CONTENTS
- 1. Technology Export | Concept
- - Technology Classification
- 2. Technology Export | Comparison of Major Regulations
- - Advanced Technology
- - National Core Technology
- - National Advanced Strategic Technology
- 3. Technology Export | Practical Considerations
- - Approval and Reporting Procedures and Schedule Management
- - Review of Overlapping Regulations and Procedures
- - Support Programs and Response to Regulatory Changes
- 4. Technology Export | Structures Companies Must Understand
- - Daeryun's Support System
1. Technology Export | Concept
A technology export occurs when a company transfers its technology to a foreign company, or lets the foreign company use it through arrangements such as license agreements, joint research and development, or technology cooperation, in order to enter overseas markets and generate revenue.
Because the technology itself is the subject of the transaction, business results can vary significantly depending on the contract structure, the scope of the rights granted, and the method used to calculate consideration.
The technology may also be subject to each country's export control policies and core technology protection rules, so the legal and policy risks should be reviewed together.
Technology Classification
Because the rules governing technology exports depend on the nature of the technology, it is important to determine accurately and in advance which category a given technology falls under.
Category | Concept | Features and Applicable Laws |
Advanced technology | Technology with a high degree of technological intensity and innovation | Designated and announced by the Ministry of Trade, Industry and Energy / Based on the Industrial Development Act / Covered as protected subject matter under the Industrial Technology Protection Act / Linked to policy support such as taxation, funding, and human resources |
National core technology | Industrial technology with a significant impact on national competitiveness and security | Designated by the Ministry of Trade, Industry and Energy / Subject to the Industrial Technology Protection Act / Subject to controls such as approval and reporting on overseas transfer / Managed with a focus on preventing technology leakage |
National advanced strategic technology | Technology with high strategic value for supply chains and economic security | Designated under the National Advanced Strategic Industries Act / Centered on major industries such as semiconductors, batteries, and bio / Subject to regulation and protection across exports, investments, and M&A |
2. Technology Export | Comparison of Major Regulations
For technology exports, the level of applicable regulation and the procedures vary with the nature of the technology, and when the technology qualifies as national core technology or national advanced strategic technology, the regulation can directly affect the overall transaction structure.
Depending on how the transaction is structured, regulation may reach not only technology transfer but also joint research, licensing, investment, and mergers and acquisitions, so review in advance is important.
Advanced Technology
Advanced technology is not subject to separate export controls, and unless it is designated as national core technology, no approval procedure applies to overseas transfer, licensing, joint research, and similar activities.
It is, however, covered as protected subject matter in the form of industrial technology, and policy benefits such as tax reductions or funding support may be tied to it.
National Core Technology
For national core technology, an approval or reporting obligation may arise for various types of transactions, including overseas transfer, provision of technology, licensing, joint research, investment, and mergers and acquisitions.
Technology developed with national research and development support requires prior approval, and technology developed with private funds must still go through a reporting procedure, so the applicable requirements depend on the transaction structure.
A ‘transfer’ of technology may also be recognized not only as a sale but also through methods such as providing materials, giving technical guidance, dispatching personnel, and participating in joint research, so a company must assess whether regulation applies based on the overall form of the transaction.
Failure to follow the procedures can lead to sanctions that directly affect the business, such as suspension of the transaction, an order to restore the original state, and the imposition of an enforcement fine, so preparing a response in advance is important.
National Advanced Strategic Technology
National advanced strategic technology follows a regulatory framework similar to that for national core technology, but with a more stringent, approval-centered structure.
Regardless of whether research and development costs were funded, prior approval is, as a rule, required for overseas transfer and investment, and additional management systems also apply, such as personnel controls for technology protection and confidentiality obligations.
3. Technology Export | Practical Considerations
In a technology export, an ‘export’ may be recognized not only through technology transfer but also through methods such as joint research, technical guidance, the provision of data, and the granting of cloud access.
Transaction structures such as overseas investment or the acquisition of equity may also fall within the scope of regulation, so reviewing the technology classification and the overall transaction structure in advance is necessary before the contract is concluded.
Approval and Reporting Procedures and Schedule Management
If the technology a company holds qualifies as national core technology or strategic technology, an approval or reporting obligation may arise for the transaction as a whole, including overseas transfer, investment, and mergers and acquisitions.
These procedures can take some time, including review by a committee, so they should be reflected in the contract and transaction schedule and prepared for in advance.
Review of Overlapping Regulations and Procedures
Even when a single technology qualifies as both national core technology and strategic technology, the procedures may differ depending on the applicable laws.
When certain requirements are met, some approval or reporting procedures may be simplified, so it is important to review accurately whether overlapping regulations apply.
Support Programs and Response to Regulatory Changes
When a technology qualifies as advanced technology or strategic technology, policy benefits such as taxation and funding support may be tied to it, so the company should also review whether it can use the relevant support programs.
The technology classification standards and the subjects of regulation are continually amended in response to changes in the industrial environment, so the relevant laws and notices should be checked periodically for changes.
4. Technology Export | Structures Companies Must Understand
Technology exports are a core business area that directly affects a company's technological competitiveness and revenue structure.
The scale of technology trade has continued to expand recently, and technology exports are rising rapidly, centered on advanced industries such as information and communications, electronic components, and bio.
As technology imports also increase, however, technological competition among countries is intensifying, and the structure shows a high level of dependence on certain countries as well.
In short, technology exports are an area where opportunity and risk coexist, so an approach that weighs regulation, security, and contract structure together with a market expansion strategy is necessary.
Daeryun's Support System
The 🔗intellectual property rights attorneys of Daeryun Law Firm analyze the contractual, regulatory, and dispute risks that can arise throughout the technology export process and provide tailored response strategies.
From advance review through later dispute response, we support stable overseas entry and technology protection with structured legal advice at each stage.
Advance Response
· Drafting of license, joint development, and technology transfer agreements and review of their risks
· Review of whether the technology constitutes national core technology or advanced strategic technology
· Advance assessment of the need for export approval or reporting
Regulatory Response
· Review of the possible application of foreign export controls (such as the EAR)
· Establishment of technology protection and internal compliance systems
· Review of legal risks related to foreign exchange and investment structures
Subsequent Response
· Response to disputes over royalty and consideration payments
· Response to technology leakage and infringement of intellectual property rights
· Administrative and criminal response related to violations of export controls
