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[Interview] Chairman of AMCHAM Board of Governors Jeffrey Jones with the Korea H…

   AMCHAM Korea News Clipping  Media Korea Herald Date March 30, 2018 Title [Doing biz in Korea] 'Government's distrust in business is biggest problem' Link http://www.koreaherald.com/view.php?ud=20180329000762? Source Print (A1) and Internet News  [Doing biz in Korea] ‘Government’s distrust in business is biggest problem Fewer regulations with greater clarity would help foreign firms do business here: Jeffrey Jones A lack of trust between the government and companies is among the biggest problems for companies doing business in Korea, according to the chairman of the board of governors of the American Chamber of Commerce in Korea.“The government and companies in Korea don’t trust each other. The government thinks the company management is not transparent and companies think regulations are too vague and harsh,” said Jeffrey Jones, in an interview with The Korea Herald.“The distrust leads to frequent audits and compliance, making foreign companies doing business difficult here,” the chairman added. For companies to improve transparency and build trust “they need to establish a system where boards are really functioning properly,” he said. The boards of directors at Korean conglomerates run by ownership families are generally little more than rubber-stamp bodies. According to data compiled by the Daishin Economic Research Institute, just 0.3 percent of 27,575 agenda items reviewed by the boards were rejected or delayed among the top 165 listed firms in Korea from 2011 to 2015. “But, if you look at the public-listed companies in the US, the board makes a decision and makes recommendations to their shareholders,” Jones said. He said companies should have professional boards of directors, who don’t just do what the management wants, but who really look at the operation of companies in a transparent and open way. AMCHAM plans to hold seminars for companies to strengthen transparency of board of directors and corporate governance. It has also been holding compliance and risk management seminars since 2016. As for the government’s side, it should ease hurdles posed by the regulatory environment that are too vague and too harsh for companies to comply with, the executive said. “There are tremendous ambiguities in the legal system, and that creates uncertainty and makes compliance difficulty,” said Jones, who has also been practicing in Korea as a lawyer for more than 35 years. He said different interpretations on the same matter among many laws and a lack of clear knowledge by governmental officials confuse companies. Korea’s regulatory challenges were also noted in a report released by the World Economic Forum last year. Regarding national competitiveness in terms of the burden on companies posed by governmental regulations, Korea ranked No. 105 of 138.“Many and vague regulations increase cost of compliance, making most multinational companies doing business in Korea difficult. So what we need is fewer regulations but greater clarity.”He also said criminalization of businesses in Korea’s regulatory system hinders entrepreneurship of companies doing business here. “In Korea, it seems every violation of laws, even if it is administrative, is criminal. There is too much criminal liability,” he said. For instance, in Korea, a manager failing to file a foreign exchange report, or who pays wages late, or even fails to inspect an office elevator, could be subject to criminal penalties.The same goes for Korea’s handling of breach of duty, he noted.“Korea is also the only country that makes breach of duty a crime. Even if a manager acts in the best interest of companies and makes a decision that results in losses, criminal liability can be imposed.”Under criminal law in Korea, a breach of duty is defined as when a person who manages another person’s business gains wealth by violating his duty. Chiefs from the largest conglomerates, including Samsung, Hyundai, SK and CJ have been charged with breach of duty in the past.Some other countries, including Germany, Japan, Switzerland and Austria, punish people for breach of duty, though it is not criminalized.Jones, who is has been well reputed for his dedication and expertise in economic activities here, has been a lawyer at local law firm Kim & Chang since 1980. He served as chairman of AMCHAM from 1998 to 2002. Since 2003, he has been a member of the board of directors, and became its chairman last year. 


[Interview] Chairman & CEO James Kim with KOTRA (Korea Trade-Investment Promotio…

  The Korea-US free trade agreement (KORUS FTA) has been a hot topic of discussion over the last year. Amid continued talks of renegotiation, pundits from both the American and Korean side have weighed in about the future of the FTA. And if there’s one person who understands both perspectives, it’s James Kim. As the first Korean-American to serve as chairman and CEO of the American Chamber of Commerce (AMCHAM) in Korea, Kim acknowledges that the FTA has room for improvement but emphasizes that the agreement is crucial to further strengthening the Korea?U.S. economic partnership. Here’s what Kim had to say about the FTA and how AMCHAM has become the go-to organization for enhancing trade and investment opportunities between the two countries. What is the role of AMCHAM and how is AMCHAM Korea strengthening Korea-U.S. relations? AMCHAM serves as a solid platform for the U.S. and the international business community to voice their opinion in building a business-friendly environment in Korea. We have been in Korea for 65 years, helping and supporting the business community to succeed and thrive in the market. As the largest foreign chamber in Korea, our focus is to foster growth of the U.S. and Korean economies through increased trade and commerce. AMCHAM achieves these goals by serving as a vital communication channel for the U.S. business community and engaging in dialogue with key decisionmakers in both Korea and the U.S. As an advocate of business, we also assist in opening opportunities for our members while helping to reduce barriers for fair competition. In addition, facilitating the successful implementation of the KORUS FTA is a primary focus for AMCHAM. We believe it is key to furthering the U.S.?Korea economic partnership, and that it will continue to bring benefits for the vast majority of those American businesses operating in Korea and Korean businesses operating in the U.S. We have over 30 committees covering virtually all industries in Korea. The committees meet regularly to exchange AMCHAM is at the forefront of strengthening the Korea-U.S. alliance by serving as a vital communication channel between the two countries ideas and information, and engage in dialogue with relevant stakeholder throughout the government, academia and the business community.  We also collaborate with the Korean government to increase investment. Last year we signed an MOU with the Presidential Committee on Jobs Policy with the aim to promote job creation and foreign direct investment in Korea. Also each year, AMCHAM visits Washington D.C. to meet with key officials from the White House, Congress and policy think tanks to discuss issues critical to the U.S.?Korea relationship. Last year, we delivered the message that the KORUS FTA is effective on several levels for the continued economic relationship between the U.S. and Korea. But AMCHAM is not just about business. We operate a charity foundation called Partners for the Future which helps underprivileged students. Since 2000, we have awarded close to 3,000 scholarships to university students in Korea. Are there particular industries in Korea that are attracting attention from American companies? Korea is well-known for its vibrant and dynamic industries like the IT sector. It also helps that Korea has a highly educated work force characterized by strong work ethics. Thanks to home grown companies, Korea leads the world in areas such as semiconductors and display panels. We’re seeing a lot of global companies attracted to this kind of environment, not only in manufacturing but also services and innovative startups. For example, companies like WeWork with its innovative shared space business model, is thriving in Korea and opening up new spaces. Delta Airlines recently decided to locate its Asia head office in Korea. These are all examples of how attractive the Korean market is. What are some challenges that American companies face when doing business here? What canthe Korean government do for foreign companies to make things easier for them? Some of the biggest challenges of doing business in Korea are the various regulations dubbed ‘Korea? Unique Standards’. These barriers create imbalances in what should be a level playing field, and foreign businesses lose motivation to participate and compete in the Korean economy. Aligning these unique standards with global standards is very important. However, we are seeing progress. Particularly the government’s willingness to engage in meaningful dialogues with the global business community has greatly improved. For instance, recently the Korean authorities decided to delay the implementation of a revised tax regulation designed to widen the taxation base among foreign investors. This was made after intense discussions with the international finance community, including AMCHAM. Korea and the United States have been close allies for many years. What are your hopes for economic/political relations between the two regions? Today, Korea is the 6th largest trading partner to the U.S. and the 2nd largest foreign direct investor to the U.S. from Asia. There is no question that the economic relationship between the two countries is inseparable. The KORUS FTA has been the platform through which the two nations are able to increase cooperation and resolve potential issues. However, we must acknowledge that the FTA has room for improvement, especially in regards to the implementation of the existing agreement. I am confident that through a constructive and productive process we will have a more stable and sustainable roadmap for the future. As evidenced by President Moon Jaein and President Donald Trump’s greatly successful state visits in 2017, I remain optimistic that the rock-solid alliance U.S. and Korea have built over the years will only strengthen in the future.?