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On the 22nd, the 'AI Basic Act', which will become the legal basis for the AI ​​(artificial intelligence) industry, came into effect. This bill contains at its core regulations on 'high-impact AI' that can have a significant impact on human life or basic rights. The safety and reliability of AI technology, which has so far remained in the realm of self-regulation, has now entered a phase where responsibility is required according to explicit regulations. These changes require AI business operators to have systematic compliance and risk management capabilities beyond technological competitiveness, and are expected to fundamentally reorganize the operating paradigm of the entire industry. First of all, 'transparency' must be secured so that users can clearly recognize whether AI is involved. This is basic work to build user trust by preventing situations where AI-generated information is mixed with human results and making the source transparent. Accordingly, high-impact AI or generative AI operators must notify the use of AI through terms and conditions before providing services, and attach identifiable marks such as watermarks to the results to indicate that they are AI products. In addition, companies with very large AI models must have a preemptive safety verification system. The bill stipulates that AI with a cumulative amount of calculations used for learning greater than 10 to the power of 26 FLOPs is subject to core management. This is a step higher than the EU AI Act's standard of 10 to the 25th FLOPs, and can be interpreted as an intention to build a preemptive risk management system that goes beyond existing models and encompasses the next generation of super AI that will emerge in the future. Currently, the LLM of major domestic companies does not meet this standard, so it is unlikely to be immediately classified as 'high-impact AI', but establishing governance in preparation for the future technological environment has become an unavoidable task. Additionally, a 'people-centered management system' must be established to complement the 'black box' problem, which is the opaque decision-making structure of AI. In order to clarify who is responsible for the results, business operators must have a system that can explain the algorithm's judgment criteria and data overview, and establish specific procedures that allow humans to immediately intervene and control in the event of a system error. Ultimately, in order to efficiently implement increasingly complex legal requirements, an integrated response strategy that penetrates the entire company's value chain is essential. Although the law has already been implemented, the 'one-year fine guidance period' set by the government to establish the system is a very valuable golden time for companies. This period is not simply a grace period to avoid punishment, but should be used as an optimal preparation period to secure actual legal stability and improve internal systems. Fortunately, the AI ​​Framework Act is substantially alleviating the burden of overlapping regulations on operators through the 'deemed implementation' system. If the AI ​​development business has already completed certain measures, the user using it is also considered to have fulfilled the corresponding obligation, or if it has faithfully complied with the obligations under individual laws such as the Digital Medical Products Act or the Credit Information Act, it is recognized as having fulfilled its obligations under this Act. Therefore, companies should use the given guidance period as a diagnostic tool to closely review whether their service falls into the high-impact AI category. At the same time, it will be necessary to establish a 'customized implementation strategy for each industry' to reduce the waste of duplicate responses by considering consistency with other laws and regulations. The driving force to spread the sails of innovation despite the strong waves of regulation ultimately depends on how precisely a company manages legal risks. Small and Medium Business Team[View full article] In the era of AI Basic Law, legal obligations and preemptive response strategies for high-impact AI (link)

Law "It is highly likely that the damage was inferred based on the circumstances after the fact... It is difficult to determine." A convenience store owner who was put on trial on charges of taking a drunk part-time worker to a hotel and sexually harassing her was found not guilty. The 12th Criminal Division of the Seoul Southern District Court found not guilty a man in his 40s, Mr. A, who was indicted on charges of quasi-forcible molestation under the Child and Adolescent Sexual Protection Act in December last year. Mr. A ran the convenience store he runs in October last year. After drinking with the victim, Mr. B, who was a part-time worker, he was accused of taking the drunk Mr. B to a hotel and molesting him by removing his clothes. Mr. A denied the charges. He claimed, “I took off the vomit-covered victim’s coat and top and bottom, but I did not intend to molest him.” Regarding the reason why he did not come out of the room for about 30 minutes, “Mr. B vomited on the hotel floor, so I asked the staff for understanding and tried to resolve the situation.” An explanation was given. The court found that Mr. A was not guilty. Considering the fact that the victim had no recollection of the situation at the time, it was believed that the possibility of inferring the damage in light of the post-mortem circumstances could not be ruled out. The court said, "There is suspicion that the molestation was committed as in the indictment, as the defendant's DNA was detected in the victim's underwear," but added, "As a result of checking the CCTV in the hotel lobby, while the defendant was supporting the victim, he put his arms around his shoulders or hugged him with both arms, and some parts of his body were raised. “It is possible that he touched the victim,” he ruled. He added, “Although the victim claimed to have been naked after waking up, it is difficult to determine molestation considering the fact that DNA was not detected inside the victim’s underwear.” Park Seong-dong, a lawyer at Daeryun Law Firm, who represented Mr. He said, “I was able to obtain a good result by faithfully explaining the situation at the time, where it was difficult to consider the person who committed the crime. #Accident #Actual harassment #Why is the store owner not guilty? Park Seok-ho (haitai2000@ikbc.co.kr)[View full article] Why is a convenience store owner in his 50s found not guilty after drinking with a part-timer and molesting her at a hotel? (Shortcut)

Analysis of key issues such as pharmaceutical patents and SOP issues... Gong Daeryun, a practical application risk management method, said, “The rapidly changing pharmaceutical and bio environment... will become a ‘legal compass’ that helps companies grow.” Daeryun Law Firm announced on the 29th that it successfully completed the webinar (online seminar) ‘2025 Pharmaceutical and Bio Sector Settlement - Medical, Bio and Healthcare Group Seminar’. This webinar, held on the 28th at the Daeryun main office in Park One, Yeouido, Seoul, heated up the pharmaceutical and bio industry last year. It was prepared to conduct an in-depth analysis of heated patent disputes and personnel and labor issues and to find practical response strategies for companies in preparation for the rapidly changing regulatory environment. The webinar was broadcast live online on this day, and many people in charge and practitioners from related industries, including pharmaceutical companies, bio ventures, and healthcare companies, participated and showed great interest. The presenter was attorney Lee Il-hyung, head of the Daeryun Pharmaceutical Bio Healthcare Center. Attorney Lee, who holds a pharmacist's license, delivered practical implications by analyzing major precedents he personally worked on, such as the '13-valent pneumococcal vaccine ruling', based on his extensive experience in litigation in the medical and pharmaceutical field. "It is important to note that the court recognized the special nature of bio-processing and interpreted the scope of 'research and testing exception' broadly," he said. "As much of the legal uncertainty related to the production of semi-finished products has been resolved, companies can more stably and confidently pursue R&D and global cooperation using public technology. “It was an opportunity,” he explained. Attorney Lee then continued to make suggestions from a human resources and labor perspective on the issue of illegal dispatch, which is a chronic risk in the pharmaceutical industry. He focused on the relationship between the main contractor's obligation to comply with standard operating instructions (SOP) and whether illegal dispatch is established. He said, “In strictly regulated industries such as pharmaceutical and bio, it is reasonable to view requiring compliance with SOP as a legitimate exercise of quality control rights rather than command and order to personnel.” However, he advised, “If the SOP goes beyond the simple standard of results and specifically controls the work method, there is still a risk,” and “the management system must be thoroughly blocked from the main contractor’s direct work instructions and the management system must be reorganized so that the partner company operates as an organization with its own expertise rather than simply supplying manpower.” Lastly, practical countermeasures in line with changed laws, such as the Digital Medical Products Act that went into effect last year, were also shared. Attorney Lee emphasized, “The implementation of the Digital Medical Products Act is an opportunity to dominate new markets such as digital therapeutics through the use of real-world data (RWD),” and added, “Companies must proactively establish cybersecurity and quality management strategies in line with the changed certification system and create new business opportunities.” Daeryun CEO Kim Kook-il said, “The role of the law firm is to help companies focus on their core business without wavering in the rapidly changing pharmaceutical and bio regulatory environment.” He added, “Daeryun will continue to “We will not miss out on changing industry trends and faithfully fulfill our role as a legal compass for the company’s sustainable growth,” he said. Reporter Kim Jong-cheol (jckim99@sportsseoul.com)[View full article] Sports Seoul - “Opportunity to dominate new markets”… Daeryun successfully concludes ‘2025 Pharmaceutical/Bio Settlement’ webinar (Go here) Medipana - "SK Vasa-Pfizer patent dispute, ruling that almost shook domestic CMOs" (link) Medipana - Daeryun holds ‘2025 Pharmaceutical/Bio Settlement’ webinar on the 28th (Go here) Pharmacist Public Opinion - “Opportunity, not regulation”… Is the Digital Medical Products Act a game changer for pharmaceuticals and bio? (Shortcut) Daily Medi - Daeryun Law Firm successfully concludes ‘2025 Pharmaceutical/Bio Settlement Webinar’ (Go here)

The Supreme Court ruled that if a medical institution that made the insurer bear the cost of medical care benefits through deception or other unfair methods goes out of business, not only is the relevant medical institution no longer able to carry out its business, but the object of the disposition itself has disappeared, so a business suspension cannot be imposed on the medical institution and a new medical institution opened by the same person after the closure (see Supreme Court ruling 2020du39365, pronounced on January 27, 2022). However, even in the above case, if substantial identity is recognized between the two health care institutions, such as the opening location of the newly opened health care institution being the same or located nearby the previous health care institution and using a similar name, the patient demand base formed during the operation of the previous health care institution being the same or similar, or the transfer of human and material resources as is, there is a possibility that business suspension may still be considered possible for the newly opened health care institution by the operator who closed down the wrongful billing health care institution. Therefore, based solely on the conclusion of the above Supreme Court decision, considerable caution is required in cases where the business closes after an on-site investigation and before the suspension of business, and then opens a practice nearby under the same or similar name, or maintains an operating form to the extent that it is misunderstood as a medical institution that is virtually identical in appearance. Meanwhile, if the Ministry of Health and Welfare's on-site investigation confirms unfair claims and a medical institution that is at risk of being subject to a business suspension closes its business and no longer operates the institution, the business suspension becomes ineffective as a means of sanction. It should be noted that in such cases, a fine may be imposed instead of a business suspension. Ultimately, if unfair claims are confirmed as a result of the Ministry of Health and Welfare's on-site investigation, it is difficult to avoid administrative action in any form, whether it is a business suspension or a fine. So, what if the business closes before the investigation after selecting the target for the field investigation? In this regard, the Ministry of Health and Welfare's notice regulations, revised on June 30, 2022, stipulate that if business suspension is judged to be ineffective as a sanction because a medical institution has closed down before the administrative disposition is finalized or the institution subject to the disposition does not exist due to a change in the personality of the representative in a medical institution opened by a corporation, a fine may be imposed in lieu of a business suspension ('a fine in lieu of a business suspension') ‘Applicability Standards’ Article 2, Paragraph 2 (c). Accordingly, according to the above revised notice, even before the administrative disposition is confirmed, for example, before the on-site investigation by the Ministry of Health and Welfare is conducted, if unfair claims are confirmed through on-site confirmation by the National Health Insurance Corporation and the medical institution is selected as a target for on-site investigation, the risk of fine imposition still exists even if the relevant medical institution closes its business and avoids business suspension. However, if a specific administrative investigation, such as an on-site confirmation by the National Health Insurance Corporation, has not been conducted on a nursing facility that closed before the Ministry of Health and Welfare conducted an on-site investigation, there are still significant questions as to what standards and grounds can be used to impose fines.[View full article] [Contribution] Legal risks in case of closure of a nursing home before and after a field investigation by the Ministry of Health and Welfare (Click here)

Daeryun Law Firm announced on the 28th that it has launched the ‘School Violence Response Group’, a dedicated organization that covers the entire process from the initial response to dispute resolution and psychological recovery stages of school violence incidents. Recently, school violence disputes are expanding beyond the School Violence Response Committee (School Violence Committee) into a ‘complex war’ combining administrative, criminal, and civil matters. According to data from the Ministry of Education, the number of administrative lawsuits filed against the school violence committee increased from 255 cases in 2021 to 628 cases in 2023, an increase of approximately 2.5 times in two years. As school violence disputes become more structurally complex, the need for a more systematic and professional response is increasing. In line with this trend, Daeryun's School Violence Response Group operates a ‘one-stop support system’ that goes beyond simple legal assistance and connects professional infrastructure. In addition to analyzing evidence through the digital forensics center, we plan to organically provide psychological recovery support through professional counselors and personal protection services using security personnel to take responsibility for students' safe return to daily life. The group leader will be Cho Young-sam, a former judge of the juvenile division of the Chuncheon District Court. Attorney Cho heard many cases of juvenile protection and juvenile punishment while serving as a judge, and is an expert who understands the flow of juvenile justice practice. Attorney Gyu-seok Park, a former prosecutor, also joined the group. Attorney Park is in charge of special crimes and juvenile cases at the Chungju Branch of the Cheongju District Prosecutors' Office, and has handled major issues and investigative work in the process of converting school violence cases into criminal procedures. While working at the Gwangju Metropolitan Office of Education, Attorney Eun-jeong Na served as a working-level member of the school violence countermeasures committee and student disciplinary coordinator, and gained practical experience in overall procedures and disciplinary and protective measures at the education office level. Attorney Dae-won Kim, a lawyer specializing in school violence registered with the Korean Bar Association, He is serving as a member of the school violence response deliberation committee of the Incheon Metropolitan City Southern Office of Education, and has in-depth practical capabilities in the school violence committee deliberation structure and judgment standards. Management CEO Kim Kuk-il said, “School violence cases are high-level disputes in which juvenile justice, education administration, and investigative procedures operate simultaneously,” and added, “Daeryun has continuously advanced its response system based on professional manpower, practical experience, and infrastructure.” He then emphasized, “Through the school violence response group with a one-stop support system, we will present practical solutions so that students and families can return to a comfortable daily life.” Reporter Jin Ga-young news@lawissue.co.kr[View full article] Roishu - Daeryun launches ‘School Violence Response Group’… Establishment of a one-stop integrated response system (link) Seoul Shinmun - Daeryun Law Firm launches ‘School Violence Response Group’… Establishment of a one-stop response system (link)

Preemptively identify legal risks that may arise when entering the local market and provide practical solutions Daeryun “China and Vietnam are places where opportunities and risks conflict…an opportunity to prepare a specific strategy” Daeryun Law Firm and Korea-China Association announced on the 27th that they will hold a ‘Seminar on our companies’ legal issues and practical responses to China and Vietnam’ at FKI Tower in Yeouido, Seoul at 2 p.m. on the 11th of next month. This seminar will focus on rapidly changing business in China after the recent Korea-China summit. It was prepared to preemptively prepare for the Vietnamese market, which has established itself as a key point for the environment and global supply chain. Daeryun plans to examine legal risks that may arise when entering the local market and present practical solutions to help Korean companies make stable overseas investments. This seminar will be divided into two key sessions: China and Vietnam. In the first China session, attorney Daeryun Yoon Kyeong-won and Professor Park Seung-chan, president of the Korea-China Association and director of the China Management Research Institute, will appear as presenters. Attorney Yoon will share in-depth perspectives on ‘Types of legal issues and points to keep in mind when entering into China’, and Professor Park will share in-depth perspectives on ‘The recent Korea-China summit and our companies’ response.’ In the second Vietnam session, Attorney Daeryun Choi Young-jin will explain ‘Types of legal issues and points to keep in mind when entering into Vietnam’. In addition, KOTRA PM Choi Dong-cheol will take the podium to analyze and deliver local investment opportunities under the theme of ‘Vietnam investment support project, success stories, and introduction of investment opportunities.’ After all presentations, a Q&A session will be held to resolve practical difficulties of attendees and discuss response measures. Applications for participation can be made through the Daeryun official website. Anyone from a company considering or already entering China or Vietnam can apply. Daeryun Kim Kuk-il, CEO of Daeryun, said, “China and Vietnam are lands of infinite opportunity for our companies, but at the same time, they are places where unexpected legal disputes and risks exist. We hope that this seminar will help companies clearly understand the changing trade environment and establish specific strategies for successful local settlement.” Reporter Kim Hee-guk kukie@kookje.co.kr[View full article] Kukje Newspaper - ‘A place of new opportunity’… Daeryun holds China-Vietnam legal dispute and investment strategy seminar (Go here) Tax Ilbo - Daeryun holds seminar on legal issues and practical response in China and Vietnam (Go here)

“If the shareholder class action lawsuit is won, the American investment company’s argument will lose its persuasiveness” National Pension Service invested 200 billion won in Coupang… As Coupang investors in the United States take issue with the Korean government's investigation and submit a letter of intent to arbitrate an International Investment Dispute (ISDS), the large-scale information leak appears to be turning into a commercial dispute. Accordingly, the outcome of the class action lawsuit filed by domestic and foreign Coupang investors has become more important than before. Although it is strictly a separate issue, it is intertwined in the sense that it proves the background and core of the losses suffered by investors. As a shareholder who invested more than 200 billion won in Coupang, attention is being paid to whether the National Pension Service will initiate a class action lawsuit. According to related industries on the 26th, Greenox and Altimeter, investment companies in Coupang, recently requested the Office of the U.S. Trade Representative (USTR) to investigate the Korean government's Coupang-related measures and take appropriate trade relief measures. The investment companies stated the reason, saying that investors suffered enormous losses as the Korean government launched an intensive investigation targeting Coupang after Coupang's personal information was leaked. In addition, the investment companies submitted an International Investment Dispute (ISDS) letter of intent to arbitrate to the Korean government to file an arbitration claim under the Korea-U.S. Free Trade Agreement (FTA). These investors said, "Prime Minister Kim Min-seok said in relation to law enforcement for Coupang's information leak case, 'With the same determination as when eradicating the mafia. ISDS is a legal remedy through which a foreign investor can claim compensation for damages from the government when an investment loss is incurred due to the actions of the government of the investment host country. If an agreement is not reached within a certain period of time after the letter of intent to arbitrate is submitted, a formal arbitration procedure is initiated. As the information leak incident has become a common problem, the importance of the outcome of the class action lawsuit filed by Coupang shareholders has become greater than before. The U.S. branch of Daeryun Law Firm SJKP announced last month that it would officially file a consumer class action lawsuit against Coupang Inc in the New York Federal Court. In addition, We the People Law Office also filed a class action lawsuit against Coupang Inc and its key executives, including Chairman Kim Beom-seok, in the U.S. District Court for the Western District of Washington on behalf of domestic shareholders this month. The class action lawsuit filed by shareholders and the ISDS are currently separated in terms of legal procedures, but the core point is 'shareholder damage'. Coupang shareholders who filed the class action claim that 'Coupang's Their position is that they suffered losses due to information security failures, and the U.S. headquarters also exercised actual management rights and are not free from responsibility. If they actually win, this means that the American investment company's claim that it suffered losses due to the Korean government's investigation will lose its persuasiveness. SKJP's U.S. attorney Dong-hoo Son said, "The class action lawsuit on behalf of the victims is aimed at relieving specific damages to individuals in accordance with private contract and tort law, and focuses on the company's compliance with security obligations and governance failures. He added, "ISDS aims to protect investors' property rights based on international law and examines whether the Korean government's administrative measures are discriminatory or harsh." He added, "If the company's security failure and gross negligence are clearly proven in the class action lawsuit and a large-scale compensation judgment is issued, it could be decisive evidence supporting the legitimacy of the fine imposed by the Korean government in the ISDS." As a result, attention will also be focused on whether the National Pension Service will participate in the lawsuit. It appears that the National Pension Service is also a stakeholder holding about 218.1 billion won worth of Coupang stocks as of the end of 2024. Lee Young-gi, a lawyer at We the People Law Firm, said, "In the case of the National Pension Service, it also revealed that it will exercise shareholder rights for ESG, which was advocated in the recent presidential work report." He added, "If pension funds such as the National Pension Service, which are institutional investors who have suffered great damage from the decline in Coupang's stock price, participate, it will be easy to prove the sharp decline in the stock price." did.joongjp@yna.co.krsijung@yna.co.kr[View full article] US Coupang investment company ISDS notice... Is the ‘national pension role theory’ emerging? (Shortcut)

[Anchor] Two American companies that are major shareholders of Coupang announced that they would initiate international investment dispute and ISDS arbitration procedures against the Korean government. After the Coupang incident, they claimed that American investors suffered losses due to discriminatory treatment by the Korean government. At the same time, they also requested the U.S. government to investigate Korea. Reporter Jeong Jae-woo reports. [Report] Coupang investment companies Greenox and Altimeter claimed that they received unfair discriminatory treatment in the letter of intent to arbitrate submitted to the Korean government. He claimed that the Korean government targeted Coupang to protect existing large corporations. It was written that Coupang, an American company, was severely punished, while Korean and Chinese companies were lightly punished. As a result, the stock price fell and American investors suffered losses, which was cited as the reason for filing the dispute. On the New York Exchange on the 22nd local time, the stock price of Coupang's headquarters fell by nearly 30% compared to before the information leak. However, analysis suggests that Coupang is unlikely to win the dispute based only on the decline in the stock price. This is because it is not easy to prove both that government regulations are unfair and that they are the cause of the decline in stock prices. [Lee Tae-ho/Former Vice Minister of Foreign Affairs/Advisor, Gwangjang Law Firm: “The general trend is to recognize the state’s legitimate regulatory authority quite broadly...”] A more powerful target is the U.S. government’s trade remedy investigation. On the same day, Coupang investors petitioned the U.S. Trade Representative to investigate the Korean government based on Article 301 of the Trade Act, and retaliatory tariffs were imposed. We directly requested measures such as retaliation. Considering our sensitive situation regarding tariffs and the Trump administration's tendency to use tariffs as a weapon, it is a burden that cannot be ignored. The U.S. Trade Representative must decide whether to initiate an investigation within 45 days of receipt, and the key is to persuade the U.S. government not to initiate an investigation. [Son Dong-hoo/American lawyer/law firm SJKP: "Given the Trump administration's protectionist tendencies and America-first stance, there is no scenario in which the investigation will lead to actual retaliatory measures. Quite realistic..."] Prime Minister Kim Min-seok, who is visiting the United States, met with members of the House of Representatives and explained that there is no discrimination against Coupang. This is Jeong Jae-woo of KBS News. Camera reporter: Ji Seon-ho/Video editor: Yoo Ji-young/Graphics: Kim Ji-hoon Jeong Jae-woo (jjw@kbs.co.kr)[View full article] ISDS with low odds of winning... The target is Super 301 trillion won? (Shortcut)

'target regulation' claim… As a task to prove proportionality"We need to clear up the misconception that certain companies are disadvantaged." US investment companies are involved in an international investment dispute over the government's response following Coupang's large-scale personal information leak.(ISDS)and trade retaliation(trade law 301article) I took out the cards at the same time.. The investigation by the government and the National Assembly went beyond its essence. 'target regulation'This is their argument.. As the possibility that issues surrounding individual companies escalate into trade risks for the nation's core industries as a whole is emerging, 'laws and principles'The government, which has emphasized 'Proportionality of regulations'I went to the test where I had to prove that.23According to the Ministry of Justice and the industry, Coupang's U.S. investments, Greenox and Altimeter, 22Day(local time) against the Korean government ISDS Submitted a letter of intent to arbitrate. They say that the response of the Korean government and the National Assembly after Coupang's personal information leak incident was the Korea-U.S. Free Trade Agreement.(FTA)consultation 'Obligation to be treated fairly and equitably' He predicted billions of dollars in damages for violating the law..At the same time, the U.S. Trade Representative(USTR)in trade law 301The level of pressure was increased by requesting an investigation based on the article.. This provision stipulates that the U.S. government can take retaliatory measures, such as tariffs, if it determines that there is unfair behavior against U.S. companies in foreign markets.. USTRAfter receiving the petition, 45Decide whether to initiate an investigation within 12 days.Investment companies argued that the government and National Assembly's response was intentional excessive regulation targeting specific foreign companies.. It has expanded beyond personal information leaks to overall management, including labor, finance, and customs. 'target regulation'It was put forward as the basis for. While the response of the Korean National Assembly and government resulted in billions of dollars in losses, it was also reported that the fact that no Coupang customer claiming financial damage has been confirmed to date has been raised as an issue..Ministry of Justice 'International Investment Dispute Response Team'The position is that a joint response system will be established to review and actively respond to legal issues.. It is expected that the government will argue that it was a strict response in accordance with laws and principles, considering the large impact of the personal information leak incident and the social responsibility of platform companies..The key issue is 'Proportionality of regulations'… "Proving the appropriateness between damage and sanctions is key." government sanctions 'Proportionality of regulations' It is expected that the key issue will be whether it was within the allowable range under international trade norms in light of the principles.. Son Dong-hoo SJKP American lawyer "ISDS The arbitral tribunal takes as its core criterion the principle of proportionality, which is the balance between the public interest purpose of regulation and harm to investors."said.At the same time, the investigation that began due to the personal information leak has expanded to cover the entire company, including labor, finance, and customs, and the possibility of trillion-level fines being imposed without the actual financial victims being identified is fair and equitable treatment under international law.(FET) It was pointed out that it could be an issue of violation of principles.. he is "An investigation that purges all areas of a company under the pretext of a specific incident may be viewed by investors as retaliatory harassment or a violation of reasonable expectations."as "This is ISDS It has the potential to be used as a decisive basis for proving the government's malice in an arbitral tribunal."was diagnosed.mudfish "The government will assert its preventive deterrence against market order disturbances and its own regulatory authority, but in international practice, large fines without specific damage proven are difficult to logically defend."saying "'Specificity of Damage'class 'sanctions level' How to prove the appropriateness of the relationship will determine the success or failure of the lawsuit."added.Shaking up industry and trade overall 'complex issue' injury… A diplomatic solution is urgently needed. This issue goes beyond the controversy over the level of sanctions against individual companies and goes beyond Korea's industrial policy and corporate regulation., Shaking up the overall trade strategy 'complex issue'There is a possibility that it may expand to. The analysis is that the government's regulatory judgment has shifted to a phase where it is intertwined with trade risks..Lawyer Son " ISDS Arbitration and USTR A strategy of conducting research in parallel is recommended to policy decision makers. 'Regulation chilling effect'can give"as "If enforcement of domestic law is enforced, the risk of retaliation and astronomical compensation that will follow acts as a practical psychological and political binding force on policy decisions."pointed out. And then "USTRretaliatory measures are not simply limited to the affected company's industry."as "In the case of Korea, semiconductors and automobiles (retribution) Being on the list is a possible scenario"explained.The problem is that the issue is spreading into an international dispute without sufficient investigation of the truth and political agreement domestically.. As the possibility of the government investigation becoming drifting increases, the stage of the dispute appears to be moving to the international sphere without strengthening internal logic and institutional arrangements..experts say 'Hitting a specific company'We suggest that diplomatic communication is urgent to resolve the misunderstanding and convince people that this measure is a legitimate enforcement of domestic law.. Lee Jeong-hee, professor of economics at Chung-Ang University, "There has always been a trade controversy about foreign companies being disadvantaged, but in practice, cases where trade between countries becomes a major problem due to a single specific company are rare."as "It remains to be seen whether the U.S. government will actually retaliate., at the government level 'The goal is not to disadvantage a specific company, but to hold it accountable for damage to domestic customers.'Diplomatic efforts to continue to make people understand that"He emphasized. Reporter Go Hyeon-sol (sol@mt.co.kr) [View full article] Fair regulation vs excessive pressure... Issues in ISDS/Article 301 ‘Coupang Incident’ (Shortcut)

“The most effective pressure” to delay taxation with retaliatory tariffs in France’s digital tax dispute… “A cool-headed diplomatic solution is needed.” Coupang’s U.S. investment company, venture capital (VC) Greenox and Altimeter, submitted a letter of intent to arbitrate an international investment dispute (ISDS) on the 22nd (local time) in opposition to the Korean government’s measures to regulate personal information leaks. They officially requested that the Office of the United States Trade Representative (USTR) investigate the Korean government and impose trade sanctions, including the imposition of tariffs. What U.S. investors presented as the basis for the USTR investigation is Article 301 of the Trade Act, so-called 'Super 301'. This is a legal means by which the United States can impose sanctions, such as retaliatory tariffs, on trading partners' unfair trade practices through presidential authority, and has been used as a core basis for major trade disputes in the past. Article 301 of the Trade Act was a major instrument of trade policy during the Trump administration. In 2018, the United States initiated a Section 301 investigation and imposed retaliatory tariffs on Chinese products due to China's infringement of intellectual property rights. This served as a means not only to resolve the U.S. trade deficit but also to demand system changes in other countries. In 2019, tariffs were imposed on aircraft and wine in the European Union (EU) due to subsidy payments to Airbus. The industry generally analyzes that this issue has a similar structure to the ‘French Digital Service Tax (DST) dispute’ in 2019. At the time, when France imposed taxes on American IT companies, USTR considered it an act of discrimination and opened an investigation. Afterwards, they announced the imposition of tariffs on French champagne, etc. and brought about a postponement of taxation. Coupang investment companies also define the Korean government's measures as 'discrimination against American companies', so the USTR's judgment in the future is drawing attention. Experts advise that we should keep in mind the possibility that this incident will spread beyond the individual Coupang issue and spread to Korea's major industries as a whole. Dong-hoo Son, an American lawyer at SJKP, said, “The essence of Article 301 is to find the most effective point of pressure to bring about policy changes in the other country’s government,” and analyzed, “It is a sufficiently realistic scenario for Korean semiconductors or automobiles to be placed on the retaliation list, as was the case in France.” He went on to say, "Article 301 has a strong tendency to be a political sword, and ISDS can be said to be a legal shield, but going through both procedures at the same time appears to be a diversionary operation." He added, "I am concerned that the risk of retaliation and astronomical compensation will act as a psychological and political binding force on policymakers." It is also pointed out that the structural specificity of Korea's data management system could become an issue in this dispute. Songcheon Moon, professor emeritus at KAIST Graduate School of Business, known as a world-renowned scholar on cyber DB security and the first national doctor of computer science, pointed out, “The U.S. claim is based on self-defense, and from their point of view, it is legal and reasonable.” Professor Moon advised, "The government will have to sufficiently prove that the weight and severity of damage from personal information leaks due to system differences between the two countries are different. The United States does not have a resident registration number, but Korea has a structure that has a lot of food for hackers due to the 'absolute ring' resident registration number." There are also voices calling for focusing on diplomatic solutions rather than overly interpreting the issue. Lee Jeong-hee, a professor of economics at Chung-Ang University, expressed caution, saying, "There has always been a trade controversy about foreign companies being disadvantaged, but in practical terms, there are not many cases where trade has become a major problem due to one specific company. It remains to be seen whether the U.S. government will actually take action." He emphasized, “We must continue to make people understand that we are not trying to diplomatically disadvantage a specific company, but rather hold them responsible for domestic damage.” Reporter Hwang Jeong-won (jwhwang@mt.co.kr)[View full article] France also suffered... The power of ‘Super 301 trillion’ summoned by Coupang (link)