G/SCM/Q2/KOR/70  
 
26 March  2024 
(24-2569) Page: 1/3 
Committee on Subsidies and Countervailing Measures  Original:  English  
 
  
SUBSIDIES  
REPLIES TO  THE QUESTIONS POSED BY  THE UNITED KINGDOM1  
REGARDING THE NEW AND FULL NOTIFICATION OF THE REPUBLIC OF KOREA2 
The following communication, dated and received on 2 5 March  2024, is being circulated at the 
request of the delegation of the Republic of Korea.  
 
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Tariff Reduction on Aircraft Parts  
Question 1  
Could the Republic of Korea please provide further information on the eligibility 
criteria for 'businesses (excl. SMEs)' to qualify for sup port under the scheme?  
Reply : 
Goods eligible for tariff reduction  
Goods that are eligible for reduction in customs duties are parts and raw materials used in 
manufacturing or repairing aircraft (including parts).  
Persons eligible for tariff reduction  
The beneficiaries are selected based on objective criteria set forth in the relevant customs acts and 
regulations.  
• Customs Act Article 89 (Exemption from Customs Duties on Goods Subject to Uneven 
Tariff Rates) (6):  
a person who manufactures or repairs aircraft (including parts) at a factory designated by 
the head of a customs office, as prescribed by Presidential Decree Article 113.  
• Presidential Decree of the Customs Act Article 113 (Designation of Manufacturing and 
Repair Factory):  
Any person who intends to have his/her manufacturing and repair factory designated shall 
file an application stating the following matters, together with a business plan and a map 
of the relevant area and its surroundings, to the head of the  relevant customs office:  
1.  The name, location, structure, the number of buildings and area of the relevant 
manufacturing and repair factory;  
2.  The name of goods manufactured therein and names of raw materials and components;  
 
1 G/SCM/Q2/KOR/68  
2 G/SCM/N/401/KOR  G/SCM/Q2/KOR/70  
 
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  3.  Operational facilities and equipme nt and their capacity; and  
4.  Period intended to be designated.  
The head of the relevant customs office, upon receipt of an application, shall designate a 
manufacturing and repair factory if he/she deems such designation does not hinder 
supervision and contro l. 
Question 2  
Could the Republic of Korea please clarify whether the rates available to SMEs would 
be subject to reductions over time, in the similar way to rates towards non -SME 
businesses?  
Reply : 
Under the current Customs Act, the reduction rates availab le to SMEs do not decrease over time.  
Loan Programme for R&D of Information and Communication Technology  
Question 3  
Could the Republic of Korea please provide further information on the eligibility 
criteria for the scheme, including whether non -SME enterpr ises are able to apply for 
the scheme?  
Reply : 
Non-SME enterprises are not eligible to apply for the scheme, and a company's eligibility is 
determined by comprehensive evaluation of the company's technology, business prospects, 
management capabilities, credit status, etc. The loans were provided until December 2023, when 
the scheme ended.  
Question 4  
Could the Republic of Korea please clarify whether the interest rates for the loans 
provided through the scheme changed during the reporting pe riod, and under what 
timeframes are recipients required to repay the loans?  
Reply : 
The scheme offers loans with variable interest rates that reset quarterly, payable in three years with 
a grace period of two years.  
Emission Reduction Project for In -use Die sel Vehicles  
Question 5  
Can the Republic of Korea please provide further information on the eligibility 
criteria for the scheme, including the conditions of application for private 
enterprises?  
Reply : 
The Ministry of Environment provides a wide variety of support through the emission reduction 
projects of in -use diesel vehicles such as early -scrapping of old vehicles, installation of diesel 
particulate filters (DPF), and engine replacement of engine in construction machinery.  G/SCM/Q2/KOR/70  
 
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  The eligibility criteria vary with each program, but the target of support is mostly emission grade  4 
and 5 diesel vehicles (manufactured before 2009) and diesel -powered construction machinery 
(manufactured before 2004).  
Additionally, the subsidy is provided to vehicles and constructi on machinery registered with local 
governments under their jurisdiction.  
Support for R&D of Environmental Technology Development Projects  
Question 6  
Could the Republic of Korea please provide further information on the eligibility 
criteria for private ente rprises to apply for the scheme, including whether foreign 
enterprises operating in the Republic of Korea can qualify?  
Reply : 
Foreign enterprises active in Korea may participate in R&D activities if they qualify as R&D 
institutions under the National R&D Innovation Act, such as corporations registered in Korea or 
recognized as enterprises under commercial law, and no additional application qualification 
restrictions are imposed.  
Question 7  
Could the Republic of Korea please provide information on the numbe r of recipients 
of the scheme for 2021 and 2022, including the number of recipients which were 
private enterprises?  
Reply : 
The number of institutions (recipients) that have carried out R&D of environmental technology 
development projects is 320 in 2021 and  406 in 2022, of which private enterprises are 182 in 2021 
and 220 in 2022 (figures including redundancy between years, recipients for both 2021 and 2022 
are being double -counted)  
 
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