The government decided to immediately activate a ‘temporary implementation framework’ before the law takes effect to ensure seamless implementation of the Korea-U.S. strategic investment memorandum of understanding (MOU). As it is expected to take about three months to enact the relevant special act, the aim is to preempt unnecessary misunderstandings on the U.S. side regarding Korea remaining committed to carrying out the investment.

On the 10th, Deputy Prime Minister and Minister of Finance and Economy Gu Yoon-cheol chaired the External Economic Ministers Meeting at the Government Complex Seoul and finalized the ‘operational plan for the temporary implementation framework to carry out the Korea-U.S. strategic investment MOU’.

This measure reflects the legislative timetable and effective date of the currently promoted ‘special bill for managing Korea-U.S. strategic investment’. Even if the special act passes the National Assembly, the government expects it will take at least three months to actually take effect after the establishment of subordinate decrees and other steps.

The government judged that leaving this interim period unaddressed could lead the U.S. side to harbor the suspicion ‘is Korea’s investment commitment weakening?’. Gu stated, “It is not desirable for the national interest for unnecessary misunderstandings to arise or for trust to be damaged between Korea and the U.S. during the MOU implementation process.”

Earlier, the two countries agreed to lower mutual tariffs to 15% from 25% on the condition that Korea invests $350 billion in the U.S. However, on the 26th of last month, U.S. President Donald Trump unilaterally notified that he would raise tariffs back to 25%, the level prior to the trade agreement, citing delays in legislating the Special Act on Investment in the U.S.

To address such U.S. concerns, the government decided to establish a prior preliminary review system for candidate projects identified by the two countries, to the extent administratively feasible, until the special act takes effect. To this end, in place of the corporation (fund) steering committee under the special act, the ‘External Economic Ministers Meeting’ will serve as the temporary control tower.

A ‘Strategic Investment MOU Implementation Committee’, involving the Minister of Trade, Industry and Energy, vice ministers from relevant ministries, and related institutions, will also be operated on a temporary basis. To examine the commercial rationality of the candidate projects from both Korea and the U.S., a project preliminary review team of experts will be formed under the committee. An official at the Ministry of Finance and Economy explained, “As detailed project reviews take considerable time, this is intended to shorten the review period.”

Gu said, “This procedure is an administratively feasible prior preliminary review before legislation,” and added, “Final investment decisions and execution will be pursued after the special act passes, taking into account commercial rationality and overall financial conditions, including the foreign exchange market.”