Skip to main content

COVID-19

2020-04-09

We provide below our legal updates and selected links to the Korean government and public organization websites to provide you with the most up-to-date and essential insights on various legal challenges that you may be facing due to the COVID-19 pandemic. For any additional information (including translations) or questions, please reach out to the BKL COVID-19 Response Team or your BKL contact.  



BKL Legal Updates


General

 Managing Compliance Risks Relating to COVID-19 Epidemic (ENG)


Human Resources/Labor

 COVID-19 news update – labor/employment issues (KOR)

 FAQs regarding HR Issues in consideration of COVID-19 Pandemic (ENG)

 Government Support Measures for Employers in connection with COVID-19 Pandemic (KOR) 


Contract – Force Majeure Issue

 COVID-19 and Force Majeure Issue in Sales Transactions — South Korea (ENG)


Listed Company

 Disclosure Considerations in light of COVID-19 pandemic (KOR) 


Banking & Securities

 Regulations enacted to promote funding in response to COVID-19

 Six-month Ban on Short Sale Trades (ENG)


Construction

 Effects of COVID-19 Pandemic on Construction Contracts and Challenges Faced by Construction Industry (KOR) 


Fair Trade

 Key Issues and Measures Relating to Korean Competition Laws (ENG)


Governmental Support

 Financial Support to be Provided by Central and Provincial Governments in connection with COVID-19 pandemic (KOR)


Overseas – China

 Administrative/criminal punishment for failure to comply with public health measures against COVID-19 (KOR)

 COVID-19: HR Issues in China (KOR)

 COVID-19: Legal Issues in China (Part 2) (KOR)

 COVID-19: Legal Issues in China (Part 3) (KOR)

 COVID-19: Legal Issues in China (Part 4) (KOR)

 COVID-19: Q&A regarding HR Issues in China (KOR)


Overseas - Southeast Asia

 Guidance on conducting business in Myanmar in light of COVID-19 (2) (KOR)

 Guidance on conducting business in Indonesia (e-litigation) (KOR)

 COVID-19: Legal Issues in Indonesia (KOR)

 COVID-19: Legal Issues in Myanmar (KOR)

 COVID-19: Legal Issues in Vietnam (KOR)


Overseas - Dubai

 COVID-19: Legal Issues in UAE (2) (KOR)

 COVID-19: Legal Issues in UAE (1) (KOR)


Overseas - Japan

 Guidance on conducting business with Japanese companies in light of COVID-19 (KOR)


Protection of Personal Information
 Personal Information Protection Regime in connection with disclosure of names of infected employees (ENG)


Tax

 Survey of key legislation and measures for tax relief in response to COVID-19 (KOR)




Useful Links to Government/Public Institution Materials related to COVID-19

 

Response measures jointly determined by relevant ministries 

The government announces measures to minimize the impact of COVID-19 on the tourism, movie, communication, media industries April 1, 2020

At the 13th economic ministerial meeting / third crisis management meeting, the government announced a set of new measures to help the tourism, movie, communication and media industries that have been hit hard by the COVID-19 outbreak, such as temporary exemption from rent and relevant fees. 


Government eases foreign exchange (FX) market stability rules March 26, 2020 

As uncertainties in capital flows continue to grow due to COVID-19, MOEF, FSC, the BOK and FSS have decided to ease FX market stability rules by: (i) increasing FX future trading limits by 25%; (ii) temporarily exempting financial institutions from non-deposit FX liabilities; and (iii) temporarily lowering FX liquidity coverage ratio from 80 to 70% for three months from late May 2020.  

The government has announced plans to inject KRW 20 trillion of emergency funds to increase employment maintenance subsidies and provide liquidity support to importers/exporters and companies with an overseas presence.

At the second emergency economic meeting, the government decided to double the planned economic rescue package to KRW 100 trillion to help companies hit by COVID-19.  The support package includes KRW 58.3 trillion in loans to small and medium-sized enterprises (SMEs), small business owners and large corporations and KRW 41.9 trillion in funds to purchase corporate bonds, etc.
For more information on the economic support package, please visit: www.moef.go.kr/sns/2020/emgncEcnmyMtg.do

At the first crisis management meeting, the government announced emergency measures aimed at helping sectors to cope with the impact of COVID-19, i.e., aviation/transportation, tourism/performing arts, export and shipping.

In anticipation of decline in participation in shareholders’ meetings which could affect major resolutions for companies, various authorities, including FSC and the Ministry of Justice, jointly announced measures to allow companies to delay the submission of financial statements and annual reports for their annual shareholder meetings, and encouraged voters to use postal or electronic voting systems rather than attending meetings in person. 

The government has announced measures to help ease the impact of COVID-19 and improve exporters’ financial conditions by increasing trade finance by KRW 3.1 trillion, restructuring the supply chain of SMEs and plans for innovating trade structures. 

The government has decided to provide emergency support for the aviation industry through various measures including: (i) emergency loans, delayed reclamation of unused traffic rights and slots, delayed payment of airport usage fees; (ii) support for market expansion; and (iii) exemption from landing fees, increased slot flexibility at Incheon International Airport, support for lease deposits. 

Ministry of Science and Information and Communication Technology (ICT)
In order to reduce COVID-19-related impact on ICT companies, MSIT has decided to reduce fees for using or leasing relevant equipment or defer payment thereof for key institutions supporting ICT businesses, such as the Korea Communications Agency (KCA), the National IT Industry Promotion Agency (NIPA), the Electronics and Telecommunications Research Institute (ETRI), the Telecommunications Technology Association (TTA) and the Korea Internet & Security Agency (KISA). 

Korea Customs Service (KCS)
KCS has announced plans to expand customs duty exemption for raw materials transported by air to support domestic manufacturers that are experiencing difficulties in importing raw materials.  

Effective March 18, 2020, KCS has implemented special tax support for importers and exporters located in Daegu, Gyeongsan, Bonghwa and Cheongdo, areas designated as special disaster zones.  Measures include suspension of customs investigation and postponement of deadlines for paying penalties. 

Ministry of Employment and Labor (MOEL)
MOEL has amended its guidelines for preventing the infection and spread of COVID-19 at workplaces.

MOEL has ordered prompt approval of applications for extending working hours by financial institutions.

MOEL has issued guidelines on working from home that contain Q&As on relevant labor laws. 

MOEL has announced that it will temporarily provide up to 90% of employment maintenance subsidies for all industries from April to June 2020 to help cover the cost of employees’ paid leaves of absence and suspension of business.  

MOEL has announced that it will temporarily increase government subsidy for reduced working hours from March 1 to June 30, 2020 where such reduction of working hours is implemented for child care.  MOEL’s subsidy will cover indirect labor costs, compensation for reduced pay and costs associated with employee substitution for a maximum of one year.  

MOEL has issued guidelines on social distancing for employers and employees at workplaces to help prevent the spread of COVID-19.  

MOEL has announced that it will cover parts of the cost incurred in setting up the requisite infrastructure for working from home, such as infrastructure costs for call centers.  

MOEL has issued guidelines for preventing the infection and spread of COVID-19 at workplaces.

MOEL has announced that it will provide special support for the travel and tourism industries for the next six months to help affected companies to maintain employment and decided to extend its support for areas designated as employment crisis regions until December 31, 2020.  

MOEL has issued Q&As on labor laws on issues relating to COVID-19.  

MOEL has issued English and Chinese versions of its guidelines for preventing the infection and spread of COVID-19 at workplaces.

MOEL has simplified procedures for SMEs to apply for employment subsidy in order to help SMEs to implement flexible work arrangements, such as remote working arrangement, flexible scheduling of work hours. 

Korea Fair Trade Commission (KFTC)
By amending its regulations “Standards on SME-Large Company Fair Dealings/Agreements” for subcontracting transactions, KFTC seeks to incentivize corporations to pursue co-prosperity with subcontractors by granting more points for fair dealings/agreements. 

KFTC has announced measures to ease the burden on businesses in meeting deadlines for submitting various documents to KFTC, including extending submission deadlines for respondent’s response briefs by two weeks.  

KFTC stated that it engaged in discussions with companies regarding resolving disputes that arise in connection with COVID-19 and that it would resolve such disputes expeditiously.  

KFTC has issued warning to 6 businesses for exaggerating the purifying function of auto air purifiers. 

National Tax Service (NTS)
NTS has announced that it will provide support to businesses affected by COVID-19, including extending filing deadlines for VAT.  

NTS has announced that it will provide support to businesses affected by COVID-19, including extending filing deadlines for VAT.  

Ministry of Land, Infrastructure, and Transport (MOLIT)
MOLIT has issued its updated guidelines preventing the infection and spread of COVID-19 on construction sites.  

MOLIT has announced additional measures for the aviation industry, including delaying reclamation of unused traffic rights and slots and reduction or exemption from airport usage fees. 

The Construction Guarantee Cooperative and the Korea Specialty Contractor Financial Cooperative will support the construction industry by providing emergency special loans in proportion to the contribution ratios of the members, and public institutions will modify construction-related contract provisions in response to the COVID-19 pandemic. The government plans to implement a wage system or measures to prevent late payment of compensation to construction workers.  

Financial Services Commission (FSC), Financial Supervisory Service (FSS) 
In order to ease burden on the operation of financial companies so they can readily provide financial support to entities/individuals in these challenging times, FSC and FSS have announced that the exemption policy will be amended to the effect that (i) the scope of exemptions from sanctions will be defined in advance and (ii) officers/employees will be presumed eligible for exemption absent intent/gross negligence.  FSC and FSS have also implemented measures to ensure that warnings or non-action decisions will be issued for light offences and sanctions are not imposed absent intent/gross negligence, and that consulting services will be offered for companies entering the market in connection with the approval/licensing process.

FSC has announced that it would run special lending programs beginning on April 1, 2020 to help SMEs and small business owners to cope with the impact of COVID-19.  

FSC and FSS have announced that the final version of the Basel III standards will be implemented in the second quarter of 2020, which would allow banks to apply the Basel III standards starting in late June 2020.   

In light of the difficulties caused by COVID-19, the Securities and Futures Commission has decided to exempt 63 companies that are unable to make timely submissions and 36 auditors from administrative sanctions.

FSC has temporarily banned stock short selling for all listed firms and raised the ceiling on local firms repurchasing their own shares, for six months beginning on March 16, 2020.   

In response to the COVID-19 crisis, FSC, FSS and Fintech Center Korea have announced plans for ensuring continuous operation of the financial regulatory sandbox system.  

In relation to the increased risk of cyber-attacks during the COVID-19 pandemic, FSC and FSS have issued guidelines to help financial companies improve cybersecurity, including recommended practices to minimize damages from hacking.  

In anticipation of decline in participation in shareholders’ meetings which could affect major resolutions for companies, various authorities, including FSC and the Ministry of Justice, jointly announced measures to allow companies to delay the submission of financial statements and annual reports for their annual shareholder meetings, and encouraged voters to use postal or electronic voting systems rather than attending meetings in person. 

FSC has announced it will implement special financial support measures to help small and medium-sized enterprises and small business owners impacted by COVID-19, such as special loans and credit guarantees, extensions on existing loans and guarantees, and export-import financing.  

Ministry of Economy and Finance (MOEF)
As uncertainties in capital flows continue to grow due to COVID-19, MOEF, FSC, BOK and FSS have decided to ease FX market stability rules by: (i) increasing FX future trading limits by 25%; (ii) temporarily exempting financial institutions from non-deposit FX liabilities; and (iii) temporarily lowering FX liquidity coverage ratio from 80 to 70% for three months from late May 2020.  

MOEF announced that for automotive components imported to Korea by air transport, tariff for maritime transport would apply, rather than tariff for air transport.  

Ministry of Culture, Sports and Tourism (MCST) 
MCST increases financial support for the tourism industry - March 19, 2020
MCST announced that it plans to increase the fund for financial support for the tourism sector and provide up to KRW 300 billion in emergency loans.

Ministry of Justice (MOJ)
MOJ has implemented measures to restrict residence or scope of activities of all incoming foreigners as part of its efforts to ensure public peace/order pursuant to Article 22 of the Immigration Control Law.  
Any foreigners in violation of such measures may be punished by imprisonment for up to 3 years and monetary fine of up to KRW 20 million.

MOJ announced that it would impose strict measures against individuals in violation of self-quarantine under the Act on Prevention and Control of Infectious Diseases, such as criminal punishment and/or compensation for damages.   

Ministry of Health and Welfare (MOHW), Korea Centers for Disease Control and Prevention (KCDC), etc. 

MOHW announced that it plans to provide support for clinical trials of virus test kits from March 26, 2020, in order to promote export of the diagnostic tools 

MOHW announced that it plans to provide special financing to medical institutions in financial difficulties due to COVID-19.  

CDSCH and the headquarter for quarantine management have issued a guideline for implementing safety measures at workplaces to prevent the spread of COVID-19.  

Ministry of Trade, Industry and Energy (MOTIE)
MOTIE has announced plans to provide financial support in the amount of KRW 10 billion in 2020 to help cover R&D costs for automotive component manufacturers 

MOTIE has announced that it will exempt companies from certain administrative procedures applicable to importing chemical substances in order to help deal with supply difficulties.   

MOTIE has announced that CDSCH and the headquarter for quarantine management have issued a guideline for implementing safety measures at workplaces to prevent the spread of COVID-19.  

MOTIE has announced extensions and deadlines for various R&D projects in the industrial development sector in consideration of the COVID-19 crisis.  

Korean Intellectual Property Office (KIPO)
To help international patent applicants navigate amid the COVID-19 crisis, KIPO has made available guidance from the International Bureau of WIPO on the status of its operation and its rules on extension of relevant submission deadlines. 

In light of the COVID-19 situation, KIPO has announced that it has extended statutory time limits for submission of documents for applicants of patents, utility model, designs and/or trademarks out of concerns that they would not be able to meet relevant deadlines.  Deadlines falling between March 31, 2020 and April 29, 2020 have been postponed to April 30, 2020.  

KIPO has updated the status of various countries’ patent and trademark offices and the measures implemented by them in light of COVID-19.  

KIPO has announced that it will implement remote/video conference meetings to reduce physical, in person meetings by examiners to help reduce the spread of COVID-19.   

KIPO announced that it has formed a taskforce and will implement measures for effective response to the COVID-19 situation, including providing special lending programs to affected companies in cooperation with participating banks.

KIPO has provided status updates of CNIPA, which recently announced that if an applicant misses a deadline because of epidemic control measures, such applicant can invoke force majeure and apply for a reinstatement of its rights.  

The Bank of Korea (BOK)
BOK has analyzed the global impact of COVID-19 on payment methods, which has led individuals/entities to rely on payment methods requiring no human contact.

Governors and Heads of Supervision announced measures to increase operational capacity of banks by deferring the implementation of Basel III standards for one year.  

BOK has decided to supply unlimited liquidity by purchasing repurchase agreements on a weekly basis. 

BOK announced that it entered into a USD 60 billion bilateral currency swap agreement, which is expected to relieve liquidity concerns caused by COVID-19.  

The Monetary Policy Board of BOK has decided to cut key interest rates by 50 basis points to 0.75% amid growing concerns over COVID-19.   

Ministry of Oceans and Fisheries (MOF)
MOF announced that it would launch a project to help shipping and logistics companies’ entry into foreign markets. 

In light of COVID-19, MOF announced that it will accept vessel inspections and safety certifications done remotely.  

MOF announced a set of measures to provide emergency financial support for shipping companies, including provision of operating capital and exemption and reduction of various fees.   

Ministry of the Interior and Safety (MOIS)
Beginning on April 1, 2020, all travelers entering Korea from overseas must undergo a 14-day mandatory self quarantine.  

MOIS announced that various regional public companies and institutions are providing support to help small businesses cope with the impact of COVID-19, including reducing rent and/or providing full refunds for facility usage fees paid by small businesses.   

In order to stem the spread of COVID-19, MOIS has announced plans to provide KRW 51.9 billion to local administrations in a total of 17 cities and provinces affected by COVID-19, including KRW 28.2 billion for the Daegu and Gyeongbuk regions.

Amendment to Enforcement Decree
The amended Restriction of Special Taxation Act went into effect on March 23, 2020.  The amendment seeks to minimize the impact of COVID-19 by exempting certain SMEs affected by COVID-19 from paying corporate tax and income tax.  Around April 2020, updates will be made to the Enforcement Decrees to the Restriction of Special Taxation Act and the Act on Special Taxation for Rural Development to reflect the amendment.   

The National Assembly passed revision bills relating to epidemic prevention and quarantine for effective response to the COVID-19 situation, including allowing relevant authorities to fine suspected infected patients who refuse to be tested and patients who do not comply with quarantine or hospitalization orders.  
Move post
Classification Title
Next Closed offices of BKL during Korean Thanksgiving Holidays
top