Korea permits 2-year regulatory sandbox period for novel ICT innovation

The National Assembly on Thursday passed a bill that grants a regulatory sandbox for new businesses in the information and communication technology sector, a development that is expected to speed up the adoption and commercialization of next-generation technologies in Korea.

The bill to amend the Special Act on Promotion and Vitalization of Convergence of Information and Communications Technology was passed into law on Thursday, according to the Ministry of Science and ICT.

The changes include the adoption of a regulatory sandbox system for selected new technologies and services. It is a system that offers a regulatory wavier for a set amount of time to businesses to test out innovative products, services and business models in the market.

Those seeking the regulatory waiver should file an application for a special designation, and if approved, the regulatory sandbox will last for two years, with the possibility of a one-time extension, according to the Science Ministry.

“Businesses will be able to test out their technologies and services in the real market and readjust their strategies accordingly, while the government can swiftly improve related regulations based on real-life data,” the ministry said in a statement.

Korea’s temporary approval and expedited approval procedures -- which went into effect in 2014 to speed up the entry of innovative products and services that lack a legal basis by virtue of their novelty -- have also been simplified to cut down on repetitive elements.

The temporary approval period has also become longer, from one year to two years, with the opportunity for a one-time extension.

To ensure the smooth implementation of the changes, the ministry has formed a special evaluation body to foresee the regulatory sandbox and temporary approval application and review process.

“We will do our best to inform businesses of the changes so as to prevent a situation in which they are unable to use the fast-track procedures due to a lack of awareness,” the ministry said.

By Sohn Ji-young (jys@heraldcorp.com)