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[AMCHAM BOG Letter to President Yoon] ​AMCHAM urges Yoon to ease strict workplace safety act to attr…


AMCHAM urges Yoon to ease strict workplace safety act to attract foreign firms

US business lobby sees Korea's potential as Asia-Pacific business hub once regulations are eased



By Park Jae-hyuk, The Korea Times - The American Chamber of Commerce in Korea (AMCHAM) requested President Yoon Suk Yeol to ease certain regulations that are unique to Korea, in order to convince multinational companies to relocate their Asia-Pacific headquarters to Seoul from Hong Kong and mainland China in light of growing geopolitical risks, the U.S. business lobby said Tuesday.


In particular, the organization highlighted concerns regarding the Serious Accidents Punishment Act (SAPA), which it claims has elevated risks for CEOs by imposing severe penalties on top corporate officials, including imprisonment or hefty fines, for fatal industrial accidents, surpassing penalties enforced in Japan, Hong Kong, and Singapore.


AMCHAM conveyed these requests through a letter and a recent report sent to the president. Notably, this marks the first instance of the business lobby, representing U.S. companies in Korea, directly addressing Yoon since the organization formally presented a comprehensive set of policy recommendations to him in April 2022, when he was president-elect. During a luncheon held last month between Yoon and foreign business leaders, AMCHAM Chairman James Kim highlighted to the president that Korea's stringent regulations constrain the nation's ability to establish itself as a prominent business hub for high-tech industries.


"CEO risks and digital economy-related challenges arise from Korea-specific regulations," the AMCHAM chairman told The Korea Times. "For example, the SAPA imposes penalties on CEOs for serious industrial accidents, surpassing those in other countries."


Under SAPA, which came into effect in January 2022 and was extended to encompass small companies this year, CEOs can potentially face up to one year in prison or a maximum fine of 1 billion won ($746,000) in the event of major on-the-job accidents including deaths.


AMCHAM also emphasized that Korea should reform its rigid labor laws, cloud service restrictions and unpredictable tax systems, claiming that those regulations are not in line with global standards and hinder the country's competitiveness.


However, the chamber did not complain about the Fair Trade Commission’s plan to introduce a law to predesignate market-dominant online platforms to prevent unfair practices, despite concerns among U.S. tech giants about the potential to inadvertently favor Chinese late movers such as AliExpress and Temu.


In a detailed report attached to the letter, AMCHAM suggested that the government develop a structured program with targeted incentives to attract foreign investments. Housing and education assistance, as well as rental space subsidies, were mentioned as necessary measures to make Korea a more attractive destination for global enterprises.


For expatriates in Korea, the chamber also asked for a seamless mobile phone setup process and simplified procedures for opening bank accounts and obtaining credit cards. In addition, the government was urged to promote its regional headquarters program by collaborating with relevant institutions, municipalities and business community.


AMCHAM underscored the significant potential for Korea to emerge as the premier commercial hub in the region citing a survey by the business lobby that showed the Asian country ranked as the second-most-preferred destination for the APAC headquarters after Singapore for the third consecutive year.


“As Korea continues to position itself as a leading business hub in the APAC region, collaboration between government entities, local stakeholders, and international businesses will be essential,” the AMCHAM chairman said. “By embracing regulatory reforms and proactive promotion strategies, Korea can solidify its status as a preferred destination for multinational companies seeking to establish their presence in the region.”


The chairman also vowed to help Korea become the number one destination for regional headquarters, adding that he looks forward to working more closely with both the U.S. and the Korean governments for their continued economic growth and prosperity.


He is reportedly in talks with government officials to deliver the chamber's proposals to the presidential office in person.


AMCHAM said it will continue to engage the government to discuss proposals further, including talks with the Ministry of Economy and Finance and the Ministry of Trade, Industry and Energy.


Source: https://www.koreatimes.co.kr/www/tech/2024/03/129_370937.html