The Public Notice on Designation of NCT (the NCT Public Notice) provides a detailed list of National Core Technology (NCT) protected under the Act on Prevention of Divulgence and Protection of Industrial Technology (the Industrial Technology Protection Act). Recently, the Ministry of Trade, Industry and Energy (MOTIE) amended the Public Notice, which has been in effect since July 5, 2024.
Under the Industrial Technology Protection Act, technologies that, if and when leaked overseas, could adversely affect national security and economy are designated as NCT and regulated. The goal is to prevent Korean companies’ technologies in need of protection at the national level from leaking overseas and to protect such technologies. Prior to this recent amendment, 75 technologies in 13 fields, including semiconductors, displays, and automobiles, were designated as NCT. Now with the latest amendment to the NCT Public Notice, 4 technologies in the fields of nuclear energy, machinery, and automobiles & railways have been newly designated as NCT whereas 3 technologies in the nuclear energy field have been de-designated. Also, 24 technologies in 8 fields, including semiconductors, electrical & electronic, and automobiles, have been renamed.
Companies that own NCT come under the purview of the Industrial Technology Protection Act, which include, among others, (i) implementation of protective measures (Article 10 of the Industrial Technology Protection Act), (ii) government review in the case of technology export (Article 11 of the same Act) and (iii) government review in the case of overseas mergers and acquisitions (Article 11-2 of the same Act). Technology-centric companies should exercise added vigilance when dealing with technologies designated as NCT under the NCT Public Notice.
1. Technologies Newly Designated as NCT
4 technologies in the fields of nuclear power, machinery, and automobiles & railways have been newly designated as NCT in recognition of the need to protect them as NCT, given their competitive advantage and growth potential.
2. Technologies De-Designated from NCT
A total of 3 technologies in the nuclear power field, which have been deemed to not require protection due to their becoming common and generally known, have been de-designated from NCT.
3. NCT that Have Been Renamed
To clarify the scope of the technology, the names of 24 technologies in 8 fields, including semiconductors, electrical & electronic, and automobiles, have been changed. This renaming is a response to comments consistently raised by the relevant industries that the names lack clarity and are ambiguous.
4. Implications
Companies that own technologies newly designated as NCT pursuant to the amended NCT Public Notice are now subject to regulations under the Industrial Technology Protection Act, as they are treated as NCT-owning companies from the effective date of the amended Public Notice. These companies need to familiarize the related regulations and undertake necessary preparations.
In other words, NCT-owning companies need to implement protective measures on NCT and comply with the approval¹ or reporting² procedures in accordance with the Industrial Technology Protection Act in case they intend to (i) export NCT by way of entering into licensing agreements or technology transfer agreements with overseas entities or (ii) proceed with cross-border mergers and acquisitions. In this regard, the related agreements should reflect requirements related to the approval or reporting procedure to avoid violating the Industrial Technology Protection Act and breaching the agreements. A need for thorough preparation cannot be overstated.
Lee & Ko’s Trade Secret & Company Information Protection Team renders professional assistance with respect to various NCT and National Advanced Strategic Technology (NAST) matters, including investigations on NCT/NAST leak, approval for cross-border mergers and acquisitions, and approval for technology export, drawing from our accurate understanding of such technologies and extensive work experience with the National Police Agency’s Security Investigation Unit, the National Intelligence Service, and MOTIE. If you need any legal assistance, please contact us.