Reasons for Proposal

Due to structural changes in the global economy caused by various factors such as COVID-19, transition to a low-carbon economy, and geopolitical factors such as the Russian-Ukrainian war, the movement of core resources, raw materials have frequently been hindered. Meanwhile, the overseas supply chain is rapidly being reorganized from resource security bloc phenomenon to U.S.-China supply chain division appearance, and countries around the world are already expanding their own nationalist priority trends, such as strategic weaponization of supply chain superior technologies and frequent export controls to secure stable domestic demand, thereby hindering the stable operation of our domestic economy and emerging as a national security challenge.

Voluntary efforts from the private sector and companies are important to stabilizing the supply chain, but if companies fully bear the cost of stabilizing and internalizing supply chains, such as diversifying import lines and expanding production bases, it could weaken the national competitiveness. Therefore, the government needs to play a role in preparing for the possibility of individual disturbances spreading to the entire economy and expanding into a national crisis. 

It is necessary to provide a general basis for support for various support demands that are difficult to cope with special laws in individual fields and general financial project support. In addition to high-tech raw materials and intermediate goods, there is a need for support in areas close to the overall economy and people’s livelihoods such as food, general-purpose goods, logistics, etc. In particular, in the event of disturbance to key items important for economic security, it is necessary to stabilize the supply chain through swift funding and take measures in support of companies.

This bill is proposed to ensure national security, maintain safety related to the economic activities of the State and the people and contribute to the development of the national economy by establishing a support system for general finance, taxation, finance, etc. while utilizing the expertise of each department, building a pan-government response system through the establishment of a control tower, such as the “Supply Chain Stabilization Committee,” to prevent supply chain risks arising from various domestic and international factors, and responding effectively in the event of supply chain disruption.

Major Provisions

A. The purpose of this Act is to prevent supply chain risks arising from various domestic and foreign factors and to effectively respond to supply chain disruptions, thereby contributing to national security, maintaining safety related to national and public economic activities, and developing the national economy (Article 1).

B. Prepare a Definitions provision on economic security, supply chain, supply chain stabilization, economic security items, economic security services, supply chain risks, supply chain crisis situations, crisis items, etc. (Article 2).

C. Present the basic direction of economic policy to maintain safety related to economic activities of the State and the people, and establish a basic plan for stabilizing the supply chain for economic security every three years to guarantee the smooth operation of the supply chain from an economic security perspective (Article 7).

D. Install a supply chain stabilization committee under the President’s jurisdiction to deliberate and coordinate important matters concerning supply chain stabilization for economic security (Article 10).

E. Designate goods, raw materials, etc., services, or infrastructure essential to the people’s lives or indispensable to the stable operation of the national economy as economic security items or economic security services (Article 13).

F. Operate and manage an early warning system to check the risk of supply chain, and stipulate matters concerning cooperation between countries related to the early warning system result, provision of tariff information, and obligation to protect information of the State, etc. (Articles 14 through 17).

G. Recognize supply chain stabilization leading business operators at the request of business operators or business organizations to stabilize economic security items, etc., and support diversification of importing countries, strengthening of domestic and foreign production bases, technology development, and reserve management (Articles 18 through 26).

H. Prepare a crisis response manual in advance to cope with the supply chain crisis, and in the event of a crisis, carry out crisis response measures such as designation of crisis items, supply and demand stabilization measures, operation of crisis response headquarters, tariff support, emergency procurement, etc. (Articles 27 through 36).

I. Minimize supply chain risk damage to Korean companies by systematically supporting key projects to stabilize the supply chain, set up a supply chain stabilization fund to contribute to sound development of the national economy and economic security, and stipulate matters concerning the raising, management, use, purpose of funds (Articles 37 through 42).

J. Stipulate obligations to report to the Supply Chain Stabilization Committee at the time of implementation, such as delegation and entrustment of authority, emergency measures in accordance with other laws and regulations, formation of organization related to crisis response, etc., confidentiality obligation, etc. (Articles 43 through 48).