Development Project of US Military Returned Lease Land, Expansion of Private Investment up to 100%

Resolution of the Cabinet Meeting on the Amendment to the Enforcement Decree of the US Military Base Area Act

The Ministry of the Interior and Safety announced on the 28th that the amendment to the Enforcement Decree of the "Special Act on Support for Areas Surrounding U.S. Military Bases in Korea" was approved at the Cabinet meeting held on the same day.

Since 2021, the financial soundness criteria for project implementers promoting development in areas surrounding U.S. military bases in Korea have been limited to corporations in which public entities hold at least 50% of the shares to ensure solid project progress. However, it has been pointed out that such criteria rather restrict private-led development initiatives.

Moreover, contrary to the purpose of the law to specially support the underdeveloped areas surrounding U.S. military bases in Korea, the standards for private sector participation were stricter compared to individual laws such as the Urban Development Act.

Accordingly, local governments related to the U.S. military, such as Paju-si and Uijeongbu-si, have continuously requested that the requirements be relaxed to the level of general individual laws.

The Ministry of the Interior and Safety has prepared an amendment to the Enforcement Decree of the "Special Act on Support for Areas Surrounding U.S. Military Bases in Korea" by easing regulations that hinder regional development and considering the financial conditions of local governments.

The main points of this amendment are as follows: The scope of corporations established for the purpose of implementing projects, which was originally limited to cases where the combined shareholding ratio of public entities such as the state, local governments, public enterprises, quasi-governmental institutions, and local corporations is 50% or more, will now be expanded to include private entities with financial soundness conditions such as civil engineering contractors, civil engineering and architecture contractors, landowners, and real estate trust companies, provided their combined shareholding ratio is 50% or more.

With this amendment, private investors can now hold up to 100% of the shares in development projects for U.S. military return sites.

Choi Hoon, Director of the Local Autonomy Balanced Development Office at the Ministry of the Interior and Safety, stated, “Through this amendment to the Enforcement Decree of the U.S. Military Base Act, we expect private investment projects for the development of areas surrounding U.S. military bases in Korea to be revitalized,” adding, “We will continue to actively support so that residents in underdeveloped areas caused by zones currently or previously provided to the U.S. military can receive practical assistance.”