SOUTH KOREA Law and Practice Contributed by: Heejun Choi, Kyoung-Ho Kim, Sungsok Yang, Eunjee Kim and Kwang-Chun Park, Dentons Lee
For many industrial goods, tariff rates are relatively moderate and a substantial proportion of imports benefit from Korea’s extensive FTA network, includ - ing agreements with the United States, the European Union, China, ASEAN, Australia and New Zealand. Importers claiming preferential rates must satisfy the applicable rules of origin and documentation require - ments. The highest tariffs generally apply to sensitive agricul - tural, livestock and food products, protected through tariff-rate quotas and high out-of-quota tariff rates. Korea also makes active use of trade remedy meas - ures. Anti-dumping duties may be imposed where dumped imports cause material injury to a domestic industry, while countervailing duties and safeguard measures are also available. Accordingly, Korea combines a generally liberalised tariff regime for industrial goods with targeted protec - tion for sensitive agricultural products and selected industries through tariff-rate quotas, trade remedies and FTA-based preferential tariff rules. Korea operates a mandatory merger control regime under the Monopoly Regulation and Fair Trade Act (“MRFTA”). Certain mergers, acquisitions and other transactions constituting a business combination must be notified to the Korea Fair Trade Commission (“KFTC”) where the applicable jurisdictional thresh - olds are met. The regime is based primarily on party size rather than market share. Accordingly, a filing may be required even where the parties have limited market shares, although competitive effects remain central to the KFTC’s substantive review. Reportable business combinations generally include: • acquisitions of shares exceeding the prescribed ownership threshold; 6. Competition Law 6.1 Merger Control Notification
• additional share acquisitions resulting in the acquirer becoming the largest shareholder; • mergers; • acquisitions of all or a substantial part of another company’s business; • certain interlocking directorates; and • formation of joint ventures where a participant becomes the largest shareholder. For share acquisitions, notification is generally required when the acquirer obtains more than 20% of the vot - ing shares of a non-listed company or more than 15% of the voting shares of a listed company. Subsequent acquisitions may also be reportable where they result in the acquirer becoming the largest shareholder. A filing is generally required when one party (together with its affiliates) has assets or annual sales of at least KRW300 billion and the other has at least KRW30 bil - lion. Korea has also introduced a transaction-value filing regime for acquisitions of innovative businesses with limited current revenue where the transaction value exceeds the statutory threshold and the target has a significant business presence in Korea. Although market share is not a jurisdictional threshold, it remains central to the KFTC’s substantive assess - ment and the KFTC may prohibit or impose remedies on transactions that substantially lessen competition. Accordingly, merger notification in Korea is deter - mined principally by the type of transaction and the size of the parties (or, in certain cases, transaction value and Korean nexus) rather than market share. 6.2 Merger Control Procedure The merger control process in Korea is adminis - tered by the Korea Fair Trade Commission (“KFTC”) under the Monopoly Regulation and Fair Trade Act (“MRFTA”). The first step is to determine whether the transac - tion constitutes a reportable business combination and satisfies the applicable jurisdictional thresholds. If so, the parties must determine whether pre-closing or post-closing notification is required.
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