<기사제목>Ministry of SMEs and Startups to Improve 71 Regulatory Issues According to Corporate Life Cycle

Expectations for Alleviating Management Burdens on Small and Medium Enterprises

On the 28th, the Ministry of SMEs and Startups announced at the 561st Regulatory Reform Committee the "Regulatory Improvement Plan for the SME and Startup Sector According to the Corporate Life Cycle," jointly prepared with related ministries.

This regulatory improvement plan originated from the awareness that the main regulatory difficulties faced by companies vary according to their life cycle. Key associations such as the Korea Federation of SMEs and the Korea Venture Business Association proposed tasks, which were classified according to the business life cycle stages?commercialization, growth, closure, and re-start?and improvement measures were developed accordingly.

Specifically, since last September, a total of 1,193 regulatory improvement tasks were identified through 13 regional SME offices, public institutions, and major associations. After expert reviews by the Korea Development Institute (KDI) and the Korea Institute of Public Administration, as well as consultations with related ministries, a total of 71 tasks were decided to be improved.

First, in the commercialization stage, where there are no existing standards making commercialization difficult in new industries, related standards will be established, and regulations that do not align with global standards will be relaxed to meet international levels. The first measure is to establish guidelines for cell collection from living animals to revitalize the cell-cultured food industry. Under current law, cell collection from living animals is considered animal testing, but there are no common guidelines; only the review by the Institutional Animal Care and Use Committee (IACUC), which is independently established and operated by each animal testing institution, is required. Reflecting field opinions that specific guidelines are needed to harmonize industry development and animal welfare, a regulatory sandbox will be used for demonstration, and based on the results, guidelines will be established.

Noh Yong-seok, Policy Planning Officer of the Ministry of SMEs and Startups, is giving a preliminary briefing on "Regulatory Improvement Measures for the SME and Startup Sector According to the Business Life Cycle" at the Government Seoul Office in Jongno-gu, Seoul on the 25th.

Installation of logo lamps linked to vehicle width lamps or rear lamps will also be permitted in accordance with international standards. Currently, unlike in the US or Europe, it is not possible to install lighting devices on car manufacturer logos in Korea. Since the international standard (UN R148) was revised last March to allow logo lamp installation, Korea plans to revise related regulations by the end of this year accordingly.

In the growth stage, certification and environmental regulations that increase the management burden on companies will be improved, and excessive administrative burdens on companies will be reduced. Regarding the environmental label certification system for toilet paper, companies have continuously raised concerns that even if the material of the toilet paper is the same, if the length or width differs, a new environmental label certification must be obtained. If the product has already passed the environmental label certification and only the length or width differs, the existing certification can be used as a substitute. Related notices will be revised by December this year.

Additionally, when supplying CCTV to the government and public institutions, security performance quality certification, which was previously recommended, became mandatory from March last year. However, since there was only one certification body, certification reviews were delayed by more than six months, burdening companies. To improve this, from this month, CCTV supply to the public sector will be possible by issuing only a simplified "Security Function Confirmation Certificate."

The burden of installing wastewater treatment facilities in food factories will also be eased. Food manufacturing and processing industries generally use more water than other industries and have been required to install wastewater treatment facilities three times larger than those of general factories. However, it was deemed unreasonable to apply the same regulation to food factories that use little water and generate wastewater at the level of general factories. Therefore, for factories that do not use water in food manufacturing and processing processes such as powdered food manufacturing and coffee bean processing, or that have installed separate wastewater treatment facilities, the wastewater generation standards of general factories will be applied. Related notices will be revised within the first half of the year.

Furthermore, the use of Onnuri gift certificates will be allowed in coin karaoke rooms, pet hospitals, and other businesses located within traditional markets. Since these businesses are not particularly harmful, the Enforcement Decree of the Traditional Market Act will be revised by July this year to permit the use of Onnuri gift certificates. Administrative procedures related to seafood exports will also be improved. When exporting seafood to the EU, a catch certificate confirming that the seafood is not illegally caught is required. The catch certificate can only be issued if the fishing vessel has no administrative sanctions for illegal fishing in the past two years. Exporters can obtain the catch certificate at the export stage, but if the fishing vessel of the purchased seafood has a history of administrative sanctions for illegal fishing, exporters cannot obtain the certificate, causing damage. Therefore, registered exporters with the Ministry of Oceans and Fisheries will be able to directly check the administrative sanction history of fishing vessels before purchasing seafood. Related regulations will be revised by July this year.

In the closure and re-start stage, excessive closure reporting periods and procedures will be rationalized. According to the Value-Added Tax Act, closure reports must be submitted to the competent authority by the 25th of the month following the closure date. However, for seven industries including publishing, karaoke rooms, and employment agencies, the closure reporting period is stipulated as within 7 days by each law, which is burdensome for small business owners in these sectors. Therefore, the closure reporting period for these industries will be extended from 7 days to 30 days. Also, when reporting closure for telemarketing businesses, if the business registration certificate is lost or damaged, reissuance was required before closure reporting. From this year, the procedure has been simplified so that closure reporting can be done immediately by submitting a written explanation.

The Ministry of SMEs and Startups will work with related ministries to monitor the progress of the detailed improvement tasks included in this regulatory improvement plan to ensure smooth implementation. For delayed tasks, the causes will be analyzed with related ministries, and solutions will be developed to thoroughly manage follow-up.