Memorandum on the South Korea-United States Insurance Market Agreement
August 14, 1986
Memorandum for the United States Trade Representative
Subject: Determination Under Section 301 of the Trade Act of 1974
To our mutual benefit, the Governments of the United States and the Republic of Korea (Korea) have reached an agreement resolving the investigation initiated under Section 302(c) of the Trade Act of 1974, as amended (19 U.S.C. 2412(c)), of Korea's prior prohibitions and restrictions on access to its insurance market. This agreement represents the constructive benefits of cooperation between our Governments. Therefore, pursuant to Section 301 of the Trade Act, I have determined to accept the agreement described below as an appropriate and feasible action to resolve this investigation and therefore to terminate the investigation. I direct the United States Trade Representative (USTR) to notify the Government of Korea of my approval of the agreement and to take any actions necessary to implement and monitor it.
Reasons for Determination
On September 16, 1985, in response to my request, the USTR initiated an investigation pursuant to Section 302(c) of the Trade Act of 1974 into the Korean Government's policy of prohibiting or restricting the activities in Korea of foreign insurance firms. These restrictions prevented U.S. firms from participating fully in Korea's compulsory fire insurance, life insurance, and reinsurance markets. Pursuant to Section 301 of the Trade Act of 1974, I have determined that these restrictions were unjustifiable, unreasonable, or discriminatory and a burden or restriction on U.S. commerce.
Representatives of the Governments of Korea and the United States held a series of consultations from November 1985 through May 1986 concerning access to the Korean insurance market. As a result of these consultations, we reached an agreement regarding actions that Korea will take to improve our firms' access to its insurance market. Korea has agreed to license qualified U.S. insurance firms to underwrite both life and non-life insurance in Korea. Furthermore, Korean insurance authorities will review all applications in a timely manner and provide written notice of their decisions on the qualifications of U.S. firms. A consultative mechanism will ensure discussion of matters relating to implementation of this agreement and other issues related to the Korean insurance market. This agreement accomplishes our goal of obtaining increased access for U.S. firms to Korea's insurance market.
This determination shall be published in the Federal Register.
[Filed with the Office of the Federal Register, 4:46 p.m., August 14, 1986]
Note: The memorandum was printed in the ``Federal Register'' of August 18.