The Association of Southeast Asian Nations Korea s Ease of Doing Business Commercial Legal Affairs Division Ministry of Justice Republic of Korea
Table of Contents 1. What is Doing Business? (Enforcing Contracts) 2. Korea s Current Doing Business Status 3. Overview of the Ease of Doing Business (EoDB) Project
What does Doing Business measure? Doing Business indicators: Focus on regulations relevant to the life cycle of a small to medium-sized domestic business. Are built on standardized case scenarios. Are measured for the most populous city in each country, and the second largest business city in countries with more than 100 million inhabitants. Are focused on the formal sector DO NOT measure all aspects of the business environment such as security, macroeconomic stability, prevalence of bribery and corruption, level of training and skills of the labor force, proximity to markets, regulations specific to foreign investment or the state of the financial system.
11 Areas of Business Regulation Measured by Doing Business Affect Firms Throughout Their Life Cycle As start-up Starting a business Labor market regulation When things go wrong Enforcing contracts Resolving insolvency In daily operations Paying taxes Trading across borders In getting financing Getting credit Protecting minority investors In getting a location Dealing with construction permits Getting electricity Registering property
Methodology Case Study Assumptions Seller and Buyer are domestic companies Buyer orders custom made goods and then does not pay Value of the claim is 200% the GNI per capita or USD 5,000, whichever is greater Seller sues Buyer before the court with jurisdiction over cases worth 200% of the GNI per capita or USD 5,000 Seller requests pre-trial attachment to secure claim Dispute on quality of the goods requires an expert opinion Judge decides in favor of Seller, Buyer does not appeal, and Seller enforces judgment through a public sale of Buyer s movable assets METHODOLOGY CHANGE IN DOING BUSINESS 2015 Whenever the value of the claim determined as 200% of the GNI per capita falls below USD 5,000, the equivalent of USD 5,000 in local currency will be used instead
Ranking: Overall Doing Business Environment
Ranking: Korea s Doing Business
Ranking: Enforcing Contracts
Korea s Ranking from 2008 to 2015 Topic Rankings 2008 2009 2010 2011 2012 2013 2014 2015 1 Starting abusiness 107 126 53 60 24 24 34 17 2 Dealing with Construction permits 22 23 23 22 26 26 18 12 3 Getting Electricity - - - - 11 3 2 1 4 Registering Property 62 67 71 74 71 75 75 79 5 Getting Credit 25 12 15 15 8 12 13 36 Enactment of E-Filing Law 6 Protecting Investors 66 70 73 74 79 49 52 21 Establishment of E-Filing System 7 Paying Taxes 43 43 49 49 38 30 25 25 8 Trading Across Borders 13 12 8 8 4 3 3 3 9 Enforcing Contracts 9 8 5 5 2 2 2 4 10 Resolving Insolvency 11 12 12 13 13 14 15 5
Korea s Reform Efforts Topic Rankings 2009 2010 2011 2012 2013 2014 2015 Enforcing Contracts 8 5 5 2 2 2 4 Benefits of E-Court Cost and space savings Security Transparency Access to justice
Asia Pacific Economic Cooperation Promote free trade and economic cooperation 2009 Singapore APEC Meeting : Action Plan - 25% Improvement of Business Environment by 2015 - cheaper, faster and easier to do business Capacity-building activities, implementation of reform programs - Phase I, II
Korea s Doing Business KOREA Doing Business Ease of Doing Business Action Plan Starting a Business : USA, New Zealand Getting Credit : Japan Enforcing Contracts : Korea Trading across Borders : Singapore, Hong Kong Dealing with Permits : Singapore
5 Steps of Ease of Doing Business Project Designation of Partner Economies Analysis & Research on Improvement Measures Consultation with Government Offices of Partner Economies Workshops in Partner Economies International Conference in Seoul
Phase 1: 2010 Phase 1: 2010 APEC Workshop on Enforcing Contracts World Bank Hong Kong Japan Malaysia Singapore
Phase 2: 2011 Phase 2: 2011 KOREA Doing Business Int l Conference on Enforcing Contracts of Indonesia and Peru World Bank UNCITRAL Indonesia Peru
Phase 2: 2012 Phase 2: 2011 KOREA Doing Business Int l Conference on Enforcing Contracts of Thailand, Philippines and Indonesia World Bank UNCITRAL Thailand Philippines
Phase 2: 2013 Phase 2: 2011 KOREA Doing Business Int l Conference on Enforcing Contracts of Vietnam, Brunei and Saudi Arabia World Bank UNCITRAL Vietnam Brunei Saudi Arabia
Phase 2: 2014 Phase 2: 2011 KOREA Doing Business Int l Conference on Enforcing Contracts of Mexico and Myanmar World Bank UNCITRAL Mexico Myanmar
Lessons Learned: Reform measures Multiple Approaches to Reform Procedure: revising the Civil Procedure Law Time: introducing IT system Cost: hiring more lawyers Multiple Aspects of Reform: Factors to be taken into consideration Legal Aspect: revision of the law Political Aspect: opposition from interest groups Cultural Aspect: improvement of practices CUSTOMIZED SOLUTION
2014 EoDB with Mexico and Myanmar: Suggestions Phase 2: 2014 KOREA Doing Business Mexico Put in place e-filing and e- delivery system Grant a wider and more flexible provisional enforcement Review and simplify steps of preliminary trial Myanmar Adopt collection procedures for money claims Allocate small cases to lower courts with simplified procedure Establish more specialized courts of chambers to enable prompt and efficient dispute resolution
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