Key Amendments to the Korean Industrial Technology Protection Act and the Korean Fifth Comprehensive Plan for the Prevention of Divulgence and Protection of Industrial Technology

On December 27, 2024, Korea’s National Assembly passed a major amendment to the Act on the Prevention of Divulgence and Protection of Industrial Technology (the “Amended Industrial Technology Protection Act” or “Amended ITA”). The revised framework significantly tightens restrictions on industrial technology transfers, particularly National Core Technologies (“NCTs”). The major impetus for the amendment is to protect Korean technology from misappropriation by foreign nations and companies; however, the amendment will affect any company doing business in Korea or seeking to collateralize, license, or acquire the technology of a Korean company.

Korean Ministry of Trade

On the same day as this amendment, the Korean Ministry of Trade, Industry and Energy (MOTIE) introduced the Fifth Comprehensive Plan for the Prevention of Divulgence and Protection of Industrial Technology (the “Fifth Comprehensive Plan”). The amended ITA takes effect on July 22, 2025.

IPG Legal is seeing the new law affect technology holders in three different ways:

  • Collateral on technology in overseas build-outs. For example, a Korean manufacturer planning an overseas manufacturing plant may be asked by a foreign lender to pledge its technology/IP as collateral. This is a common situation. Even without immediate transfer, foreclosure can expose trade secrets, invite third-party access, and, if the tech is a National Core Technology, may trigger export approval issues.
  • M&As. M&A transactions with National Core Technology require disclosure and potential approval from the MOTIE and other Korean government agencies.
  • Foreign Capital-Invested Company with R&D in Korea. Foreign Companies may develop National Core Technologies through a Korean subsidiary, which may be subject to obligations under the amended Korean Industrial Technology Protection Act.

Link to Amended Korean Industrial Technology Protection Act Amended Korean Industrial Technology Protection Act

Link to A. Reinforced Oversight and Registration of Korean NCTs A. Reinforced Oversight and Registration of Korean NCTs

  1. Under the previous ITA, holders of technology were required to self-initiate applications for NCT designation. MOTIE may now direct holders of NCTs, it deems likely to possess NCTs, to apply for designation.
  2. The Amended ITA introduces a mandatory registration system. When a holder of technology is recognized as holding an NCT, it must register the details with MOTIE. Noncompliance may trigger administrative fines and, in some cases, even criminal sanctions.

Link to B. Expanded Authority for the Korean Government to Prevent Overseas Technology Leakage B. Expanded Authority for the Korean Government to Prevent Overseas Technology Leakage

Prior to the amendment, the MOTIE could issue remedial orders only after an investigation by intelligence agencies and a review by a committee. The Amended ITA allows MOTIE to act immediately and independently to block or reverse unapproved exports and overseas transactions, including M&As and technology transfers.

Link to C. Expanded Definition of Infringement and Higher Penalties C. Expanded Definition of Infringement and Higher Penalties

  1. The scope of “industrial technology infringement” under the amended ITA is expanded to include:
  • Unauthorized use or removal of technologies from restricted areas;
  • Solicitation or inducement of technology leaks; and
  • False or omitted filings concerning NCT exports.

2. The amended ITA also clarifies extraterritorial application of Korean law by confirming that infringements committed outside Korea may still fall under the ITA’s jurisdiction.

3. Penalties under the amended ITA significantly increased:

  • Punitive damages for willful infringement: raised from three times to five times actual damages;
  • Maximum criminal fines for overseas NCT leakage: increased from KRW 1.5 billion to KRW 6.5 billion;
  • Maximum fines for general industrial technology leakage abroad: raised to KRW 3 billion.

Link to The Fifth Comprehensive Plan: Policy Direction Through 2028 The Fifth Comprehensive Plan: Policy Direction Through 2028

The Fifth Comprehensive Plan, announced concurrently by MOTIE with the passage of the amended ITA, provides a strategic roadmap for implementing the amended Industrial Technology Protection Act. The Plan emphasizes stronger government management and control and sector-specific oversight.

Key initiatives under the Fifth Comprehensive Plan include:

  1. Designation of New NCTs in strategically vital Korean industries such as battery, semiconductor, military, and aerospace sectors;
  2. Creation of an M&A division within the Industrial Technology Protection Expert Committee to assess foreign transactions involving NCT holders;
  3. Enhanced security support for small and medium-sized enterprises (SMEs), research institutes, and universities with potentially weaker compliance frameworks;
  4. Use of “big data” to track and manage key personnel with access to sensitive technologies; and
  5. Development of cloud-based protection protocols for holders of NCTs.

Link to Implications for Businesses in Korea Implications for Businesses in Korea

The amended Act and the Fifth Comprehensive Plan together represent a systemic overhaul of Korea’s industrial technology protection regime. Companies operating in advanced sectors, especially those involved in R&D, export, or foreign investment, should:

  • Review and classify their technologies to assess whether they could be deemed NCTs;
  • Ensure compliance with registration and reporting obligations;
  • Implement internal security protocols for managing sensitive information and personnel; and

Violations can now lead to substantial fines, reputational damage, and criminal liability.

Q1. Does pledging tech as collateral require export approval?
Not per se. But enforcement may create a functional disclosure/export when a receiver, court officer, or buyer gains access. If the technology is (or becomes) an NCT, approval/reporting and security measures can be triggered. Build the enforcement pathway now, not after default. Get a proactive lawyer in Korea to assist with building a reporting and compliance system and conduct a full IP Audit.

Q2. Can regulators unwind my cross-border deal?
Yes, where NCT rules were ignored or misrepresented. Tools include suspension, prohibition, and restoration to the status quo post merger or tranfer.

Q3. How do we know if we’re an “NCT holder”?
Start with the statutory definition, then the current MOTIE NCT lists/notifications (they change often; 2024–2025 saw notable updates). If in doubt, seek an official determination.