[Yoo Choon-sik] Uncertainty rises as AI law decrees miss schedule

Korea Herald

06-07-2025

South Korea has missed its self-imposed deadline of June 30 to disclose draft versions of enforcement decrees and rules for its basic artificial intelligence law.
The National Assembly overwhelmingly passed the AI Basic Act — officially the Framework Act on the Development of Artificial Intelligence and Establishment of Foundation for Trust — in late December 2024. It took markets around the world by surprise, given that the country was quickly slipping into one of the worst political turmoils in years after then-President Yoon Suk Yeol's failed attempt to impose martial law triggered widespread unrest.
The subsequent promulgation of the law by the Cabinet Council in January this year also came as a surprise, given that the government was being run by an acting president.
The Ministry of Science and ICT said at that time that it would disclose draft versions of enforcement decrees and rules by the end of June for public comment so that they could be finalized early enough for companies and users alike to prepare for the January 2026 implementation of the law and ensure smoother compliance.
On the surface, the delay is understandable, given that President Lee Jae Myung, who is just over a month into his tenure, has yet to get his administration completely into shape. Lee started work without the usual transition period because the election was held to fill the presidency vacated by the forced removal of Yoon by the Constitutional Court after his impeachment a few months earlier.
However, companies are growing nervous as the period of darkness is extended regarding the subordinate legislation process, because they have to prepare strategies for what will emerge as one of the region's major markets for AI business opportunities, with limited clarity and time to act accordingly.
The delay also comes amid complaints among many stakeholders within and outside South Korea that the country, while enacting the law later than the European Union, will be the first jurisdiction in the world to implement regulatory obligations. The EU is not due to enforce its provisions until several months after South Korea shows its hand.
For instance, while South Korea's AI Basic Law is set to take effect in late January 2026, most regulatory provisions of the EU AI Act — such as those on high-risk systems, general-purpose models, governance, penalties and national authorities — are due to take effect from August 2026 in multiple steps, with staggered deadlines.
By the time South Korea's government and National Assembly hurriedly passed the law in late 2024, policymakers and industry experts alike thought having the law in place would help the country's AI companies doing business in major markets, where they expected authorities to introduce tough regulations.
However, earlier this year, the global AI policy landscape took a dramatic turn toward prioritizing the development of AI innovation, especially since the announcement by DeepSeek and other Chinese developers of the successful development of world-class AI systems.
Major countries including the United States, Britain, Canada and Germany have recently taken bold steps to foster AI development, with some of them explicitly shifting their policy stance away from regulation. This change in the global landscape has raised concerns that South Korea may have moved too hastily, locking itself into a regulatory-first approach.
Uncertainty is worse than anything
These concerns even led to the then-opposition Democratic Party of Korea — now the ruling party — proposing a revision bill in April to suspend regulatory provisions for three years, emphasizing that 'the AI-related trends in the US, the EU, and Japan, have been shifting away from regulation toward promotion and industry growth.'
There is no indication of the revision bill proceeding swiftly, with the leader of the proposing lawmakers acknowledging that the revision may not be approved quickly, according to media reports. However, these concerns apparently have prompted the Ministry of Science and ICT to seek ways to effectively delay full implementation of the bill's obligations to avoid stifling innovation.
'(The ministry) is considering introducing a grace period on the provision imposing fines for some time after the enforcement of the law so that there will be an effect similar to a delay in the regulatory measure,' the ministry recently told President Lee's state affairs planning committee, according to media reports published recently.
The ministry was referring to Article 43 of the law, stipulating that the Minister of Science and ICT could levy a fine of up to 30 million won ($22,000) for those in violation of obligations listed in Articles 31, 36, and 40. However, the same article delegates further details to a presidential decree, allowing flexibility in enforcement.
The planning team has been receiving briefings from the outgoing government's ministries, so this plan may still change when the new minister takes office. Bae Kyung-hoon, head of LG AI Research, was nominated to be the first minister of science and ICT under the Lee administration, but has yet to take office after confirmation hearings held last month.
All issues related to subordinate legislation also remain highly uncertain because Lee has yet to unveil how to implement his election pledges, including one to revamp the Presidential Committee on AI — launched in late 2024 by his predecessor to review and coordinate AI policy issues but inactive for several months, mainly due to the political turmoil of that period.
It remains to be seen how many of the tentative plans prepared by the outgoing government will be upheld by the Lee administration and how soon South Korea will clear the remaining uncertainty regarding some conflicting regulatory obligations between different laws and guidelines, experts said.
In stark contrast to the heightened uncertainty continuing, there is one thing that everyone agrees always makes sense: Uncertainty is worse than anything for the business world as well as for the investor sentiment toward South Korea, especially in the fast-moving domain of artificial intelligence.
Yoo Choon-sik worked for nearly 30 years at Reuters, including as the chief Korea economics correspondent, and briefly worked as a business strategy consultant. The views expressed here are the writer's own. — Ed.