U.S.-Korea Free Trade Agreement: Potential Economy-wide ... - USITC

of standards and criteria and on temporary licensing, as well as a preview of its future work
program. The parties must review such recommendations within a reasonable time frame to
determine consistency with the FTA. Upon a favorable review, each party commits to work
with and encourage its respective bodies to implement the recommendations within a
mutually agreed time. The annex would further require parties to review implementation of
the provisions of the annex at least once every 3 years.
The FTA includes Korean NCMs that apply to cross-border trade in professional services
supplied by foreign lawyers, accountants, architects and engineers, and by others in
numerous occupations identified by Korea as professional services. The most prevalent
NCMs would require licensing and registration by Korean authorities and reserve the
establishment of and investment in prescribed professional services entities solely to Koreanlicensed
professionals. For example, only a registered Korean-licensed lawyer may supply
legal services and establish and/or invest in any of four categories of legal entities. 55
Three categories of accounting and auditing entities in Korea, each able to be established
only by a Korean certified public accountant (CPA), are the sole authorized suppliers of
accounting and auditing services in Korea. 56 Suppliers of labor-affairs consulting services
or customs-clearing services in Korea must be licensed in Korea and establish an office
there. Another Korean NCM would require local presence in order to supply architectural,
engineering, integrated engineering, urban planning, and landscape architectural services in
Korea, except for a foreign architect in a joint contract with a Korean-licensed architect. 57
Korea’s NCMs would also preserve the right to adopt or maintain restrictions on foreign
legal consultants (FLCs), CPAs, and certified tax accountants to a greater extent than in other
free trade or trade preference agreements negotiated by the United States. Under the
exception for FLCs, Korea can place any requirements on foreign-country-licensed lawyers
or foreign law firms supplying any type of legal service in Korea, entering into any
relationship with Korean law firms, or entering such relationships or hiring Korean-licensed
lawyers, other legal practitioners, CPAs, certified tax accountants, and customs brokers.
Korea would commit to a three-phase removal of certain restrictions on the activities of
FLCs in Korea. Upon the FTA’s entry into force, Korea would allow a U.S. law firm to
establish an FLC office in Korea and allow U.S.-licensed lawyers to supply legal advisory
services on home-country law and international law as FLCs in Korea. Within 2 more years,
Korea would allow FLC offices to conclude a cooperative agreement with a Korean law
firm, to include profit sharing, in cases with mixed Korean and non-Korean legal affairs.
Within 5 years of the FTA’s entry into force, Korea would allow the creation of joint
ventures between U.S. and Korean law firms, which may include employing Korean-licensed
lawyers as partners or associates, although Korea would preserve the right to impose
restrictions on voting shares or equity interests.
Similarly, Korea reserves the right to restrict the hiring of Korean-registered CPAs by
foreign CPAs or non-Korean-registered accounting corporations, or the supply of auditing
services in Korea by foreign CPAs. By or before the FTA’s entry into force, Korea would
allow U.S.-registered CPAs or accounting corporations constituted under U.S. law to
55 Moreover, certified judicial scriveners and notaries public must establish in the jurisdiction of the court
or public prosecutor’s office, respectively, in which they practice.
56 Only Korean-authorized CPAs working in one of two categories of establishment may provide auditing
services on public companies in Korea. Similar requirements exist for certified tax accountants in Korea.
57 Local presence requirements also apply to the supply of safety and health management or diagnostic
services, or related consulting services, to industrial workplaces.
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