The South Korean government notifies from June 24 to July 14, 2008 the amendment of the Enforcement Decree of the Inter-Korea Cooperation Fund Act and the Enforcement Ordinance to enhance the transparency and efficiency in providing the government fund.
Details of the amendment are as follows:
Enforcement Decree of the Inter-Korean Cooperation Fund Act
It has specified the Project for Supporting the Restoration of the National Community (Article 8, Clause 5) which is a comprehensive regulation on fund allocation, in order to prevent arbitrary allocation of fund (enforcement decree section 8)
The regulation is classified into four categories: support for the exchanges of separated families; humanitarian assistance; support for North Korean denuclearization; and support for national community restoration.
The term loss subsidy has changed into Inter-Korean Trade & Economic Cooperation Insurance (enforcement decree section 9)
Inter-Korean trade & economic cooperation insurance is a non-profit policy insurance of guaranteeing against emergencies happening in the particular territory of North Korea such as expropriation, war or irresistible force that private insurance companies usually do not cover.
It has set up a legal basis for the establishment of North Korean Denuclearization articles to strengthen connection between the fund spending and the goals of the North Korea policy such as resolution of the North Korean nuclear issue (enforcement decree section 13)
This article has been newly created in consideration of the need for creating and operating additional financial resources in case of the progress in the North Korean denuclearization process.
It has clarified the redemption procedures under the enforcement decree (enforcement decree section 18) for the redemption of the fund under the fund act (section 11).
Redemption criteria have been concretized for false or inappropriate fund allocation, funds used for other purposes, or violation of regulations. Procedures of appeal of dissatisfaction have been newly established such as petition of objection.
Inter-Korean Cooperation Fund Act Enforcement Regulations
The type of businesses which require deliberation and approval in the Inter-Korean Exchange & Cooperation Promotion Committee prior to the allocation of the funds has expanded(enforcement regulation section 2).
Projects for personal exchanges cooperation and cultural, academic and sports cooperation which require deliberation and approval have widened from those spending over 500 million won to over 300 million won.
In case of loss subsidy for financial institutions or undertaking and selling of North Korean won, debt redemption guarantee for trade and economic cooperation businesses, deliberation and approval need to be taken for over 50 million won from previously over 500 million won.
The operation procedures of inter-Korean trade•economic cooperation insurance (loss subsidy) system have improved(enforcement regulation section 2, 3).
Terms of insurance contract will be deliberated and approved by in the Inter-Korean Exchange & Cooperation Promotion Committee annually and contracting evaluation for individual companies will be carried out by Export-Import Bank in accordance with guidelines.
The government hopes that this amendment of enforcement decree of inter-Korean cooperation fund act and enforcement regulations will contribute to strengthening transparency of the fund and resolving problems that have been brought up including obscure disbursement of the fund and inappropriate follow-up measures.