang, 536-5301
MINISTRY OF NATIONAL DEFENSE
1, Yongsan-dong 3-ka, Yongsan-ku, Seoul 140-023
Minister, LEE Yang Ho, 748-6022
Vice Minister, LEE Jung Rin, 748-6100
Spokesman, KIM Young Choul, 748-6060
Chief Protocol Officer, CAPT CHO Boo Keun, 748-6031
Assistant Minister for Policy, LTG CHO Sung Tae, 723-6037
Assistant Minister for Mngmt. & Plans, CHO Yong Su, 748-6120
1st Assistant Minister, SOHN Byung Ik, 748-6130
2nd Assistant Minister, YOON Chong Ho, 748-6140
Commander, Defense Procurement Agency, MG LIM Sam, 754-3196
CG, Defense Security Command, MG LIM Jae Moon, 748-7200
CG, Defense Security Agency, MG LEE Eui Se, 723-6698
(9125th MND Unit)
Defense Intelligence Agency, LTG YOO Jeong Gap, 748-2000
President, National Defense College, MG HAN Kwang Duk, 309-8231
Chief, Armed Forces Special Inspection Group, LTG RHE Jae Dal, 748-1900
Policy & Plans Office, KIM In Jong, 748-6200
Finance Bureau, LEE Kwa Seoung, 748-5300
Mobilization & Reserve Forces Bureau, YOO Hyo Il, 748-5200
Personnel Bureau, LEE Youn Woo, 748-5101
Troop Information & Education Bureau, MG OH Jum Rok, 748-6400
Logistics Bureau, MG AHN Kwang Nam, 748-5701
Installations Bureau, MG KANG Awk Tae, 748-5801
Acquisition Policy Bureau, MG PARK Young Ik, 748-5600
Project Coordination Office, COL LEE Won Hyoung, 748-5500
Troop Information & Education Bureau, MG OH Jum Lock, 748-6400
Force Programming Bureau, KWON Young Hyo, 748-6600
Arms Control Bureau, MG KIM Yong Koo, 748-6300
Joint Chiefs of Staff:
Chairman, GEN KIM Dong Jin, 748-3001
1st Vice Chairman, PYUN Jang Won, 748-3010
2nd Vice Chairman/Chief Director, Support, VADM KANG Duk Dong, 748-3020
Chief Director, Strategic Planning, LTG CHOE Dong Hwan, 748-3600
Chief Director, Operations Planning, LTG KIM Dong Shin, 748-3200
Director, Operations, MG CHOI Don Guel, 748-3400
Director, Force Planning, MG CHO Young Kil, 748-3800
Director, Forces Evaluation, RADM LEE Ji Doo, 748-3900
Director, Command Control & Communications, MG KIM Kwang Pyung, 748-2600
Director, N. Korean Intelligence Directorate, MG PARK Hyun Jin, 748-2200
Director, Logistic Planning, MG CHUNG Jung Taek, 748-2400
Director, Combat Readiness Inspection, MG JUNG Kook Bon, 748-2500
Director, Exercise & Doctrine, MG KIM Hyon, 748-3500
Director, Strategic Planning, MG CHOI Yong Hwan, 748-3700
Director, Overseas Intelligence, RADM KIM Chong Dae, 748-2300
Director, Intelligence Collect. & Security, MG KIM Young Chul, 748-2100
Director, Operations Plans, MG CHUNG Hwa Eun, 748-3300
Director, Personnel Planning, MG CHA Ki Joon, 748-3100
Director, Civil Affairs & Psychological Warfare, MG KOO Tae Do, 748-2700
Chief, Secretary, BG KIM Myong Lip, 748-3030
Director, Defense Intelligence Agency, LTG YOO Jeong Gap, 748-2000
Director, Operation Analysis Group, YOON Gap Soo, 748-2530
CG, Defense Intelligence Command, MG SEO Tea Suk, 748-7290
Superintendent, Joint Staff College, MG LEE Jung Ho, 748-1368
CG, Defense Communication Command, BG AHN Byung Kil, 748-1500
Republic of Korea Army:
Chief of Staff, GEN YOON Yong Nam, 505-6000
Vice Chief of Staff, LTG KIM Hyung Sun, 505-6100
Republic of Korea Navy
Chief of Naval Operations, ADM KIM Hong Yeol, 815-3566
Vice Chief of Naval Operations, VADM YIM Tae Sup, 815-3567
Republic of Korea Air Force
Chief of Staff, GEN KIM Hong Rae, 506-6000
Vice Chief of Staff, LTG PARK Chun Taek, 506-6100
ROK-US Combined Forces Command (CFC)
Deputy Commander in Chief, GEN CHANG Sung, 794-2081
MINISTRY OF EDUCATION
77, Sejong-ro, Chongro-ku, Seoul 110-760
Minister, KIM Sook He, 720-3400
Vice Minister, LEE Chun Soo, 720-3266
Public Information Officer, KIM Yon Soo, 739-3345
Planning & Management Office, LEE Soo Jong, 720-3267
Education Policy Office, SUH Jung Hun, 737-5506
Higher Education Support, KIM Myung Kon, 720-3978
Local Education Support, LEE Bo Ryeong, 720-3477
Teacher Policy & Support, KIM Duck Hwan, 720-3305
Non-Formal Education & Intl. Affairs Bureau, CHO Sun Jae, 737-4184
Textbook Compilation & Curriculum Devlopmnt., HAN Myung Hee, 736-3409
MINISTRY OF CULTURE AND SPORTS
82, Sejong-ro 1-ka, Chongro-ku, Seoul 110-050
Minister, CHOO Don Shik, 720-3801
Vice Minister, KIM Do Hyun, 720-3805
Public Information Officer, SHIN Hyun Taek, 734-5833
Assistant Minister, CHOI Chang Shin, 733-0031
Planning & Management Office, LEE Kyung Moon, 720-3809
Religious Affairs Office, CHUNG Duk Yong, 720-3819
Youth Policy Office, KIM Sa Heung, 734-0182
Cultural Policy Bureau, KIM Yong Moon, 736-4030
Arts Bureau, CHUNG Ki Young, 734-3815
Culture & Industry Bureau, HA Jin Kyu, 720-3836
Tourism Bureau, SUH Jung Bae, 734-5287
Sports Policy Bureau, SUNG Sang Woo, 734-5286
Int'l Sports Bureau, OH Jee Chul, 734-5288
Office of Cultural Properties
5-1, Chung-dong, Choong-ku, Seoul 100-120
Director General, KIM Jin Moo, 318-4300
National Museum
1-57, Sejong-ro, Chongro-ku, Seoul 110-050
Director General, CHUNG Yang Mo, 732-9428
MINISTRY OF AGRICULTURE, FORESTRY AND FISHERIES
1, Joongang-dong, Kwacheon, Kyunggi-do 427-760
Minister, CHOI In Kee, 503-7201
Vice Minister, PARK Sang Woo, 503-7204
Public Information Officer, KIM Young Kap, 503-7210
Assistant Minister, CHO Il Ho, 503-7206
Planning & Management Office, LEE Young Rae, 503-7240
Agriculture & Fisheries Statistics Information, KIM Jung Jae, 503-7250
Agricultural Policy Office, KIM Dong Tae, 503-7208
Int'l Agriculture Bureau, CHOI Yong Kyu, 503-7290
Room 322, 3-dong, , 507-2095(F)
Kwacheon Government Building
1 Chungagn-dong, Kwacheon-shi
Kyunggi-do, Korea
Rural Development Bureau, LEE Sang Moo, 504-9400
Marketing Policy Bureau, Vacant, 504-9410
Horticulture & Special Crops, SHIN Soon Woo, 504-9420
Livestock Bureau, AHN Duck Soo, 504-9430
Agricultural Cooperatives:
Mr. Won, Cheol Hi, President
National Agricultural Cooperatives Federation (NACF)
75, Choongjung-ro 1-ka, Chung-ku, Seoul
Phone: 737-0021/9
Fax: 397-5010
Mr. Song, Chan Won, President
National Livestock Cooperatives Federation (NLCF)
451, Seongnai-dong, Kangdong-ku
Seoul, Korea
Phone: 485-3141
Fax: 475-8129
Mr. Park, Jong Shik, President
National Federation of Fisheries Cooperatives
11-6, Shincheon-dong, Songpa-ku
Seoul, Korea
Phone: 240-2114
Fax: 240-3000
Rural Development Administration:
Administrator, KIM Kwang Hee, (0331) 292-4371
Fisheries Administration:
Administrator, LEE Hee Soo, 753-0810
Forestry Administration:
Administrator, KWAK Man Sup, 962-4211
National Animal Quarantine Service:
Director General, KIM Ok Kyung, 653-5034
National Plant Quarantine Service:
Director General, HONG In Shik, (0343) 49-0523
MINISTRY OF TRADE, INDUSTRY AND ENERGY
1, Joongang-dong, Kwacheon, Kyunggi-do 427-760
Minister, PARK Jae Yoon, 503-9400
Vice Minister, PARK Un Suh, 503-9402
Public Information Officer, CHO Hwan Eik, 503-9404
Assistant Minister, CHUNG Hae Joo, 503-9415
Planning & Management Office, Sokan CHANG, 503-9416
Int'l Trade Office:
HAN Duck Soo, 503-9415
D/G for Int'l Trade I, LEE Chong Ku, 503-9442
D/G for Int'l Trade II, KIM Hong Kyung, 503-9443
D/G for Int'l Trade III, HAN Young Soo, 503-9431
Energy Policy Office:
KIM Tae Kon, 503-9617
D/G for Energy Policy I, KIM Hyo Sung, 503-9661
D/G for Energy Policy II, KIM Dong Won, 503-9625
D/G for Energy Policy III, SUH Joo Sok, 503-9638
Industrial Policy Bureau, OH Kang Kyun, 503-9451
Small & Medium Enterprise Bureau, OH Young Kyo, 503-9458
Basic Industry Bureau, LEE Gun Woo, 503-9469
Processing & Consumer Goods Industry Bur., SUH Sa Hyun, 503-9486
MINISTRY OF INFORMATION AND COMMUNICATION
100, Sejong-ro, Chongro-ku, Seoul 110-777
Minister, KYONG Sang Hyon, 750-2001
Vice Minister, LEE Kye Cheol, 750-2020
Public Information Officer, SUH Young Kil, 750-2800
Planning & Management Office, PARK Sung Deuk, 750-2100
Information & Communication Policy Office, JUNG Hong Shik, 750-2300
Information & Communication Promotion Bureau, LEE In Pyo, 750-2060
Int'l Cooperation Bureau, LEE Jong Soon, 750-2070
Radio & Broadcasting Bureau, LEE Sung Hae, 750-2400
Posts Bureau, LEE In Hak, 750-2200
Postal Savings, Insurance & Finance Bureau, PAK Young Ihl, 750-2500
MINISTRY OF ENVIRONMENT
1, Joongang-dong, Kwacheon, Kyunggi-do 427-760
Minister, KIM Joong Wie, 504-9211
Vice Minister, KIM In Hwan, 504-9217
Public Information Officer, PARK Jong Keon, 504-9220
Planning & Management Office, YOON Suh Sung, 504-9230
Environmental Policy Office, CHO Byung Hwan, 504-9236
Nature Conservation Bureau, YOON Chang Won, 504-9281
Air Quality Management Bureau, KIM Jong Suk, 504-9246
Water Quality Management, SHIM Jae Kon, 504-9251
Water Supply & Sewage Bureau, KWAK Kyul Ho, 507-2451
Waste Management & Recycling Bureau, CHUNG Kook Hyun, 504-9258
MINISTRY OF HEALTH AND WELFARE
1, Joongang-dong, Kwacheon, Kyunggi-do 427-760
Minister, SUH Sang Mok, 503-7500
Vice Minister, JOO Kyung Shik, 503-7502
Public Information Officer, JEON Do Suk, 503-7504
Planning & Management Office, KIM Jong Dae, 503-7519
Social Welfare Policy Office, IN Kyung Suk, 504-7720
Public Health Bureau, LEE Dong Mo, 503-7537
Food Affairs Bureau, CHON Kye Hyo, 503-7582
Medical Affairs Bureau, CHO Pyung Ryun, 503-7547
Pharmaceutical Affairs Bureau, SIM HAN Sup, 503-7556
Pension & Health Insurance Bureau, KIM Yong Moon, 504-1101
MINISTRY OF LABOR
1, Joongang-dong, Kwacheon, Kyunggi-do 427-760
Minister, LEE Hyung Koo, , 503-9700
Vice Minister, CHOI Seung Boo, , 503-9702
Public Information Officer, CHOI Song Chon, , 503-9713
Planning & Management Office, AHN Young Soo, 503-9704
Labor Relations Office, KIM Sang Nam, 503-9774
D/G for Labor Relations Policy, KIM Won Bae, 503-9728
D/G for Labor-Management Corporation, KIM Chung Kyu, 503-9729
Labor Standards Bureau, CHO Sun Moon, 503-9740
Industrial Safety & Health Bureau, CHANG Soun Shik, 500-5617
Employment Security Bureau, LEE Hong Ji, 503-9747
Vocational Training Bureau, KIM Jae Young, 503-9753
Labor Insurance Bureau, KIM Song Ja, 503-9760
MINISTRY OF CONSTRUCTION AND TRANSPORTATION
1, Joongang-dong, Kwacheon, Kyunggi-do 427-760
Minister, OH Myung, 504-9001
Vice Minister, YOO Sang Yol, 504-9005
Public Information Officer, KIM Sang Youn, 504-9030
Assistant Minister, HONG Chul, 504-9008
Planning & Management Office, YOO Jik Hyung, 504-9010
Construction Affairs Office, KIM Kuen Ho, 504-9020
Construction Technology Officer, NAM Dong Ick, 504-9021
Water Resources Officer, HA Jin Kyu, 504-9040
Construction Economy Officer, GANG Ghil Boo, 504-9050
Transport Policy Office, LEE Heon Seok, 504-9060
Transport Planning Officer, LEE Hwan Guan, 504-9061
Roads Officer, CHOI Joo Hyung, 504-9070
Logistics Officer, JEONG Im Cheon, 504-9080
National Development Planning Bureau, KANG Yun Mo, 504-9110
Surface Transportation Bureau, JANG Bu Shi, 504-9140
Transport Safety Bureau, LEE Hyang Yeul, 504-9150
Civil Aviation Bureau, SUNG Ki Soo, 504-9180
Land Bureau, SUNG Boo Hyun, 504-9120
Housing & Urban Affairs Bureau, PARK Byung Seon, 504-9130
MINISTRY OF GOVERNMENT ADMINISTRATION
77, Sejong-ro, Chongro-ku, Seoul 110-760
Minister, SEO Suk Jae, 720-4321
Vice Minister, WON Jin Shik, 720-4325
Public Information Officer, CHO Ki Ahn, 720-4351
Planning & Management Office, KANG Bin, 720-4327
Protocol & State Council Bureau, KIM Bum Il, 720-4332
Personnel Bureau, OH Hyoung Hwan, 720-4340
Organization Bureau, MOON Dong Hao, 720-4348
Administrative Efficiency Bureau, KIM Choong Yang, 720-4402
MINISTRY OF SCIENCE AND TECHNOLOGY
1, Joongang-dong, Kwacheon, Kyunggi-do 427-760
Minister, CHUNG Kun Mo, , 503-7601
Vice Minister, KOO Bohn Young, , 503-7604
Public Information Officer, CHOI Seok Sik, , 503-7608
Planning & Management Office, KIM Ji Ho, , 503-7623
Research & Development Coordination Office, SONG Ok Hwan, , 503-7630
Coordinator for R&D Planning & Management, PARK Dong Suk, , 503-7636
Basic Research Coordinator, PARK Sang Dong, 503-7631
Machinery & Material Research Coordinator, CHEON Eui Jin, 503-7633
Electrical & Electronic Research Coordinator, MOON You Hyun, 503-7634
Chemical & Bio-technology Research Coord., CHANG Moon Ho, 503-7635
Natural Resources & Ocean Research Coord., CHANG Sang Ku, 503-7606
Atomic Energy Office, KIM Se Jong, 503-7607
Atomic Energy Policy Officer, CHO Chung Won, 503-7644
Nuclear Safety Officer, HUH Nam, 503-7645
Technology Promotion Bureau, LEE Sang Tae, 500-3232
Technology Cooperation Bureau, KYUNG Jong Chul, 500-3249
Technical Manpower Bureau, YU Hee Yol, 500-3214
National Science Museum:
Director General, KWON Kap Taek, (042)861-2521
APPENDIX F: MARKET RESEARCH
List of DOC/ISAs, and USDA/FAS/Commodity Reports
List of DOC/ISAs:
AHS Commuter Helicopter Service January
ELP Thermal Power Generation Equipment January
FUR Furniture January
TLS Power Tools January
TEL Wireless Data Comm Equipment January
ACH Architect Services January
APS Automotive Parts April
FRA Sea Food Restaurant April
FPP Food Processing Equipment April
HCS Healthcare Services April
TEL Fiber Optic Transmission Systems April
ELP Liquid Natural Gas Equipment April
TOY Toys July
PAP Pulp and Paper Materials July
MED Sterilizers July
TRN Air Cargo Service July
FLM Film/Video Recordings July
CPT Expansion Boards July
CON Mobile Lifting Construction Equipment July
SPT Sporting Goods October
INS Insurance October
TRA Conventional Travel October
PKG Packaging Equipment October
MED Catheters October
ICH Industrial Specialty Chemicals October
OGM Pipeline Equipement & Services October
List of Agricultural Commodity Reports/Cables:
Title of Report: Due Date 1996:
Oilseeds Update 01/20
Grain Update 01/20
Seafood Semi 02/01
Livestock Semi 02/01
Oilseeds Annual 03/01
Grain and Feed Annual 04/01
Sugar Annual 04/10
Agricultural Situation 09/30
Citrus Semi 05/01
Tobacco Annual 05/01
Cotton Annual 06/20
Poultry Annual 06/20
Grain Update 06/15
Oilseeds Update 06/15
Forest Production Annual 07/15
Grain Update 08/01
Livestock Annual 08/01
Oilseeds Update 08/01
Seafood Annual 08/15
Oilseeds Update 10/20
Grain Update 10/20
Cotton Update 10/20
Citrus Annual 11/01
Planting Seeds 11/15
APPENDIX G: TRADE EVENT SCHEDULE
Embassy Seoul's trade promotion program ranked among the top programs
worldwide and increased slightly from the previous year as post
continued to implement the recommendations of the Strategic Review. In
FY'95, post participated in 52 separate events, an increase from 49 in
FY'94, ranging from Post Initiated Programs to participation in official
US Pavilions at international trade fairs. Post plans to emphasize
support for NTM/NTE U.S. companies in a variety of trade events. The
following is a list of trade events for FY'96.
TRADE EVENT SCHEDULE
A. 1. Visit USA Travel Trade Fair
2. December 5-7, 1995
B. 1. American Comsumer Products Fair
2. December 1-10, 1995
C. 1. Study USA '96
2. February 2-6, 1996
D. 1. State of Michigan Trade Exhibition
2. October 14-17, 1995
E. 1. INPOCO '96
2. April 1996
F. 1. Great American Food Show
2. March 1996
G. 1. KIMES '96
2. March 1996
H. 1. COMPUTER SOFTWARE TRADE MISSION
2. May 1996
I. 1. Environmental Technologies
2. April 1996
J. 1. KIECO '96
2. April 1996
K. 1. KOTFA '96
2. October 1996
L. 1. Aerospace Seoul '96
2. October 10-13, 1996
In Korea:
From the U.S.: (U.S. domestic mail):
US Foreign Commercial Service US Foreign Commercial Service
American Embassy in Seoul American Embassy in Seoul
82 Sejong-Ro, Chongro-Ku Unit 15550
Seoul 110-050 APO AP 96205-0001
Tel: 397-4221 Tel: 82-2/397-4221
Fax: 739-1628 Fax: 82-2/739-1628
This report was completed in July 1995
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