[8th Academic Forum on Unification Law➀] Are North Korea’s business litigation and health care laws changing?

ORIGINAL LINK : https://blog.naver.com/PostView.naver?blogId=gounikorea&logNo=223299145337

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△The 8th Unification Legislative Academic Forum Poster (ⓒ(Company) Unification Law Policy Research Association)

△The building of the Seoul Regional Bar Association (left, ⓒSeo Min-jun reporter) and Kim Ki-hyun, a lawyer who led the first session (ⓒright, Seo Min-jun reporter)

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Hello? I am Seo Min-jun, a reporter who delivers useful and broad information on unification and North Korean issues. If the Korean Peninsula is unified in the future, the legal systems of the South and North, which each have different laws, must be integrated into one. Have you ever thought about how to organize the legal system of the South and North at this time?

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The Unification Law Policy Research Association is studying the differences in legal systems between South and North Korea in preparation for unification, and researching the assumptions and response directions of various legal problems related to unification law. Starting with the first Unification Legislative Individual Research Academic Conference in 2014, the 8th Unification Legislative Academic Forum was held on November 18, 2023, and I, reporter Seo Min-jun, covered the vivid unification legislative presentation at the forum site. In this article, I will discuss the changes in North Korea’s corporate law and health care law system, which were covered in the first session, ‘Presentation of Papers on Unification Legislative Individual Research’. The first session ‘Presentation of Unification Legislative Individual Research Papers’ dealt with the changes in North Korea’s corporate law and health care law system.

Lawyer Kim Won <북한의 기업소의 소유·지배 구조와 통일 이후 재편 방안>

△ Lawyer Kim Won giving a presentation (ⓒSeo Min-jun reporter)

The first presentation of the first session is ‘Ownership and Control Structure of North Korean Companies and Restructuring After Unification’ by Kim Won, a lawyer working at the law firm Robert. In North Korea, similar to Korean companies, ‘companies’ are operated. Companies are “economic units that directly organize and carry out production or service activities with certain efforts, facilities, materials, and funds”. Simply put, it is most similar to a public enterprise corporation in Korea in that it is an economic institution operated by the state in a planned manner, not private ownership, but Korea enjoys much more autonomy and can actively pursue profits depending on the situation. There is a difference. According to North Korean official media, more than 3,000 companies were established as of the end of December 2022.

North Korea, based on the socialist economic system that all property should be shared, ‘socialist ownership of the means of production’ forms the economic foundation of North Korea. Individual ownership is only recognized for consumption goods for immediate use, and it is not possible to personally own a company, which is a means of production. Companies have relative independence only in accounting and operating the disposal of products and related funds. Only North Korean authorities can own essential companies, and it is recognized that social cooperative organizations own and operate small and medium-sized companies. Comprehensive operation including establishment and dissolution is only possible through a planned procedure from the center.

Since the implementation of planned economy from 1947, North Korean corporate law has changed slightly over time and has become its current form. North Korean corporate law initially implemented the ‘single manager management system’ where the manager appointed by the superior institution is responsible for managing all companies. Since then, the single manager management system has strengthened the intervention of the party and at the same time, the independent financial system was legally established in February 1973. The independent financial system is a system that recognizes the independence of commodity sales in business activities, although ownership is impossible. Also, by the 1990s, according to Article 47 of the North Korean Civil Act, companies had similar rights to corporations by stipulating that companies can dispose of state-owned property and have management rights. And after Kim Jong-un came to power, there was a big change when the socialist company responsibility management system was adopted as a new company management method in 2014.

△Summary of North Korean corporate law history (ⓒSeo Min-jun reporter)

Socialist Corporate Responsibility Management System: A method of corporate management that allows companies to perform their tasks satisfactorily by leading and creating their own business activities based on socialist ownership, so that their employees can fulfill their responsibilities and roles as owners in production and management.

Refer to the contents of Article 29, Paragraph 2 of the North Korean Corporate Law amended and supplemented in 2014

The most noteworthy word in the socialist corporate responsibility management system is “management rights”. Management rights mean that companies can conduct proactive activities by organizing their own organization through personnel rights and directly setting prices and selling rights without the intervention of the authorities. However, this does not mean that autonomy has been given like in Korea, but it is of great significance in that discretionary authority has been given with a part of the market economy mixed. For example, it has been confirmed that Lee Jung-ho, the president of Geumgong Trade Company, competes with other companies through a process of improving quality by saving raw materials by independently investigating the market and understanding demand, and especially 30% is paid to the state and the remaining 70% is reinvested in the factory. It can be confirmed that it has a much more proactive form than before.