[Regulatory Sandbox] What is the Korean-style Regulatory Sandbox, according to a lawyer

지난 2019. 4. 25. the government held an event to inform the public of the achievements upon reaching 100 days of the regulatory sandbox implementation. The “regulatory sandbox” has become such a prominent issue in the first half of 2019 that it’s safe to say almost no citizen is unaware of it.

Law firm Veat also, starting with the “ICT·Convergence Regulatory Improvement Consulting Service” in 2018, has been making its best efforts to establish the Korean-style regulatory sandbox system by undertaking legal consulting services for the “ICT Regulatory Sandbox Consultation Center” from the beginning of 2019.

Source: Government Deliberation Committee, Ministry of Science and ICT Press Release

As everyone knows, but for the sake of reiteration, the “regulatory sandbox” is a system that supports the demonstration (regulatory sandbox) or market launch (temporary permit) of new technologies and services when they are rapidly created, and even if they do not comply with existing laws and regulations, they do not harm the lives and safety of citizens (Ministry of Science and ICT, ‘19.1.10 press release). Currently, the regulatory sandbox consists of the “regulatory innovation 3-pack” based on the “regulatory innovation 5 laws.”

“Regulatory Innovation 5 Laws” refers to the following laws.

▲ 「Act on Promotion of Information and Communications Technology and Convergence”, (Ministry of Science and ICT, ‘19.1.17.施行),

▲「Act on Promotion of Industrial Convergence”, (Ministry of Trade, Industry and Energy, ‘19.1.17.施行),

▲「Special Act on Support for Financial Innovation”, (Financial Services Commission, ‘19.4.1.施行),

▲「Act on Regulatory Exceptions for Regulatory Free Zones and Regional Special Development Zones”, (Ministry of SMEs and Startups, ‘19.4.17.施行)

▲「Act on Basic Policy for Administrative Regulation”, (Government Deliberation Committee, ‘19.7.17.施行)

“Regulatory Innovation 3-Pack” consists of ▲expedited processing, ▲temporary permits, and ▲regulatory exceptions for demonstration, and sometimes also includes ▲batch processing system. Looking specifically at the 「Information and Communications Convergence Act」,

(1) ’Expedited processing’ is a system that allows those who want to conduct business using new ICT convergence technologies and services to inquire about whether there are any permits or regulations related to the business and, if there is no response from the relevant ministries within 30 days, to be deemed as having no regulations and to be able to freely conduct business (Information and Communications Convergence Act Article 36, etc.).

(2) ‘Temporary permit’ is a system that allows the early market launch under certain conditions when new ICT convergence technologies and services have sufficient safety to be released into the market but there are no corresponding standards, regulations, or requirements, or when applying existing standards, regulations, or requirements is unclear or unreasonable, and market launch is delayed (Information and Communications Convergence Act Article 37, etc.).

(3) ‘Regulatory exceptions for demonstration’ (regulatory sandbox) is a system that allows for limited testing and technical verification of the technology and services when applying for a permit or when the application of existing standards, regulations, or requirements is unclear or unreasonable (Information and Communications Convergence Act Article 38-2).

The above is a brief overview of the regulatory sandbox system upon reaching 100 days of implementation.

Source: Ministry of Science and ICT Press Release

From the next session, we will discuss practical issues related to the regulatory sandbox system and things to pay attention to when writing an application, based on various regulatory sandbox consultation and review cases.

Please contact Law firm Veat (contact: Song Do-young, attorney, 02-576-8990) for more information.