The Ministry of Trade, Industry and Energy (the "MOTIE") held its 43rd Industrial Technology Protection Committee (the "Committee") on May 30, 2023 and announced a draft amendment to the Act on Prevention of Divulgence and Protection of Industrial Technology (the "Industrial Technology Act" or "ITA"). The draft amendment seeks to expand the scope of application of the ITA to better manage national core technologies ("NCTs") that are subject to export controls, and includes proposed changes to simplify the export review process for lower-risk NCTs to ease burdens on companies needing to share or disclose such technologies.

1. Broader application of the ITA 

The draft amendment expands the scope of application of the ITA, and thereby clarifies several grey areas that have previously arisen regarding the law's application due to lack of detail regarding the meaning of certain specific provisions. 

The draft amendment to the ITA adds provisions giving the government the power to order companies to file for NCT determination and to require entities holding NCTs to register them. The government now may also attach conditions to the export of NCTs where the NCTs only need to be declared, as well as where they must be approved for export, and can conduct later audits to confirm implementation of those conditions. The draft amendment also lowers the level of intent required for punishments for improper exports of NCTs, and adds the acts of introduction, arrangement, and solicitation of technology divulgence as additional acts that can be punished. Finally, compulsory enforcement fines may be imposed if a party found liable for an unlawful M&A fails to comply with an order to restore the status quo. 

The draft amendment will likely be submitted to the National Assembly later this year (legislation announcement by July – regulatory review by October – approval by the president by November). The detailed language of the draft amendment is yet to be made public, but additional information on the specifics are expected to roll out during the course of the legislative process.

2. Proposed streamlining of the review process for certain NCT exports

The MOTIE also seeks to ease the burden on companies needing to export certain lower-risk NCTs by simplifying the review process for such exports. The relevant MOTIE notice (Industrial Technology Protection Guide) will be amended by July 2023 to include the following: 

• Annual blanket review system for overseas approval of finished drugs: When exporting technology for finished drugs for overseas approval purposes, the technical data for overseas approval may receive prior blanket approval annually. At the time of actual export, the export review period would then be shortened through review by an expert committee.
• Annual blanket review system for joint research with overseas subsidiaries: In case of joint R&D between a domestic institution and an overseas subsidiary or institution wholly owned by the domestic institution, the joint R&D project may be subject to prior blanket approval annually, followed by ex-post reporting, to shorten the time spent on review.
• Written review for export in response to discovery in overseas patent disputes: When exporting technical materials due to overseas patent disputes requiring discovery of documents (such as at the US ITC), the export review period may be shortened by requiring only written review rather than in-person review followed by written review.
• Export of technology under a non-exclusive license: Export of technology under a non-exclusive license, or transfer of technical information already publicly disclosed in a patent application, is exempt from export review.

The MOTIE is continually discussing further changes to the relevant laws and regulations in this area, so companies are well-advised to keep an eye on future similar developments.