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(Seoul=Yonhap Infomax) Da Ye On—South Korea and the United States have agreed to execute $350 billion in investments into the US as part of recent trade negotiations, and a special law to support this initiative is taking shape.
The government plans to create the "Korea-US Strategic Investment Fund" to support investments in the US and collaborative projects in shipbuilding, and will establish the "Korea-US Strategic Investment Corporation" as a temporary entity with a mandate of up to 20 years to manage the fund.
According to the National Assembly on the 25th, Kim Byung Ki, floor leader of the Democratic Party, will propose the "Special Act on the Management of Korea-US Strategic Investments" on the 26th, which outlines these measures.
According to the draft bill exclusively obtained by Yonhap Infomax, the government will designate the $350 billion investment agreed upon in trade talks as a "strategic investment" and detail the implementation plan in the special law.
The strategic investment is divided into two categories: $200 billion committed by South Korea to strategic sectors such as shipbuilding, semiconductors, pharmaceuticals, critical minerals, energy, artificial intelligence, and quantum computing; and $150 billion in private investment, guarantees, and ship financing in the shipbuilding sector.
Funding for these strategic investments will be sourced from the Korea-US Strategic Investment Fund, and the Korea-US Strategic Investment Corporation will be established for up to 20 years to manage the fund.
The statutory capital of the Korea-US Strategic Investment Corporation will be KRW 3 trillion ($2.2 billion), with contributions from the government and related entities.
Certain operations may be delegated to the Korea Development Bank, Export-Import Bank of Korea, Korea Trade Insurance Corporation, and Korea Investment Corporation.
The board of the Korea-US Strategic Investment Corporation will consist of up to five directors, including one president, and one auditor. The president will serve a three-year term, while directors and the auditor will serve two-year terms, with the possibility of annual reappointment.
The Korea-US Strategic Investment Fund will be established within the corporation to efficiently execute strategic investments. The fund will be formed with entrusted assets from the government, the Bank of Korea, and others, and will be used to support investments in the US and shipbuilding cooperation.
The special law also allows the Korea-US Strategic Investment Corporation to issue Korea-US Strategic Investment Bonds, with the fund bearing the cost, to raise capital for strategic investments.
A "Korea-US Strategic Investment Operations Committee" will be set up within the corporation to deliberate and decide on matters related to the planning and management of strategic investments. The committee will select projects to propose to the US Investment Committee as potential US investment targets, and will also decide whether to proceed with projects proposed by the US side.
The committee will oversee all aspects of investment decisions and execution, as well as the overall management of the Korea-US Strategic Investment Fund and Corporation.
The special law stipulates that the committee must not approve investments exceeding $20 billion per fiscal year for US investment projects.
The operations committee will be composed of up to 15 members, including one chairperson, with the Minister of Economy and Finance serving as chair.
Additionally, a Project Management Committee will be established within the Ministry of Trade, Industry and Energy to review the commercial viability and strategic and legal considerations of US investment projects, and a Korea-US Consultative Committee will be formed to facilitate discussions with the US.
dyon@yna.co.kr
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