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Strong drive needed to deregulate

Posted February. 09, 2019 08:45,   

Updated February. 09, 2019 08:45

한국어

The government’s plan to exclude a company’s proprietary technology such as patents from a list of regulated internal transactions has fallen by the wayside due to misalignment. In Thursday’s Cabinet meeting, a bill suggested by the Ministry of Economy and Finance upon request of businesses, in which sales generated from parts and materials transactions through a patent-owning company having inevitably awarded contracts to a special corporation associated with the specific technology should not be subject to regulation, was opposed by the Fair Trade Commission. The anti-trust watchdog said that allowing an exception will produce expedients and work in the interest of major shareholders.

Witnessing FTC Chairman Kim Sang-jo shatter the plan ambitiously pursued by Finance Minister Hong Nam-ki, the country’s firms would feel doubtful about how many regulations the incumbent government will be able to cut. It is only righteous that unfair business practices of illegally favoring subsidiaries to benefit families that own the companies must be stopped. It is also natural for the country’s watchdog to raise an issue as to internal transactions. However, the Finance Ministry must have had proper reasons to push ahead with the amendment. The Fair Trade Act already has a clause that stipulates that transactions between subsidiaries associated with specific technology are not considered internal transactions, in an apparent recognition that business secrets need to be kept from outside for a certain period.

Each and every regulation currently in place must have come out of certain reasons, such as safety, environment, and the protection of SMEs. Also, public agencies that execute their authority based on such regulations tend to resist efforts to cut red-tape, citing possible side effects. Still, there would be no single regulation the government can get rid of if it fails to brave the opposition of individual ministries or public officials. What’s needed is an ability to assess whether a regulation would be appropriate despite a wave of changes over time and what will happen when the regulation is removed, as well as a strong drive to get over opposition.

Businesses, which have had hopes of finally getting regulations slashed with President Moon and Minister Hong lately seeking economic revitalization, must have felt frustrated when the Fair Trade Commission vehemently countered the amendment and the Finance Ministry responded with a lethargic attitude. Whether it is economic recovery or deregulation, what’s important is not saying a hundred times but actually getting something done.