Special Amendment of Subordinate Statutes to Drive 5 Percent Economic Growth

1. Special Amendment of Subordinate Statutesto Drive5 Percent Economic Growth

2. In the first month of the new decade, we embark on a powerful, take-off to open the era of Korea, afirst-rate country.

3. GROWTH target of over 5 percent! It will become another reality with proactive preparation.

4. EconomicGrowth and Statutory Amendment • In the economy, “psychology” and“expectations” have great impacts . • Expectations • Psychology

5. Economic Growth and Statutory Amendment • In the economy, “psychology” and“expectations” interact • Deregulation, promoted competition, improved business environment • → Positive Influence on Economicgrowth Regulations

6. Economic Growth and Statutory Amendment • In theeconomy, “”sychology” and “expectations” interact • Over 5% • 3- 4% • Deregulation, promotedcompetition, improvedbusinessenvironment→ BenificialInfluenceonEconomicgrowth • Additional growth of over 1%p possible •  Achieve investment growth of around 20 percent • (Increasing investment  50,000 new jobscreated) • Projected • Target

7. Legislation • 1,360 • Largest number of legislative bills everintroduced • 587 • 516 • 484 • 93.2 – 98.2 • Civil • Government • 98.2-03.2 • Citizen’s • Government • 03.2-08.2 • Participatory • Government • 08.2-now • Lee Myung-bak • Government

8. Legislation • Largest number of legislative bills ever introduced 55.1% • 750 • Passage rate below the expectation due to changesin legislative environment. 96.9% 71.2% 87.8% • 500 • 418 • 425 • 08.2-now • Lee Myung-bak • Government • 93.2-98.2 • Civil • Government • 98.2-03.2 • Citizen’s • Government • 03.2-08.2 • Participatory • Government

9. Need for Creating National Performance • through Subordinate Statutes • Subordinate statutes havegreater impacts on the people and business. Statutes Subordinate Statutes • 72% • Number of statutesin force : 4,468 • Other administrative rules : 7,300

10. Regulations Bound • by Subordinate Statutes Many regulations are tethered to enforcement ordinances. First, amend subordinate statutes that can be modified instead of waiting until laws are passed!

11. Special amendment of subordinate statutes; Let’s start now, TOGETHER

12. Efforts made to date and Areas for Improvement

13. Number of Planned Amendments • of Subordinate Statutes 465 486 • 24 • 38 • 28 • 71 • 325 Number of Competent agencies responsible for statutes: 30

14. Subordinate Statutory Amendments • for Different Areas Protection of the socially underprivileged • 13 • 152 Economic revitalization Other system improvement Citizen-oriented resolution of public inconvenience • 144 • 12 • 165 건 486 Regulatory improvement ; rationalization of permit system

15. Original Amendment Timeline • After • Jan 2012 24 • By Dec 2011 건 486 102 • ByJun 2011 90 • By Dec 2010 • Delayed • Due date not set • 155 • 115 • 0 • 50 • 100 • 150

16. Why is Subordinate Statutory Amendment • Delayed? • Due dates for amendment loosely set 2011 2012 2010

17. Why is Subordinate Statutory Amendment • Delayed? • Due dates for amendment loosely set • Subordinate Statute • Management System • Follow-up mechanism not workingproperly Amend Identify Check Deter-mine

18. Why is Subordinate Statutory Amendment • Delayed? • Due dates for amendment loosely set • Vice ministerial • meeting • Interministerial • coordination • Legislative • drafting • Regulatory • review • Corruption • evaluation • Cabinet • council • Review • Follow-up mechanism not workingproperly • Complicated legislative procedurescause postponement until other statutes are amended

19. Direction of Special Amendment of Subordinate Statutes

20. After • Jan 2012 • By Dec 2011 24 • By Jun 2011 • By Dec 2010 102 • Due date not set • 0 • 50 • 100 • 150 90 • Delayed • 155 amendments whose timeline is not set yet are to be made immediately after the timeline is finalized • 115 • 155

21. After • Jan 2012 • By Dec 2011 24 • By Jun 2011 • By Dec 2010 102 • Due date not set • 0 • 50 • 100 • 150 90 • Delayed • Amendments whose timeline is not set yet are to be made immediately after timeline is finalized • 115 • 155 • 115 amendments not properly followed up are to be madeimmediately

22. After • Jan 2012 • By Dec 2011 24 • By Jun 2011 102 • Delayed • By Dec 2010 • Due date not set 90 • 0 • 50 • 100 • 150 • Amendments whose timeline is not set yet are to be made immediately after timeline is finalized • 115 • 153 • Amendments not properly followed up are to be madeimmediately • Expediteamendment by advancing deadline

23. After • Jan 2012 9 24 49 102 • By Dec 2011 90 422 • By Jun 2011 • 115 0 • Delayed • By Dec 2010 • Due date not set • 155 6 • 0 • 50 • 100 • 150 • 200 • 250 • 300 • 350 • 400 • 450 The subordinate statutory amendment timelineadjustedat the request of the Presidential Council on National Competitiveness and the Ministry of Government Legislation

24. However, • “More prompt amendment” • needs to be made like • emergency legislation

25. First Round of Amendments Due February • First Round of Amendments • - Each ministry takes initiatives in drafting subordinate statutesby Feb • -shortening legislative proceedings, etc. • (briefing before the Cabinet Council, etc.)

26. Second Round of Amendments Due March • Second Round of Amendments • (for statutes requiring deliberation and opinion-gathering) • - Each ministry examines the amendments by March

27. Amendments to be Completed • Across-the-board in April • Third Round of Amendments • - Across-the-board amendmentsby MOLEG • (for subordinate statues not amended by March)

28. Amendments to be Completed • Across-the-board in April • Regulatory reform • Protection of • the socially • underprivileged • Other system • improvement • Economic • revitalization • Citizen-oriented resolution of • public inconvenience • Across-the board amendments led by MOLEG • - Legislation time shortened • - Effect of simultaneous enforcement

29. Amendments to be Completed • Across-the-board in April • * Government Legislation Monitoring and Support Center under MOLEG • - Set up the “Special Subordinate Statutory Amendment Task Force Team”in addition to the “Government Legislation Task Force Team” • - Monitor and report on progress

30. Several Cases for Statutory Amendment to be Expedited

31. Cases for Economic Revitalization Easing of permission requirements for the security business • Excessive requirements for permission for the security business: High entry barriers and constraints on vitalization • (Market size: KRW1.4trillionOver KRW 5 trillion) Easing of capital requirements; Abolishment of requirements for training facilities Vitalization of securities industry and job creation through lowering of entry barriers

32. Cases for Regulatory Improvement Improvement of land transaction permit system for apartment-type plants for SMEs • Land transaction permit system applies even with fewer speculative factors Exception to land transaction permit system to be recognized SMEs’ acquisition of plants expected to become easier

33. Cases for Regulatory Improvement Easing of registration requirements for recreational condominiums • Required to furnish more than 50 rooms for registration (Upfront investment of KRW 17 billion) Requirementrelaxed to 30 rooms Upfront investment per project owner to be reduced by KRW 6.8 billion; entry barriers for SMEs lowered

34. Cases for Regulatory Improvement Simplification of pork grading criteria • Pork grading criteria and labeling too complicated and misleading for distributors and consumers Standards for pork grading to be simplified (17 → 7etc.) Burden on slaughter-houses and meat packing industry to be reduced

35. Cases for Resolution of Public Inconvenience Simplification of driving test • Too many items (11) for basic control skills test and too much time required for education(25 hours) Reduction of basic control skills test items (11 → 2) and education time (25 hours→ 8 hours) Opportunity cost to the public for acquiring drivers’ licenses to be reduced by KRW 600 billion

36. Cases for Resolution of Public Inconvenience Relaxation of the installation criteria for day care facilities • Difficulty of installment of day care facilities due to excessive regulations • * An industrial complex with 100,000 only accommodated 200 children Relaxation of the limitation for the number of floors of day care facilities(3→5) Easing of the installation criteria for playgroung and kitchen, etc. Giving support to the measure for low birth rate by expanding day care facilities (Prompt review of general modification plan by the consultative body of the agency concerned)

37. Cases for Resolution of Public Inconvenience Rationalization of imposition of penalty surcharges and fines for negligence • Double imposition for the same violations and unreasonable imposition standards Elimination of double imposition and rationalization of imposition standards * 159 statutes to be amended Burden on the public amounting to KRW 280 billion to be relieved by eliminating double imposition

38. Cases for Protection of the Socially Underprivileged Expansion in eligibility for handicap signs for vehicles • Issued only to vehicles registered with welfare institutes or organizations for the disabled Vehicles used by the disabled and registered under the name of a local government to be added Accessibility and mobility of the disabled to be enhanced

39. Major Focuses of Implementation by the PCNC • Prompt resolution of presentinvestment bottlenecks • - Addressing 335 amendmentsproposedby business and under reviewby the Private and Public Office for Regulatory Reform • * Deregulation of expansion of plants in nature conservation zones (KRW19 trillion), etc.

40. The Presidential Council on National Competitiveness will take the initiative in rationalizing regulations that hamper INVESTMENT and EMPLOYMENT in order to achieve economic growth of over 5 percent.

41. Major Focuses on Implementation by the PCNC • Active improvement of regulations which are barriers to investment and employment • Advancement of regulations which are obsolete in terms of global standards • Improvement of entry regulations(43) • * Easing of the standards for registration of tourists business.

42. Major Focuses on Implementation by the PCNC • Rationalization of regulation appropriate for thenewpublic consciousness and regulatory environment • - Reexamination of projects not accepted (117 cases) • - Introduction and operation of the regulatory equity review system We will introduce the regulatory equity review system to remedy damages ofpeople through uniform execution of regulation.

43. How is the Statutory Amendment to proceed IN THE FUTURE?

44. Promote efficiency in state affairs by institutionalizing statutory amendment system

45. System Improvement Process Identify improvement projects Determineimprovement projects Amend statutes Identify projects

46. System Improvement Process Identify improvement projects Determine improvement projects Amend statutes Determine projects • Cabinet Council • PCNC, etc.

47. System Improvement Process Identify improvement projects Determine improvement projects Amend statutes Amend Statutes • Cabinet Council • PCNC , etc. • Ministry-level • execution

48. System Improvement Process Identify improvement projects Determine improvement projects Amend statutes • Cabinet Council • PCNC,etc. • Ministry-level • execution Set shortest amendment lead time; Impose obligations for prompt amendment Periodic across-the- board legislation by MOLEG monitoring of progress

49. Provide identification and amendment framework to improve statutes

50. Identification and Amendment Framework to • Improve Statutes Citizen’s Participatory Legislation Center Entities to identify improvement projects On-going identification ofimprovement projects through on-site visits Korea Law Service Center Structured amendment and reporting • Statutes • Establishment of the • administrative rule DB • Establishment of the • municipal • ordinances/rues DB • General public(public • legislative officer, etc.) • Administrative agencies • Civic groups, etc.