Will the 3-Year Workout Extension 'Gichokbeop' Pass the Blocked Legislation and Judiciary Committee?

No New Taiwan-Related Laws Passed After National Audit
Basic Law for Supply Chain Stabilization Also Pending

Attention is focused on whether the amendment to the “Corporate Restructuring Promotion Act (기촉법),” which extends the corporate workout system that helps companies on the brink of bankruptcy recover quickly, will pass the National Assembly’s Legislation and Judiciary Committee by the 7th, extending the system for three more years until 2026. If the “Basic Act on Supply Chain Stabilization Support for Economic Security” and the “Special Act on Gadeokdo New Airport,” both prepared to respond to the global supply chain crisis, also pass the committee on the same day, they could be processed by the National Assembly within the year.

The Legislation and Judiciary Committee will hold a plenary session in the afternoon to review and vote on the amendment to the Corporate Restructuring Promotion Act along with as many as 185 other bills.

The Corporate Restructuring Promotion Act was enacted as a temporary law during the foreign exchange crisis when large corporations experienced a chain of bankruptcies, and its sunset clause has been extended five times. However, it lost its effect after the sunset date passed on October 15. In response, companies struggling due to prolonged high interest rates and low growth urged the National Assembly to pass the act, and it passed the relevant standing committee, the National Assembly’s Political Affairs Committee, on the 28th of last month. The amendment includes extending the act’s effect for three years until 2026. If the amendment passes, companies showing signs of insolvency can receive workout (restructuring) support such as maturity extensions and financial assistance with the consent of more than 75% of creditors. Even in temporary liquidity crises, market support will be possible on the condition of creditor consent.

On the 29th, a full meeting of the Legislation and Judiciary Committee was held at the National Assembly. Photo by Hyunmin Kim kimhyun81@

The “Supply Chain Stabilization Committee” will be newly established to prepare for global supply chain risks, and a government-wide response system will be built under the Basic Act on Supply Chain Stabilization Support for Economic Security, which is also expected to be processed together. The Basic Act stipulates that the government will establish a basic plan for supply chain stabilization every three years and set up a Supply Chain Stabilization Committee under the President. It designates essential goods and raw materials critical to citizens’ daily lives or the stable operation of the national economy as economic security items to be supported.

Additionally, amendments to the School Violence Prevention and Countermeasures Act, the Special Act on Student Loan Repayment after Employment, and the Special Act on the Construction of Gadeokdo New Airport are also awaiting approval.

The Legislation and Judiciary Committee is responsible for systematic and technical review of bills processed by each standing committee of the National Assembly. However, the committee has repeatedly faced disruptions due to clashes between the ruling and opposition parties over the impeachment of former Broadcasting and Communications Commissioner Lee Dong-gwan, who resigned. This has delayed the processing of bills related to people’s livelihoods. Since this year’s government audit, no other bills have been processed. The Democratic Party demanded an apology from Kim Do-eup, the committee chairman from the People Power Party, holding him responsible for disrupting the committee to block the impeachment of the former commissioner. However, Chairman Kim criticized the Democratic Party’s “impeachment unilateralism” and said, “I sincerely apologize not to the Democratic Party but to the people,” making the plenary session expected to face difficulties.