'Cause, Three-Out'... Yoon Administration to Introduce Departmental Regulatory Cost Reduction System Next Year

Introduction of a More Stringent Reduction System Than the Management System
Up to 300% Targets Depending on Ministry Characteristics

[Image source=Yonhap News]

[Asia Economy Sejong=Reporter Kwon Haeyoung] The Yoon Suk-yeol administration will introduce a regulatory cost reduction system called 'One in, Three out,' which reduces existing regulatory costs by up to three times when new regulations are introduced. As a government emphasizing 'private sector-led economic growth,' it plans to create a business-friendly environment through a more strengthened cost reduction system than the currently operating 'Regulatory Cost Management System.'

According to the government's national agenda implementation plan and related ministries on the 18th, the government plans to set annual regulatory reduction targets for each ministry to reduce regulatory costs for businesses and citizens. This system requires reducing existing regulatory costs when new regulations are introduced or strengthened, with specific reduction target rates expected to be determined between 100% and 300%, reflecting the characteristics of each ministry. ▶Related article on page 4

Although the government currently manages the total regulatory costs through the Regulatory Cost Management System to prevent an overall increase, it has been criticized for low participation and lack of transparency in operation, resulting in reduced effectiveness. According to the Federation of Korean Industries, this system applies to only 8.2% of newly introduced or strengthened regulations.

The newly introduced regulatory cost reduction system is expected to actively encourage regulatory relaxation by setting annual reduction targets for each ministry. For example, if Ministry A, with a regulatory reduction target rate of 300%, introduces a regulation that increases regulatory costs for businesses and citizens by 10 billion won, Ministry A must abolish or ease existing regulations to reduce regulatory costs by 30 billion won. This 'One in, Three out' method benchmarks the 'One in, Two out' regulatory reduction systems adopted by the UK and the US.

A government official stated, "We aim to finalize the detailed contents through inter-ministerial consultations this year and implement them in the first half of next year," adding, "We will continue to promote regulatory innovation that citizens and businesses can feel by setting regulatory reduction targets for each ministry to induce substantial regulatory cuts."