Korean Currency Control Laws Revised: Korea Won – Yuan

Yonhap News, a Korean-language wire service, reported today that the South Korean government has revised currency control law in order to allow the direct trade of South Korean Won and Yuan.   The Korean Government is expecting this move will increase trade, while allowing the diversification of foreign currency holdings. Yonhap notes, in part, that: “The [M]inistry [of Strategy & Finance] said South Korea’s Hana Bank and Woori Bank have been designated as the clearing banks to take charge of won-yuan settlements and payments. The Chinese won-yuan exchange market is scheduled to start operating in June in Shanghai, a follow-up to a summit meeting between South Korean President Park Geun-hye and her Chinese counterpart Xi Jinping in October 2015. The direct trade market in Seoul was already opened in December 2014, with its daily turnover reaching an average of $2.26 billion as of end-November last year.” We will be writing,

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Capturing Chinese Tourist Money in Korea: Retail Opportunities in Korea

The NPR blog has an interesting article on the frenzy to learn Chinese by Koreans in order to satisfy the hoards of Chinese tourists entering the Korean market.  These young students and their future employers are capturing the Chinese tourist business via understanding the unique buying characteristic of Chinese tourists and, also, learning their language.  The article notes that the major reason for Chinese tourist visiting Korea is shopping. This recent development has, also, benefited many foreign brands doing business in Korea.  Prices, in Korea, are, in many cases, substantially cheaper than prices paid for products in China and even Hong Kong.Additionally,  Chinese tourist, overall, believe Korean products are of a higher quality than Chinese products and that products bought in Korea are not counterfeit. Opportunities abound for those in retail.  Some of the greatest opportunities are in handbags, cosmetics, shoes and in the fast-casual brand market.  The major Korean

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Material Breach of Contracts Under Korean Law: Primary Obligations vs. Secondary Obligations

In most Western nations a “material” breach of a contract leads to the non-breaching party not having to perform its obligations under the contract, while allowing the non-breaching party to immediately sue for all damages (or performance). The Restatement (Second) of Contracts 241 notes that the following criteria can be used to determine whether a specific action/inaction constitutes a material breach: “In determining whether a failure to render or to offer performance is material, the following circumstances are significant: (a) the extent to which the injured party will be deprived of the benefit which he reasonably expected; (b) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived; (c) the extent to which the party failing to perform or to offer to perform will suffer forfeiture; (d) the likelihood that the party failing to perform or to

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Why we should care about North Korea?: North’s Harsh Reality by Senior Advisor Tom Coyner

While reading Foreign Minister Yun Byung-se’s essay “Preparing for Reunification” in the Feb. 13 edition of the Korea JoongAng Daily, I felt both empathy and frustration. But in the end, I can understand why diplomats continue to make seemingly ludicrous, even quixotic, demands of North Korea. The minister’s column reminded me of a white paper I recently edited for a major Korean research center. The white paper summarized extensive investigations by think tanks of the six-party talk nations, with the exception of North Korea. The shared study looked at nation rebuilding in a reintegrated Korea. Each contributing think tank considered what would need to be done within Korea and what would be the costs and benefits to its own nation as Korea reunified. To cut to the chase, the paper almost unintentionally detailed how disruptive the DPRK is by its very existence. DPRK is the acronym of North Korea’s official

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Korea’s U-Turn Program: Enticing Korean Companies to Return to Korea – Will it work?

The Korean government has passed the Act on the Support for Korean Enterprises Re-shoring from Overseas (“U-Turn Company Support Law”).  This Law, among other things, allows Korean enterprises that have setup operations overseas that return to Korea to benefit from: Assistance from KOTRA Government Paid Legal and Other Consulting Fees related to Re-shoring and windup Corporate Income Tax Cuts Land Subsidies Custom Clearance Support Use of Free Trade Zones Equipment Investment subsidies Foreign Worker “special activity visas” Employment subsidies Export Financing More details will be available soon and I will update the reader.  Will it work?   ____ Sean Hayes may be contacted for a consultation by emailing him at: SeanHayes@ipglegal.com or via the numbers shown to the left. Sean Hayes is co-chair of the Korea Practice Team at IPG Legal. He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and

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South Korea Begins 7th Round of Negotiations with China on Free Trade Agreement

Today, China and South Korea began the 7th round of Free Trade Agreement (FTA) negotiations in Shandong Province, China. The negotiations are expected to last until September 5th. According to Xinhua News, the previously-held 6th round of the negotiations led to resolutions in the countries’ disagreements over “services, investment, rules of origins, customs clearance, trade remedies and intellectual property rights.” The current round of talks should be focusing on “agriculture, manufacturing industries, including automobile, machinery and oil sectors.” China is South Korea’s largest trading partner so the upcoming FTA has the possibility to dramatically impact South Korea’s economy.  In 2009, Korean exports to China totaled USD 86 billion, with imports from China totaled USD 54.2 billion.  Contrast that with Korea’s trade with the United States in the same year – with exports to the U.S. totaling just USD 37.7 billion and imports from the U.S. totaling USD 29 billion. Last

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Korean Legal News for the Week of January 20, 2013

This Week’s Legal News Reported by Media Korean Washer Makers Vow Legal Action Against US Duties Korean Patent and Trade Mark Filings Increase in Face of Economic Climate Korean Giant LG Threatens to Disrupt View of Palisades with Office Tower N. Korea Issues Blunt New Threat to US Experts Suggest Korea Fortify Economic Ties with China Korea Grows Less than Forecast as Won Strengthens Korea President’s Brother Gets Two-Year Jail Term for Corruption Whirlpool Wins Duties on Washers from Mexico, S. Korea Vietnam-S.Korea FTA Talks Forecast to Go Well Japanese Leader Not Going to S. Korea for Presidential Inauguration Aung San Suu Kyi Leaves for US, S. Korea Malaysia-S. Korea Bilateral Trade Upturn Taxi Drivers in Korea Threaten to Go on Strike This Week’s Posts from the Korean Law Blog Sean Hayes in the Christian Science Monitor on Korean Adoptions Taxis May be on Strike Again and Thus Sean Hayes

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The U.S. Military Presence in Korea: New Focus for U.S. Foreign Policy?

Those who don’t doubt their faith generally prove in the end to be less resilient than those who do. Doubt is good. It tests and often affirms, but it also challenges cherished assumptions and beliefs that were formed once upon a time to be reconciled with current realities. A few days back, I circulated a lengthy interview of BR Myers by the Wall St. Journal where he challenged the premises of the current US Forces deployment in Korea. Brian is hardly a Lefty who looks at the world through the antiquated and tired lenses of “US Imperialism.” Nor would I suggest the same of the below author who asks the reader to reconsider the current American paradigm in the face of diminished resources. What is clear is that the world has greatly changed over the past 60 years following the Korean War’s cessation of hostilities. Today, North Korea and its

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South Korea to Buy Yuan-Denominated Assets

Heung-sik CHOO, director-general of the Bank of Korea (BOK) stated to Bloomberg that the BOK may purchase RMB-denominated (Chinese yuan) assets.  The news may trigger most Asian economies to consider more investments in China-currency denominated assets. At present, the only other developed country that has announced plans to invest in RMB-denominated assets with foreign currency reserves is Japan. The Director General noted that the BOK will begin by only investing in Chinese government bonds.  The investment is expected to be modest. The China Daily has reported on this issue today and noted: The BOK obtained a Qualified Foreign Institutional Investor (QFII) license in late December and has gained the approval of its counterpart, the People’s Bank of China, to buy bonds, Choo was quoted by Bloomberg as saying. The National Pension Service, the largest investor in South Korea, recently said that it received approval from China to invest in the

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4 Korean Companies on Thomson Reuters 2011 Top 100 Global Innovator List

Four Korean-headquartered companies have been named by Thomson Reuters as 100 Top Global Innovators.  The four companies listed were Cheil Industries, LG Electronics, LS Industrial Systems and Samsung Electronic. The only Asian country with companies on the list, this year, is Japan.  Japan has 27 of its companies on the list.  So yes, no China on the list. America leads the list with 40 companies followed by France (11), Sweden (6) and Switzerland (3). Any companies left off the list that should be on the list? _________ SeanHayes@ipglegal.com (c) Sean Hayes – SJ IPG. All Rights reserved.  Do not duplicate any content on this blog without the express written permission of the author. info@ipglegal.com.

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Will the Failure to Pass the KOR-US FTA by Korean NA Harm Korea?

The KOR-US FTA has a great likelihood of not passing the Korea National Assembly this year, because of the resistance of radical liberals and the inactivity of the GNP and the Administration.   The GNP fears that pushing the bill onto the floor of the National Assembly will cause an election defeat in the elections next year. I fear that Korea will be greatly harmed by the peculiar behavior of the liberals and cowardliness of the GNP leadership and conservative presidential candidates. Korea is an export country and without the benefits of exports the country will be relegated to the ranks of the less-developed world.  Most Korean exports are products that are bought because of no negative impressions, competitive efficiencies and the impression that the product is of a  high quality.  Increasingly, competitors, including China, Vietnam, Indonesia, and Malaysia are catching-up with Korea.  In many cases, China can make an equal

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The China Law Blog by IPG’s China Practice Team

IPG is proud to announce the launch of IPG’s The China Law Blog.  The China Law Team will be posting, at least, four posts per week on issues concerning China law, litigation, law firms, law amendments and lawyers. We welcome your questions and comments.  The blog may be found at: www.thechinalawblog.com___________SeanHayes@ipglegal.com (c) Sean Hayes – SJ IPG. All Rights reserved.  Do not duplicate any content on this blog without the express written permission of the author. info@ipglegal.com.

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The Korean Law Blog Meets the China Law Blog in Beijing for a Discussion of the Ages

I will be in Beijing tomorrow and Sunday to visit with my good friends at the China Law Blog. Old China hat Steve will be giving a talk on China and the WTO at an event that should be interesting and hopefully doesn’t land Steve in the clink. Here is a remark from the China Law Blog on the event. CLB’s own Steve Dickinson will be one half of a two person discussion this Sunday, October 16, at 3:00 p.m., on China and the WTO. The event is part of the Hopkins China Forum, which describes itself as “a quarterly speakers series that brings together counterparts from the United States and China in China’s capital city to discuss current events.” More specifically, the topic is “China and the WTO: A 10 Year Review With a Look to the Future.” it will be a “conversation” between our own Steve Dickinson and

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Korea: “Connected Yes, Competitive Maybe.” Korea – Beware of the Dragon to the North.

Sang-Hun CHOE posted a great article in the New York Times quoting IPG’s Senior Commercial Advisor Tom Coyner in an article entitled – Connected Yes, Competitive Maybe. Mr. CHOE emphatically notes that: But being hyper-connected is not the same as being hyper competitive. Connectivity on its own does not bring productivity or happiness. It does not necessarily even bring foreign investment. And for all its positives, Seoul’s connectivity comes with some downsides. For starters, the city is home to the headquarters of global hardware giants like Samsung and LG, but the companies have built their success largely by copying and improving existing products rather than by innovating or moving into new technology frontiers. Korea is still a blue-collar manufacturing country that has failed, to date, as noted by Mr. CHOE to create truly innovative products and move into new technologies.  China, in many cases, is years ahead of Korea in

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The Asian Law Blog

We are proud to announce the introduction of the Asian Law & Business Blog. The blog is a work in progress, but will include updates on Korea, China, Cambodia, Laos, Vietnam, Malaysia, Indonesia, and the Philippines law. The motivation for the blog is the fact that I don’t only work in Korea and I am engaged in numerous projects in Asia Korea, China, India, Vietnam, Laos, Cambodia, Malaysia, the Philippines and the United States. At present the blog includes, mainly, posts from The Korean Law Blog. The blog can be found at: www.theasianlawblog.com The Korean Law Blog also has a simplified header and a new more simple design. Some have mentioned that the header looks like it was made by someone with the computer skills of a first grader. Yes, the former header was made my little ole me. I have contacted, on numerous occasions, professionals to improve the look

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As China Goes, So Goes the World: How Chinese Consumers are Changing Everything

My friends over at the China Law Blog wrote a post on a book that I bought based on my careless reading of their post. As I mentioned in previous posts, China Law Blog is, simply, the best blog on China Law and should be read daily if you are interested in the Chinese legal system or doing business with or for the Chinese. The book mentioned in their post is entitled: As China Goes, So Goes the World: How Chinese Consumers are Changing Everything. I got through about 80 pages last night and I put it down and decided that it is simply a history book on China interwoven with a consumerism-based doomsday prophesy. I read enough history books on China and hear enough rants about consumerism on MSNBC. I enjoy history and rants, but combined they lead me to Pawn Stars on my Slingbox. Slingbox and DVR has

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Korea Due Diligence: Not So Different From China

Steve Dickson wrote a great article entitled China Due Diligence. Not Optional – that I will steal and copy at length. His article appears on the China Law Blog. The blog is a must read for all doing business in China. Most companies are not aware that due diligence is required whenever you do any kind of business with a Chinese company. If you do not already know the Chinese company with which you will be conducting business, you must confirm that the company really does exit and that you are dealing with the actual  company and not an impostor. Substitute Chinese with Korean and we have a good article for this blog. I had a client contact me asking for advice on how to collect a debt of USD 150,000. I first asked the client for the name of the debtor and he gave me the name JH Park.

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Enter the Korean Market – Then Enter China and Japan

Secretary General Jean – Jacques Grauhar made many interesting comments in the EU Chamber’s August 2011 issue of Infomag. He is the most Texas looking Frechman I have ever met. On another side note, I hope the American Chamber of Commerce in Korea catches up to the EU Chamber in Korea. The EUCCK is producing much better magazine content and much better programs for members. I am not sure if the EUCCK has more resources than AMCHAM, but when I speak to members of both chambers, many mention the stark differences and are disappointed in AMCHAM. Competition, hopefully, will produce an even better AMCHAM – it is actually quite decent now. The Secretary General mentioned something that I think all global businesses should recognize. He notes that: While the world focuses on the Chinese market, company executives should also try to include Korea in their itinerary whenever they visit this part

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Following the Chinese Lead

Sean Hayes, the main contributor to this blog, wrote an interesting piece entitled Following the Chinese Lead in the Korea Times on March 2, 2011. The article can be found below. Following the Chinese Lead By Sean Hayes (Korea Times Weekly Column) Most of the world has come to realize, including even the Chinese ruling elite, that central planning leads to inefficient utilization of capital, low growth and entrenched poverty. This realization led the Chinese ruling elite to scrap most facets of its Mao-dictated centrally planned economy in favor of a decentralized one based on the freedom of contracts and other major basic tenets of capitalism. However, the developed world seems to have mistaken the evils of centralized planning with the need for a centralized strategy and thus is often ignoring one of the most critical historical roles of effective central governments. Throughout modern history, great leaders with great visions

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China Law Blog on Korea Outsourcing

We at the The Korean Law Blog are proud of  being quoted by The China Law Blog.  The China Law Blog is hands down the King of Asian law blogs.  IPG’s China Law Blog can be found at: The China Law Blog. Dan’s post quoting the Korean Law Blog’s post notes that: But in so many areas of China business, there is a real uniformity of views among lawyers experienced in representing clients in or doing business with China. That is certainly the case when it comes to the legal safeguards one must undertake when outsourcing from China. These legal safeguards will save you money by both reducing the chance of problems and by greatly increasing your chances for a good resolution should problems occur. I thought of this uniformity of views when I read a post on the Korean Law Blog, entitled, “Korean Outsourcing: The Legal Basics.” It is a

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