Monday, 13 March 2017

KORUS Negotiation Documents (Preamble for Investors): Disclosed by the Supreme Court Order

Now we got a piece of negotiation documents of KORUS FTA. They reveal the US unilateralism, which will be pursued more strongly by the Trump Administration. Efforts of Korean negotiators to insert "Korea" into the KORUS Preamble were all failed. Compare the final text and failed proposals of South Korean Government (SKG).

US Proposal (16 June 2007)

Seeking to establish clear and mutually advantageous rules governing their trade and investment and to reduce or eliminate the barriers to trade and investment between their territories, recognizing that where, as in the United States, protections of investor rights under domestic law equal or exceed international law standards, foreign investors shall not be accorded greater substantive rights with respect to investment protections than domestic investors under domestic law;

SKG Proposal (22 June 2007)

Seeking to establish clear and mutually advantageous rules governing their trade and investment and to reduce or eliminate the barriers to trade and investment between their territories, recognizing that where, as in Korea and the United States, protections of investor rights under domestic law equal or exceed international law standards, foreign investors are accorded as shall not be accorded greater substantive rights with respect to investment protections as than domestic investors under domestic law;

US Proposal (23 June 2007)

Agreeing that foreign investors are not hereby accorded greater substantive rights with respect to investment protections than domestic investors under domestic law where, as in the United States, protections of investor under domestic law equal or exceed those set forth in this Agreement;

SKG Proposal (25 June 2007)

Agreeing that foreign investors are not hereby accorded greater substantive rights with respect to investment protections than equal to those of domestic investors under domestic law where, as in Korea and the United States, protections of investor under domestic law equal or exceed those set forth in this Agreement;

SKG Proposal (27 June 2007)

Agreeing that foreign investors are not hereby accorded greater substantive rights with respect to investment protections than domestic investors under domestic law where, as in the United States, protections of investor under domestic law equal or exceed those set forth in this Agreement, and recognizing that the laws and regulations of Korea, including Article 6 of the Constitution [1] and Article 3 of the Foreign Investment Promotion Act [2], provide foreign investors and their investment protection equal to that provided to domestic investors and their investments

Final Text

Agreeing that foreign investors are not hereby accorded greater substantive rights with respect to investment protections than domestic investors under domestic law where, as in the United States, protections of investor rights under domestic law equal or exceed those set forth in this Agreement;

Timeline and Backgrounds of the Litigation

  • April 2006: Mr. Han, then the vice-Prime Minister of SKG told to reporters that the US and Korea agreed not to make public every detail of the negotiation for three years from the effective date of KORUS (March 15, 2012). He added that SKG initially intended to disclose the negotiation documents without delay but the USTR asked to keep them for ten years from the date. According to him, the time restriction of three-year came from SKG's successful effort to persuade the USTR. See exchanged letters on this between SKG and the USTR.
  • 11 March 2015: MINBYUN (Lawyers for a Democratic Society) submitted a FOIA request to SKG.
  • 31 March 2015: SKG rejected the request.
  • 21 January 2016: The Seoul Administrative Court (2015GuHap66936, 21 Jan. 2016) decided in favor of the plaintiff (for details of the ruling, see here, and see Korean text of the decision)
  • 11 February 2016: SKG appealed.
  • 2 September 2016: The Seoul High Court (2016Nu34730, 2 Sep. 2016) dismissed the appeal of SKG (Korean text of the decision). Ruling in favor of the plaintiff, the court made clear that SKG cannot rely upon the foreign relations exception of the Official Information Disclosure Act with groundless assumptions or abstract inference.
  • 23 September 2016: SKG appealed.
  • 29 December 2016: The Supreme Court (2016Du51962, 29 Sep. 2016) rejected the appeal without giving reason in judgement (cert. denied)
  • 2 February 2017: SKG disclosed the documents.

[1] Article 6 of the Korean Constitution: (1) Treaties duly concluded and promulgated under the Constitution and the generally recognized rules of international law shall have the same effect as the domestic laws of the Republic of Korea. (2) The status of aliens shall be guaranteed as prescribed by international law and treaties.

[2] Article 3 of the Foreign Investment Promotion Act

Article 3 (Protection of Foreign Investment) (1) With respect to the proceeds that come from the stocks, acquired by a foreign investor, proceeds from the sale of stocks, the principal, interest and service charges paid in accordance with the contract for such a loan as prescribed by the provisions of Article 2(1)4(b), and the compensation paid in accordance with a contract for the introduction of technology, their remittance to foreign countries shall be guaranteed in accordance with the contents of the permission or report of the contract for foreign investment or for the introduction of technology, as of the time for the said remittance.
(2) Except as otherwise prescribed by the Acts of the Republic of Korea, foreign investors and foreign-capital invested companies shall be treated in the same way as nationals of the Republic of Korea and Korean corporations are treated in business operation.
(3) Except as otherwise prescribed by the Acts of the Republic of Korea, the provisions concerning the abatement or exemption of taxes among the tax laws applying to nationals of the Republic of Korea or Korean corporations shall also apply to foreign investors, foreign-capital invested corporations, persons who have extended loans as prescribed by the provisions of Article 2(1)4(b), and persons who have provided technology in accordance with the provisions of Article 25.