EUCCK Honors Korean Government Authorities

In what is perhaps the first and only such event by a foreign business association here, the European Union Chamber of Commerce in Korea presents awards that not only honor member companies but also government authorities who have made a significant contribution to strengthening the relationship between the EU and Korea.

As every foreign investor in Korea is aware, without adequate cooperation from government authorities, it will be nearly impossible to smoothly conduct operations here. Many times, EU companies have been amazed at the efficiency and responsibility displayed by respective government agencies. However, their contributions are barely given adequate attention. In order to fill this gap and give credit where it is due, the EUCCK presented awards to government authorities in the following categories:

Globalized Partner

― This award is presented to the government authority/division, which is most global in its outlook. The National Tax Service is the proud recipient of this award in 2008, which was received by Commissioner Han Sang-ryule.

The Chamber pointed out that under Mr. Han's leadership, the NTS made great strides in the past year, particularly in its efforts to engage the foreign business community in tax administrative policy-making.

Foreign company feedback was fully reflected in the administration of taxes, some almost immediately. A Committee for the Review of International Tax Laws was launched to improve domestic tax rules in accordance with global taxation standards. The advance ruling system was adopted to help taxpayers achieve certainty in tax matters. Various tax information booklets were published in English to help answer frequently asked questions.

Six sigma quality is applied to make tax assessments more accurate, and the Voice of Customer (VOC) system is in place to listen to taxpayer complaints and transform them into a foundation for directing administrative policies. The NTS was also active in settling tax issues to give MNE tax certainty as early on as possible by expediting MAP and APA processes. It continued to strengthen cooperation with foreign tax administrations in a global effort to address aggressive tax planning and the abuse of tax havens.

The EUCCK appreciates the NTS' contribution to enhancing EU-Korea relations by creating a business-friendly tax environment for Korea's foreign business community.

Efficient Partner

― In the day-to-day running of their business operations, EU companies often interact with various government authorities/divisions. They are often amazed at the efficiency they encounter, and this award is to show our appreciation. This year, the Regulatory Reform Committee (RRC) has been chosen to receive the Efficient Partner Award.

The RRC was set up in 1998 under the office of the president as a public-private joint committee that reviews and rules on regulatory matters. Its purpose is to lead regulatory reform efforts of the Korean government by removing unnecessary regulations and minimizing the introduction of inefficient regulations. It aims to promote independence and creativity in social and economic activities, improve the quality of life for citizens and sustain national competitiveness.

The RRC draws up regulatory reform guidelines every year, according to which it helps amend regulations of administrative agencies at all levels. As a result, an estimated 1,000 regulations have thus far been strengthened or removed every year. With the inauguration of the new administration in Korea, about 1,600 tasks have been identified and are being executed as regulatory reform tasks.

Also, in an attempt to discover regulation that users want reformed, the Committee has kept listening to business circles, mostly through business organizations like the Korea Chamber of Commerce and Industry, the Federation of Korean Industries and the Korea Federation of Small and Medium Business.

In addition, to support foreign businesses operating in Korea, the Committee organizes meetings between relevant ministries and AMCHAM and the EUCCK in order to collect suggestions on regulatory areas that need reform.

The RRC plays the role of a gatekeeper in that it blocks unreasonable regulations by conducting feasibility studies for the regulation in question to be introduced or strengthened. If the Committee finds a regulatory proposal unreasonable, it recommends improvement or withdrawal of the proposal so that regulatory quality is ensured.

In a bid to further strengthen the legitimacy and feasibility of regulation, the Committee is scheduled to make improvements to a range of regulatory programs this year. Specifically, it plans to expand the application of the negative regulatory system, strengthen the sunsetting of regulation, improve RIAs, and build an electronic system for regulatory information.

Responsible Partner

― There are many instances when EU member companies have to partner with government authorities. In such cases, the proactive behavior and responsibility of the concerned authorities is quite appreciable and deserves to be highlighted.

Dr. Ahn Choong-yong, the Foreign Investment Ombudsman at Korea Trade-Investment Ombudsman (KOTRA), has been awarded the 2008 EU-Korea Award for "Responsible Partner."

Since its establishment in 1999, the Office of the Foreign Investment Ombudsman (OIO) has made a remarkable contribution to mutual exchange and development in the relationship between Korea and the EU by making improving redundant regulations and consolidating social infrastructures for more advanced business environments for foreign investment and foreign-invested companies.

Dr. Ahn, the Foreign Investment Ombudsman, is in charge of the global standardization of the government system and infrastructure, as well as resolving grievances filed by foreign-invested companies in Korea. By making suggestions and recommendations on the improvement of the current system and presenting solutions to grievances of foreign-invested companies to the Presidential Transition Committee, the Foreign Investment Committee, and the Presidential Council on National Competitiveness, the OIO is taking a lead in the deregulation and the improvement of the government system.

For instance, there was a prominent EU company that experienced difficulties in its business management with moving its business sites and plants pursuant to the local city development project plan. Yet, with the successful mediation of the OIO to draw a solution that satisfied the mutual interests of the local autonomous government, which demanded immediate moving out of the business sites and the company that had been running its business there, the grievance case was finally resolved. More recently, the OIO has also rendered a service to the improvement of the tax imposition system by taking active measures, such as making suggestions to the government, for the resolution of an unfair tax system that requires foreign-invested manufacturers present guarantees of tax payment.

With such outstanding accomplishments, the OIO is being asked to give presentations and lectures to share its know-how and expertise to many countries around the world, including Brazil and Argentina, that wish to benchmark and adopt the Foreign Investment Ombudsman system into their own countries.