South Korea and the U.S. signed an agreement Wednesday to allow more Korean firms to win commercial deals in the U.S. Forces Korea's defense goods procurement, the Defense Ministry said.
Because of the formerly loose definition of "Korean company" in the Logistics Cost Sharing Implementing Agreement, contracts were awarded to foreign companies posing as local firms, according to the ministry.
A revision of the agreement signed on Wednesday has re-defined the scope of Korean companies as those with a less than 50 percent foreign-held shares and a less than 50 percent share of foreign executives.
With the latest agreement, only actual Korean companies will be allowed to execute the USFK's defense procurement and maintenance deals which are worth nearly 150 billion won ($131 million) annually.
Since 1991, South Korea has annually contributed funds to co-share the financial burden of keeping 28,500 American forces here, with the allies agreeing last year to set the annual contribution at 920 billion won.
To offset the South Korean contribution, local firms are allowed to win USFK's commercial deals in the procurement and management segments. (Yonhap)
