The KORUS FTA will Pass: Don’t Hold Your Breath

According to U.S. Senate Majority Leader Harry Reid and House Speaker John Boehner, the Korea-United States Free Trade Agreement will get an up or down vote soon.   How soon – who knows. If KORUS FTA reaches the floor of each house of Congress, the Bill will without little doubt pass.  I am less optimistic on the vote than the Speaker and the Majority Leader, since three FTAs are still bundled (Korea, Columbia and Panama) and the Trade Adjustment Assistance Act (TAA) is still a politically sensitive issue with Democrats. According to a friend that is still working in the Senate from the days I worked at the Senate – the Bills will not receive a vote this month. The Democrat Leadership has reluctantly agreed to split and give a separate vote on the Korea, Columbia and Panama agreements with the politically sensitive TAA. We will still need to see what the rank and

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Korea-EU FTA Part I: Custom Duties/Tariffs on Imports into Korea

Korea has implemented FTAs or like agreements with Chile, EFTA, ASEAN, Chile, India and now the EU. The Korea-EU FTA was implemented on July of 2011. I have already seen an increase in interest in entry by Europeans into the Korean market. Korea is Europe’s fourth largest export destination behind the United States, Japan and China. This is the first in a multipart article on the Korea-European Free Trade Agreement. Custom Duties/Tariffs under the Korea-EU FTA for Items Entering Korea Cosmetics: Year 5: Duty Free (Presently 8%) Pharmaceuticals: Year 3: Duty Free (Presently 6% average) Medical Devices: Year 7: Duty Free (Presently 5% average) Agricultural: Year 3: 45% of Products Duty Free; Year 5: 65% of Products Duty Free; Year 10: 85% of Products Duty Free;Year 18: 95% of Products Duty Free. Tariffs High at Present and Vary Greatly Based on Product. Rice is protected. Chemicals: Year 5: Duty Free

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Korean Law School Students SHOULD Face Grim Reality – Blame the Professors

The Korea Times posted a decent article entitled “Law School Graduates Face Grim Reality.” The author’s one flaw is that it only takes into account the opinion of law professors and students. The reality, in Korea,  is that most professors do not have law licenses and even the professors with law licenses often have little experience practicing law.  The quotes from the articles are correct, but do not reflect the complete reality. The article quotes a professor that contends “What’s certain is that the government should be most blamed for all the confusion and disputes surrounding the law school system. And the victims of this mishandling will be the students.” The professor refused to be named in the article. Another professor noted, “The country will have 1,500 lawyers next year, but they will be driven into cutthroat competition.” What is wrong with competition? I have been taught to believe that

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How to Select an Attorney in Korea by Tom Coyner

There are excellent and ethical attorneys in every country; this is certainly also the case in Korea. While all are no doubt intelligent and highly educated, the manner in which many approach their clients’ needs harkens more to the early 20th century than the cusp of the 21st century. Unfortunately, most Korean attorneys fail to appreciate or care to consider the commercial context of their counsel. Based on what one reads in the press, doing business here is tough. But generally, the difficulties are greatly overstated. The tragi-comedy is that cynical self-interest cultivates much of Korea’s allegedly thorny business environment. Furthermore, the conventional wisdom of how difficult it is to do business in Korea goes largely unchallenged. As a result, both experienced and inexperienced foreign executives frequently hesitate too long, turn to legal counsel too late, and then meekly accept huge legal bills. In this scenario, it is often hard

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Working with Korean Lawyers and Law Firms

The China Law Blog has a great post on working with Korean and Chinese lawyers and law firms. The post notes, in part, concerning Korean law firms that: 1. Non-responsiveness is the norm. American lawyers generally see their role as helping clients achieve their goals and keeping their clients informed. Korean lawyers operate far more independently. They consider themselves the legal experts and can get offended when questioned. According to their perspective, a client should trust them, not ask questions, and not expect updates. This obviously does not work well for American clients. Two excellent Korean law firms have admitted to me they “always get fired” when they work directly with American companies or with American lawyers inexperienced with Korea. If a Korean lawyer has a hearing scheduled in a case, I email him the day before to urge him to provide me with a full report by the next

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Limits to Foreign Adoptions in Korea is Negative for Children

I do not write a great deal about issues not relating to Korean business, but this news just rubbed me the wrong way. We have dealt with a number of adoptions either on a pro bono or low-fee basis for childless couples. This news is not only bad news for these families, but also for the children that now will live the remainder of their childhood without the opportunity to have loving parents. The National Assembly has recently passed a bill that will make it even harder for foreigners to adopt Korean children. At present the imposed quota makes it difficult for more than the privileged handful to adopt children. From next July, non-Koreans will only be allowed to adopt children whom the government can’t place in foster care. Additionally, the government will be responsible for ensuring that adopted children stay with Korean families – the specifics will be decided

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The British are Coming: U.K. Law Firms in Korea

One if by Land and Two if by Sea, the British Law Firms are Coming and They are Talking to little Ole Me. Ok, enough of my poor “joke of the week.” The KOR-EU FTA passed and thus British law firms will be able to setup shop in Korea over a five-year three-stage phase-in period.  All of the leading British firms have begun building relationships with an eye to formal partnerships in the future. KOR-US FTA, however, has stalled because of opposition of some prominent lawmakers in the liberal parties.  The two FTAs are very similar and the opposition has more to do with politics and liberal Nationalism than the contents of the FTA.   American law firms, because of this reality, may be left in the cold.  We have been approached by many of the British and U.S. firms requesting meetings concerning how to structure a relationship with my team. From

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The Green-Tea Party (Korea Times by Sean Hayes)

My grandfather was proud to be a Democrat and my father a Republican and I am proud not to vote. My Italian grandfather lived through the Great Flu Epidemic of 1918 that took his father; the Great Depression that took his pride; World War II which took his thumb; the mass production of the automobile that took his pre-teen brother in a fatal accident; and heart disease that took his wife in the prime of her life. My grandfather lived the life of the typical immigrant and accordingly was a Democrat. Republicans of this generation were rightly perceived to be a party that represented the rich and the democrats were the alternative, thus, representing the working-class. My off-the-boat Irish father came to the U.S. and worked at odd jobs until my grandfather introduced him to the stability presented by the local utility company. My father experienced similar hardships in Ireland

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American Law Firms in Korea

Things may be changing soon. Presently there are no U.S. law firms in Korea, but things will change if the Korea-U.S. FTA is passed. Presently numerous American law firms are interested in access to the market. I have been contacted by a few firms interested in building alliances. The doors will also open to British firms with the Korea-EU FTA. The Korea Herald had an interesting interview with Gregory Nitzkowski the managing partner of Paul Hastings. Gregory Nitzkowski noted in the article that: “It is not the dominance in the Korean legal market that we seek, but rather a firmer connection to our global clients, many of whom are Korean-based international companies such as the Samsung or SK Group.   A market is usually in favor of the staus quo and changes for the unknown many come as a threat.  It is natural for Korean law firms to feel a certain

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KORUS FTA is Dead without a Push from Manufacturers and an Understanding of the Unions.

The National Association of Manufacturers Blog has a brief mention of the reasons why the U.S.-Korean Free Trade Agreement (KOR-US FTA) is a benefit to American manufacturers and will not lead to the outsouricng of more jobs as President Obama is now alleging. The blog post notes that: Not to belabor a point that has been raised by international economists and trade policy analysts across the political spectrum: Cutting tariffs and non-tariff barriers in foreign markets through preferential trade agreements does not reduce or outsource American factory jobs, it creates more of them. How? Our market is open, with tariffs averaging 2.5 percent. Most other markets (developing as well as some developed) in the world have tariff and non-tariff barriers that are far higher. When we sign a FTA with a country, its barriers come down, and as a result, our exports go up, both in volume and value, and

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Korea-EU FTA: Country of Origin under the Kor-EU FTA

In order for an importer/exporter to benefit from the lowered tariff rates under the Korean-European Union FTA, the product must be recognized as a product either from Korea or an EU member nation. Article 2 of the Protocol to the Korea-EU (the “Protocol”) provides that in order for a product to be recognized as a product under the Protocol , the product must either: “Wholly Obtained” within the territory of the Party; OR Has undergone “substantial transformation” within the territory of the Party. Protocol Article 4 notes that “wholly obtained” means, in summary,: Minerals extracted and vegetables grown and harvested in the territory of the Party; Seafood taken from the territorial waters of the Party; Products made from (2) seafood on “factory ships;” Scrape and Waste derived from the manufacturing or processing in the territory of the Party. A “factory ship” “vessel” must be registered in the territory of the Party, sail

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Korean Law Firm’s Competition from American/British Law Firms

The Donga-Ilbo reported that 83% of the Korean companies surveyed would utilize foreign law firms for domestic matters if foreign firms operated in Korea. The local Korean newspaper surveyed 50 Korean companies, state-run enterprises, law firms and financial institutions. At present no American, British, French, German or any other foriegn law firms are allowed to operate in the Korean market. However, a number of foreign lawyers in Korea have taken on senior roles at Korean law firms and many Korean law firms have standing relationships with American and British law firms. The biggest fear for Korean law firms and lawyers was always thought to be the loss of foreign clients, however, it seems likely that even Korean companies may also be lost to foreign law firms without a drastic improvement in the quality and efficiency of representation by Korean attorneys. [email protected]

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Korea may Introduce U.S. Grand Jury System

Prosecutor General Joon-gyu KIM, in reaction to a recent bribery/sex scandal involving over 100 current and former Korean prosecutors, announced that Korea should adopt a U.S. grand jury system. The Korean prosecutor general vowed that for major cases he will initiate citizen-review panels immediately. Grand juries, in United States federal courts, comprise groups of between 16 and 23 citizens. The prosecution must present evidence to the grand jury before the prosecution can indict. In the U.S. federal system, 12 jurors must vote that the evidence is sufficient for the prosecution to indict and thus for a case to go to trial. The United States is one of the only legal systems to still utilize the system. The protections afforded by the grand jury, in U.S. federal court, are guaranteed by the 5th Amendment to the United States Constitution. The major advantage of the grand jury system, in Korea, will be

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Learn from Lee Administration

Korea Times October 2, 2009 by Sean C. Hayes (Host of this blog) The Lee Myung-bak administration and local governments have been pumping money into the economy through infrastructure spending. The administration has also lessened the regulatory burden on builders and provided funds for infrastructure and other building improvements. U.S. President Barack Obama, on the other hand, created a stimulus package that overwhelmingly has been used by states to pay for social program promises by politicians and feed the folks that put the Obama administration into office. For example, a group backed by Al Gore received a $600-million grant to develop an electric car; numerous charities that promoted liberal democratic causes received a stimulus fund; $30 million went to a train station that was abandoned for over 30 years; and $1 billion is going to a “FutureGen” power plant that seems likely to be never put into operation. Of course,

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Koreans Hold Unique View on Foreign Firms by Tom Coyner

For many years, the Korean market has been synonymous with protectionism in many foreign marketers’ minds.However, with the advent of a strong middle class and its successful struggle to gain a genuine democracy during the past two decades, many of the trade barriers have fallen. As more foreign products and services have become integrated into the Korean economy, a wider acceptance of foreign corporations has taken place. However, it would be a mistake to say this is a trend.  A number of counter factors remain — some of which are even strengthening. Foreign companies, especially from the major countries, are regarded with mixed feelings. While high technology and advanced products are admired and coveted, they are at the same time somewhat feared by Korean businessmen who perceive the possibility of having to depend on them. When using foreign IT products and services, Koreans sometimes feel they themselves are not up

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Testing the Con. Court Tests

By Sean Hayes (Korea Times 3/26/09) In my column, last week, I discussed a case at the Constitutional Court of Korea considering the ban on night protests. The article detailed the test used for time, place, and manner regulation of speech and assembly in the United States. As I mentioned in the column, in the United States, a law concerning assembly will be upheld if it is a reasonable time, place and manner regulation.A reasonable time, place, and manner regulation is content-neutral, has an important government interest, is narrowly tailored to achieve the interest, and provides viable alternative channels for communication. The test was developed in the United States and has been adopted, in part, by many non-American courts.The regulation, in Korea, would likely meet the American test. However, in Korea, the law may be analyzed in a different manner because of notable differences in the text of the Korean

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Ban on Night Protests

By Sean Hayes (Korea Times 03/20/09) The Constitutional Court heard oral arguments, last week, in a landmark case concerning the right to assembly. The case will have a lasting impact on the government’s ability to handle serious difficulties ― violence, disturbance of the peace and the destruction of property by an oft-violent liberal radical minority. The case concerns a Korean law prohibiting protests at night. Some protesters during last summer’s rallies against the importation of U.S. beef and other demonstrations were prosecuted under the law. The law allows violators to receive a sentence of up to one year in jail or a 1-million-won fine. The facial purpose of the law is to prevent protests from causing injuries and damage to property. As most of us know, many peaceful protests in Korea have turned violent at night. In the not so distant past, protests over the importation of U.S. beef led

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Opening Door to Legal Change

By Sean Hayes (Korea Times 03/05/2009) On Monday, the National Assembly passed a bill that permits law firms from countries with free trade agreements with Korea to operate “foreign law consultancy businesses” and individuals from these countries to be registered as “foreign legal consultants.” At present, the best estimate is that over 400 foreign attorneys work and reside in Korea. The vast majority are Koreans. These attorneys work for law firms, accounting firms, and corporations. Many of these attorneys play lead and/or vital roles in representing Korean and non-Korean clients in a vast array of matters concerning Korean and international legal matters. These attorneys are not technically “attorneys,” can’t be paid directly by clients, normally don’t sign work product, and can’t appear in court.But they do play vital functions for clients and Korean firms by bridging the gap between the high expectations of clients and the often low client service

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