The South Korean government is establishing a regulatory framework to facilitate strategic investment cooperation with the United States, aiming to promote a $200 billion investment project.
On June 9, the Ministry of Finance announced that the Cabinet approved the enforcement decree for the Special Act on Strategic Investment between South Korea and the United States. This decree outlines the operational guidelines for the law, which will take effect on June 18, and details the procedures for implementing the strategic investment memorandum of understanding (MOU) signed by the two countries last year.
The decree defines "commercial viability," a key criterion for assessing investment projects in the U.S. It states that the total expected revenue distributed to South Korea during the anticipated lifespan of each investment must be sufficient to cover the principal and interest of the investment.
The interest rate used to calculate the principal and interest will be based on the yield of 20-year U.S. Treasury bonds at the time of investment, plus an agreed-upon margin between South Korea and the U.S. The expected lifespan and margin will be determined through deliberations by the Korea-U.S. Strategic Investment Operating Committee, chaired by the Deputy Prime Minister and Minister of Finance, in consultation with the U.S. side.
The selection process for investment projects has also been clarified. The Project Management Committee, chaired by the Minister of Industry, will review the commercial viability of individual projects, along with legal and strategic considerations, domestic corporate participation, U.S. government support plans, and expected revenues, before reporting to the Operating Committee.
However, projects lacking commercial viability may still be reviewed separately if they significantly impact national security or supply chain stability.
The government has set the operational period for the Korea-U.S. Strategic Investment Corporation, established under the special law, at 20 years from the date of registration. The legal capital of 2 trillion won will be raised through annual cash contributions from the government.
Additionally, the government may delegate some responsibilities to the Korea Overseas Infrastructure & Urban Development Support Corporation (KIND), along with the Export-Import Bank of Korea, Korea Development Bank, Korea Trade Insurance Corporation, Korea Investment Corporation (KIC), and Korea Maritime Promotion Corporation.
The government plans to complete the enforcement decree's promulgation process swiftly and launch the Korea-U.S. Strategic Investment Corporation on June 18. Specific investment projects in the U.S. will be finalized following assessments by the Project Management Committee, deliberations by the Operating Committee, reports to the National Assembly, and consultations with the U.S. side.
* This article has been translated by AI.
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