On Thursday, March 12, 2026, the National Assembly passed the Special Act on the Operation and Management of Strategic Investments between the Republic of Korea and the United States (the “Special Act on Korea-U.S. Strategic Investments”) during its plenary session.

 

To establish the legal and institutional foundation for implementing the Memorandum of Understanding on Korea-U.S. Strategic Investments (the “Korea-U.S. Strategic Investment MOU”) signed on November 14, 2025, the government and the National Assembly promptly prepared and introduced the Special Act on November 26, 2025, upon the signature of the MOU. Subsequently, a total of eight additional bills were proposed amid the keen interest of lawmakers.

 

With a view to expediting the passage of the Act, the National Assembly temporarily established and operated a special committee for one month starting February 9, based on bipartisan agreement. The committee conducted intensive deliberations on the nine bills, leading to the final passage of the Act at the plenary session today. This outcome came approximately four months after both governments signed the Korea-U.S. Strategic Investment MOU on November 14, 2025.

 

[Key Provisions of the Special Act ]

 

➊ Definitions

 

The Act defines key terms in alignment with the Korea-U.S. Strategic Investment MOU.

 

First, “strategic investment” refers to a total of USD 200 billion in investments (“investments in the U.S.”) pledged by Korea into strategic industries[1], as well as USD 150 billion in investments approved by the U.S. (“shipbuilding cooperation investment”), including private investment, guarantees, and ship financing for the shipbuilding sector.

 

Second, “commercial viability” is defined as an investment that, in accordance with the principle of good faith, is deemed capable of generating sufficient cash flow for the repayment of principal and interest, as prescribed by Presidential Decree, over the duration of investments in the U.S.

 

 

➋ Principles in Investments in the U.S.

 

The Act mandates that while commercial viability serves as the primary principle, investments must be pursued in a manner that aligns with national interests, such as economic development and industrial competitiveness.

 

However, exceptions may be permitted—even in cases where commercial viability is not fully secured—provided there are compelling reasons such as national security or supply chain stability. Such exceptions are subject to the prior consent of the relevant standing committees of the National Assembly (the Strategy and Finance Committee and the Trade, Industry, Energy, SMEs and Startups Committee).

 

➌ Governance Framework for Strategic Investments

 

The decision-making structure for strategic investments consists of two bodies in order to ensure thorough review and decision-making based on each body’s expertise.

 

One is a Steering Committee (chaired by the Deputy Prime Minister and Minister of Finance and Economy) established under the newly established Korea-U.S. Strategic Investment Corporation. The other is a Project Management Committee (chaired by the Minister of Trade, Industry and Resources).

 

The procedures for investments in the U.S. are as follows:

 

1) The Project Management Committee reviews the commercial viability, as well as strategic and legal considerations, of candidate projects.

 

2) The Steering Committee then deliberates and decides on whether to proceed with the project, taking into account the review results from the Project Management Committee, and the financial status of the Fund.

 

3) The government provides a prior report to the relevant standing committees of the National Assembly (the Strategy and Finance Committee and the Trade, Industry, Energy, SMEs and Startups Committee) regarding the decision to proceed with the project. This reporting may be conducted in closed sessions upon consultation between the committee chairpersons and the floor leaders of both ruling and opposition parties if requested by the government for national security reasons.

 

4) The government engages in consultations with the U.S. regarding the project, based on the decision of the Steering Committee, and reports the results back to the Committee. For this purpose, a Korea-U.S. Consultation Committee will be operated, chaired by the Minister of Trade, Industry and Resources and composed of representatives from both countries.

 

5) If the U.S. president selects an investment target based on Korea-U.S. consultations and recommendations of the U.S. Investment Committee, the Steering Committee makes the final decision on the investment and execution.

 

 

 

➍ Safeguards

 

The following safeguards specified in the MOU are incorporated into the Act as government obligations:

 

1) Investments in the U.S. shall be capped at USD 20 billion per year and executed in accordance with project progress.

 

2) If execution of such investments is expected to cause foreign exchange market instability, the government shall consult with the U.S. to adjust the amount and timing.

 

3) If principal and interest recovery is deemed difficult within 20 years, the government shall consult with the U.S. to adjust the distribution ratio of cash flows.

 

4) The government shall also review potential conflicts with domestic laws, recommendations of Korean firms and project managers, and support measures from the U.S. government (e.g., land leases, water and electricity), and consult with the U.S. accordingly.

 

➎ Temporary Establishment of the Korea-U.S. Strategic Investment Corporation

 

A Korea-U.S. Strategic Investment Corporation (the “Corporation”) will be established as the entity responsible for managing and operating the newly created Korea-U.S. Strategic Investment Fund. The Corporation will be funded by government contributions, with statutory capital set at KRW 2 trillion, and will operate on a temporary basis for up to 20 years before being dissolved in accordance with the Act.

 

Its executive structure will consist of three Directors (including one President) and one Auditor, with the Steering Committee exercising oversight. The Corporation’s primary function is to raise, manage, and operate the Fund. Lending and guarantee functions may be delegated to existing policy finance institutions with expertise, including the Korea Development Bank, the Export-Import Bank of Korea, the Korea Trade Insurance Corporation, the Korea Investment Corporation, and the Korea Ocean Business Corporation.

 

To enhance transparency, the Corporation is mandated to establish and operate an internal Risk Management Committee, set internal control standards, and publicly disclose management and strategic investment-related matters.

 

➏ Establishment of the Korea-U.S. Strategic Investment Fund

 

To efficiently and systematically manage financial resources for strategic investments, a Korea-U.S. Strategic Investment Fund will be established under the Corporation.

 

The Fund will be capitalized through:

government contributions to the Corporation (for shipbuilding cooperation investment),

foreign currency assets entrusted by the Bank of Korea and the Foreign Exchange Stabilization Fund (for investments in the U.S., within limits that ensure the stability of the original assets), and issuance of government-guaranteed bonds overseas. These resources will be deployed for investments in the U.S. (subject to a $20 billion annual cap) and financial support for shipbuilding cooperation investment (such as guarantees and loans). In order to ensure systematic management of revenues and expenditures, the Fund will maintain segregated accounts for investments in the U.S. and shipbuilding cooperation.

Furthermore, the government is required to submit an annual report to the relevant standing committees of the National Assembly, detailing the Fund's management, economic and industrial impact assessments, and progress and performance of strategic investments. In addition, the government must promptly report any significant changes to the fund structure or substantial losses.

 

➐ Addenda

 

The Act will enter into force three months after its promulgation. In the interim, a preparatory committee for establishing the Corporation will be operated. The National Assembly also noted, in its supplementary opinion, that any preliminary reviews of U.S. investment projects conducted prior to the Act's enforcement should be followed by expedited deliberation and decision-making by the Project Management Committee and the Steering Committee once the Act takes effect.

 

[ Assessment and Future Plans ]

 

Deputy Prime Minister and Minister of Finance and Economy Koo Yun Cheol expressed deep gratitude for the bipartisan cooperation and swift decision by the National Assembly in passing the Act.

 

He noted that, amid heightened global uncertainties—including supply chains, tariffs, and trade environment—particularly due to escalating tensions in the Middle East, the Act will help alleviate uncertainties faced by Korean companies.

 

DPM Koo also emphasized that the Act establishes a legal and institutional foundation for implementing bilateral agreements, reaffirming strong mutual trust between Korea and the U.S. Based on this, both countries are expected to expand comprehensive cooperation in strategic industries such as shipbuilding and energy, creating a win-win synergy and supporting Korean firms’ entry into global value chains and global competitiveness.

 

Minister of Trade, Industry and Resources Kim Jung Kwan stated that the passage of the Act reflects a shared commitment between the government and the National Assembly to strengthening Korea-U.S. strategic partnership while maintaining stable tariff arrangements.

 

He added that, once the Korea-U.S. Strategic Investment MOU is fully implemented, the government will actively engage with the U.S. to ensure that it contributes to enhanced cooperation in strategic industries and expands opportunities for Korean firms in the U.S. market and in supply chain partnerships.

 

The government will move swiftly to promulgate the Act once the Act is transferred from the National Assembly, and will make all necessary preparations for smooth implementation within the three-month transition period. A preparatory committee for establishing the Corporation and Fund will be launched immediately after promulgation, alongside prompt initiation of procedures for enacting subordinate regulations.

 

Meanwhile, as decided at the Ministerial Meeting on External Economic Affairs on February 10, preliminary reviews of candidate U.S. investment projects will proceed within the scope of administrative feasibility prior to enforcement. However, final investment decisions and execution will be carried out after the Act takes effect, based on a comprehensive assessment of commercial viability and financial conditions, including the foreign exchange market.