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Settlement of Cash Grant
- 담당부서 : 외투기업고충처리실(고상원)
- 조회수 : 2,436

Organization : Ministry of Trade and Industry
Regulation : Article 10-3 of the Cash Grant Agreement

Grievance

Grievance
•Background: With regard to the “Cash Grant Agreement” enacted by MOTIE, the Ministry claimed that the “amount of performed investment” is the amount of investment that foreign investors will make in Korea and the “amount of executed investment” is the amount of investment that is actually made in Korea, including cash grants by the Korean government. •Main Issue: According to the abovementioned provision, MOTIE said that it can partially redeem an already given cash grant if the amount of investment subtracting the amount of the cash grant falls short of the ratio of the “amount of executed investment” eligible for a cash grant. However, foreign company H argued that it is unreasonable to redeem a cash grant since the amount of executed investment stated in the Cash Grant Agreement is unrelated to the amount of cash grant and it fully executed the promised amount of investment. •Request: Company H raised such a grievance to the Ombudsman’s Office and requested a clear interpretation of the terms in the Agreement and improvement by consulting with MOTIE.

•Background: With regard to the “Cash Grant Agreement” enacted by MOTIE, the Ministry claimed that the “amount of performed investment” is the amount of investment that foreign investors will make in Korea and the “amount of executed investment” is the amount of investment that is actually made in Korea, including cash grants by the Korean government.

•Main Issue: According to the abovementioned provision, MOTIE said that it can partially redeem an already given cash grant if the amount of investment subtracting the amount of the cash grant falls short of the ratio of the “amount of executed investment” eligible for a cash grant. However, foreign company H argued that it is unreasonable to redeem a cash grant since the amount of executed investment stated in the Cash Grant Agreement is unrelated to the amount of cash grant and it fully executed the promised amount of investment.

•Request: Company H raised such a grievance to the Ombudsman’s Office and requested a clear interpretation of the terms in the Agreement and improvement by consulting with MOTIE.

Resoultion and Results

Resolution and Results
•Resolution ‣The Ombudsman visited the local government concerned to explain the issue and listen to the position of the local government. - The local government gave its opinion that when a foreign-invested company performs and executes a certain amount of FDI in accordance with the “Cash Grant Agreement,” the company fully implements the mandatory provision under the Agreement. Thus, it is unreasonable to redeem part of the cash grant. ‣ Based on the local government’s opinion, the Ombudsman delivered the stance of the local government regarding the settlement of the cash grant and raised the issue with the existing system. - Article 10-3 of the Cash Grant Agreement clearly states that the “investment execution plan does not include cash grants,” so it may create confusion for foreign-invested companies. Outcome: •Results: The official in charge promised to revisit the problem raised by the Ombudsman’s Office and come up with improvement measures to prevent such problems. In addition, he decided to take proper measures for the satisfactory settlement of the cash grant for the company.

Resolution and Results

•Resolution
‣The Ombudsman visited the local government concerned to explain the issue and listen to the position of the local government.

- The local government gave its opinion that when a foreign-invested company performs and executes a certain amount of FDI in accordance with the “Cash Grant Agreement,” the company fully implements the mandatory provision under the Agreement. Thus, it is unreasonable to redeem part of the cash grant.

‣ Based on the local government’s opinion, the Ombudsman delivered the stance of the local government regarding the settlement of the cash grant and raised the issue with the existing system.

- Article 10-3 of the Cash Grant Agreement clearly states that the “investment execution plan does not include cash grants,” so it may create confusion for foreign-invested companies.

Outcome:
•Results: The official in charge promised to revisit the problem raised by the Ombudsman’s Office and come up with improvement measures to prevent such problems. In addition, he decided to take proper measures for the satisfactory settlement of the cash grant for the company.

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FOREIGN INVESTMENT OMBUDSMAN

FOREIGN INVESTMENT OMBUDSMAN

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