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Fiscal Restrictions

KOREA

Reported on December 2014

Chapter Public Procurement  |  Sub-chapter Preferential purchase schemes covering digital products and services
Additional security verification
In Korea, there are security verification requirements for government procurement. The government requires that products certified at a Common Criteria Recognition Arrangement (CCRA) accredited lab outside of Korea must undergo an additional security verification process for every procurement, even when it is the same product being purchased by the same government customer. In contrast, products that are certified at a CCRA accredited lab in Korea are exempt from this additional security verification process. CCRA is an agreement on mutual acceptance of security evaluation and certification on the basis of common criteria.
Coverage Telecommunication sector
Fiscal Restrictions

KOREA

Reported in December 2014

Chapter Public Procurement  |  Sub-chapter Preferential purchase schemes covering digital products and services
Limitations on foreign participation
It is reported that government procurement policies include the provision of additional “evaluation points” for local products in tender bids. In addition, procedures for local performance benchmark testing of ICT products are developed by local testing bodies, which results in locally manufactured products receiving an enhanced performance rating and testing criteria.
Coverage ICT products
Source
  • These barriers were reported by the US Telecommunications Industry Association (TIA): http://www.tiaonline.org/sites/default/files/pages/TIA_Submission_for_1377_Report_USTR-2014-0022_Final.pdf
Fiscal Restrictions

KOREA

Reported in December 2014

Chapter Public Procurement  |  Sub-chapter Preferential purchase schemes covering digital products and services
Limitations on foreign participation
Reports indicate that the Korean government has in place several policies that appear to be designed to discriminate against foreign companies regarding procurement for telecommunications equipment and possibly other products. It is reported that some policies provide preferential treatment to domestic providers or products, and that procuring agencies may modify tender specifications if domestic vendors complain that the specifications cannot be met by local vendors.
Coverage Telecommunication sector
Source
  • These barriers were reported by the US Telecommunications Industry Association (TIA): http://www.tiaonline.org/sites/default/files/pages/TIA_Submission_for_1377_Report_USTR-2014-0022_Final.pdf
Fiscal Restrictions

KOREA

Since 2015

Chapter Taxation & Subsidies  |  Sub-chapter Discriminatory tax regime on online services
Korea Revised Value Added Tax Law (VATL)
The Korea Revised Value Added Tax Law (VATL) allows to apply a 10% VAT to the supplies of electronic products purchased from non-resident providers. Where an overseas vendor with no establishment in Korea sells a “mobile application” to a Korean customer, the vendor is required to register for VAT in Korea and account for local VAT on its supply. The definition of “mobile application” (according to the VAT Enforcement Decree) is broad and covers any electronic services (e.g., games, music, videos, software) that can be played, operated or executed via mobile communication devices, computers, etc.
Coverage Several digital products (e.g., games, music, videos, software)
Fiscal Restrictions

KOREA

Since 2015

Chapter Taxation & Subsidies  |  Sub-chapter Discriminatory tax regime on digital goods and products
Korea Revised Value Added Tax Law (VATL)
The Korea Revised Value Added Tax Law (VATL) allows to apply a 10% VAT to the supplies of electronic products purchased from non-resident providers. Where an overseas vendor with no establishment in Korea sells a “mobile application” to a Korean customer, the vendor is required to register for VAT in Korea and account for local VAT on its supply. The definition of “mobile application” (according to the VAT Enforcement Decree) is broad and covers any electronic services (e.g., games, music, videos, software) that can be played, operated or executed via mobile communication devices, computers, etc.
Coverage Several digital products (e.g., games, music, videos, software)
Fiscal Restrictions

KOREA

ITA signatory? I II

Chapter Tariffs and Trade Defence  |  Sub-chapter Applied tariffs on digital goods
Average MFN rate
4.71%
Weighted average MFN rate
1.87%
Maximum tariff rate
8.00%
Coverage rate of zero-tariffs
43.21%

Coverage: Digital goods
Sources

Trading restrictions

JAPAN

Since 2001

Chapter Online sales and transactions  |  Sub-chapter Domain name (DNS) registration requirements
General-Use JP Domain Names
In order to apply for the domain name .jp, companies or individuals are required to have a permanent postal address in Japan.
Second level domains, such as co.jp, may be applied for by companies incorporated with official registration in Japan. Non-Japanese corporations registered in Japan as "Gaikoku Kaisha" (Foreign Company) may also apply for a co.jp domain name.
Coverage Horizontal
Trading restrictions

JAPAN

Reported in 2004

Chapter Online sales and transactions  |  Sub-chapter Barriers to fulfillment
De minimis level for express delivery services
It is reported that express delivery services (EDS) face discriminatory treatment with regard to customs and taxes. The de minimis level for the exemption of taxes and duties is approximately 30,000 yen (approx. 250 USD) for post office items in comparison to 10,000 yen (approx. 100 USD) for EDS items.

In contrast to the post office items, EDS items need to also include transportation costs for calculating the de minimis level. Furthermore, EDS items are subject to more stringent customs inspections, including detailed manifests for all items - a requirement which does not apply to the post office items.
Coverage Express delivery services
Trading restrictions

JAPAN

Reported in August 2013

Chapter Online sales and transactions  |  Sub-chapter Barriers to fulfillment
De minimis rule
According to Japan's de minimis rule, goods not exceeding 62 SDR / 10000 JPY / 90 USD of value are exempted from taxes and duties collected by customs.
Coverage Horizontal
Trading restrictions

JAPAN

Since 2000, amended in 2010

Chapter Online sales and transactions  |  Sub-chapter Barriers to fulfillment
UNCITRAL model law
The Electronic Signature Law and Payment Services Act regulates e-signatures and e-payments, but do not follow the UNCITRAL model law on e-commerce or e-signatures.
Coverage Horizontal
Trading restrictions

JAPAN

Reported in 2018

Chapter Standards  |  Sub-chapter Product screening and testing requirements
Certification requirement
Telecommunications terminal equipment requires certification for connection to public network services in Japan. Although testing is mandatory, it may be conducted in several laboratories abroad. Certification is issued both by the government affiliated Japan Approvals Institute for Telecommunication (JATE) and private certification bodies.
Coverage Telecommunication sector
Restrictions on data

JAPAN

Since April 2005

Chapter Data policies  |  Sub-chapter Sanctions for non-compliance
Act on the Protection of Personal Information (Act No. 57 of 2003; "APPI")
Breaches of the Act on the Protection of Personal Information may result in fines up to 300,000 yen (around 2,500 USD) or imprisonment up to 6 months.
Coverage Horizontal
Source
  • www.linklaters.com/pdfs/mkt/london/Data_Protected_2014.pdf
Restrictions on data

JAPAN

Unclear, pursuant to laws of 2003-2004

Chapter Data policies  |  Sub-chapter Administrative requirements on data privacy
FSA Guidelines
In the financial sector, companies are required to alert both the authorities and the data subjects in case of a breach.
Coverage Financial Sector
Sources
Restrictions on data

JAPAN

Unclear, pursuant to laws of 2003-2004

Chapter Data policies  |  Sub-chapter Administrative requirements on data privacy
FSA Guidelines
In the financial sector, companies are required to appoint a data protection officer (DPO).
Coverage Financial Sector
Sources
Restrictions on data

JAPAN

In December 2015

Chapter Data policies  |  Sub-chapter Personal rights to data privacy
Right to be forgotten
A ruling in December 2015 by Saitama district court is the first in the country to cite the right to be forgotten in demanding the removal of personal information online. Previously, in October 2014, a Japanese man asked a Tokyo court to fine Google Inc., after it failed to remove certain Internet search results referencing him, despite being ordered to do so in a previous judgement by the Tokyo District Court.
Coverage Horizontal