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Dec 30, 2013

China Issues New Guidelines for Behavior of Chinese Tourists

By 2015, there will be 100 million Chinese tourists traveling throughout the world, according to a UN estimate.  That means that Chinese have surpassed Americans and Germans as the world's biggest tourism spenders.  Partly in response to this, and the somewhat embarrassing issue a few months ago where a Chinese tourist in Egypt had scribbled his name onto a priceless historical relic, the Chinese government has put out some new guidelines that will apply to Chinese tourists.

Here are some of the more interesting ones from a CNN article:
  • Photography: "When taking photos in tourist spots, do not fight and be patient. Do not force the others to take a picture with you, nor obstruct the others when they are photographing. If you would like the others' to take a picture for you, say thank you."
  • Toilet use: "Do not occupy the public toilet for a very long time. Do not leave footprints on the toilet seats and flush after use."
  • Queue jumping: "Respect order in public. Jumping the line is not acceptable anywhere."
  • On tipping: "Service industries in a lot of countries honor tipping. If you think the service is good, please tip accordingly." At the buffet table: "When you're at a buffet dinner, only take what you can consume. Do not waste food."
  • Taking in a show: "Respect the performers. Clap after the show to show your gratitude to the performers. During curtain call, join the crowd for a standing ovation. If a performer slips up on stage, be understanding but do not cheer, whistle and jeer."
Some of these laws also apply specifically to Chinese domestic behavior during Golden Week, a special holiday in China where most citizens take vacations within China.  In June of 2013, photos surfaced of Chinese tourists taking mocking photos and posing with a dying dolphin in Hainan province.  The proliferation of these photos, and a general perception that Chinese tourists are often difficult to deal with, is probably the main reasoning behind these new domestic rules.

You can read the original article by CNN here:China's First Tourism Law Comes into Effect, Tourists Issued Manners Guides

You can also check out some other relevant articles by IPG Legal here:

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SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Dec 27, 2013

Sean Hayes and IPG Legal Wish You a Happy New Year



Sean Hayes and all of us at IPG Legal wish you a safe, happy and prosperous New Year. _____
SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Weekly Asian Legal News from International Law Firm - IPG Legal

This Week's Asian Legal News Reported by Media
Most Recent Posts from The Asian Law Blog
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SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Dec 23, 2013

"Ordinary Wages" Under Korean Labor & Employment Law: Korean Supreme Court

The definition of "ordinary wage" has been clarified by the Korean Supreme Court in two decisions handed down this week.  The calculation for an Ordinary Wage is utilized to calculate statutory entitlements, thus, has an impact on the aggregate amount of contributions necessary to be paid to an employee.  The issue is one of the most significant issues, this year, for domestic and foreign employers.  

The basic test has  been that an Ordinary Wage is a "regular, uniform and flat" payment.   Obviously, this "test" leaves much unanswered.

With this vague definition, the Korean courts have inconsistently interpreted the definition, thus, leading to much confusion.  I have written many memos on this issue with few opportunities to give a definitive answer, because of the lack of a consistent interpretation of the definition by the lower courts and, seemingly, even the Supreme Court.

This week, the Supreme Court, in a case that I will call the Regular Interval Bonus Case, has delivered  a couple of more clear examples, than in the past, of cases that will be considered Ordinary Wages.   In the case, the employer was providing a "regular bonus" every two months.

The Court in the Regular Interval Bonus Case opined, in part, that:
  1. Any collective bargaining agreement (labor-management agreement or like agreement) that deems a certain type of payment as not an Ordinary Wage is void and, thus, unenforceable.  An exception is available for certain specific companies that have implemented this practice in particular limited situations based on the vague principle of "good faith and trust."  I will elaborate on this more in a followup post after the holidays; and
  2. Payments paid at regular intervals (e.g. every other month) are an Ordinary Wage.
The Supreme Court remanded the case to the High Court to determine if the exception is applicable.

In the second case, that I will call the Allowances Case, utilized the Ordinary Wage definition and rationale in the Regular Interval Bonus Case to opine that these allowances when paid just for being employed at a certain period of time will not be considered "flat" under the Ordinary Wage "regular, uniform, and flat" definition.

The Allowances Case was remanded, also, to the High Court to determine if the payments were, only, payments made for being employed during a certain period of time.

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SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Dec 22, 2013

Happy Holidays from IPG Legal



SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Dec 17, 2013

Possible Successful Business Opportunities in Korea

I just read a blog post by my friends over at the China Law Blog that motivated me to write the following post.  Korea is an excellent testing ground to determine the feasibility of your business for other Asian markets such as China.  The country has, also, proven more profitable, for many businesses, than the often too hard to catch "Chinese Middle Class."

The following is a list of some industries that are succeeded in Korea.

1.  Franchises.  The franchise market in Korea is booming.  All major players are in Korea and, most,  are doing very well.  Many of the less known franchises have, also, succeeded.

2.  Education.  Koreans have a thirst for education that seems insatiable.  Much of the market, however, is closed to foreign competition.

3. Military Technology.  Korea is one of world's largest purchasers of military technology.  All major players have a solid footing in Korea with many of the second-tier players playing a vital role in Korea's blossoming native military technology industry.

4.  Food & Beverage.  Foreign products are now seen, everyday, on Korean dinner tables.

5.  Health & Pharmaceuticals.  As an aged society, Korea has struggled with many of the same diseases as seen in the West.

6.  Fashion & Textile.  The middle and upper class in Korea have an aptitude for luxury goods that is beginning to rival even the Japanese.

7.  Green Tech.  As the world changes so does Korea.  The World has a thirst for sustainable solutions and Korea is, slowing, following suit.

8.  Suppliers to Chaebols.  The major companies in Korea are purchasers of everything from automobile supplies to crude oil.

9.  Software.  The top foreign players dominate the market with a few Korean companies that have made a substantial niche in the market.  Many foreign players have successfully licensed software to major conglomerates with success.

10.  Industrial Machinery.  Surprisingly enough, Korea is an importer of high-tech industrial machinery.  A great deal of the machinery is imported from Japan.

11.  Entertainment Business.  With a shrinking workweek and more disposable income Korea consumers are increasingly spending on entertainment and leisure.  I am looking forward to Metallica in Seoul at the end of this month.

12.  Tourism.  Tourism spending has increased over the past decade, leading to low hotel vacancy rates and a boost in retail spending on fashion, entertainment and electronics.  The largest tourist population visiting Korea is the Chinese.  The Chinese find, in many cases, shopping in Korea more economical than shopping in Hong Kong.
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SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Dec 15, 2013

Garnishing Pay in Korea: Collections in Korea

Garnishing Wages in Korea

I received a call from a friend asking about information concerning collecting on a large debt. He loaned money to a “friend” and the friend never made a payment on the loan. Word to the wise, don't make large loans to friends----cry poverty instead.

In Korea, after a judgment or order to pay by a court, a plaintiff can collect on an unpaid debt through garnishing of wages. Garnishing of wages is normally the best way to guarantee the collection of debt when a debtor doesn’t have real or personal property. Most law firms can perform the service for a modest fee.
  • Less than W1.2mil (No wages can be garnished)
  • W1.2mil - W2.4mil (Monthly Wage – W1.2mil)
  • W2.4mil –W6mil (1/2 Monthly Wage)
  • Over W6mil (Half monthly Wage minus W3mil divided by two plus W3million minus monthly wage)
Examples:
1. W2,000,000 Monthly Pay (Can garnish monthly W800,000)
2. W3,000,000 Monthly (Can garnish monthly W1,500,000)
3. W5,000,000 Monthly Pay (Can garnish W2,500,000)
4. W6,000,000 Monthly Pay(Can garnish W3,000,000)
5. W12,000,000 Monthly Pay (Can garnish W7.500,000)
6. W20,000,000 Monthly Pay (Can garnish W13,500,000)

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SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Dec 13, 2013

Asian Legal News for the Week of December 8, 2013

This Week's Asian Legal News Reported by Media


Most Recent Posts from The Asian Law Blog


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SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Dispute Resolution Clauses in Franchise, Joint Venture, Partnership Agreements in Korea

It is essential for all joint venture, franchise, shareholder and like agreements, in Korea, to include dispute resolution clauses.

These clauses are fundamental to establish, amongst other things, the:
  1. prevailing language of the agreement;
  2. forum to resolve the dispute;
  3. process of resolving the dispute;
  4. damages and costs for breaching the agreement;
  5. enforceability of a judgment against a party to the agreement; and
  6. flexibility of mediation and arbitration rules.
To often I see shareholder, joint venture, franchise and partnership disputes going badly because of poorly drafted agreements.  Some of these agreements are drafted by lawyers with, seemingly, little experience in litigation and arbitration in Korea and, thus, little sense of the manner in which these business relationships go awry.  

One of these critical flaws in these Korean agreements is the lack of consideration of dispute resolution and the simple plugging into agreements standard dispute resolution clauses.

Please see our other posts on joint venture agreements:
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SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

How Sustainable is the Korea-Pop Music Phenomenon?

Among the many topics that have surfaced during the past two months as I traveled about Ireland and the US West Coast, I settled on the below, current report as I have been thinking for months of writing a column on just what the Korea Wave or Hallyu may actually be or not be.

Samsung Economic Research Institute (SERI) does a decent job in describing what are the results of Hallyu around the world.  The analyst provides a decent account of how these boy and girl acts succeed, but there is no real attempt to explain why Korean pop (K-Pop) has been so popular or at least appear to be so successful.  My initial impressions from many observations and discussions have provided me with some very tentative conclusions.

The most obvious and least surprising success factor for any kind of adolescent or young adult phenomenon is sex appeal or the thinly veiled offering of being seductively attractive to the other young people.  As I have stated in prior KER messages, Hallyu is a thinly disguised rip off in many cases of Japanese boy and girl bands but with upgraded versions of being what we once called “prick tease” sexy rather than simply cute, as in the case of the shy Japanese.

Of course, this does not address why Korean cinema have done so well, but there are some major common denominators.   Both the music groups and the cinema feature remarkably beautiful women and handsome men – many cosmetically enhanced by some of the world’s finest (i.e., Korean) cosmetic surgeons.  These entertainers literally embody what many other Asians wish all East Asians to appear like.  On top of that, many of the movies are well made. But even if the songs are not quite up there or the films less than what one may wish to see, the actors and signers look fabulous.  But what is not so clear is how genuinely popular is Hallyu in sustainable ways.

There have been some big flashes in the pan concerts and television appearances abroad, but I have yet to see major trends outside of the Korean diaspora centers.  Many first, second and third generation Koreans regularly check out Hallyu YouTube videos – and so do their non-Korean ethnic friends. There used to be a saying in Hawaii that one would never see a group of Koreans, but always a Korean in every group.  As Koreans move out of their first generation overseas ghettos, they have become remarkably integrated.

According to my observations in LA’s Korea Town and my conversation with a son who lives there, many non-Koreans who are into Hallyu have or have had an ethnic Korean partner.  All of which brings me to the SERI analysis’ conclusion that implies one should not try to over leverage Hallyu in unnatural promotions, such as promotion of relatively stodgy traditional Korean culture, etc.  Hallyu is essentially about young people and older people reminiscing of what is was like to having once been young.

The challenge is where does Hallyu go from here? According to a long-term Japanese pop cultural observer who will soon be retiring as a university lecturer at a women’s university in Tokyo, when Hallyu first appeared, it really caught the Japanese young people off guard in a very positive way.  But after a couple of years, enthusiasm has begun to wane as both early and newest Hallyu groups stick to the tried-and-true success formulas with little, genuine innovation.   Meanwhile, Korean private and public sector marketers are feverishly promoting Hallyu – often without adequate appreciations of just why the trend has been successful and what challenges Hallyu faces in order for its industry to achieve lasting success.

For Hallyu to have real legs that can promote not only itself as well as other aspects of Korea into the future, Korean artists will need to be more creative than what they have so far exhibited.  While we may debate if that may be possible in corporate controlled entertainment anywhere, ultimately it will be up to Korean artists to act more like the Beatles and less like the Monkees if they are to make a lasting contribution to global pop culture.

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Lessons from K-pop’s Global Success
K-pop has entrenched itself as a bona fide phenomenon in Asia and is rapidly extending its reach to new markets. Companies in other industries can benefit from its success by deploying K-pop based products and tourism packages, using K-pop stars as spokesmen, and piggybacking on K-pop’s transnational appeal. Companies can also learn from K-pop’s system of rigorous training and long-term planning.  Report may be found at: Samsung Economic Research Institute (SEO Min-Soo).
You will need to login to SERI Quarterly to see the report.

Post by Tom Coyner.  Senior Commercial Adviser for IPG.

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SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Dec 10, 2013

Executive Compensation Necessary to be Publicly Disclosed in Korea: Korean Commercial Law

Until a recent amendment to the Korean Commercial Code, the compensation of executives in listed companies was not required to be disclosed to shareholders.   Most developed economies require this disclosure.

The prior law, only, required the total compensation for all directors to be disclosed to shareholders. The new rule, which comes into effect on November 29, 2013, requires that all registered directors of companies annual compensation be disclosed if the amount of the individual's annual compensation exceeds KRW 500 million Korean won.

The amended Korean Commercial Code, also, requires that companies disclose the criteria for choosing the compensation.  We suspect to see cases filed related to the payment criteria and differentials in payment between certain directors.

Some family-controlled companies will, likely, drop some family members from boards. These family members will, likely, be paid as mere company employees and, not, as board members. Thus, circumventing the purpose of the law.

We will update the reader on developments with regard to this issues.

Other articles that may be of interest:
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SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Korean Home Prices Too Low? A big NO WAY by Tom Coyner

It will soon be that dreaded time again for me – the renegotiation of my apartment lease. Thankfully, it happens just once every two years, but it is a real pain. The silver lining to this biannual cloud is that it forces me to look more closely at the Korean housing market, an important factor in most economic considerations.

At first brush, Korean real estate is as loopy as any foreigner may surmise about anything in the Korean economy.

First of all, there is a glut of slow-moving, unoccupied apartments – and yet prices remain artificially high. This is partially due to the universal axiom that real estate prices rise much faster than they fall. People naturally welcome seeing investment values inflate and resist recognizing shrinking values.
Second, housing costs are kept high, in spite of the vast supply of housing, due to a practice called jeonse, the non-interest-bearing, fully refundable deposit paid to the landlord in lieu of rent. Conventional rental properties can also be found, but most Korean tenants prefer jeonse as part of their strategy to eventually save enough money to buy.

During times of higher interest rates, jeonse was roughly 50 percent of the market value of the property. The landlord would then use the deposit for investment, or at least put the money in the bank, and enjoy the return. But thanks to very low interest rates, traditional jeonse levels have become increasingly unpopular among landlords. As a result, there have been two important developments.

The first development has been the rise in jeonse significantly above normal levels. In some extreme cases, deposits approach actual market values of properties. One can also now find combinations of jeonse plus monthly rental payments. These schemes compete in the market, keeping housing costs high, despite the glut of unoccupied apartments.

The second development has been government intervention. President Park Geun-hye has championed herself a protector of the lower and middle classes. During the past months, her administration has launched programs to help the struggling, first-time home buyer. The thinking has been to find ways to make it easier for first-time buyers to purchase the glut of unsold apartments through low-interest fixed-rate home mortgages and a decrease in real estate acquisition taxes.
At first glance, all of these initiatives seem like overdue relief for the weakened middle class. But are they really? These programs do nothing about the ridiculously high, yet stagnant, real estate prices and their corresponding high jeonse and rental rates. A cynic may suggest that, so far, the conservative government has only looked after the welfare of construction companies by making it easier for them to offload inventory at premium prices. In other words, the government’s policies are simply prolonging the real estate supply priced above natural buyer demand. In fact, some Korean economists have warned against investing in properties at prices artificially maintained by government mortgage programs. Rather, the mortgage rates should follow the prices – not the reverse.
So, given this situation, what should be done?
First, all artificial mechanisms that maintain current pricing should be removed – perhaps gradually, but at least steadily. The Korean construction industry has already become globalized, realizing that it cannot sustain its growth within the domestic market. As it has globalized, competing with other international construction companies, Korean companies’ quality of operations and deliverables have remarkably improved. Meanwhile, domestic-only construction companies have struggled to survive, often lacking the means to upgrade their construction processes. In other words, the Korea-only construction companies have found themselves in the same niche as the buggy whip manufacturers did a century ago. Accordingly, one way or another, they need to die or transform themselves into other businesses.

Second, the Bank of Korea needs to set the Korean prime rate at a higher rate to return the market to more normal conditions, at a rate worthwhile for landlords to accept jeonse at more reasonable, smaller amounts. In so doing, cash-strapped jeonse tenants would then have more money to spend or possibly bank – both of which would be economic positives.

Third, the Korean government should signal that the era of high real estate speculation is over. Government policies, including taxation, need to reflect this reality. Since so much of the government supporters’ wealth is held in speculative real estate, this may be unrealistic. But this mindset remains a requirement for strengthening the long-term economy.

But, even if the above suggestions were implemented, there would not be an immediate effect. Like artificially high real estate prices, speculators would be slow to allow their investments sink to natural supply-and-demand levels. To stimulate such movement, taxation penalties for unoccupied properties held beyond a certain time period may be needed. Such measures would be unpopular among government supporters and, thereby, may be unrealistic.
If the government wants to talk populist, it should act populist – particularly when it comes to housing. Otherwise, the electorate will discover that it has been “had” by the elite yet once again.

The article first appeared in the Korea Joonang Daily at: Korea Home Financing Reform.

by Tom Coyner.  Senior Advisor to IPG Legal and President of Softlanding Korea

info@ipglegal.com
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SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Severance Payments in Korea: Death to Korea's Competitiveness by Tom Coyner

Getting what you want and doing as you wish offers immediate gratification, but these short-term rewards may lay the foundation for long-term disaster. There are two areas that come to mind regarding Korean business practices.

Recently, a Financial Times article on revised Korean compensation calculations was widely circulated among long-term Western expats here. It generated much discussion as this whole issue could have a major impact on the labor costs of doing business in Korea. I remember when I was hired by the Chase Manhattan Bank in Seoul during the 1970s, I was offered an annual salary divided by 14 payments to allow for 12 monthly payments plus two one-month payments scheduled for June and December.

I uniquely asked for and got the same annual compensation divided by 12 and paid out monthly sums the so-called semi-annual bonuses. So, in a sense, these scheduled bonuses that normally are consistently paid out could be considered part of one’s base pay. But as we have seen during extreme economic depressions, such as in the 1997-98 “IMF Crisis” and in 2008, not paying out the scheduled bonuses without touching the monthly salaries can be one of the first lines of defense of a company’s financial well-being.

The rub is that monthly salaries - not the total annualized base pay - have formed the basis for overtime, unused holiday compensation and severance pay. As such and with this understanding, the salaries have been allowed to rise within this structure. Whereas to suddenly switch the base for various benefit payments could lead to major financial problems for both Korean and foreign companies.

To make matters worse for Western companies operating in Korea, such a compensation reform move could be the last straw that breaks the back for major foreign employers. Unlike the typical, smaller foreign operations of, say 100 employees or fewer that is most commonly managed at the top by a bilingual Korean, the larger organizations with their larger spans of control and greater management complexities tend to still bring in expatriate executives and specialists.

Often these foreigners lack any or adequate Korean language skills. To offset this issue, bilingual staff members interpret much of what is happening, often effectively insulating the expatriates from much of the daily operations. The ongoing irritation and potential major problems come if the organization lacks the internal discipline for internal communications to be consistently communicated - particularly in written form - in English.

For the Koreans, one can empathize with the hassle of writing English e-mail and reports.  But given they have voluntarily joined an international organization, one’s sympathy can only go so far. The Korean staff may as well be writing in relatively indecipherable code for the rest of the global organization whenever they write in Korean.

This local practice is a major hindrance for their foreign senior management to adequately monitor what is happening in the ranks, and in times of crisis, to audit what was the cause of the problem. Korea is hardly alone. I once worked with a major international consumer goods company in Japan that had multiple layers of bilingual Japanese staff buffering foreign executives from the real operations at their Asia-Pacific head office in Kansai. Finally, the situation became so intolerable that once an opportunity presented itself, the company relocated its regional office to Singapore. My point is that there are other Asian countries than Korea, including even China, where the staff may work at cheaper wages and are more willing to communicate and document routinely in English.

Unfortunately for many Korean employees, often all of this is lost upon or not taken seriously enough by union and other local leaders. For all that Korea has to offer as a place for investment, the country hardly holds a monopoly in Asia for foreign companies. Consequently, western companies have relocated from Korea in the past and could well do so again in the future. Getting back to changes in compensation practices, while in the U.S., President Park Geun-hye told American executives that she was aware of the employee compensation issue and U.S. management’s concerns. She said she would look into the matter upon her return to Korea.

 As much as Korea is increasingly becoming integrated into the global economy, it is clear that many of the nation’s leaders are being caught off guard by various forms of globalism. Well, they are hardly alone. But Korea needs, more than most countries, to find ways to better integrate its communication and compensation practices for the nation’s long-term welfare.

Korea long ago stepped away from other Asian countries by offering low-cost labor competition. As the nation has climbed up the food chain, naturally wages have increased. But in doing so, knowledge and other workers’ productivity has become of greater concern - not only domestically, but also internationally. And that now means Korea is facing off with competition from China and India where similar, if not lower, wages are more often complimented with a greater readiness to conduct day-to-day business in English.

Without far-sighted leadership, the Korean market may someday be characterized by small or, at best, medium-sized foreign investors whereas the international big players will be located elsewhere, relegating Korea to remain as a secondary if not tertiary international market.

*The author is president of Soft Landing Korea, a sales performance consulting firm, and senior advisor to IPG Legal.  The article, originally, appeared in the Korea Joonang Daily.

info@ipglegal.com
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SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Investor-State Disputes/Arbitration in Korea: ABA Dispute Resolution Magazine

The American Bar Association Dispute Resolution Magazine has an interesting article on Investor-State Disputes that is relevant to Korea.  The article appears in the Fall 2013 edition of the magazine.

Some of the "top" law firms in Korea have been notoriously conflicted - thus leading to choices made in agreements that are less than favorable to clients.  This has led, in part, to South Korea being perceived as not a foreign-friendly destination for direct investment.  Additionally, the courts, recently, invalidated an arbitration award against the Korean government - thus frightening more investors from the Korean shores.  Hopefully, Korea has learned from these mistakes.  Korea is a developed market with a vibrant local economy.  Protective measures are no longer needed.  Enforcement of the next arbitration award against the Korean government can be a way to enhance the international reputation of the Korean courts and, thus, increase investor confidence.

The article notes, in part, that:
"The first treaties providing for arbitration to resolve investment disputes appeared in the 1960s, as part of a broader system to encourage international investment.  This system of investment protection was designed to respond to investors' strong distrust of the local courts of developing countries following the decolonization period, when former colonies nationalized and expropriated foreign investments in natural resources and land"
The article goes on to note that these treaties and the "globalized world economy" has led to:
"Not surprisingly,  with the massive increase of investment over the last decade in all countries and regions, a growing number of investor-state disputes have been submitted to international arbitration.  The World Bank International Centre for Settlement of Investment Disputes (ICSID), the main institution supporting investor-state arbitration, has registered more than 300 investment-treaty cases in the last 15 years.  More than 135 cases have been brought under the rules of UNCITRAL, the United Nations Commission on International Trade. 
The article notes, as what occurred with the Lone Star fiasco, " the investor walks away or becomes persona nongrata in the host country, ending the investor's hope for profit and the country's hope for sustained growth."

The Lone Star fiasco has led many investors, some that I have spoken with, as seen as a destination that is not foreign-capital friendly.  Hopefully, in the future, the Korean government will look at issues that arise in a long-term perspective.

Other articles that may be of interest:
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SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Dec 9, 2013

Enforcement Decrees are Becoming more Common in South Korea

The Park Administration’s usage of enforcement decrees, an executive decision-making process that allows the administration to bypass the National Assembly, has been steadily increasing according to a new article from The Hankyoreh.

The article mentions that appeals filed at the Constitutional Court seeking relief from enforcement decrees have shot up from a low of 46 in 2006 to 87 in 2012.  From the article:
"Enforcement decrees are often used to overpower the law for political ends. Perhaps the most prominent recent case of this was the decision to strip the Korean Teachers’ and Education Workers’ Union (KTU) of its legal status. That Oct. 24 decision by the Ministry of Employment and Labor was based on Article 9, Item 2 of the enforcement decree for the Trade Union and Labor Relations Adjustment Act, which states that an established union 'must be notified that it is not viewed as a labor union according to the law' if grounds for rejecting its application are discovered and it does not respond within 30 days to a request to take corrective action."
The article concludes with a quote by President Park Chung-hee, whereby he uses the term ‘administrative democracy’ to describe many of his actions.

It appears as though his daughter may be following the same course.  Be sure to check out the original article here: Administrations' Expediency Shaking the Rule of Law in S. Korea.

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SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Nov 28, 2013

Status of Interns Under the Korean Labor Standards Act: Employees Entitled to Severance/Minimum Wage?


Interns in Korea may be considered Employees under the Korean Labor Standards Act, thus, entitling the interns to minimum wage, severance and the numerous other protections and benefits under the Act.   The matter is having an impact on franchises, entertainment companies, and other SMEs.

The, incredibly vague, Employment & Labor Ministry Guideline 826 (April 7, 2009) notes, in part, that:
If a person is considered an employee under the Labor Standards Act shall be determined by considering the subordinate relations with the employer collectively - with regard to the details of job, supervision by the employer, disciplinary actions, capability to ignore work orders and the type of wages paid, etc.  In cases when students provide work to an employer to gain academic credit with no promise to hire via a academic-industrial cooperation agreement, even though the agreement contains working hours, a stipend, social insurances, etc. the students are, generally, not considered employees.  However, in evaluating the employment contract made with a company, if the work is essentially similar to the provisions of the labor service, and conducted under the supervision of an employer, the trainees can be considered employees. 
The Guideline contains little specific guidance.  However, courts have been pragmatic and, typically, interns that are hired for a few month period of time shortly after graduation for university are considered mere interns.

The fear we have and that is, already, showing its ugly head is that less internships will be available.  Many of us began our careers as interns and proved our worth through these internships.  We may have never got our foot in the door without these internships.  Hopefully, this reality with be consistently reiterated by the attorneys litigating these cases and Labor Scrivener/Paralegal (노무사) will push this issue at the Labor Boards.   


_____
SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Korean Pro-North Priest Investigated By Prosecution


Chang-Shin Park a Jeonju diocese senior priest is being investigated by the Joenju District Prosecutors Office.  The priest made peculiar remarks defending the 2010 shelling by North Korea of a South Korean occupied island on the West Coast of Korea. The shelling led to the death of two Korean civilians and a Korean Marine.  The argument justified the shelling by noting that North Korea, inter alia, is just protecting its territory as South Korea is doing on Dokdo Island.

A priest justifying the killing of civilians by North Korea for purposes of defending tiny islets seems a little peculiar to this observer and seems to show that Korea has a radical liberal element that may be more pro North than South. 

The comments by Chang-Shin Park was slammed by other priests and also the nation's president.  A group of priests are considering reporting the actions of Park to the Vatican.

Seemingly, the priest would be prosecuted under the National Security Law.



_____
SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Asian Legal News for the Week of November 24, 2013

This Week's Asian Legal News Reported by Media


Most Recent Posts from The Asian Law Blog

_____
SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Nov 24, 2013

Should UPP be Banned in Korea? Korea Government Files to Court to deregister Pro-North Party

The Park Administration as filed to the Constitutional Court of Korea a complaint to disband the leftist UPP.  The petition claims that the party engaged in pro-North Korea activities.  The case, also, calls for the immediate suspension of six of the lawmakers of the party.

Justice Minister Hwang Kyo-ahn noted to the press that:
"We have determined that the UPP’s platform and its objectives are intended to favor North Korean socialism, which goes against the free democratic basic order of our Constitution and that the activities of the RO (Revolutionary Organization) which forms the party’s core, were in line with North Korea’s strategy to revolutionize the South."  

This is not mere politics.  Evidence exists, including tape recordings, that establish that a leader of the UPP called on members to prepare for a war to assist North Korea in overthrowing North Korea.

At least six of the nine justices at the Constitutional Court must vote to disband the party for the party to be banned.

What do you think?
_________
Sean Hayes may be contacted at: SeanHayes@ipglegal.com.

Sean Hayes is co-chair of the Korea Practice Team and Entertainment, Media and New Tech Law Team at IPG Legal. He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. He assists clients in their contentious, non-contentious and business developments needs in Korea and China.

Nov 21, 2013

Asian Legal News for the Week of November 17, 2013

This Week's Asian Legal News Reported by Media

Most Recent Posts from The Asian Law Blog

_____
SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Applying for a D-8 Investment Visa in Korea: The Basics

We often receive requests for information from potential clients overseas that want to open a business or office in Korea.  The potential clients are often lost, don't know where to start, and have very generalized questions about what they should do.  We often begin by helping to counsel these potential clients regarding which visa they'll be applying for to get things moving.

We often advise that one of the more common visas to apply for is the D-8 investment visa.  It's also possible to open a business on some of the "F long-term stay" visas, however, most will not qualify without significant time in Korea or family in Korea.

Thus, for most people who are new to the peninsula, the D-8 investment visa is usually the way to go.  Here is a basic list of requirements for an applicant investing not less than KRW 100,000,000:
  • Application for a visa (or Confirmation letter of visa issuance).
  • Passport (or a photocopy of a passport in the case of applications for a Confirmation letter of visa issuance).
  • Photocopy of a certificate of FDI company registration. 
  • Photocopy of a business registration certificate or incorporation register, if applicable.
  • Certificate of declaration of a foreign currency (issued by the Customs Office).
  • Certificate of remittance issued by the relevant bank (Minimum of KRW 100,000,000).
  • Photocopy of foreign currency purchase certificate. 
  • Photocopy of office lease contract. 
  • Photocopy of bank book. 
  • Business Plan

_________
Sean Hayes may be contacted at: SeanHayes@ipglegal.com.

Sean Hayes is co-chair of the Korea Practice Team and Entertainment, Media and New Tech Law Team at IPG Legal. He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty.

He assists clients in their contentious, non-contentious and business developments needs in Korea and China.

Nov 20, 2013

K-Pop Star Psy and Currency Swaps - Interesting Article on the Continued Ascent of "Brand Korea"

Reuters, in a new article co-written by Se Young Lee and Christine Kim, has made out yet another case for the impressive popularity of "Brand Korea."  Korea's government recently announced three currency swap deals worth more than USD 20 billion.  What makes things truly remarkable about all this is that Korea is able to couple its economic prosperity with cultural influence in Asia and, now, even North America.

The result, as we know, is a booming situation on the peninsula where the impression is that everything is going to continue to get better.

The article notes, amongst other things, that:
"[Korea] can easily afford to match cultural diplomacy with economic muscle as it competes with Japan and China for influence. K-Pop icons such as Psy, whose 'Gangnam Style' hit went viral in 2012, and even Korean food are used by Seoul to build South Korea's brand, while Samsung Electronics Co Ltd. and Hyundai Motor Co. are firms with global reach...."
That about sums it up, as far as I'm concerned.  Things definitely seem to be looking up on the Korean Peninsula.  If you'd like to read more, check out the full article below.
With Psy and Currency Swaps, South Korea Grabs Global Influence.

_____
SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Nov 19, 2013

Can Koreans Perceive Foreigners as Part of the Tribe? by Senior Advisor Tom Coyner

Living abroad offers interesting and frustrating challenges. Having lived half my life in East Asia, I have long accepted that the trade-off in having an above-average existence comes with above-average potential irritations. That is, if one really gives a damn about what is happening, living in Asia can drive the well-intentioned expatriate up the wall. On the other hand, if one rationalizes what is happening in the immediate community is none of the foreigners’ business, life can be much simpler and more pleasant.

A recent case in point came in the guise of an e-mail from an American friend who has lived in Korea for more than 40 years. Having lived here more than two-thirds of his life and being bilingual in Korean, he often seems more Korean than Western. But even before he arrived as a Peace Corps volunteer, he had developed a passion for older architecture. In time, he has developed a deeper understanding and appreciation for the Joseon Dynasty (1392-1910) and early 20th-century Korean buildings than even Korean experts. In fact, today, the Korean media have given him the nickname of the “hanok jikimi” - “protector (literally translated “keeper”) of hanok.”

My friend lives in a traditional hanok house and has defended his well-maintained neighborhood from being demolished by private land developers.

Returning to the aforementioned e-mail, my friend alerted several “old Korea hands” about the plans to yet again redevelop Insa-dong. On Aug. 22, the Seoul Metropolitan Government announced a city development plan that could turn what remains of a traditional entertainment neighborhood into a modern, more profitable commercial zone. Seoul newspaper articles quoted bureaucrats announcing lifting a 35-year ban on developing the district. Details of the plan are not yet clear, but initial announcements give good reason to be concerned. That left me scratching my head, since a great deal of development supported by landlords was done over the protests of the more aesthetically inclined shopkeepers.

Specifically, according to newspaper articles, the permitted number of floors will be increased from one or two floors, in keeping with previous restrictions and traditional standards, to three or four floors, more in common with shopping malls. Citing concerns for pedestrian convenience and emergency vehicle access, the minimum alley width will be increased from two meters to four meters. Of course, to do this means tearing down many of the hanok and other older buildings lining small alleyways.

While I can sympathize for the need for greater access of fire engines, etc., I also recognize the absurdity. I live in a traditional community with widened alleys - clogged with illegally parked vehicles, making the area inaccessible for larger emergency vehicles. The concern with fire safety can be addressed with alternative facilities, such as increasing the number of fire hydrants in the alleys and installing smoke detectors, sprinkler systems and other fire prevention and mediation equipment in the buildings.

Kim Ji-ho, an official in charge of the city’s urban planning bureau, was quoted as saying, “The project’s goal is to increase the value of the city. The city government will try its best to preserve Insa-dong’s historical features.” Given my observations over the decades, I suspect there is greater concern about increasing the value than preserving historical features.

And this is where the long-term Seoul residents, Koreans and foreigners alike, may get involved. According to the city, Insa-dong will go into redevelopment after the city planning commission makes a final announcement in October. Until then, foreign preservationists plan to organize a pushback on the tentative plans.

While I’m sure there are also Korean preservationists, there are some fundamental differences between native and foreign preservation attitudes. At the risk of oversimplification, one may say that foreign preservationists believe in preserving as much as possible of the originality of the buildings so long as the structure is not a safety hazard. Native preservationists tend to preserve just the overall structural frame with a few essential bits and rebuild massively around these primary parts of a structure.

Aesthetically, the foreign approach preserves many of the details that in aggregate may comprise the greatest preservation cultural values. Whereas the native approach works along the lines that what is non-essential and old should be replaced to ensure the long-term viability of the structure; sadly, in most cases the building owners and local bureaucrats simply do not accept that originality of form and structural components is what creates the uniquely Korean cultural value. Incidentally, there is a lot more money to be made in pursuing the local approach versus the foreign methods.

So what happens, when a historical building is preserved, too often only the primary beams and pillars along with some of the foundations, and if one is lucky, the original roof tiles are kept. The rest goes to the scrap heap. A good example is Sungnyemun, often called “Namdaemun.” Much of what went up in flames in 2008 was material built into the gate during the 1962 major renovation project when it was razed and rebuilt.

In other words, much of what had survived the Japanese invasion of 300 years ago, the 17th-century Manchu invasion, the Japanese colonial period of neglect and nearby blasts from the 1950-53 Korean War, was disassembled, with some components thrown away during the renovation project a half-century ago. And what happened to this monument, designated as National Treasure No. 1, has too often become the fate of other important as well as mundane architectural survivors.

I have often wondered aloud that if the natives don’t care about preservation beyond moneymaking opportunities, then why should the foreigners bother? If the foreigners think they know better and believe that future generations of Koreans may blame the present generation’s poor stewardship of national assets, is it the foreigners’ concern?

I can put together a coherent argument either way. But no matter how some of us foreigners may feel, Korea is not our country. Even foreigners with Korean citizenship are not “really Korean” in many local people’s opinion. So, as a foreigner, I may argue that I need not really give a damn. But as a global citizen, well, the issue becomes a bit more complicated.

*The author is president of Soft Landing Consulting, a sales-focused business development firm, and a senior adviser to the IPG Legal group.  The original article may be found at: Who really Cares - and Why?

By Tom Coyner

_____
SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Nov 18, 2013

Samsung Investigated for Union Busting by Korean Ministry of Employment and Labor

A large part of Samsung's success has been its "good" relationship with the Korean government and its "no union" policy.  Samsung has been criticized for decades for receiving preferential treatment from the Korean government, because of relationships with government officials/politicans and perception that without Samsung the country is doomed.

Many in Korea have, also, criticized Samsung for its environmental practices, labor practices, abuse of suppliers and gauging of local consumers.  Much of the criticisms have, at least, some merit.

The government may be changing its practices with regard to Samsung.  An opposition party has revealed a document produced by Samsung management that allegedly instructs management to encourage employees to disorganize trade unions if unions are established.

The document has led the Korean Metal Workers' Union, Lawyers for a Democratic Society and the People's Solidarity for Participatory Democracy to file a criminal complaint with the Seoul Central District Prosecutors' Office against Chairman Lee Kun-hee and 10 other top executives of the company.  Lets see if the prosecution calls Chairman Lee.




The case has been referred to the Seoul office of the Ministry of Employment and Labor.  The Ministry will call the Accusers to the office first and, then, decide whether to conduct a full investigation.






Is the Korean government changing or it this an investigation that is going nowhere?

_____
SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Nov 15, 2013

South Korea still Required to use Internet Explorer due to 1999 Law

A South Korean law that requires the use of Internet Explorer when making purchases online is still in effect today.  The Washington Post has brought attention to the fact that South Korea, while seemingly a high-tech country whose cell phone coverage reaches deep into the extensive subway system, is still legally mired in the past and required to use what is considered by most people to be an ineffective and unpopular browser.

In 1999, at a time when internet use worldwide was just beginning to take off, the South Korean government hoped to encourage its citizens to shop online.  Security became a concern, and to try and promote some semblance of safety and uniformity, the National Assembly required everyone to use Internet Explorer.

Now that Internet Explorer is by some accounts actually the least secure browser to use, lawmakers in the National Assembly have proposed legislation to repeal the previous law.  The Washington Post illustrates one reason of Internet Explorer has deleterious effects on South Koreans by noting that:
“In current versions of Internet Explorer, Web surfers must approve the use of ActiveX by clicking ‘Yes’ to a question asking whether to proceed. This gives users the chance to avoid accessing or passing along untrusted material. But South Koreans are so accustomed to saying ‘yes’ that they sometimes mistakenly download malicious software.” 
The reasons why Internet Explorer is the most insecure browser are numerous, but perhaps the biggest reason is that it is still one of the most commonly-used browser in the world - therefore, it is a prime target for viruses and malicious software. 

Read the full article in the Washington Post here: South Korea is Stuck with Internet Explorer for Online Shopping because of Security Laws.

by Daniel Gardner
_________
Sean Hayes may be contacted at: SeanHayes@ipglegal.com.

Sean Hayes is co-chair of the Korea Practice Team and Entertainment, Media and New Tech Law Team at IPG Legal. He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty.

He assists clients in their contentious, non-contentious and business developments needs in Korea and China. 

Nov 12, 2013

Samsung to Debut Online Drama Series

Following on from Netflix's success with "House of Cards," Samsung is launching a web-based drama series to capitalize on the rapid rise of smartphone connectivity in South Korea.

Entitled "Infinite Power," the six episode series is adapted from a popular internet cartoon focusing on the struggles of today's college graduates in the ultra-competitive job market in Seoul.

Singer Im Seul-ong plays the main character who chases the dream of working at a major corporation.

While previous web-based series have failed to produce a domestic hit, Samsung and the series producers predict this could be become a mainstream distribution model over the next five years.  The company is relying on it audience interactions through social media.

by Daniel Gardner

_____
SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

North Korea Executes 80 people for Watching Foreign TV Shows

Earlier this month, it has been reported that North Korea executed around 80 citizens for watching smuggled South Korean television shows.  The executions were carried out in seven cities around North Korea.

In one gathering, 10,000 people watched eight people executed by firing squad inside a sports stadium in the Eastern port of Woosan.

Watching foreign television or films from the US or South Korea is considered to be a capital crime in North Korea, punishable, often, by death.

As well South Korean soap operas, also, it seems Desperate Housewives, also, has a large following in North Korea.

Efforts by the North Korean regime to control the distribution of foreign content has been thwarted by an increase in the number of flash drives and portable media devices smuggled into the North.

By Daniel Gardner

_____
SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

The Korean War in Full Tom Coyner Color

There has been a great deal of activity commemorating the 60th anniversary of the Korean War armistice, but there has been little review of the events that made up the second half of that war.

One may recall the basics: war begins in June 1950, UN responds in July, fighting around the Pusan Perimeter until August, Incheon landing and retaking of Seoul in September, UN forces capture North Korea, Chinese forces push back UN forces from October through December and fighting occurs around the 38th parallel during the first half of 1951. Then details seem to disappear during the two-year stalemate from July 1951, followed by the armistice negotiations with continued fighting until July 1953.

In other words, after the Allied Forces retook Seoul a second time in March 1951, there is little mention, other than the casualties and a few battles. So, what really happened during those ensuing two and a half years?

According to Kathryn Weathersby, a Johns Hopkins historian who did research in Moscow when the Soviet archives were temporarily opened to scholars, Joseph Stalin cynically prolonged the 1950-53 Korean War. At the time, the Americans and their allies did not realize they had stepped into Stalin’s trap set to keep them bogged down in Korea for two and a half years.

Militarily, Stalin was very insecure. He welcomed the United States getting sucked into an Asian land war rather than seeing the Americans once more contest his machinations in other parts of the world. He had already suffered a setback in the Greek Civil War (1946-49) when the United States and the United Kingdom helped defeat the Greek Communists and their allies. Yugoslavia’s Tito already had broken away from Stalin’s command and the United States forced him to withdraw his demand to station Soviet military forces in the Turkish Straits. The Soviet dictator worried the United States would further challenge his attempts to expand the area under Moscow’s control.

Until Stalin’s death, the global Communist movement, apart from Tito, pretty much followed Moscow. Stalin ordered all Communist leaders to support prolonging the Korean War. He wanted time when the United States would not be able to challenge weak Communist regimes and movements. This gave Communist states the opportunity to arm themselves against presumed future conflicts with the West, including a possible third world war.

Furthermore, there was a chain of command in carrying out the war in Korea, starting with Stalin then down one notch to Mao Tse-tung and finally to Kim Il-sung. As a result, all political - and many military - decisions originated or were approved by Stalin. Even Mao accepted this chain of command as long as Stalin was alive during the early years of the People’s Republic of China, founded in 1949.

Consequently, by July 1952, when it became obvious that military victory was not possible, Kim appealed to his Communist bosses to end the war. North Koreans were experiencing needless widespread damage and human suffering from constant U.S. bombing.

Being the least powerful in command, Kim found he was routinely disregarded, with major decisions being made by Stalin and Mao with Kim, at best, being advised and sometimes even ignored. Hiding this humiliation, even before the war’s end, the North Korean propaganda machine began proclaiming that they alone had essentially beaten back the Americans.

Sometimes, however, the Russians would censure these proclamations by insisting that Pyongyang recognize the sacrifices made by the Chinese and the contributions of other socialist nations.

Nonetheless, North Korea’s distortion of the war’s history can be traced back to this national humiliation.

The Americans, not fully understanding what was happening on the other side of the war, became increasingly frustrated by the Communists’ refusal to agree to an armistice. They could no longer move the battle lines northward. The United States used its largely uncontested Air Force to repeatedly bomb the North in hopes of forcing their enemies to come to an agreement. Instead, Stalin pursued the war for an extra two and a half years at considerable cost to the North Koreans. During this time, the United States eventually bombed 85 percent of all buildings in the North. But for the Soviets and Chinese, this was a relatively painless price to pay for keeping the United States preoccupied and away from other sensitive parts of the world.

Actually, the Chinese benefitted during this time. To protect the logistically essential Yalu River bridges, Stalin assigned Russian pilots to fly North Korea-marked jets and successfully fight off the Americans in the northernmost part of North Korea. The Soviet pilots were based in Siberia and Manchuria. The Russian group transferred technology and know-how to the Chinese, who had not yet developed a modern air force. So while almost twice as many Chinese soldiers died than North Korean comrades, the war gave the Chinese the foundation for an air force of their own - something that became even more valuable in the 1950s when China broke away from the USSR following Stalin’s death.

After Stalin died in March 1953, the Communist side finally agreed to an armistice. Yet the North Koreans resented the armistice, since it left the country divided. Furthermore, the North Koreans resented the Russians and the Chinese for prolonging the war by sacrificing the Korean people. Since then, North Koreans have believed that the rest of the world owes their country ongoing reparations. Even today, they often regard foreign aid as reparations.

* The author is president of Soft Landing Consulting, a sales-focused business development firm, and senior adviser to the IPG Legal.  The article appeared in the Korea Joongang Daily.


_____
SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Nov 7, 2013

Bo Xi Lai's Conviction Upheld: Life Sentence Still Stands

ABC News, and almost every other international news agency, has recently reported that former Chinese Communist Party Politburo member Bo Xi Lai has recently lost the appeal of his corruption conviction.  As a result, his life sentence stands.

Most commentators, IPG Legal included, seem to agree that the charges brought against Mr. Bo were politically-motivated and the entire legal system in China, particularly as it relates to cases that may seriously affect China’s political or economic system, is still in large part controlled by the Chinese Communist Party.

I have myself observed a Chinese criminal court try and convict a man who had no access to a lawyer.  The case involved a large company suing a private businessman for fraud.  Before issuing her final ruling on the case, the judge went into a backroom where she consulted with Communist Party officials on how the case should be concluded.  Unsurprisingly, the man was convicted, and even more unsurprisingly, the judge was quite frank about what she was doing in the backroom.

This was just one guy defrauding a mid-tier business... so, we can imagine what must be happening behind the scenes when something actually important comes along.

IPG Legal will keep you updated with more news about the case as it happens.  We don’t think we’ve seen the last of Mr. Bo just yet.

To learn more about the case and read the article from ABC News see:
China Court Upholds Bo Xi Lai Conviction, Life Term.

_____
SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Asian Legal News for the Week of November 03, 2013

This Week's Asian Legal News Reported by Media

Most Recent Posts from The Asian Law Blog

_____
SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Nov 6, 2013

Should UPP be Banned in Korea? Korea Government Files to Court to deregister Pro-North Party

The Park Administration as filed to the Constitutional Court of Korea a complaint to disband the leftist UPP.  The petition claims that the party engaged in pro-North Korea activities.  The case, also, calls for the immediate suspension of six of the lawmakers of the party.

Justice Minister Hwang Kyo-ahn noted to the press that:
"We have determined that the UPP’s platform and its objectives are intended to favor North Korean socialism, which goes against the free democratic basic order of our Constitution and that the activities of the RO (Revolutionary Organization) which forms the party’s core, were in line with North Korea’s strategy to revolutionize the South."  

This is not mere politics.  Evidence exists, including tape recordings, that establish that a leader of the UPP called on members to prepare for a war to assist North Korea in overthrowing North Korea.

At least six of the nine justices at the Constitutional Court must vote to disband the party for the party to be banned.

What do you think?
_________
Sean Hayes may be contacted at: SeanHayes@ipglegal.com.

Sean Hayes is co-chair of the Korea Practice Team and Entertainment, Media and New Tech Law Team at IPG Legal. He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. He assists clients in their contentious, non-contentious and business developments needs in Korea and China.

Nov 5, 2013

Garnishing Pay in Korea: Collections in Korea

Garnishing Wages in Korea

I received a call from a friend asking about information concerning collecting on a large debt. He loaned money to a “friend” and the friend never made a payment on the loan. Word to the wise, don't make large loans to friends----cry poverty instead.

In Korea, after a judgment or order to pay by a court, a plaintiff can collect on an unpaid debt through garnishing of wages. Garnishing of wages is normally the best way to guarantee the collection of debt when a debtor doesn’t have real or personal property. Most law firms can perform the service for a modest fee.
  • Less than W1.2mil (No wages can be garnished)
  • W1.2mil - W2.4mil (Monthly Wage – W1.2mil)
  • W2.4mil –W6mil (1/2 Monthly Wage)
  • Over W6mil (Half monthly Wage minus W3mil divided by two plus W3million minus monthly wage)
Examples:
1. W2,000,000 Monthly Pay (Can garnish monthly W800,000)
2. W3,000,000 Monthly (Can garnish monthly W1,500,000)
3. W5,000,000 Monthly Pay (Can garnish W2,500,000)
4. W6,000,000 Monthly Pay(Can garnish W3,000,000)
5. W12,000,000 Monthly Pay (Can garnish W7.500,000)
6. W20,000,000 Monthly Pay (Can garnish W13,500,000)

_____
SeanHayes@ipglegal.com

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.

www.ipglegal.com

Second-Screen Legal Issues Addressed by Attorney Sean Hayes at MIPCOM in Cannes, France

The following article appears in MIPCOM. MIPCOM's website may be found here.

Primary Issues for Second Screen
"The Second-screen format that enables viewers to interact with TV content via social media could be opening up a tangle of legal issues, concluded speakers at Second Screen - Legal Issues and Solutions. Organized by the International Association of Entertainment Lawyers, the speakers noted that viewers' ability to access extra TV-related content on smartphones and tablets posed new legal challenges for broadcasters and advertisers hoping to monetize the experience. 

For example, second-screen apps with digital-fingerprint and automated content-recognition (ACR) technologies are able to track viewing behavior via data collected during a show. 

"But who owns your digital fingerprints or the collection of these fingerprints?" Asked Christiaan Alberdingk Thijm, Dutch attorney-at-law at bureau Brandeis. "The collection of fingerprints forms a database. But while the European Union recognizes database rights, the US does not. The second screen is a lawyer's paradise." 

The other speakers, Dr. Ralph Oliver Graef, attorney-at-law at Germany's Graef Rechtsanwalte, IPG Legal's senior partner, Sean Hayes, and moderator Jeff Liebenson, principal at US-based Liebenson Law, noted that copyright infringement, privacy violation and advertisement-skipping could be negative by-products of this new era of second-screen TV viewing."
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info@ipglegal.com

Applying for a D-8 Investment Visa in Korea: The Basics

We often receive requests for information from potential clients overseas that want to open a business or office in Korea.  The potential clients are often lost, don't know where to start, and have very generalized questions about what they should do.  We often begin by helping to counsel these potential clients regarding which visa they'll be applying for to get things moving.

We often advise that one of the more common visas to apply for is the D-8 investment visa.  It's also possible to open a business on some of the "F long-term stay" visas, however, most will not qualify without significant time in Korea or family in Korea.

Thus, for most people who are new to the peninsula, the D-8 investment visa is usually the way to go.  Here is a basic list of requirements for an applicant investing not less than KRW 100,000,000:
  • Application for a visa (or Confirmation letter of visa issuance).
  • Passport (or a photocopy of a passport in the case of applications for a Confirmation letter of visa issuance).
  • Photocopy of a certificate of FDI company registration. 
  • Photocopy of a business registration certificate or incorporation register, if applicable.
  • Certificate of declaration of a foreign currency (issued by the Customs Office).
  • Certificate of remittance issued by the relevant bank (Minimum of KRW 100,000,000).
  • Photocopy of foreign currency purchase certificate. 
  • Photocopy of office lease contract. 
  • Photocopy of bank book. 
  • Business Plan

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Sean Hayes may be contacted at: SeanHayes@ipglegal.com.

Sean Hayes is co-chair of the Korea Practice Team and Entertainment, Media and New Tech Law Team at IPG Legal. He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty.

He assists clients in their contentious, non-contentious and business developments needs in Korea and China.