RESTRICTEDWORLD TRADE
ORGANIZATIONGPA/W/267
23 June 2003
(03-3359)
Committee on Government Procurement Original:  English
RESPONSES TO QUESTIONS FROM THE EUROPEAN COMMUNITY
RELATING TO KOREA TELECOM (KT)
Communication from the Republic of Korea
Please find below Korea's responses to questions from the European Community regarding
Korea's notification to the Committee on Government Procurement on the withdrawal of Korea
Telecom (KT Corporation) from Annex 3 of Appendix Ι of the Agreement on Government
Procurement (GPA) (GPA/W/207).
1. Please provide the names of facilities-ba sed operators other than KT (fixed network
operators and mobile network operators).  What are their respective market shares (mobile;  fixed
voice - local, long-distance and international;  data services;  broadband access;  etc.)?  In respect of
each service, what is the percentage of the popul ation having the choice of another operator other
than KT?  What share of the equipment market does each operator have?
1. Current status of facilities-based operators (as of 25 February 2003):(i) The total number of local, long-distance, international, and mobile service operators is 35.
• Local:  2, Long-distance:  4, International:  4, Telecommunication circuit lease:  18,
Services provided over allocated frequencies:  22.
• A carrier providing multiples services is regarded as one operator.
* Please refer to Table 1 for further details.GPA/W/267
Page 2
[Table 1.  Facilities-based Service Operators]
(As of 25 February 2003)
ServiceService
CoverageNo. of
OperatorsOperators
Local Telephone Nationwide 2KT, Hanaro Telecom
Long-distance Telephone Nationwide 4KT, Dacom, Onse Telecom,
Hanaro Telecom
International Telephone Nationwide 4KT, Dacom, Onse Telecom,
Hanaro Telecom
Domestic
International6KT, Dacom, Hanaro Telecom,
EnterpriseNetworks,
Space Broadband, EastSet
Domestic 3PowerComm, SK Global,
Dreamline
Long-distance
International3SK Telecom, Hansol iGlobe,
 Onse TelecomTelecommunication Circuit
Lease
International 6Dacom Crossing,
Seoul International Telephone,  
Samsung Networks, Thrunet,
Ilsin C2C, Korea Reach
Mobile
telephoneNationwide 1 SK Telecom
PCS Nationwide 2 LG Telecom. KT Freetel
GMPCS Nationwide 2 Dacom. Korea ORBComm
Nationwide 1 KT PowerTEL
Trunked radio
system (TRS)Regional 5Seoul TRS, KB Telecom,
Daegu TRS, PowerTel TRS,
Jeju TRS
Nationwide 1 Real Telecom
Radio Paging
Regional 3Seoul Mobile Communications,
EyesVision, Centisce
Wireless Data
CommunicationNationwide 3Air Media, Real Telecom,
Hanse Telecom
Very High-
speed wireless
InternetNationwide 1 DacomServices
provided
over
allocated
frequencie
s
IMT-2000 Nationwide 3 KtiCom, SK IMT, LG TelecomGPA/W/267
Page 3
2. Market share in terms of revenue (as of late 2002):
Local telephone
KT Hanaro Telecom Total
Market Share (%) 96.1 3.9 100
Long-distance telephone
KT Dacom Onse Telecom Total
Market Share (%) 78.0 18.6 3.3 100
International telephone
KT DacomOnse
TelecomResale Total
Market Share
(%)44.6 19.8 11.4 24.2 100
Mobile telephone
SK Telecom KTF LG Telecom Total
Market Share
(%)59.2 29.1 11.7 100
Broadband Internet
KT Hanaro Thrunet Onse Dreamline Dacom Others Total
Market
Share
(%)48.1 26.3 14.5 3.2 2.0 1.8 4.1 100
Private lines
KT Dacom PowerComm Others Total
Market Share
(%)55.6 8.2 22.8 13.4 100
3. Market share in terms of No. of subscribers (as of late 2002):
Local telephone
KT Hanaro Telecom Total
Market Share (%) 96.0 4.0 100GPA/W/267
Page 4
Long-distance telephone
KT Dacom Onse Telecom Total
Market Share
(%)86.8 8.6 4.6 100
Mobile telephone
SK Telecom KTF LG Telecom Total
Market Share
(%)53.2 31.9 14.8 100
Broadband Internet
KT Hanaro Thrunet Onse Dreamline Dacom Others Total
Market
Share
(%)48.1 28.0 12.7 4.4 1.7 1.4 3.6 100
4. Please note that the government does not have any relevant data on the market share of the
respective providers in the equipment market because such information is regarded as confidential bythe companies.
2. Could the Government of the Republic of Korea please provide figures regarding local access
and respective market shares between competitive access providers (cable TV, KT and other
competitive providers if any)?  Could the Government of the Republic of Korea please provide figuresrelated to the number of unbundled lines?
1. The market share by local access types is as follows:(i) KT and Hanaro Telecom are the two providers of local telephone services in Korea, and their
respective market share is as follows:  (as of late 2002)
Classification KT Hanaro Telecom Total
Share of Revenues 96.1 3.9 100
Share of Subscribers 96.0 4.0 100GPA/W/267
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(ii) Broadband Internet market share by access providers (as of late January 2003):
Market Share (%) Subscription Rate by Service Types (%)Classifi-
cationRevenues Subscribers xDSLCable
ModemApartment
LANSatellite
Total 100 100 100 100 100 100
KT 48.1 48.1 77.3 - 46 100
Hanaro 26.3 28.0 20.1 37 34.2 -
Thrunet 14.5 12.7 - 36 0.7 -
Onse 3.2 4.4 - 12.9 0.6 -
Dreamline 2.0 1.7 1.2 2.3 0.2 -
Dacom 1.8 1.4 - 1.9 6.7 -
Others 4.1 3.6 1.1 9.5 11.0 -
Subscription rate by service types (%) 55.3 33.9 10.6 0.1
• Apartment LAN refers to a LAN-type broadband Internet service using telephone lines or UTP
cables at apartments or collective housing.
2. With regard to unbundled lines, Korea notified standards on local loop unbundling in
April 2002, and implemented the syst em in full swing afterwards.
(i) The local loop unbundling system is not widely used as it is at the initial stage of the
implementation.  However, the Korea Communications Commission is making various efforts
to establish the system in place such as charging W 2 billion in fines on KT for its violation of
the Local Loop Unbundling Agreement in March 2003.
(ii) The following is the achievement of the unbundling:
(as of 16 February 2003)
Classification Full-unbundling line-sharing Total
Achievement 40 lines 67 lines 107 lines
3. Please provide further details as regards the independence of the regulatory authority.
Please confirm if our understanding is correct  that the Korean Communication Committee (KCC)
deliberates on regulatory issues (interconnection, accounting adjustment, mobility of numbers etc.).
1. The Korean Government completely sold off its shares in KT and fully privatized the
company.  By doing so, Korea faithfully complied with GATS 4th Protocol Reference Paper that
requires regulators to be de-facto and legally independent.
2. As EC understands, the Korea Communicati ons Commission (KCC) is responsible for
making a deliberation on the notification, standards or plans in relation to matters such asinterconnection, accounting, and number portability.GPA/W/267
Page 6
3. In addition, KCC has the authority to carry out an independent investigation into and to
impose correctional measures against activities of the telecommunications operators that undermine
fair competition and the interests of the users.
4. Refer to the attached "Framework Act on Telecommunications" for the establishment and
composition of the KCC that may either directly or  indirectly relate to the independence of the
Commission (Attachment 1).
4. Are there any government officials on KT's shareholders' committee, board or management?
Could the Government of the Republic of Korea please provide the list of previous members of the
Management Board (prior to the sale by the gov ernment of its shares in KT) and the names and
previous positions of the current members of the Management Board?
No government officials have been on KT's shareholder's committee or management before
and after the government's shares were unloaded.
As for the list of sitting directors, visit http://www.kt.co.kr/kt/eng and go to Investor Relations
→ Management Info. → Board of Directors.
5. What is the size of purchases of KT in the different categories of equipment (access,
exchanges, transmission, etc.)?
The share of KT's purchases from foreign suppliers represented 9.8% in 1999, 4.9% in 2000,
1.8% in 2001 and 2.1% in 2002.  The complete replacement of switching system and the global
slowdown in the IT sector have contributed to the de cline.  The list of major foreign items procured is
as follows:
- Y2K Solution from Lucent Technologies, Sagem SA, Ericsson Telecom AB
- Wide Band Digital Equipment from Marconi Communications
- Digital Circuit Multiplication from ECT Telecom Ltd.
- DSR from General Instrument
6. Could the Government of the Republic of Korea please provide a copy of all recent legislation
in relation to the privatization of KT?
As explained during the bilateral consultations with the EU, KT was privatized on the basis of
the following law:
- Act on Restructuring and Privatization of State Enterprises (hereinafter referred to as
Privatization Act).  For the details, please refer to Attachment 2.
7. Please provide KT special regulations for foreign contracts, if any exist.
KT's Special Regulations on International Contracts is contained in Attachment 3.
8. Please provide any KT guidelines for challenging procedures on procurement.
Please refer to KT's Guide on Dispute Settlement Regarding International Procurement
contained in Attachment 4.GPA/W/267
Page 7
9. Please provide a list of shareholders in each of KT and SKT (South Korea Telecom), as well
as the percentage values of each shareholder's shareholdings.
1. A List of KT Shareholders (Source:  Fi nancial Supervisory Service as of March 2003):
Shareholders Percentage of Shareholdings (%)
Brandes Investment Partners 6.39
Employees Stock Ownership 5.98
Minority Shareholders(less than 5%) 87.63
Total 100.00
* The total foreign ownership is about 41.64%
2. A List of SKT Shareholders (Source:  Fina ncial Supervisory Service as of March 2003):
Shareholders Percentage of Shareholdings (%)
SK 20.82
Citibank ADR 18.98
SK Telecom 10.21
Posco 6.83
Minority Shareholders
(holding shares less than 5%)43.16
Total 100.00GPA/W/267
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ATTACHMENT 1 - EC*
FRAMEWORK ACT ON TELECOMMUNICATIONS
CHAPTER V KOREA COMMUNICATIONS COMMISSION
Article 37 (Establishment and Compositio n of Korea Communications Commission)
(1) In order to create an environment of fair competition in the telecommunications business, to
make a deliberation on and resolve matters related to the protection of the rights and interests of theusers of telecommunications service, and to arbitrate the disputes among the 
telecommunications
business operators  or between  the telecommunications  business operator and the users, the Korea
Communications Commission shall be established under the jurisdiction of the Ministry of
Information and Communication.
<Amended on 30 December 1996;  28 January 2000;  26 December 2002>
(2) The Korea Communications Commission shall consist of not more than nine members
including one chairman, and among the members, one shall be permanent.
<Amended on 30 December 1996>
(3) The members including the chairman shall be  appointed or commissioned by the President,
under the conditions as prescribed by the Presidential Decree.
(4) A secretariat shall be established under the jurisdiction of the Korea Communications
Commission in order to manage the affairs of the Korea Communications Commission.
<Newly Inserted on 30 December 1996>
Article 38 (Qualifications, etc. for Members)
(1) The qualifications for members shall be as follows:
<Amended on 30 December 1996;  28 January 2000>
1. a person who holds or has held a post of public officials higher than Grade III;2. a person who serves or has served as a judge, prosecutor or attorney at law for no less
than fifteen years;
3. a person who has majored in law, economics, business administration, electronic
engineering, communications engineering, and other courses of study related to
telecommunications, and who serves or has served in a position higher than an
associate professorship at a university under the Higher Education Act or an approved
research institution, or who serves or has served at a position equivalent to it for noless than ten years;
4. a person who has served as the representative of organizations or 
institutions, or as an
officer of a company related to  telecommunications for no less than ten years;  and
                                                     
* Attachments 1-4 are in English only.GPA/W/267
Page 9
5. a person who serves or has served in a position related to the protection of users of
telecommunications service for no less than fifteen years.
(2) The tenure of office for the members who are not government officials shall be three years,
but he may be reappointed.
Article 39 (Guarantee of Status of Members)
The members of the Korea Communications Commission shall not be dismissed or
withdrawn from his commissione d post against his own will,  except for the following cases:
1. where he is sentenced to imprisonment without prison labour or heavier punishment;
and
2. where he becomes unable to perform the duties due to the mental and physical
weakness for a long period.
Article 40 (Functions of Korea Communications Commission)
The Korea Communications Commission shall deliberate on and resolve the matters falling
under any of the following subparagraphs pursuant to this Act and other Laws and Ordinances, and
make a ruling under Article 40-2:
<Amended on 28 January 2000;  26 December 2002>
1. matters relating to the provision of the telecommunications facilities, the joint
utilization of subscriber's lines, the joint utilization of radio communications
facilities, interconnection, the joint use, etc. of telecommunications facilities and
equipment or the criteria for supply of information under Articles 33-5 (2), 33-6 (2),
33-7 (3), 34 (2), 34-3 (2), 34-4 (2) of the Telecommunications Business Act;
2. matters relating to the approval of criteria under Article 34-4 (4) of the
Telecommunications Business Act;
3. matters relating to the supply, joint use, etc., interconnection or joint utilization of the
telecommunications facilities and equipment, or the authorization or report of theagreement on supply of information under Article 34-6 of the Telecommunications
Business Act;
4. matters relating to the formulation and modification of a plan for the administration
of telecommunications numbers under Article 36 (1) and (2) of the
Telecommunications Business Act;
5. deleted <26 December 2002>
6. matters relating to the measures against prohibited acts under Article 37 (1) of the
Telecommunications Business Act;
6-2 matters relating to imposition, etc. of penalty surcharge on prohibited acts under
Article 37-2 (2) of the Telecommunications Business Act;
7. matters relating to the implementation of the prior selection systems, the designation
of the prior selection registration center and the method of dealing with its affairsunder Article 38-3 (4) of the Telecommunications Business Act;GPA/W/267
Page 10
8. matters relating to the plans for number portability under Article 38-4 (4) of the
Telecommunications Business Act;
9. matters prescribed by other Acts as the matters to be deliberated by the Korea
Communications Commission;  and
10. other matters deemed necessary by the Minister of Information and Communication
for going through a deliberation by the Korean Communications Commission in order
to create an environment of fair competition in the telecommunications business and
protect the rights and interests of the uses in the telecommunications service.
[This Article Wholly Amended on 30 December 1996]
Article 40-2 (Ruling by Korea Communications Commission)
(1) The telecommunications business operators or its users may make an application to the Korea
Communications Commission for a ruling, in case where an agreement between the parties has not
been reached, or they are unable to make an agreement on the matters falling under any of the
following subparagraphs:
1. compensation for damages under Article 33-2 of the  Telecommunications Business Act, or
compensation for actual expenses under Article 46;
2. the supply of telecommunications facilities and equipment under Article 33-5 (1),(2) of
the Telecommunications Business Act, the join t utilization of radio communications facilities
under Article 33-7 (1),(2),  interconnection under Article 34 (1), the joint use, etc. under
Article 34-3 (1), or the conclusion of an agreement on supply, etc. of information
under Article 34-4 (1);
3. the supply of telecommunications facilities and equipment under Article 33-5 (1) of
the Telecommunications Business Act, the joint utilization of radio communications
facilities under Article 33-7 (1),(2),  interconnection under Article 34 (1), the joint use,
etc. under Article 34-3 (1), or the implementation of an agreement on supply, etc. of
information under Article 34-4 (1) or a compensation for damages;  and
4. other matters prescribed by other Acts as the matters to be ruled by the Korea
Communications Commission.
(2) The Korea Communications Commission shall, upon receipt of an application for ruling
under paragraph (1), notify the other party of the relevant fact, and provide them with an opportunity
to state an opinion with fixing a period: Provided, That this shall not apply in case where theinterested parties fail to comply to it without any justifiable reasons.
(3) The Korea Communications Commission shall, in case where it makes a ruling on the
application for ruling under paragraph (1), forward the document of such ruling to the parties
concerned without delay.
(4) When the Korea Communications Commission makes a ruling, and where a lawsuit has not
been initiated or it has been withdrawn concerning the content of the relevant ruling, within sixty days
from the date when the authentic copy of the document of ruling is served to the 
parties concerned, an
agreement which is identical with the  content of the relevant ruling is deemed to have been reached
between the parties concerned.GPA/W/267
Page 11
(5) A person who is dissatisfied with the amount which shall be paid or received by the parties
concerned from among the rulings of the Ko rea Communications Commission, may request an
increase or decrease of the relevant amount by a lawsuit, within sixty days from the date when he has
been served with the written ruling.
(6) In the lawsuit under paragraph (5), the other party shall be the defendant.
[This Article Newly Inserted on 30 December 1996]
Article 40-3 (Good Offices of Disputes)
The Korea Communications Commission may, in case where deemed inadequate to make a
ruling or when necessary, upon receipt of an application for ruling under Article 40-2 (1), set up the
subcommission by cases of dispute, and offer its good offices thereon.
[This Article Newly Inserted on 30 December 1996]
Article 41 (Quorum of Voting)
The deliberation of the Korea Communications Commission shall be decided by a majority of
registered members.
Article 42 (Exclusion, Avoidance, Refrainment of Members)
(1) Any member of the Korea Communications Commission shall, where he falls under any of
the following subparagraphs, be excluded from the deliberation and resolution of a relevant case:
1. where he or his spouse or his former spouse is a party to the relevant case, or in a
relationship of a cocreditor or a liable person with regard to the relevant case;
2. where he is or has been in a kinship with a party to the relevant case;
3. where he or a corporation whereto he belongs serves as a consultant or an advisor on
the legal and management affairs, etc. of a party concerned;
4. where he or a corporation whereto he belongs testifies or appraises;  and
5. where he or a corporation whereto he belongs intervenes or has intervened as an
agent for a party concerned.
(2) A party concerned may, when the situation exists that makes it difficult to expect a fair
deliberation or resolution, file an application for the avoidance.  In this case, the Korea
Communications Commission shall decide on it by a resolution.
(3) A member falling under the causes of paragraph (1) or (2) may refrain by himself from the
deliberation or resolution of a relevant case.
[This Article Newly Inserted on 28 January 2000]GPA/W/267
Page 12
Article 43 (Investigation and Listening to Opinions, etc.)
The Korea Communications Commission may, in case where deemed necessary to deal with a
case for ruling, carry out the acts falling under any of the following subparagraphs, upon a request
from a party concerned or ex officio:
1. a request for the presence of a party concerned or a relevant witness, and listening to
his opinions;
2. a request to an appraiser for an appraisal;3. a request for the furnishing of any document or articles related to a case of dispute,
and the provisional holding of furnished document or articles;  and
4. an act of letting civil servants belonging to the Korea Communications Commission
enter the business place of a party concerned and other places related to the case of
dispute to examine and peruse the documents or articles, or copy such documents.
[This Article Newly Inserted on 28 January 2000]
Article 44 (Operation, etc. of Korea Communications Commission)
Matters necessary for the organization, operation, etc. of the Korea Communications
Commission other than those stipulated in this Act shall be prescribed by the Presidential Decree.
Article 44-2 (Information and Communications Policy Deliberation Council)
(1) In order to deliberate on the major policies related to the information and communications
falling under any of the following subparagraphs, the Information and Communications Policy
Deliberation Council shall be established under the jurisdiction of the Ministry of Information and
Communication:
1. basic plans for telecommunications under Article 5;
2. enforcement plan for technology promotion under Article 8;
3. permission for the key communications service under Article 5 (1) of the
Telecommunications Business Act;
4. principal policies related to the information and communications industry;  and
5. other matters recognized by the Minister of Information and Communication to
require the deliberation by the Information and Communications Policy Deliberation
Council.
(2) Matters necessary for the composition and operation of the Information and Communication
Policy Deliberation Council under paragraph (1) shall be determined by the Presidential Decree.
[This Article Newly Inserted on 30 December 1996]GPA/W/267
Page 13
ATTACHMENT 2 – EC
ACT ON RESTRUCTURING AND PRIVATIZATION OF STATE ENTERPRISES
ACT NO. 6607
Article1 (Purpose)
The purpose of this Act is to contribute to the creation of sound corporate culture and the
balanced development of national economy, by introducing a management system run by specialized
executives and to hold the management accountable for its performance, thereby enhancing
management efficiency and facilitating privatization, while preventing the concentration of economic
power in the process.
Article 2 (Applicable Enterprises)
This Act shall apply to those corporations fa lling into any of the following subparagraphs
(hereinafter referred to as "Applicable Enterprises") <Amended 26 January 1999;  14 January 2002>:
1. Korea Tobacco and Ginseng Corporation  transformed into a joint stock company
subject to the Commercial Law , pursuant to the Act on the Abolishment of Korea
Tobacco and Ginseng Corporation Act .
2. Korea Telecommunication Corporation transformed into a joint stock company
subject to the Commercial Law , pursuant to the Act on the Abolishment of Korea
Telecommunication Corporation Act .
3. Korea Gas Corporation established pursuant to the Korea Gas Corporation Act .
4. HANJUNG (Korea Heavy Industry Incorporated) .
5. Incheon International Airport Corporation  established pursuant to the Incheon
International Airport Corporation Act .
6. Korea Aerospace Corporation  established pursuant to the Korea Aerospace
Corporation Act .
Article 3 (Relationship with Other Laws and Regulations)
(1) This Act shall supersede other laws and regulations concerning the organization, shareholder
rights, and the equity sale for privatization of Applicable Enterprises.
(2) Applicable Enterprises pursuant to Article 2 Paragraph 1 through 3, Paragraph 5, and
Paragraph 6 shall not be considered as government Investment Institutions subject to the Framework
Act on the Management of Government-Invested Institutions .
<Amended 26 January 1999;  14 January 2002>
(3) Matters concerning Applicable Enterprises (with the exception of Korea Gas Corporation )
other than those provided for herein shall be stipulated by the Commercial Law  provisions
concerning joint stock company.GPA/W/267
Page 14
(4) Matters concerning Korea Gas Corporation other than those provided for herein shall be
stipulated by the Korea Gas Corporation Act .
Article 4 (President)
(1) The president shall be appointed at the shareholders' general meeting.
(2) The term of the president shall be three (3) years, and cannot be dismissed without due reason
except in the case set forth in Article 13 Paragraph 3.
(3) The president, in applying the Commercial Law , shall be deemed the chairman of Board of
Directors .
Article 5 (Directors)
(1) Directors shall be classified into standing directors and non-standing directors, and shall be
appointed at the shareholders' general meeting.
(2) The quorum of standing directors including president shall account for less than 50 per cent
(%) of the total quorum of directors.
(3) The term directors shall be three (3) years.  The term of successor to a vacant non-standing
director's seat shall be the remaining term of the predecessor.
(4) One-third of the quorum of non-standing directors shall be appointed annually.
Article 6 (Board of Directors)
(1) The president shall convene a board of directors meeting ex officio  or upon request by more
than one quarter (1/4) of registered directors, and shall be the chairman.
(2) In case the president cannot participate in the resolution of the board of directors pursuant to
this Act, or cannot perform the duty of the chairman of board of directors due to compelling reasons,
the director as stipulated by the Articles of Incorporation shall act on the president's behalf.
Article 7 (Remuneration of the President and Standing Directors)
(1) The board of directors shall determine, upon its resolution, the criteria and payment method
of the remuneration of the president and standing directors, and report to the shareholders’ generalmeeting.
(2) The criteria of remuneration as set forth in Paragraph 1 shall be formulated in such a way as
to reflect the management performance of Applicable Enterprise to the determination of remuneration.
(3) The president and standing directors cannot participate in the resolution of board of directors
pursuant to Paragraph 1.
Article 8 (Recommendation of the Director Candidate)
(1) In case the president recommends the standing director candidate, the recommendation shall
be approved by the board of directors.  In this case, standing directors except the president cannot
participate in the board of directors' resolution.GPA/W/267
Page 15
(2) Non-standing director candidates shall be  recommended by either a shareholder or
shareholder association, pursuant to the Articles of Incorporation.
Article 9 (Qualifications for Non-Standing Director)
(1) Candidates eligible for non-standing director shall be those with specialized knowledge or
experiences in economics, business management, law, or relevant technology.
(2) Notwithstanding Paragraph 1, those with material  interest in the Applicable Enterprise cannot
be a non-standing director.
(3) The scope of those with material interest pursuant to provision set forth in Paragraph 2 shall
be stipulated by the Articles of Incorporation.
Article 10 (Non-Standing Director's Rights to Demand Materials)
A non-standing director can request the president for the provision of materials required for
performing duties.  In this case, the president shall respond to the demand unless there are special
circumstances.
Article 11 (President Recommendation Committee)
(1) For the purpose of recommending candidates for president, each Applicable Enterprise shall
establish its respective President Recommendation Committee (hereinafter referred to as
"Committee").
(2) The Committee shall be composed of a few non-standing directors, one of former or
incumbent presidents pursuant to the Articles of Incorporation, and a few non-official members
entrusted by the Committee (with the exception of the employees of Applicable Enterprise in question
and government officials).  In this case, th e quorum of Committee members who are non-standing
directors shall account for the majority of the total quorum of members.
(3) The number of non-standing directors entrusted with the Committee membership pursuant to
Paragraph 2 shall be less than one half (1/2) of the total quorum of non-standing directors.
(4) The Committee chairman shall be appointed among non-standing directors by the board of
directors.  In this case, the president and standing directors cannot take part in the board of directors'
resolution.
(5) The Committee shall make decisions, with the agreement of majority of registered Committee
members, excluding the Committee chairman.  In this case, the Committee chairman does not have
voting rights.
(6) Necessary matters concerning the composition and operation of the Committee other than
those provided for herein shall be stipulated by the Presidential Decree.
Article 12 (Appointment of President)
(1) The president shall be appointed among those who are qualified for a chief executive officer,
with extensive knowledge on business management and economics or with extensive management
experiences.GPA/W/267
Page 16
(2) Applicable Enterprise shall post a public notice on recruitment of president candidates on
major daily newspapers, and can separately investigate candidates for president who are deemed
appropriate for the post, or request a specialized agency for investigation.
(3) Committee shall examine those recruited pursuant to Paragraph 2, according to the
Presidential Candidate Examination Criteria as determined by the board of directors.
(4) In selecting the president candidates, th e Committee shall consult with those to be
recommended as candidates on the terms and conditions of contract on management target determined
by the board of directors, and where it is deemed necessary in the process of consultation, can modify
the contract terms and conditions determined by the board of directors.
(5) In accordance with the results of examination pursuant to Paragraph 3 and consultation
pursuant to Paragraph 4, the Committee shall both recommend the presidential candidates and submit
draft contract to the shareholders' general meeting.
(6) Standing directors including the president, can not attend the board of directors' meeting held
for the purpose of determining the Presidential Candidate Examination Criteria pursuant to
Paragraph 3, and the president cannot attend the board of directors' meeting held for the purpose of
determining the terms and conditions of the contract on management target pursuant to Paragraph 4.
In this case, the chairman of the board of directors shall be the Committee chairman.
Article 13 (Contract with the President)
(1) Upon the approval by shareholders' general meeting of the draft contract submitted pursuant
to Article 12 Paragraph 5, the Applicable Enterprise shall sign the contract with the president.  In this
case, the Committee chairman shall sign the cont ract as the representative of the Applicable
Enterprise.
(2) Pursuant to Paragraph 1, the board of directors can evaluate the performance of contract
signed with the president, or request a specialized agency for the evaluation.  In this case, the
president and standing directors cannot participate in the resolution of board of directors.
(3) In case the evaluation results pursuant to Paragraph 2 leads to a determination that the
president's performance falls short of management target, the board of directors can propose the
president's dismissal to the shareholders' general m eeting.  In this case, the president and standing
directors cannot participate in the board of directors' resolution.
Article 14 (Establishment of Shareholders Association)
(1) Where it is deemed necessary for the effective operation of shareholders' general meeting, as
stipulated in the Presidential Decree, the Applicable Enterprise can establish and operate a
shareholders association composed of some shareholders.
(2) Necessary matters concerning the qualifications for the shareholders association membership
and its operation shall be stipulated by the Articles of Incorporation.
Article 15 (Provisions on Special Cases Concernin g Audit by the Board of Audit and Inspection)
Inspection of Applicable Enterprises pursuant to Article 24 Paragraph 1 Subparagraph 3 of
the Board of Audit and Inspection Act shall not be carried out unless there is an accident or a
concrete evidence of the occurrence of accident.GPA/W/267
Page 17
Article 16 (Exercise of Shareholder's Right by the Government)
(1) The shareholder's right of Applicable Enterprise's shares held by the government shall be
exercised by competent minister, upon consultati on with the Minister of Finance and Economy.
(2) Necessary matters concerning the consultation pursuant to Paragraph 1 shall be stipulated by
the Presidential Decree.
Article 17 (Exercise of Minority Shareholder's Right)
The provisions set forth in the Securities Transactions Act  Article 191 Paragraph 13 and
Article 191 Paragraph 14 shall be applied to the exercise of minority shareholder's right andshareholder proposal right, even when the Applicable Enterprise's shares are not listed on the
securities market.
Article 18 (Single Person Stock Ownership Ceiling)
(1) One (1) shareholder and the person in special relationship with that shareholder as stipulated
by the Presidential Decree (hereinafter referred to as "Single Person") shall neither own stocks
exceeding the ratio stipulated by the Article of Incorporation within 15 per cent (%) of total number of
issued stocks with voting rights, nor de fact o control the Applicable Enterprise <Amended
29 January 1999>.
(2) In case a single person owns stocks above the ceiling stipulated in Paragraph 1 or de facto
controls Applicable Enterprise, the single person shall immediately dispose of the exceeding amount
of stocks.  In this case, even before the disposal of exceeding amount, the scope of single person's
voting rights exercise shall be restricted to the ceiling stipulated in Paragraph 1.
(3) Single person's ownership or de facto control as stipulated in Paragraph 1 and Paragraph 2
means a single person exercising voting rights by owning stocks under its own or borrowed name, or
by collusion.
Article 19 (Foreign Stock Ownership Ceiling)
(1) Acquisition of the Applicable Enterprise's stocks by foreigner or foreign corporation can be
separately restricted pursuant to the Article of Incorporation, in addition to the restriction pursuant to
Article 18 Paragraph 1.
(2) The provisions set forth in Article 18 Paragraph 2 shall be applied mutatis mutandis to those
foreigners or foreign corporations owning stocks above the ceiling or de facto controlling Applicable
Enterprise, as stipulated in the Articles of Incorporation pursuant to Paragraph 1 <Inserted
29 January 1999>.
Article 20 (Equity Sale Method)
(1) The stocks held by the government, government-invested institution, or Korea Development
Bank established pursuant to the Korea Development Bank Act  (hereinafter referred to as
"Government-equivalent") can be sold on consignment or assignment to agencies stipulated by the
Presidential Decree, including but not limited to financial institution and securities firm.
(2) In selling stocks held by government-equivalent, where it is deemed necessary for alleviating
the repercussions on stock market, widely diversifying stocks, and enhancing international
competitiveness of the Applicable Enterprise, the Minister of Finance and Economy can restrict theGPA/W/267
Page 18
qualifications for the buyer of stocks in question or the amount of stocks available for purchase
<Amended 29 January 1999>.
(3) Upon the request of an employee stockholders association member, government-equivalent
can sell, with priority, the stocks to the employee stockholders association of the corporation inquestion within the ceiling as stipulated in Article 18 Paragraph 1.
(4) In case of selling stocks pursuant to Paragraph 3, matters including but not limited to the
allocation of stocks to the employee stockholders as sociation members, and the disposal of that stock
shall be stipulated by the Securities Transactions Act  Article 191 Paragraph 3.
(5) Notwithstanding the Budget and Accounting Act , the cost for selling government held
stocks pursuant to Paragraph 1 can be disbursed from the proceeds from equity sale.
Article 21 (Preclusion from Application)
(1) Once an Applicable Enterprise falling into any of the Article 2 Subparagraphs 1 through 3
fulfils any of the requirements set forth in the fo llowing Subparagraphs, this Act shall not apply to
that enterprise from the date of shareholders' general meeting first convened thereafter.
1. The ratio of voting stocks held by government-equivalent is within the ceiling set
forth in Article 18 Paragraph 1.
2. The ratio of voting stocks held by single person other than government-equivalent is
larger than that held by government-equivalent.
(2) Among the stocks of Korea Heavy Industry Incorporated , Article 18 and Article 19 shall
not apply to the person who acquires the stocks held by government-equivalent through the tendering
for equity sale, and once the ratio of the stocks with voting rights held by single person and person
falling into any of the following Subparagraphs exceeds 51 per cent (%) of the total issued stocks with
voting rights, this Act shall not be applied from the date of shareholders’ general meeting first
convened thereafter.
1. Person who aims at joint capital participation and management pursuant to contract.2. The person pursuant to Subparagraph 1 and person who is in special interest with the
person as stipulated by the Presidential Decree pursuant to Article 18 Paragraph 1.
(3) In case the government made investment in-kind in Korea Development Bank, The Export-
Import Bank of Korea, and Industrial Bank of Korea pursuant to the Act on the Investment In-kind
of State Properties , Article 18 shall not be applied <Inserted 29 Janaury 1999>.GPA/W/267
Page 19
ANNEX <NO. 5379, 28 AUGUST 1997>
Article 1 (Effective Date)
This Act shall take effect as of 1 October 1997.
Article 2 (Deleted <29 January 1999>)
Article 3 (Recommendation of the First Non-Standing Director)
(1) For the purpose of selecting the person to recommend as the first non-standing director
(hereinafter referred to as the "Non-Standing Director Designee"), an Ad-hoc Committee on
Non-Standing Director Recommendation shall be esta blished under relevant department in Applicable
Enterprises.
(2) The members of the Ad-hoc Committee on N on-Standing Director Recommendation pursuant
to Paragraph 1 shall be composed of shareholder representative, non-official member with specialized
knowledge in area relevant to Applicable Enterprise, and public official from relevant central
government agency.
(3) Necessary matters concerning the composition and operation of the Ad-hoc Committee on
Non-Standing Director Recommendation shall be stipulated by the Presidential Decree.
(4) The Ad-hoc Committee on Non-Standing Di rector Recommendation shall recommend the
non-standing director designee to shareholders' gene ral meeting as a non-standing director candidate.
(5) In recommending non-standing director de signee as a non-standing director candidate
pursuant to Paragraph 4, the Ad-hoc Committ ee on Non-Standing Director Recommendation,
notwithstanding Article 5 Paragraph 3, shall equall y divide the quorum of non-standing directors by
three (3), and separately recommend non-standing directors with respective terms of one (1) year, two
(2) years, and three (3) years.  In case the quorum of non-standing directors cannot be equally divided
by three (3), the recommended candidates for the longer-term directors shall be more than shorter-term director candidates.
Article 4 (Appointment of the First President)
(1) For the purpose of recommending candidate for the first president to be appointed at the
shareholders' general meeting after the enactment of this Act, an Ad-hoc Committee on President
Recommendation shall be established.
(2) Provisions of Article 11 and Article 12 shall be applied mutatis mutandis  to the composition
and operation of the Ac-hoc Committee on President Recommendation pursuant to Paragraph 1 andthe appointment of the first president.  In this case, "non-standing director" shall be interpreted as
"non-standing director designee", and "board of directors" as "non-standing director designees'
meeting".
Article 5 (Provisions on Special Cases Concerning Incumbent Executives of Applicable
Enterprises)
(1) The term of incumbent chief director of Applicable Enterprise at the time of enforcement of
this Act shall be deemed terminated at the point this Act is enforced.GPA/W/267
Page 20
(2) The president, directors, and auditor of Applicable Enterprise at the time of enforcement of
this Act shall be deemed president, directors, and a uditor pursuant to this Act, provided that their term
is effective until new president, directors, and auditor are appointed at the shareholders' general
meeting pursuant to this Act.GPA/W/267
Page 21
ATTACHMENT 3 – EC
KT'S CORPORATE REGULATION
SPECIAL REGULATIONS ON INTERNATIONAL CONTRACTS
Regulation No. 538 (30 December 2000)
Article 1 (Purpose)
The purpose of these Regulations is to define principles, procedures, etc. related to
international tendering and contracts for Korea Telecom (hereinafter referred to as "the Company"),pursuant to the provisions of Article 87 of the Contract Regulations.
Article 2 (Definitions)
As used in these Regulations, the term:
1. "International tendering" shall mean a tendering procedure for contracts to be entered
into with domestic and foreign entities or foreign entities only, to supply goods,
construction, or services, and the contracts shall include a contract through limited
tendering.
2. "International contract" shall mean the signing of a contract after an international
tendering, as provided in these Regulations.
3. "List of Qualified Suppliers" shall mean a list of prospective suppliers (hereinafter
referred to as "qualified suppliers") whose proposals have been evaluated pursuant to
the provisions of Article 16 of the Company's Procurement Regulations, and found to
be advantageous to the Company, in overall consideration of the characteristics of the
project, the price, quality level of the proposed goods, convenience of the contract,
stable supply, quality attainment, conditions of maintenance and repair, etc.
4. "Telecommunications goods" shall mean telecommunication network equipment and
other telecommunication facilities, as well as incidental services and related software
(programs and plans, technical specifications, and other documents used for
programming).
Article 3 (Scope of Application)
(1) Any of the following cases shall be subject to international contracts:
1. manufacturing or purchase of goods, the cost of which is estimated to exceed
450,000 SDR.  Provided, however, that in the case of telecommunications items, thecost of which is estimated to exceed 130,000 SDR;
2. construction, the cost of which is estimated to exceed 15 million SDR;  or3. if it is deemed favorable to the Company's interests to procure under an international
contract.GPA/W/267
Page 22
(2) Notwithstanding the provisions of Subparagraphs 1 and 2 of Paragraph (1), the following
cases may not be subject to international contracts:
1. if a contract through limited tendering is to be signed, pursuant to the provisions of
Subparagraphs 2 through 8 of Article 37 of the Contract Regulations;
2. if an emergency contract is to be execute d, pursuant to the provisions of Article 56 of
the Contract Regulations;  and
3. If it is barred from international tendering by other related laws and regulations.
(3) Calculation of estimated costs, stated in Paragraph (1), and the exchange rate of SDR to the
Korean currency shall be as provided elsewhere.
Article 4 (Principles of International Contracts)
The official in charge of the contract shall select the other party to an international contract in
an impartial manner, not provide contract-related information in a discriminatory manner, and abide
by the following requirements:
1. the method of calculating the estimated price shall not be manipulated or a split order
shall not be placed for the purpose of avoiding an international contract;
2. any rules of origin, which are different from the provisions of the Overseas Trade Act
and the Customs Act, shall not be applied;  and
3. a fixed ratio of localized parts, technology transfer, offsets, etc. shall not be called for
in the process of evaluating the eligibility of prospective suppliers, evaluation of
proposals, and award of contracts, with a view to restricting entries or contract
conditions thereof.
Article 5 (Method of Contract)
International contracts may be concluded through open tendering, selective tendering, or
limited tendering.
Article 6 (Language)
(1) The language used for international contracts shall, in principle, be Korean.  Provided,
however, that if contracting parties operate primarily in a particular region and it is deemed inevitable
to use a foreign language, the language used in the region, or one language among English, French
and Spanish may be used.
(2) In the case of announcing an international tende ring, the official in charge of the contract
shall state the following matters at the bottom of the tendering announcement in English, French or
Spanish:
1. object of the contract;2. deadline for presentation of tender and application for tendering;  and3. name and address of the organization in charge of execution.GPA/W/267
Page 23
(3) If multiple languages are allowed to be used in preparing the tender for an international
tendering, the official in charge of contract shall include one or more languages among English,
French and Spanish.
(4) If any provision written in a foreign language, pursuant to the provisions of Paragraphs (2)
and (3), is different from what is stated in Korean, the Korean text shall prevail.
Article 7 (Eligibility and Review of Applicants for Open Tendering)
(1) The official in charge of the contract may establish the requirements for eligibility of
applicants for open tendering, with regard to performance of a similar kinds of contracts, performing
capability, technological capability, status of management, and other necessary matters, depending onthe type and scale of the contract, in addition to the requirements stated in Subparagraphs 1 through 3
and 5 of Article 13 of the Contract Regulations, as deemed necessary for a successful concluding of
an international contract.
(2) Upon request by a prospective applicant for open tendering, the official in charge of contract
shall review the eligibility thereof, pursuant to the provisions of the above Paragraph (1), and notify
the prospective applicant of the result.
(3) The official in charge of the contract may not conduct a review, as provided in Paragraph (2),
of those registered in the List of Qualified Suppliers.
(4) The official in charge of the contract shall pr omptly take steps to review the eligibility, if any
one who has not been through the eligibility review pursuant to the provisions of Paragraph (1) of
Article 8, requests to participate in the tendering. If  it is deemed that there is sufficient time for
completing the eligibility review by the day before the deadline for tender submission, the official incharge shall allow him to submit the tender.
Article 8 (List of Qualified Suppliers)
(1) The official in charge of the contract may prepare and display the List of Qualified Suppliers
in such a manner that all participants in the tendering may have ready access.
(2) In the event the List of Qualified Suppliers has expired or any party is removed from the List,
the official in charge of the contract shall notify the parties concerned to that effect.
Article 9 (Public Notice)
(1) Tendering shall be announced 40 days prior to the day before the deadline for tender
submission.
(2) Notwithstanding the provisions of Paragraph (1), if the tendering falls under any of the
following circumstances and it is deemed impossible to procure the intended object under the contractunder the normal schedule, tendering may be announced 10 days prior to the day before the deadline
for tender submission:
1. if it is urgent;  or
2. if tendering is to be announced again, pursuant to the provisions of Article 38 of the
Contract Regulations.
(3) When public notice has been announced and the content thereof is revised or corrected, a
correction notice shall be made with the submission deadline extended by at least 10 days.GPA/W/267
Page 24
(4) Notwithstanding the provisions of Paragraph (1), public notice of tendering may be made
25 days prior to the day before the deadline for tender submission, if it falls under any of the
following cases:
1. if a separate 40-day pre-announcement has been made within the past 12 months;  or
2. if individual requests for supply are made  in a certain grouping or instalments under
the contract (hereinafter referred to as "recurring contract"), and the notice is a
follow-up to a previous one.
(5) The provision of Paragraph (1) of Article 17 of the Contract Regulations shall apply to any
public notice of tendering, pursuant to the provisions of Paragraphs (1) through (4), as necessary.
Article 10 (Content of Public Notice)
If a public notice, pursuant to the provisions of Article 9, is to be made, the official in charge
of the contract shall include the following matters, in addition to those set forth in the provisions of
Article 18 of the Contract Regulations, in said public notice:
1. matters concerning any additional procurement conditions in regard to the said
contract, and the scheduled date of public notice of a subsequent tendering in the caseof a recurring contract;
2. method of open tendering or selective te ndering, and whether negotiation procedures
are included;
3. type of contract to be used by the organization that placed the order—purchase, lease,
instalment purchase, etc.;
4. address, deadline for submission, and required language for the application for review
of the eligibility for tendering, the application for tendering, tender, etc.;  and
5. applicability of the GPA.
Article 11 (Submission and Receipt of Tender)
(1) The official in charge of the contract may receive tenders and related documents submitted by
telegraph, telegram, fax, etc., as necessary.
(2) In the event tenders, etc. are submitted pursuant to the provisions of the above Paragraph (1),
the applicant shall be requested to immediately submit hard copies thereof with signature for
confirmation.  In such case, if there are any discrepancies in the content between what is sent by
telegraph, etc. and the signed hard copy submitted after the deadline, the copy sent earlier bytelegraph, etc. shall prevail.
Article 12 (Determination of the Successful Applicant)
(1) The official in charge of the contract shall determine the successful applicants for open
tendering by examining the applicants' capability of ex ecuting the relevant contract in the order of the
lowest tender under the ceiling.GPA/W/267
Page 25
(2) The examination, stated in the above Paragraph (1), shall be made to determine the eligibility,
considering the applicant's performance record, technological capability, financial status, faithful
execution of previous contracts, etc., pursuant to a separate set of examination criteria.
(3) Notwithstanding the provisions of Paragraph (1), the capability of executing the relevant
contract may not be reviewed in any of the following cases:
1. if the tendering is pursuant to the provisions of Subparagraph 3 of Paragraph (2) of
Article 3;
2. if any party registered on the List of Qualif ied Suppliers, as stated in the provisions of
Article 8, submits the lowest tender;  or
3. if a party who has during the past three years supplied items equal to or higher than
the level of the contract object to the Company or public organizations, as listed in
Article 2 of the Act on Promotion of Small and Medium-Sized Companies and
Purchase of Products, submits the lowest tender.
Article 13 (Release of Information, etc.)
(1) When the official in charge of the contract selects the successful applicant or the party to
international contract (hereinafter referred to as "successful applicant"), the following matters shall beannounced within seven (7) days of the selection of the successful applicant:
1. object, amount and price of the successful tender or the intended procurement through
limited tendering;
2. name and address of the successful applicant or party to the contract through limited
tendering;
3. address of the organization that placed the order;4. procedures that were followed in determining the successful applicant or party to the
contract through limited tendering;
5. procedures of public notice in the case of open tendering;6. in the case of limited tendering, the reason for adopting the method of limited
tendering;  and
7. other matters regarding the determination of the successful applicant.
(2) If applicants for tendering request information related to the said tendering, the official in
charge shall release the following information:
1. procurement practices and procedures of the organization that placed the order;2. reasons for rejection of an application for review of eligibility for tendering,
suspension of any existing eligibility, and not being designated as eligible;  and
3. reasons for non-selection as the successful applicant, name of the successful
applicant, characteristics and strengths of the successful tender.GPA/W/267
Page 26
(3) Notwithstanding the provisions of Paragraph (2), information about the successful tender may
not be released in any of the following circumstances:
1. if release of the information, etc. is feared to undermine public interest;
2. if release of the information, etc. is feared to undermine due commercial interests of a
particular company or adversely affect fair competition;  or
3. if release of the information, etc. is feared  to cause an inadvertent disclosure of the
Company's commercial or corporate secrets.
Article 14 (Selective Tendering)
In the case of a selective tendering pursuant to the provisions of Article 34 of the Contract
Regulations, the official in charge of the contract shall establish the eligibility of applicants for the
selective tendering and standards of invitation, in consideration of the matters provided in Article 8
and characteristics of the subject matter of the contract, etc.
Article 15 (Designation and Notification of Applicants for Selective Tendering)
(1) If the official in charge of the contract deems it desirable to execute a selective tendering, he
shall designate the eligible applicants who meet the invitation standards pursuant to Article 14, and atthe same time notify the designated applicants of matters regarding the public notice of tendering, as
set forth in Article 10.
(2) The provisions of Article 9 shall apply to the notification pursuant to the above Paragraph (1),
as necessary.  In the case of a selective tendering for which the List of Qualified Suppliers is not to beused, the deadline for submission of the application for selective tendering shall be at least 25 days
prior to the day before the date of tendering announcement.
Article 16 (Application of Provisions on Open Tendering, as necessary)
The provisions of Articles 7 through 13 shall apply to selective tendering, as necessary.
Article 17 (Contract through Limited Tendering)
International contracts may be concluded through limited tendering in any of the following
cases:
1. when an open tendering attracts no applicant; if tender by mutual consent is
submitted; or, no tender meets the conditions required in the public notice of
tendering, etc.;
2. if it is related to art works, patent rights, publishing rights and other proprietary rights
for which there is no proper substitute or alternative, or if procurement must be made
from a particular supplier for technical reasons;
3. if procurement cannot be made through open tendering within a given period, for
reasons of extreme urgency;
4. if procurement is for replacement of parts of already supplied objects or expansion of
facilities (this shall apply only to such case where manufacturing or supply of items
by those other than the existing manufacturer/supplier of the said items may cause
problems related to compatibility or interoperability);GPA/W/267
Page 27
5. if prototypes, etc. developed at the request of the organization that placed the order
are to be procured (This shall not apply to the case where the subsequent items, not
prototypes, are to be procured after such contract is fulfilled);
6. if additional construction services which were not included in the initial contract
become necessary, through unforeseeable circumstances, and the organization that
placed the order needs to award contracts for the additional construction services to
the contractor carrying out the construction services concerned since the separation of
the additional construction services from the initial contract would be difficult for
technical or economic reasons and cause significant inconvenience to the
organization.  However, the total value of contracts awarded for the additionalconstruction services shall not exceed 50 percent of the amount of the main contract;
7. if it is new construction service consisting of the repetition of similar construction
services which conform to a basic project for which an initial contract was awarded
through international tendering and for which the organization that placed the orderindicated in the notice of intended procurement concerning the initial construction
service that limited tendering procedures might be used in awarding contracts for
such new construction services;
8. if goods are to be purchased from the raw materials market (commodity market, etc.);9. if a contract is to be signed with the winner of a design contest;  or10. if procurement of items from a particular company is significantly more advantageous
to the Company.
Article 18 (Filing of Objections, etc.)
Matters and specific procedures related to the formation, operation, etc. of a committee in
charge of reviewing or resolution of objections to international contracts shall be based on "The Guide
to Dispute Settlement Regarding International Procurement".
Article 19 (Relationship with the Contract Regulations)
The Contract Regulations shall apply to matters th at are not specifically provided for in these
Regulations. Provided, however, that this shall not apply to the provisions of Articles 30 through 33
and Paragraph (2) of Article 47 of the Contract Regulations.
Article 20 (Application of International Commercial Practices)
Notwithstanding the provisions of Article 19, the official in charge of the contract may
execute international contracts, pursuant to international commercial practices, if it is unavoidable dueto the currency, type and period of security payment, method of payment with L/C, inspection, and
execution of other contract procedures.
Article 21 (Establishment of the Guide, etc.)
(1) The official in charge of the contract may establish and enforce a guide for the sake of the
enforcement of these Regulations.
(2) If a guide is to be established pursuant to the provisions of the above Paragraph (1), approval
of the Director of the Finance Office shall be obtained.GPA/W/267
Page 28
ADDENDA
These Regulations shall become effective on the date of promulgation.GPA/W/267
Page 29
ATTACHMENT 4 - EC
THE GUIDE TO DISPUTE SETTLEMENT REGARDING
INTERNATIONAL PROCUREMENT
Amended (April 10, 2002)
Enacted (July 6, 1999)
Article 1 (Purpose)
The purpose of this Guide is to prescribe matters concerning the establishment and operation
of the Dispute Settlement  Deliberation Committee (hereinafter referred to as the "Committee") to
facilitate the settlement of conflicts involving inte rnational contracts, as stated in Article 18 of the
Special Regulations on International Contracts.
Article 2 (Definitions)
As used in these Regulations, the term:
1. "The person who made the objection" shall mean a natural or juristic person who has
filed a protest with KT (hereinafter referred to as the "Company"), in connection with
an international contract.
2. "The organization that placed the order" shall mean an organization under the arm of
the Company, which directly performs functions related to tendering, determination
of the successful applicant, and signing of international contracts.
3. "Examination" shall mean the Committee's deliberation or mediation of objections
filed.
Article 3 (Establishment and Formation of the Committee)
(1) The Committee shall be established at the main office of the Company.
(2) The Committee shall consist of up to seven (7) members, including the chairman, and the
chairman, vice chairman and members as follows:
1. Chairman:  Chief of the Finance2. Vice Chairman:  Chief of the Accounting Team
3. Members:  Up to five (5) related officials of grade 2 or higher, designated by the
Chairman.
(3) One (1) secretary shall be appointed to assist in the operation of the Committee.  The manager
of the related department in charge shall be the secretary.
Article 4 (Acting for the Chairman)
(1) The Chairman shall manage the overall affairs and represent the Committee.GPA/W/267
Page 30
(2) In the absence of the Chairman, the Vice Chairman shall exercise the powers and discharge
the duties of the Chairman.
Article 5 (Meeting and Voting)
(1) The Chairman shall convene a Committee meeting when an objection, as stated in Article 6,
is received.
(2) The Committee shall require a quorum of a majority of its members duly designated and
seated, and pass resolutions with the concurrence of two thirds of those members present.
Article 6 (Filing of Objection)
(1) Those who have objections to matters concerning the scope of a contract, eligibility of the bid
applicant, bidding announcement, determination of a successful applicant, or matters provided for by
related laws and regulations, in connection with the Company's international contract, may file an
objection to either nullify or correct said error or omission.  Provided, however, that objections shallnot be received for matters in litigation or that ha ve been already examined pursuant to this Guide.
(2) The objection under the above Paragraph (1) shall be made in writing, and the following
matters shall be stated therein:
1. name, address and telephone number of the person making the objection;
2. name of the organization that placed the order, and tendering and contract numbers;3. reason for the objection, and copies of documents that outline the legal basis and
related grounds for the objection;
4. other matters required for intensive review;  and5. desired form of relief.
(3) The Committee may advise the person who desires to make an objection to consult with the
contracting organization before actual filing of an objection.
(4) The person who is advised to that effect pursuant to the above Paragraph (3) shall consult
with the contracting organization without delay, and submit the result of said consultation, in writing,
to the Committee within three (3) days from consultation.
Article 7 (Period of Filing)
(1) An objection shall be filed within fifteen (15) days from the day when the event that is the
cause for the objection takes place or within ten (10) days from the day when the said event becomesknown.  The person who made the objection shall forw ard a copy of the objection to the contracting
organization without delay.
(2) In the case of an objection filed beyond the period set in the above Paragraph (1), if it is
deemed that the time limit failed to be observed for justifiable reasons or that the objection could haveserious impact on procurement procedures, the Committee may accept the objection. Provided,
however, that the justifiable reasons shall be proven by the person who made the objection.
(3) In calculating the period, the first day of the period shall be included, but holidays shall not be
included.  The calculation shall be based on the Company’s work days, unless otherwise provided.GPA/W/267
Page 31
Article 8 (Rejection of Objection)
(1) The Committee shall review the documents within seven (7) days from receipt of the
objection and reject the objection in any of the fo llowing cases while notifying the person who filed
the objection of the reason for rejection, in writing:
1. if the reason for not observing the time limit for the filing of the objection is   not
justified;
2. if the procurement is not subject to this Guide;
3. if it is a minor and meaningless objection;
4. if prior consultation with the organization that placed the order is not conducted after
being advised to do so;
5. if it is an objection made by those who have no interest therein;  or
6. if it is deemed that the matter is not appropriate for the Committee to review.
(2) In the event the objection does not fall under Paragraph (1), the Committee shall notify the
organization that placed the order of the official acceptance of the objection, in writing, without delay.
Article 9 (Suspension of Procurement Procedures or Contract Execution)
(1) In the event an objection is officially accepted, the Committee may order the suspension of
procurement procedures related to the said objection pending completion of the examination.
(2) Notwithstanding Paragraph (1), if procurement procedures need to be continued for some
compelling reason, or if suspension of procurement procedures is deemed to have significant impact
on the Company's interests or the public interest, the chief of the organization that placed the order
shall make a written request for the Committee's approval to continue the procurement procedures.
Article 10 (Examination)
(1) The Committee may demand the person who made the objection and the organization that
placed the order to submit explanations and related documents, if necessary, and request specialized
related organizations to examine and give an opinion on the validity of such explanations.
(2) The Committee may order the persons concerned to attend the Committee meeting to express
their opinions, if it is requested by the person who made the objection or the organization that placed
the order, or deemed necessary by the Committee.
Article 11 (Result of Examination)
(1) The Committee shall finalize the written report on the result of its examination, which
specifies partial or whole recognition, rejection, etc. of the objection, within 60 days from the filing of
the objection.
(2) In the event the Committee finalizes the result of the examination to the effect of partial or
whole recognition of the objection, it may prescribe the following relief measures:
1. issuance of a new explanation;GPA/W/267
Page 32
2. conducting of re-rendering;
3. re-examination of the successful applicant;
4. cancellation of the contract;  or
5. recommendations, suggestions, etc. for the sake of resolving complaints.
(3) When the examination result is finalized, the Committee shall notify the person who made the
objection and the organization that placed the order, in writing, of said result.
Article 12 (Expedited Examination)
(1) If the person who made the objection or the organization that placed the order makes a written
request for an expedited settlement of the objection, the Committee shall receive and deliberate on
such request.
(2) If expedited examination is requested, the Committee shall determine, without delay, whether
such request should be granted, and notify the person who made the objection and the organization
that placed the order of the determination, in writing.
(3) When the Committee gives notice of its decision to expedite the examination, it shall order
the chief of the organization that placed the order to submit related documents without delay.
(4) Upon receipt of the related documents pursuant to the above Paragraph (3), the Committee
shall notify the person who made the objection of the contents thereof, demand the person to submit
his opinions, and notify the organization that placed the order, in writing, of the details of such
opinions.
(5) The Committee shall finalize the result of an expedited examination within 30 days from the
filing of the objection.
Article 13 (Request for Re-Examination)
(1) If the person who made the objection or the organization that placed the order requests a re-
examination of the examination result under Article 11 for any of the following reasons, the
Committee may accept such request:
1. ff a clear legal error in the Committee’s ruling is pointed out;  or
2. if specific information, not considered earlier, is newly presented and it is deemed
that the information may lead to the overruling of the decision.
(2) The request for re-examination, pursuant to the above Paragraph (1), shall be made within ten
(10) days from receipt of the notification of the Committee’s examination result.
(3) Procedures applicable to the request for re-examination shall be pursuant to the provisions of
this Guide, except Article 9.GPA/W/267
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ADDENDA
This Guide shall become effective on the date of its promulgation.
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