G/SCM/N/315/KOR  
 
6 July 2017  
(17-3629) Page: 1/24 
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES  
NEW AND FULL NOTIFIC ATION PURSUANT TO AR TICLE XVI:1  
OF THE GATT 1994 AND  ARTICLE 25 OF THE AG REEMENT  
ON SUBSIDIES AND COU NTERVAILING MEASURES  
REPUBLIC OF KOREA 
The following communication, dated 30 June 201 7, is being ci rculated at the request of the 
Republic of Korea  
 
_______________  
 
 
The following notification is submitted for the purposes of transparency and without prejudice to 
the legal status and nature , including specificity, or effects of the notified programmes or 
measures under the AS CM and GATT 1994.  
 G/SCM/N/315/KOR  
 
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TABLE OF CONTENTS  
I. AGRICULTURE  ................................ ................................ ................................ .........  3 
A. Foodgrain Management Programme  ................................ ................................ ..............  3 
B. Variable Direct Payment for Rice  ................................ ................................ ..................  4 
C. Support For Marketing And Promotion Of Agricultural And Livestock Products  ....................  5 
D. Support For Livestock Products  ................................ ................................ ....................  5 
II. FORESTRY  ................................ ................................ ................................ ...............  6 
A. Board  Assistance Programme  ................................ ................................ .......................  6 
B. Wood Utilization  Assistance Programme  ................................ ................................ ........  7 
III. FISHERIES  ................................ ................................ ................................ ..........  8 
A. Support For Fishing Activities  ................................ ................................ .......................  8 
B. Support  for Aquaculture  Fishery  Development  ................................ ...............................  9 
C. Support for Vessel Decommissioning  ................................ ................................ ........... 10 
D. Support for Manage ment of distant water fisheries  ................................ ........................ 11 
E. Support  for Replacement  and modernization of Old distant -Fishing Vesse ls and its 
Equipment  ................................ ................................ ................................ ........................ 12 
IV. COAL INDUSTRY  ................................ ................................ ................................ .... 13 
V. MANUFACTURING INDUST RY ................................ ................................ ................  14 
A. Tariff Reduction on Aircr aft Parts  ................................ ................................ ................. 14 
B. Support for Farm Machinery Manufacturing  ................................ ................................ ..15 
VI. ENVIRONMENT, RESEARC H AND DEVELOPMENT  ................................ ....................  16 
A. Environmental Improvement Loan Programme  ................................ .............................. 16 
B. Support for R&D of Environmental Technology Development Projects  .............................. 17 
C. Project on the Emission Reduction for Diesel Vehicles  in Operation  ................................ ..17 
D. Natural Gas Bus Supply Project  ................................ ................................ ................... 19 
E. Loan Programme  for Recycling Industry Promotion  ................................ ........................ 20 
F. Support for Telemetering Systems  ................................ ................................ .............. 21 
G. Project on the Dist ribution Of Low NOX Burners  ................................ ............................ 22 
H. Loan Programme for R&D of information and communication  ................................ .......... 23 
 
 
 G/SCM/N/315/KOR  
 
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  I. AGRICULTURE  
A. Foodgrain Management Programme  
1. Title of the sub sidy programme  
Foodgrain Management Programme.   
2. Period covered by the notification  
2015-2016.  
3. Policy objective and/or purpose of the subsidy  
To maintain and manage adequate food stock s of basic agro products for food security.   
4. Background and aut hority for the subsidy  
Law 
- Foodgrain Management Act  (Article 4).   
- Agro-Fisheries Marketing and Price Stabilization  Act (Article 1 3). 
Authority:  Ministry of Agriculture , Food and Rural Affairs .  
5. Form of the subsidy  
 Grant s and loan s.  
6. Recipients a nd terms  
Grants  
- Recipients : Farms that produce soybeans .  
- Content  of subsidy : The government purchases a certain volume from the producing 
 farms.   
Loans 
- Recipients : The enterprises that purchase barley and soybeans.   
- Content of subsidy:  The govern ment provides the enterprises with loans so that they 
 can purchase  barley  and soybeans from the producing farms.  
- Loan interest  and duration: fixed rate  (2.5~3.0%) or variable rate, 12 months   
7. Amount of the subsidy  
(Unit:  million KRW) 
* The benefit of loan is estimated based on the difference between the loan rate and the market rate.  Item  Type  2013  2014 
Barley  Direct subsidy  (a)  - - 
Loan 18,200  - 
Benefit of loan* (b)  71 - 
Total(a+b)  71 - 
Soybeans  Direct subsidy ( a) 44,358  16,197  
Loan - - 
Benefit of loan * (b) - - 
Total ( a+b) 44,358  16,197  G/SCM/N/315/KOR  
 
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  8. Duration of the subsidy  
No fixed duration.   
9. Trade effects of the subsidy  
The government is implementing the  foodgrain  purchase system with a view to achieving food 
security of basic agro products . It is estimated that the support of foodgrain purchase has a 
minimal effect on trade because of Korea's low self -sufficiency  rate.  
B. Variable Direct Payment for Rice  
1. Title of the subsidy programme  
Variable Direct Payment for Rice.   
2. Period covered by  the notification  
2015-2016.  
3. Policy objective and/or purpose of the subsidy  
To stabilize the income of rice producing farmers against the price fall of rice.   
4. Background and authority for the subsidy  
Law: Act on Payment Programme for Rice Income (Ar ticle 11).   
Authority :  Ministry of Agriculture, F ood and Rural Affairs  
5. Form of the subsidy  
 Grants  
6. Recipients and terms  
Recipients : The farmhouses whose use of agrochemicals and chemical fertilizers meets the 
standard, among those who produce rice b y storing water in the rice fields that were used for rice 
farming from 1998 to 2000.  
Content of the subsidy:   Partial support for the difference in amount between the target  price and 
the average price during the harvesting season of the year.   
7. Amount  of the subsidy  
(Unit:  million KRW)  
Type  2015 2016 
Lump sum transfer   194,096  726,220  
8. Duration of the subsidy  
No fixed period.   
9. Trade effects of the subsidy  
There will be minimal effect on trade because the programme is being implemented in order t o 
stabilize the income of domestic rice producing farmhouses.  G/SCM/N/315/KOR  
 
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  C. Support For Marketing And Promotion Of Agricultural And Livestock Products  
1. Title of the subsidy programme  
Support for Marketing and Promotion of Agricultural and Livestock Products.   
2. Period covered by the notification  
 2015-2016. 
3. Policy objective and/or purpose of the subsidy  
To improve the quality and reduce the logistical costs of agro -livestock products (fruits, flowering 
plants,  Kimchi, vegetables, ginseng and livestock products).   
4. Background and authority for the subsidy  
Law: Framework Act on Agricultur e and Fisheries,  Rural Community and Food Industry 
(Article  59).  
Authority: Ministry of Agriculture, Fo od and Rural Affairs . 
5. Form of the subsidy  
 Grants.   
6. Recipients and term s 
Recipients : Exporters of fruits, flowering plants, Kimchi, vegetables, ginseng, and livestock 
products.   
Content of the subsidy:   Partial support for  costs in sorting, packaging, and transporting.   
7. Amount of the subsidy  
(Unit:  million KRW)  
Type  2015 2016 
Lump sum transfer   32,910  36,745  
8. Duration of the subsidy  
No fixed time period.   
9. Trade effects of the subsidy  
This programme  supports the partial cost of packaging and transporting in compliance with the 
Article 9.4 of the Agreement on Agricultu re and Nairobi Ministerial Decision. The impact of the 
programme on trade is expected to be minimal .  
D. Support For Livestock Products  
1. Title of the subsidy programme  
Calf Breeding Sta bilization Schedule  
2. Period covered by the notification  
 2015-2016. G/SCM/N/315/KOR  
 
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  3. Policy objective and/or purpose of the subsidy  
To improve the competitiveness and income of Hanwoo farmhouses  by cutting down production 
costs.  
4. Background and authority for the subsidy  
Law: Livestock Act  (Article 3 and Article 32).  
Authority: Ministry  of Agriculture, Fo od and Rural Affairs .  
5. Form of the subsidy  
 Grants.   
6. Recipients and terms  
Recipients : Cow raising farmers who joined the Calf Breeding Stabilization Schedule .  
Contents of the subsidy : Support is provided to compensate for the loss  in case the average 
market price of calf is lower than the standard price of the schedule .  
7. Amount of the subsidy  
(Unit:  million KRW)  
Type  2015 2016 
Lump sum transfer  666 560 
8. Duration of the subsidy  
No fixed time period.   
9. Trade effects of the s ubsidy  
The impact of the programme on trade is expected to be minimal because the purpose of the 
programme is to stabilize the income of farmers.  
II. FORESTRY  
A. Board  Assistance Programme  
1. Title of the subsidy programme  
Board Assistance Programme . 
2. Period c overed by the notification:  
 2015. (consolidated into Wood Utilization Assistance Programme since 2016)  
3. Policy objectives and /or purpose of the subsidy  
To facilit ate the use of  culled-out trees, small unmarketable trees and recycling waste wood 
materi als. 
4. Background and authority for the subsidy  
 Law: Act on the Promotion of Forestry and Mountain  Villages (Article  10) 
 Authority: Korea Forest Service . G/SCM/N/315/KOR  
 
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  5. Form of the subsidy  
 Loans 
Source of funding : Special Account for the Structural Improvement o f Rural Areas . 
6. Recipient and term s 
 Recipient s: Board producers . 
 Conditions: Interest rate of  3.0%. 
 Terms of the loan: 10 years (7 -year repayment period with a 3 -year grace period) . 
7. Amount of the subsidy  
 (Unit:  million KRW) 
 2015 2016 
Lump sum t ransfer (a)  - - 
Loan 3,000 - 
Benefit of loan*  (b) 91 - 
Total (a+b)  91 - 
* The subsidy effect is estimated based on the difference between the loan rate and the market rate.  
8. Duration of the subsidy  
 No fixed time period . 
9. Trade effects of the subsi dy  
Most of these products are used to meet domestic demand. Therefore, t he effect on trade is  
presumed to be insignificant . 
Production, Consumption and Trade  
(Unit: 1,000m3) 
 2015 2016 
Production  2,721  2,674  
Imports  2,126  2,171  
Exports  98 117 
Consumpt ion 4,749  4,728  
B. Wood Utilization  Assistance Programme  
1. Title of the subsidy programme  
Wood  Utilization Assistance Programme . 
2. Period covered by the notification  
 2015-2016. 
3. Policy objectives and /or purpose of the subsidy  
 To provide financial ass istance for the modernization of forestry machinery and facilities . 
4. Background and authority for the subsidy  
 Law: Act on the Promotion of  Forestry and Mountain  Villages (Article  10). G/SCM/N/315/KOR  
 
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   Authority: Korea Forest Service . 
5. Form of the subsidy  
 Loans. 
 - Source of funding : Special Account for Structural Improvement of Rural Areas . 
6. Recipient and term s 
 Recipient s: Wood manufacturers   
 Conditions :  
- (2015) Interest rate of 3. 0% 
- (2016) Interest rate of 3. 0% or variable  Interest rate.  
 Terms of the loan: 
- 10 years (7 -year repayment period with a 3 -year grace period) .  
7. Amount of the subsidy  
(Unit:  million KRW)  
 2015 2016 
Lump sum transfer (a)  - - 
Loan 3,430  6,430  
Benefit of loan*  (b) 104 163 
Total (a+b)  104 163 
* The subsidy effect is estimated b ased on the difference between the loan rate and the market rate.  
8. Duration of the subsidy  
 No fixed time period . 
9. Trade effects of the subsidy  
Most domestic wood production is used to meet domestic demand. Therefore, t he effect on trade 
is presumed to  be insignifican t. 
Export s and Import s 
 (Unit: 1,000m3) 
 2015 2016 
Export s Round wood  - - 
Sawn wood  32 40 
Board  98 117 
Import s Round wood  3,777  3,852  
Sawn wood  2,156  2,191  
Board  2,126  2,171  
III. FISHERIES  
A. Support For Fishing Activities  
1. Title of th e subsidy programme  
Support for Fishing Activities.   G/SCM/N/315/KOR  
 
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  2. Period covered by the notification  
 2015-2016.  
3. Policy objectives and /or purpose of the subsidy  
To relieve financial burden and support stable fishing operations by providing loans  with lower 
interest rates .  
4. Background and authority for the subsidy  
Law: Fisheries Act  (Article 8 6).  
Authority: Ministry of Oceans and Fisheries .  
5. Form of the subsidy  
 Loans.  
6. Recipient s and terms  
Recipient s: Fishermen duly licensed under the relevant domestic  fisheries legislation.  
 Terms: One year loan at an annual fixed or floating interest rate under  3% 
7. Amount of the subsidy  
(Unit:  million KRW)  
 2015  2016  
Lump sum transfer ( a) - - 
Loan 2,093,539  2,072,194  
Benefit of loan* ( b) 34,577  51,327  
Total ( a+b) 34,577  51,327  
* The benefit of loan is estimated based on the difference between the loan rate and the market rate.   
8. Duration of the subsidy  
No fixed time period .  
9. Trade effects of the subsidy  
It is not possible to estimate the impact on trade, b ecause the programme is not trade -
conditioned and beneficiaries may decide to sell the products either in the export market or the 
domestic market at their discretion. In addition, it is assumed that most of the catches will be 
consumed in the domestic mar ket and thus the impact on trade will be negligible . 
B. Support  for Aquaculture  Fishery  Development  
1. Title of the subsidy programme  
Support for Aquaculture Fishery Development.   
2. Period covered by the notification  
2015-2016.  G/SCM/N/315/KOR  
 
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  3. Policy objectives and /or  purpose of the subsidy  
To ensure a stable supply of fishery products by supporting the development of aquaculture 
fishery  in the context of changing circumstances in the production environment for domestic and 
overseas  fisheries .  
4. Background and author ity for the subsidy  
 Law: Fisheries Act (Article 86 ).  
 Authority:  Ministry of Oceans and Fisheries.   
5. Form of the subsidy  
 Grant s and loan s.  
6. Recipient s and terms  
 Recipient s: Aquaculture fishermen.   
Terms of the grant:  30 to 50% of business expenses . 
Terms of the loan: 2 years loan at an annual interest rate of 3%.  
7. Amount of the subsidy  
  (Unit:  million KRW)  
 2015  2016  
Lump sum transfer ( a) 23,780  19,860  
Loan 2,800  1,800  
Benefit of loan* ( b) - - 
Total ( a+b) 23,780  19,860  
* The benefit of loa n is estimated based on the difference between the loan rate and the market rate.   
8. Duration of the subsidy  
No fixed time period.   
9. Trade effects of the subsidy  
It is difficult  to estimate the effect on trade  because the programme is not trade -conditio ned.  
C. Support for Vessel Decommissioning  
1. Title of the subsidy programme  
Support for Vessel Decommissioning.   
2. Period covered by the notification  
2015-2016.  
3. Policy objectives and /or purpose of the subsidy  
To support vessel decommissioning in order  to maintain fleet size at  sustainable level for 
coastal and offshore fishery  resources .  G/SCM/N/315/KOR  
 
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  4. Background and authority for the subsidy  
Law: Act on Structural Improvements and Support for Domestic Fisheries (Article 13  
and 14).  
Authority:  Ministry of Oceans  and Fisheries  and local governments.  
5. Form of the subsidy  
 Grant s.  
6. Recipient s and terms  
Recipient s: Coastal and offshore fishermen.   
Terms of  the grant: 10 0% grant to grant to coastal and offshore fishermen . 
7. Amount of the subsidy  
  (Unit:  million  KRW)  
 2015  2016  
Lump sum transfer ( a) 22,452  22,332  
Loan - - 
Benefit of loan * (b) - - 
Total (a+b)  22,452  22,332  
* The benefit of loan is estimated based on the difference between the loan rate and the market rate.  
8. Duration of the subsidy  
 The subs idy will continue provisionally until 20 23.  
9. Trade effects of the subsidy  
It is difficult  to estimate the effect on trade  because the programme is not trade -conditioned.  
D. Support for Manage ment  of distant water fisheries  
1. Title of the subsidy programme  
Support for Management of Distant Water F isheries. 
2. Period covered by the notification  
 2015-2016.  
3. Policy objectives and /or purpose of the subsidy  
To ensure stable production and management for distant -water fisher ies.  
4. Background and authority for the subsidy  
Law: Distant Water Fisheries Development Act (Article 26 ).  
Authority: Ministry of Oceans and Fisheries.   
5. Form of the subsidy  
 Grants . G/SCM/N/315/KOR  
 
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  6. Recipient s and terms  
Recipient s: Distant water fishermen .  
Terms of  the loan: The government provid es grants to compensate for the difference between the 
market  interest and the loan interest for distant -water fisheries operators or overseas resource  
development companies.  
7. Amount of the subsidy  
  (Unit:  million KRW)  
 2015  2016  
Lump sum transfer ( a) 2,717  1,065  
Loan - - 
Benefit of loan* ( b) - - 
Total ( a+b) 2,717  1,065  
* The benefit of loan is estimated based on the difference between the loan rate and the market  rate.  
8. Duration of the subsidy  
No fixed time period.   
9. Trade effects of the subsi dy 
 It is difficult to estimate the impact on trade, because the programme is not trade -
conditioned.  
E. Support  for Replacement  and modernization of Old distant -Fishing Vesse ls and its 
Equipment  
1. Title of the subsidy programme  
Support for Replacement  and M odernization of Old Distant -Fishing Vessels and Their 
Equipment.  
2. Period covered by the notification  
 2015-2016.  
3. Policy objectives and /or purpose of the subsidy  
To ensure navigational safety through the replacement of old vessels and vessel equipmen t.  
4. Background and authority for the subsidy  
Law: Distant Water Fisheries Development Act (Article 26 ).  
Authority:  Ministry of Oceans and Fisheries.   
5. Form of the subsidy  
 Loans.  
6. Recipient s and terms  
Recipient s: Distant water fishermen .  
Terms of the loan: 5-year grace period and 10 -year repayment at an annual interest rate 
of 3%.  G/SCM/N/315/KOR  
 
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  7. Amount of the subsidy  
(Unit: million KRW)  
 2015  2016  
Lump sum transfer ( a) - - 
Loan 23,440  11,700  
Benefit of loan * ( b) - - 
Total ( a+b) - - 
* The benefit of loa n is estimated based on the difference between the loan rate and the market rate.   
8. Duration of the subsidy  
No fixed time period.   
9. Trade effects of the subsidy  
It is difficult  to estimate the effect on trade  because the programme is not trade -
conditio ned.  
IV. COAL INDUSTRY  
1. Title of the subsidy programme  
 Coal Industry Support in the Special Accounting  for Energy and Resource.  
2. Period covered by the notification   
 2015-2016. 
3. Policy objectives and /or purpose of the subsidy  
-  To stabilize the price  of coal and briquettes in order to protect the livelihoods of 
ordinary people and ensure a stable supply and demand of coal  
-  To compensate for  the difference  between the production cost and s ale price of coal 
and briquettes following the notification of  a sale price ceiling . 
4. Background and authority for the subsidy  
 Law:  
 - Price Stabilization Act  (Article 2 ) 
 - Coal Industry Act  (Article 29) . 
 Authority:  Ministry of Trade, Industry & Energy.  
5. Form of the subsidy  
 Grants.  
6. Recipient s and term s 
The subsidy is provided to coal mine operator s, briquette manufacturer s, and co al miners in the  
form of worker 's compensation insur ance, support for briquette manufacturing cost s and 
educational expenses.  G/SCM/N/315/KOR  
 
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  7. Amount of the subsidy  
               (Unit:  million KRW)  
 2015 2016 
Lump sum transfer (a)  215,000  202,854  
Loan - - 
Benefit of loan * (b) - - 
Total (a+b)  215,000  202,854  
* The benefit of loan is estimated based on the difference between the loan rate and the market rate.  
8. Duration of the subsidy  
No fixed time period.  
9. Trade effects of the subsidy  
 None.  
V. MANUFACTURING INDUSTRY  
A. Tariff Reduction on Aircraft Parts  
1. Title of the subsidy programme  
Tariff Reduction on Aircraft Parts . 
2. Period covered by the notification  
2015-2016. 
3. Policy objecti ve and/or purpose of the subsidy  
To reduce production costs by encourag ing the importation of aircraft parts  which  are not 
produced domestically.  
4. Background and authority for the subsidy  
 Laws: Customs Act (Article 89 ). 
 Authority:  Ministry of Strategy and Finance . 
5. Form of the subsidy  
Tariff reduction . 
6. Recipients and terms  
Those designated as aircraft manufacturers or repairer s in accordance with the Promotion Act for 
the Development of Aircrafts and Space Industries.  
7. Amount of the subsidy  
 (Unit: million KRW)  
 2015 2016 
Lump sum transfer (a)  82,872  96,438  
Loan - - 
Benefit of loan * (b) - - 
Total (a+b)  82,872  96,438  
* The benefit of loan is estimated based on the difference between the loan rate and the market rate.  G/SCM/N/315/KOR  
 
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  8. Duration of the subsi dy  
 -  SMEs: No fixed time period . 
-  Other business (reduction rate applied) : 100% (2015 ~2018) → 80% (201 9) → 60% 
(2020)→ 40% (20 21) → 20% (202 2) → abolition (after 202 3) 
Trade effect s of the subsidy  
The duty abatement is aimed at promoting importation of parts of aircraft and therefore 
there 's no effect on trade . 
B. Support for Farm Machinery Manufact uring  
1. Title of the subsidy programme  
 Support for Farm Machinery Manufacturing.   
2. Period covered by the notification  
 2015-2016.  
3. Policy objective and/or purpose of the subsidy  
To assist off -season manufacturing of farm machinery and to help machin ery manufacturers to 
meet the high  demand for farm machinery in the  farming seasons.  
To promote the manufacturing and supply of high -quality agricultural machinery made in  Korea , 
by providing financial resources for production facility establishment of ma chinery required for 
automatization and modernization of agricultural facilities and machinery .  
4. Background and authority for the subsidy  
Law: Farm Mechanization Promotion Law  (Article 4).   
Authority: Ministry of Agriculture, Food and Rural Affairs.   
5. Form of the subsidy  
 Loans.  
6. Recipients and terms  
Recipients : Farm machinery manufacturers and developers of new -tech machinery.   
Content of the Subsidy:  To provide financial assistance for producing agricultural machinery 
and for establishing and cons tructing agricultural machinery production facilities.   
7. Amount of the subsidy  
  (Unit:  million  KRW) 
* The benefit  of loan is estimat ed based on the difference between the loan rate and the market rate.   
8. Duration of the subsidy  
No fixed time period.   Type 2015 2016 
Direct subsidy (a)  - - 
Loan 169,096  178,024  
Benefit of loan* (b)  1,542  1,860  
Total (a+b)  1,542  1,860  G/SCM/N/315/KOR  
 
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  9. Trade effects of the subsidy  
Its effect on trade is expected to be almost non -existent since the amount of the subsidy accounts 
only for 0. 1% of the total value of farm machinery production.   
VI. ENVIRONMENT, RESEARCH AND DEVELOPMENT  
A. Environmental Improvement Loan Programme  
1. Title of the subsidy programme  
Environmental Improvement Loan Programme.  
2. Period covered by the notification  
2015-2016.  
3. Policy objectives and /or purpose of the subsidy  
To grant private loans at lower interest rates to business for investment in environmental  
improvements such as installing pollution prevention facilities with an aim to promote  
environmental pro tection.  
4. Background and authority for the subsidy  
Laws:  Framework A ct on Environmental Policy (Article 56).  
Authority:  Ministry of Environment.   
5. Form of the subsidy  
 Loans.  
- Source of funding: Commercial banks (Korea Development Bank) . 
6. Recipien ts and terms  
 Recipient s: Firms that install and operate pollution prevention devices and facilities.   
Terms of the loan: 4-year equal repayment period with a 3 -year grace period  (maximum 
5 billion  KRW) .  
7. Amount of the subsidy  
(Unit:  million KRW)  
 2015  2016  
Lump sum transfer ( a) - - 
Loan 62,000  62,000  
Benefit of loan * (b) 1,234  1,364  
Total ( a+b) 1,234  1,364  
* The benefit of loan is estimated based on the difference between the loan rate and the market rate.   
8. Duration of the subsidy  
 No fixed time  period.   
9. Trade effects of the subsidy  
 None.  G/SCM/N/315/KOR  
 
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  B. Support for R&D of Environmental Technology Development Projects  
1. Title of the subsidy programme  
Support for R&D of Environmental Technology Development Projects.   
2. Period covered by the notification  
 2015-2016.  
3. Policy objectives and /or purpose of the subsidy  
To improve the environment in Korea by developing cutting -edge environmental technology.   
4. Background and authority for the subsidy  
Laws:  Development of and Support for Environmental Technolo gy Act (A rticle 5).  
Authority:  Ministry of Environment.   
5. Form of the subsidy  
 Grants.   
 - Source of funding:  Special Account for Environmental Improvement.  
6. Recipient s and terms  
Recipient s: Government -invested research institutions, universities, res earch institutions and 
private enterprises that participate in the Environmental Technology Development Project.   
7. Amount of the subsidy  
  (Unit:  million KRW)  
 2015 2016 
Lump sum transfer  (a) 205,457  194,359  
Loan - - 
Benefit of loan  (b) - - 
Total (a+ b) 205,457  194,359  
 * The benefit of loan is estimated based on the difference between the loan rate and the market rate.  
8. Duration of the subsidy  
 No fixed time period.   
9. Trade effects of the subsidy  
The effect on trade is expected to be insignifican t because the programme is focused on support 
for R&D of fundamental technology in order to improve the environment.  
C. Project on the Emission Reduction for Diesel Vehicles  in Operation  
1. Title of the subsidy programme  
Subsidy for the  Installation of Emiss ion Reduction Devices  (DPF, p -DPF, etc.) and "Cleaner " Engine 
Retrofit  (from a diesel engine to a LPG (L iquefied Petroleum Gas) engine ), and for Early Scrapping 
of Superannuated Vehicles . G/SCM/N/315/KOR  
 
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  2. Period covered by the notification  
 2015-2016. 
3. Policy objectiv es and /or purpose of the subsidy  
To improve air quality  across the nation . 
4. Background and authority for the subsidy  
Laws:   
- Special Act on Metropolitan Air Quality Improvement (Paragraph 6 of Article  25 and 
Article 27)  
- Clean Air Conservation Act (P aragraph 3 of Article 58)  
Authority:  Ministry of Environment.   
5. Form of the subsidy  
 Grants.  
- Source of funding: Special Account for Environmental Improvement.   
6. Recipient s and terms  
Recipient s:  
- Diesel vehicles that fail the emission test on desig nated diesel vehicles* under 
Paragraph 1  of Article 25 of the Special Act on Metropolitan Air Quality Improvement.  
- Diesel vehicles other than designated diesel vehicles* that fail the emission test on 
automobiles in operation under Article 57 of the Clea n Air Conservation Act.  
- Diesel vehicles with expired exhaust gas guarantee period that fail the emission test 
on manufactured vehicles.  
* Designated  diesel vehicles: diesel vehicles designated by the Special Act on Metropolitan Air Quality 
Improvement.  
Terms:  To support  part of  the costs (90%) of installing emission reduction devices  and 
retrofitting with "cleaner" engines  , and to compensate the remaining value (100%) of the 
vehicles  for early scrapping  (50% each from central government and local  govern ment 
expenditure s).  
7. Amount of the subsidy  
  (Unit:  million KRW)  
 2015 2016 
Lump sum transfer ( a) 56,781  68,191  
Loan - - 
Benefit of loan  (b) - - 
Total (a+b)  56,781  68,191  
 * The benefit of loan is estimated based on the difference between the loan rate and the market rate.  
8. Duration of the subsidy  
 No fixed time period.  G/SCM/N/315/KOR  
 
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  9. Trade effects of the subsidy  
This subsidy provides the total cost for a  diesel vehicle owner who installs emission reduction 
devices , retrofits with "cleaner " engines or early s crapping.  Therefore, it does not differentiate 
between a domestic and an imported device, which means that it does not result in a 
discriminatory trade barrier . 
D. Natural Gas Bus Supply Project  
1. Title of the subsidy programme  
Subsidy for Natural Gas Vehicl e Procurement and Fuel Expenses.   
2. Period covered by the notification  
 2015-2016.  
3. Policy objectives and /or purpose of the subsidy  
To replace frequently -operated and high -exhaust diesel engine buses and garbage trucks  with 
low-emission and cleaner ve hicles in order to expedite the amelioration of air quality in 
metropolitan areas.   
4. Background and authority for the subsidy  
Laws:  Clean Air Conservation Act (A rticle 58).  
Authority:  Ministry of Environment.   
5. Form of the subsidy  
 Grants.   
- Source o f funding:  Special Account for Environmental Improvement.   
6. Recipient s and terms  
Recipient s:  
- In accordance with the Clean Air Conservation Act, grants for natural gas vehicle 
procurement are provided to persons who  purchase natural gas vehicle s. 
- In accordance with the Clean Air Conservation Act, grants for fuel expenses are 
provided to persons who  intend to supply natural gas for vehicle s that use natural gas 
as fuel.  
Terms : Subsidized by local government (50%, matching fund)  
7. Amount of the subsidy  
(Unit:  million KRW)  
 2015 2016 
Lump sum transfer  (a) 18,405  14,756  
Loan   
Benefit of loan  (b)   
Total (a+b)  18,405  14,756  
 * The benefit of loan is estimated based on the difference between the loan rate and the market rate.  G/SCM/N/315/KOR  
 
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  8. Duration of the subsid y 
 No fixed time period.  
9. Trade effects of the subsidy  
The effect of the subsidy on trade is expected to be insignificant since it is intended to support 
purchasers of natural gas buses and garbage trucks, without differentiation between domestic and 
imported vehicles, as well as natural gas suppliers to those vehicles, for the improvement of air 
quality in metropolitan areas.   
E. Loan Programme  for Recycling Industry Promotion  
1. Title of the subsidy programme  
Loan Programme for Recycling Industry Promotion .  
2. Period covered by the notification  
 2015-2016.  
3. Policy objectives and /or purpose of the subsidy  
To pro vide small recycling  businesses with long-term and low interest rate loans  for recycling 
facility installation and stable business operation wit h an aim to foster the recycling industry and 
prom ote resource  recovery from waste s. 
4. Background and authority for the subsidy  
Laws:  Act on the Promotion of Saving and Recycling of Resources  (Article 31 ).  
Authority:  Ministry of Environment.   
5. Form of the subsidy  
Loans.  
 - Source of funding: Special Account for Environmental Improvement  
6. Recipient s and terms  
Recipient s:  
Recycling business o perators specified in Article 31 of  the Act on the Promotion of Saving 
and Recycling of Resources :  
- a busines s to install recycling facilities;  
- a resource recycling business conducted by the operators of designated 
recycling businesses and designated by -product discharging businesses;  
- a business to build a recycling complex;  
- a recycling business conducted b y those who have obtained permission for 
intermediate waste disposal business or general waste disposal business; 
and 
- a business of research and technical development to facilitate recycling of 
resources.  G/SCM/N/315/KOR  
 
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  Terms:  
- Facility installation:  7-year repayment  period with a 3 -year grace period  
(maximum  2.5 billion KRW ). 
- Operation: 3-year repayment period with a 2 -year grace period  (maximum 
500 million  KRW). 
7. Amount of the subsidy  
   (Unit:  million KRW)  
 2015 2016 
Lump sum transfer ( a)   
Loan 103,617  103,5 56 
Benefit of loan* ( b) 2,062  2,278  
Total ( a+b) 2,062  2,278  
* The benefit of loan is estimated based on the difference between the loan rate and the market rate . 
8. Duration of the subsidy  
No fixed time period.   
9. Trade effects of the subsidy  
The effec t of this subsidy on t rade is expected to be insignificant  for the following reasons:  
- First, it is a loan programme that does not restrict  foreign investment or foreign 
participation .  
- Second, considering the inferior quality of  recycled products in g eneral, they are 
unlikely to  have a consequential competitive edge over non -recycled  products.   
- Therefore, its impact on international trade, either imports or exports, is estimated to 
be insignificant.  
F. Support for Tele metering System s 
1. Title of the su bsidy programme  
Subsidy for the Costs of Installation and Management of Telemetering Systems.  
2. Period covered by the notification  
 2015-2016. 
3. Policy objectives and /or purpose of the subsidy  
To support the costs of the installation and management of metering systems installed and 
managed for the purpose of improving air quality through constant metering of air pollutants 
emitted from business sites.   
4. Background and authority for the subsidy  
Laws:  Clean Air Conservation Act (A rticle 81).  
Authority : Ministry of Environment.   
5. Form of the subsidy  
 Grants.   G/SCM/N/315/KOR  
 
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  - Source of fund ing: Special Account for Environmental Improvement.  
6. Recipient s and term s 
Recipient s: SMEs under Article 3 of the Enforcement Decree of the Framework Act on Small and 
Medium E nterprises that have installed metering devices  in accord ance with  the regulations of 
Article 32 of the  Clean Air Conservation Act and Article 1 6 of the Special Act on Metropolitan Air 
Quality Improvement, and whose  business sites transmit the metered resu lts to a Clean SYS 
control centre.  
Terms : Support for the costs of installation and management of Telemetering systems (4 0% from 
the central government and 2 0% from the local government).  
7. Amount of the subsidy  
(Unit: million KRW)  
 2015 2016 
Lump sum transfer (a)  894 894 
Loan   
Benefit of loan * (b)   
Total (a+b)  894 894 
 * The benefit of loan is estimated based on the difference between the loan rate and the market rate.  
8. Duration of the subsidy  
No fixed time period.   
9. Trade effects of the subs idy  
There is no discrimination trade barrier because this subsidy supports  the cost of the installation 
and management of telemetering systems and does not differentiate between domestic and 
imported measure devices . 
G. Project on the Distribution Of Low NOX  Burners  
1. Title of the subsidy programme  
Project for the Support for Low NOX Burner Installation.   
2. Period covered by the notification  
 2015-2016. 
3. Policy objectives and /or purpose of the subsidy  
To support the installation of low NOX burners at small and medium business sites with an aim to 
improve air quality in areas of high concern in metropolitan and rural areas.  
4. Background and authority for the subsidy  
Laws:   
- Clean Air Conservation Act ( Paragraph 3 of Article  26). 
- Act on the Budgeting and Manage ment of Subsidies.  
- Notifications No. 2009 -13 (Subsidy project to support low NOX burner installation, 
delegated affairs*) and No. 2009 -26 (Subsidy project under the Ministry of 
Environment, delegated affairs*) of the Ministry of Environment.  
* Delegated  affairs: affairs entrusted to local governments . G/SCM/N/315/KOR  
 
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  Authority:  Ministry of Environment.   
5. Form of the subsidy  
Grants.   
- Source of fund ing: Special Account for Environmental Improvement.   
6. Recipient s and term s 
Recipient s: SMEs under Article 3 of the Enforcemen t Decree of the Framework Act on Small and 
Medium Enterprises, non -profit corporations, commercial buildings and apartment houses 
(with the exception of public facilities) replacing regular burners with low NOX burners on regular 
boilers, water chillers/he aters and drying facilities (limited to indirect heating facilities).  
Terms: Fixed support according to volume (local governments provide additional support equal to 
40% of the central government 's support).  
* From 2015, new and replaced boilers that burn gas or light oils (e.g. diesel, kerosene)  with a capacity over 
2 tons were excluded.  
7. Amount of the subsidy  
(Unit: million KRW)  
 2015 2016 
Lump sum transfer  (a) 8,953  8,246  
Loan   
Benefit of loan * (b)   
Total (a+b)  8,953  8,246  
 * The benefit of loan i s estimated based on the difference between the loan rate and the market rate.  
8. Duration of the subsidy  
 No fixed time period.  
9. Trade effects of the subsidy  
This subsidy 's impact on trade is expected to be insignificant, since it does not target any specifi c 
types of businesses but is given to general SMEs, non -profit corporations, commercial buildings  
and apartment houses for replacement of regular burners with low NOx ones with the objective to 
improve air quality.   
H. Loan Programme for R&D of information an d communication  
1. Title of the subsidy programme  
 Loan Programme for R&D of Information and Communication . 
2. Period covered by the notification  
 2015-2016. 
3. Policy objectives and /or purpose of the subsidy  
To alleviate excessive risk and burden that companies  face when developing technologies by 
providing loan for large -scale R&D projects in the field of information and communications.  
4. Background and authority for the subsidy  
Law: Information and Communications Technology Industry Promotion Act . G/SCM/N/315/KOR  
 
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   Authority: Ministry of Science, ICT & Future Planning.  
5. Form of the subsidy  
 Financing (l oan). 
6. Recipient s and term s 
 Recipients: Small and medium sized companies  (private)  
 Terms: Interest rate  to be adjusted  according to market interest rate . 
7. Amount of the subsidy  
 (Unit:  million KRW)  
 2015 2016 
Lump sum transfer (a)    
Loan 60,000  73,000  
Benefit of loan*  (b)   
Total (a+b)    
* The subsidy effect is estimated based on the difference between the loan rate and the market rate.  
8. Duration of the subsidy  
 None. 
9. Trade effects of the subsidy  
 None.  
 
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