August 28, 2008

1

August 28, 2008August 28, 2008

2

Overview of Regulatory ReformOverview of Regulatory ReformOverview of Regulatory ReformOverview of Regulatory Reform

Regulatory Reform Tasks & ProgressRegulatory Reform Tasks & ProgressRegulatory Reform Tasks & ProgressRegulatory Reform Tasks & Progress

Regulatory Reform for Civilian LifeRegulatory Reform for Civilian LifeRegulatory Reform for Civilian LifeRegulatory Reform for Civilian Life

Road AheadRoad AheadRoad AheadRoad Ahead

3

Overview of Regulatory Reform

4

Support abolition and easing of unnecessary regulations

Support abolition and easing of unnecessary regulations

Proactive review before regulation creation

Proactive review before regulation creation

Infrastructure building for regulatory system improvement

Infrastructure building for regulatory system improvement

Rely on Market Function

Rely on Market Function

Enhance Regulation Quality

Enhance Regulation Quality

For Improved Convenience of Civilian Life andEnhancement of Growth Potential

For Improved Convenience of Civilian Life andEnhancement of Growth Potential

OverviewOverview Task and Progress Reform Report Road Ahead

5

Regulatory Reform Tasks & ProgressRegulatory Reform Tasks & Progress

6

1. Current Status of Identifying Regulatory Reform Tasks1. Current Status of Identifying Regulatory Reform Tasks

Identify tasks through various channels such as suggestions from economic groups and local autonomies, public suggestions,

and on-site inspection

Identify tasks through various channels such as suggestions from economic groups and local autonomies, public suggestions,

and on-site inspection

Identified 1,517 regulatory reform tasks by Aug.’08Identified 1,517 regulatory reform tasks by Aug.’08

By action typeBy action type By areaBy area

57%[865 items]57%[865 items]

Revision of enforcement decree/lower-level statutes

Revision of enforcement decree/lower-level statutes

38% [587 items]38% [587 items]Statutory revisionStatutory revision

5%[65 items]5%[65 items]

Budget actions and etc. Budget actions and etc.

19% [295 items]Investment promotion for business start-up and improvement of corporate environment

19% [295 items]Investment promotion for business start-up and improvement of corporate environment

13%Others13%

Others22%[328 items]

Finance22%[328 items]

Finance

17%[261 items]

Public convenience enhancement

17%[261 items]

Public convenience enhancement

6% Health care6% Health care

3% Education3% Education

13% [190 items]Land utilization and construction & dev.

13% [190 items]Land utilization and construction & dev.

Identify regulatory reform tasks from the demand perspectiveIdentify regulatory reform tasks from the demand perspective

Reform Report Road AheadTasks and ProgressTasks and ProgressOverview

7% Environment7% Environment

7

Completed 377 out of 1,517 tasks identifiedCompleted 377 out of 1,517 tasks identified

AugAug Dec. 2008Dec. 2008 Dec. 2009Dec. 2009

Some tasks are on hold due to delayed legislation in the National Assembly and resistance of interest groups Some time is needed for completed regulatory reform tasks to take effect, and proactive PR efforts are important for the public to feel the change

Some tasks are on hold due to delayed legislation in the National Assembly and resistance of interest groups Some time is needed for completed regulatory reform tasks to take effect, and proactive PR efforts are important for the public to feel the change

Reform Report Road AheadTasks and ProgressTasks and ProgressOverview

50%50%

0%0%

100%100%

00

500500

10001000

15001500

377

11461517

PerformancePerformance

2. Implementation Status of Regulatory Reform Tasks2. Implementation Status of Regulatory Reform Tasks

As of Aug. ’08

8

Regulatory Reform for Civilian LifeRegulatory Reform for Civilian Life

9

Ease economic burdens on subsistence business owners (In Sep.’08, the revision process will be initiated for Enforcement Decree of Housing Act)

Ease economic burdens on subsistence business owners (In Sep.’08, the revision process will be initiated for Enforcement Decree of Housing Act)

- Allow discretion for places with low necessity or with difficulty in installation (Ex: emergency broadcasting facilities)

- Exclude silkworm farms, apiaries and fish farms from the scope of application

Expect to ease economic burdens of small/medium-sized farming businesses

(In Dec.’08, Enactment Decree of Installation, Maintenance, and Safety

Control of Fire-Fighting System Act will be revised)

- Allow discretion for places with low necessity or with difficulty in installation (Ex: emergency broadcasting facilities)

- Exclude silkworm farms, apiaries and fish farms from the scope of application

Expect to ease economic burdens of small/medium-sized farming businesses

(In Dec.’08, Enactment Decree of Installation, Maintenance, and Safety

Control of Fire-Fighting System Act will be revised)

Relax duty of installation of fire-fighting equipment in cattle sheds (National Emergency Management Agency)

Relax duty of installation of fire-fighting equipment in cattle sheds (National Emergency Management Agency)

Road AheadOverview Tasks and Progress Reform ReportReform Report

11 Supporting economic activities of the self-employed and farmers & fishermenSupporting economic activities of the self-employed and farmers & fishermen

Abolish mandatory purchase of National Housing Bonds for small- scale, self subsistence-oriented restaurants (Ministry of Land, Transport, and Maritime Affairs)

Abolish mandatory purchase of National Housing Bonds for small- scale, self subsistence-oriented restaurants (Ministry of Land, Transport, and Maritime Affairs)

10

Less burdens on civilian lifeLess burdens on civilian life22

Increase cap on preferential repayment of housing rent deposit money (Ministry of Justice)

- Expand the scope of tenants qualified for preferential repayment of housing rent deposit money and raise the cap on preferential repayment amount (In Aug,’08, Enactment Decree of Housing Lease Protection Act was revised)

At lease 3.41 million households (250 thousand in Seoul) are expected to benefit from the change

Unlock USIM locks on mobile phones to allow the change of service provider with changing the mobile phone (Korea Communications Commission)

Offering consumers more choices and encouraging to reduce household communication expenditure

(In June ’08, interconnection standards for telecommunications equipment were notified and legislated.

Increase cap on preferential repayment of housing rent deposit money (Ministry of Justice)

- Expand the scope of tenants qualified for preferential repayment of housing rent deposit money and raise the cap on preferential repayment amount (In Aug,’08, Enactment Decree of Housing Lease Protection Act was revised)

At lease 3.41 million households (250 thousand in Seoul) are expected to benefit from the change

Unlock USIM locks on mobile phones to allow the change of service provider with changing the mobile phone (Korea Communications Commission)

Offering consumers more choices and encouraging to reduce household communication expenditure

(In June ’08, interconnection standards for telecommunications equipment were notified and legislated.


11

- Grant basic income deduction by defining foster children as dependent families eligible for income deduction

Promote foster care by easing economic burden on child care of a foster family (In Oct.’08, Revised Income Tax Act is to be presented to National Assembly)

- Grant basic income deduction by defining foster children as dependent families eligible for income deduction

Promote foster care by easing economic burden on child care of a foster family (In Oct.’08, Revised Income Tax Act is to be presented to National Assembly)

Stronger social safety net and more education opportunitiesStronger social safety net and more education opportunities33


Expand life-long education opportunities for the disabled (Ministry of Education, Science, and Technology)

- Allow extra quota for those in need of special education in life-long education facilities

Expand education opportunities for those marginalized from education including the disabled (June ’08, Enforcement Decree of Life-Long Education Act was revised)

Expand life-long education opportunities for the disabled (Ministry of Education, Science, and Technology)

- Allow extra quota for those in need of special education in life-long education facilities

Expand education opportunities for those marginalized from education including the disabled (June ’08, Enforcement Decree of Life-Long Education Act was revised)

Allow income deduction for children under foster care(Ministry of Strategy and Finance)Allow income deduction for children under foster care(Ministry of Strategy and Finance)

12

Transfer emigration reporting civil affairs to local governments (Ministry of Foreign Affairs and Trade)

Transfer emigration reporting civil affairs to local governments (Ministry of Foreign Affairs and Trade)

Local residents can report their emigration in their domicile (In July ’08, the revised Emigration Act was submitted to the National

Assembly]

Local residents can report their emigration in their domicile (In July ’08, the revised Emigration Act was submitted to the National

Assembly]

- Related system interface is supported to allow real-time list transmission

Ease time pressure on those who are duty-bound for military service (In July ’08, Enforcement Decree of Immigration Control Act was revised. In Dec. ’08, revised Military Service act will be submitted to the National Assembly)

- Related system interface is supported to allow real-time list transmission

Ease time pressure on those who are duty-bound for military service (In July ’08, Enforcement Decree of Immigration Control Act was revised. In Dec. ’08, revised Military Service act will be submitted to the National Assembly)


Abolish mandatory reporting of country departure for those with uncompleted military service (Ministry of Justice and Military Manpower Administration)

Abolish mandatory reporting of country departure for those with uncompleted military service (Ministry of Justice and Military Manpower Administration)

44 Resolve inconvenience in immigration control and overseas travelResolve inconvenience in immigration control and overseas travel

13

Improve the current universal vehicle exhaust inspection system (Ministry of Environment)

- Shift to intensive management targeting vehicles with excessive exhausts

Save 68 billion won a year (Dec. ’08, revised Clean Air Conservation Act is to

be submitted to the National Assembly)

Improve the current universal vehicle exhaust inspection system (Ministry of Environment)

- Shift to intensive management targeting vehicles with excessive exhausts

Save 68 billion won a year (Dec. ’08, revised Clean Air Conservation Act is to

be submitted to the National Assembly)

Reduce paperwork through information sharing (Ministry of Public Administration and Security)

- Increase the range of information and organizations to share administrative information

Reduce 29 million paper documents a year (app. 50%), saving 1.8 trillion won (Administrative information sharing

system in pilot operation)

Reduce paperwork through information sharing (Ministry of Public Administration and Security)

- Increase the range of information and organizations to share administrative information

Reduce 29 million paper documents a year (app. 50%), saving 1.8 trillion won (Administrative information sharing

system in pilot operation)

55


Target info.Target info. Target Org.Target Org.

42types42types

66types66types

45Org.45Org.

66 Org.66 Org.

CurrentCurrent ImprovementImprovement CurrentCurrent ImprovementImprovement

Vehicle management system improvement and simplification of civil request affairsVehicle management system improvement and simplification of civil request affairs

14

Road AheadRoad Ahead

15

1. Accelerating Regulatory Reform1. Accelerating Regulatory Reform

Speed up the legislative process for 149 regulatory reform bills to be submitted to the National Assembly by the end of this year

Facilitate efforts for bill passage through government-political parties consultation

Support passage of bills for regulatory reform in the N.ASupport passage of bills for regulatory reform in the N.A

Place priority on legislation and revision of lower-level statutesPlace priority on legislation and revision of lower-level statutes

Place priority on regulatory reform tasks that the government can implement at its discretion, such as legislation and revision of lower-level statutes

Overview Tasks and Progress Reform Report Road AheadRoad Ahead

16

Check monthly implementation progress, analyze causes for underperformance, and encourage effective reform implementationCheck monthly implementation progress, analyze causes for underperformance, and encourage effective reform implementation

Conduct interim (Sep.) and final (Dec.) assessment on performance- Reward excellent performers (organizations and people)

Conduct regulatory reform satisfaction surveys of the general public, the regulated, and experts (November)

Drive regulatory reform of local autonomiesfor more effective results of regulatory reformDrive regulatory reform of local autonomiesfor more effective results of regulatory reform

Spread best practices to other local governments and organizations(Planning to publish the best practice booklet containing examples of Paju, Kunsan, Ahnsan)

Identify and revise unnecessary regulations based on ordinances


1. Accelerating Regulatory Reform1. Accelerating Regulatory Reform

Conduct reviews and assessments to ensure exhaustive implementation of regulatory reformConduct reviews and assessments to ensure exhaustive implementation of regulatory reform

17

Shift from universal restriction and control to non-regulative measures such as economic incentives

Apply sunset clauses to regulations to prevent permanent effects from new regulations

Strengthen the check-up for the implementation status of regulatory review results


2. Thorough Regulatory Review2. Thorough Regulatory Review

Strengthen RIA capacity to improve the quality of regulation

Strengthen the gate-keeper’s role of the Regulatory Reform Committee for regulation creation and intensificationStrengthen the gate-keeper’s role of the Regulatory Reform Committee for regulation creation and intensification

18

Expand application of negative approach based regulation Expand application of negative approach based regulation

Strengthen regulation approaches in compliance with market principles and global standard

Clean up administrative inspection to reduce corporate burdenClean up administrative inspection to reduce corporate burden

Plan to abolish or clean up 88 out of 446 cases of administrative inspection

Apply Information technology for transparent and systematic regulation information managementApply Information technology for transparent and systematic regulation information management

Set up strategic plan this year, and complete system establishment by next year


3. Establishment of infrastructure including regulatory system improvement 3. Establishment of infrastructure including regulatory system improvement

19

Documents

August 28, 2008