History: 100 years of deregulation. From the proposal to ease corporate burdens (in 1930) to a regulatory sandbox (in 2020)
The KCCI’s efforts toward deregulation stretch back almost a century.
Between the 1930s and the 1950s, the KCCI proposed streamlining the tax system to ease the burden on corporations.
In the 1960s and 1970s, the KCCI put forth efforts to build a stable corporate environment by proposing the deregulation of pricing policies.
Beginning in 1982, the KCCI and the heads of regional chambers started holding monthly meetings to identify areas that could be deregulated with the aim of invigorating the market economy.
In 1988, the KCCI set up an in-house committee to suggest improvements to laws related to commerce and industry.
In 1994, the Presidential Blue House established an organization to regularly review such regulations as potential entry barriers.
Since 2000, the KCCI has made quarterly economic/regulatory proposals, amounting to about an average of 50 every year, together with other major business associations.
They have been well received as amply demonstrated by:
- The prompt signing of a free trade agreement with the United States (in 2006)
- The scrapping of the minimum land requirements to build factories (in 2003)
In 2004, the KCCI founded a “private center to reform economic regulations” following a request by former President Roh Moo-hyun. The center, whose name was changed to the Regulatory Improvement Bureau, has delivered various suggestions on deregulation to the government.
Included in the successful cases are:
- The “One-Shot Act” geared toward helping corporate restructuring and business M&As (in 2015)
- The legalization of drive-in restaurants at gas stations (in 2010)
In 2020, the KCCI established the Regulatory Sandbox Support Center.
Organizations : ① Regulatory Improvement Bureau ② SGI, Research Bureau ③ Regulatory Sandbox Support Center
The KCCI operates three organizations in a bid to support deregulation.
(1) The Regulatory Improvement Bureau, a government-civic organization that checks problems related to regulations
(2) The SGI (Sustainable Growth Initiative) Research Division that deals with and studies regulatory policies
(3) The Regulatory Sandbox Support Center, a private organization that helps settle regulation-associated problems in a practical fashion
The Regulatory Improvement Bureau listens to the difficulties that businesspeople encounter, while the SGI Research Division comes up with policy reports and proposals on how to improve the corporate environment. The last bastion is the regulatory sandbox, which allows for the relaxation of regulations to accommodate innovation.
Functions: Figuring out regulation-related woes → Politic responses/in-depth research → Practical settlement of regulations
1) The Regulatory Improvement Bureau is jointly run by the Office for Government Policy Coordination and the KCCI to help businesspeople deal with problems they encounter. The quasi-public organization puts forth efforts to improve regulations, which weigh on small- and medium-sized enterprises and small-business owners.
2) The SGI Research Division works as a partner in government policy formulation by laying out new frameworks for deregulation. The KCCI presents various ideas in a move to change regulatory policies from a positive system (prohibition in principle and permission through exceptions) to a negative one (permission in principle and prohibition through exceptions), and replace ex-ante regulations with ex-post ones.
In addition, the SGI Research Division compares the business environments of over 220 local governments to come up with a “Nationwide Deregulation Map” and offers the “KCCI Report,” which deals with National Assembly moves on regulations.
(3) Under relevant laws, the Regulatory Sandbox Support Center operates as the only legitimate private organization to deal with regulatory sandbox applications.
The regulatory sandbox, which debuted in 2019, allows for the relaxation of regulations to accommodate innovative products and services. Korea is the first country in the world to allow a private entity to operate such a system.
All companies in areas such as convergence industries, ICT, and finance can apply for sandbox mediation. The KCCI offers consultations, legal reviews, and post-management services to applicants while helping them prepare documents free of charge.