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Untitled Document
REGULATIONs ON THE INTRODUCTION OF LATEST TECHNOLOGIES BY FOREIGN-INVESTED ENTERPRISES

Adopted by Decision No. 44 of the Cabinet on August 24, 2001

Chapter 1. General

Article 1. These regulations are formulated in order to encourage foreign-invested enterprises to introduce latest technologies.
Article 2. Latest technologies shall include patents and technical know-how that are introduced by foreign-invested enterprises, IT and technologies in the field of scientific research as well as technologies in other priority sectors that are encouraged by the State.
Article 3. The central trade guidance organ shall be responsible for unified control and guidance over the introduction of latest technologies by foreign-invested enterprises.
Article 4. These regulations shall apply to foreign-invested enterprises that introduce latest technologies.

Chapter 2. Examination and Registration of Latest Technologies

Article 5. The central organ of administrative guidance over science and technology shall be responsible for the examination and registration of latest technologies that have been introduced by foreign-invested enterprises.
Article 6. Where a foreign-invested enterprise has introduced a latest technology, it shall undergo examination related to the latest technology.
In order to undergo such examination, a written application shall be submitted to the central organ of administrative guidance over science and technology.
The application document shall state the name of the applicant, form of business, seat of the enterprise, name of the latest technology and the like and shall be accompanied by necessary documents such as data on technical and economic effectiveness.
Article 7. An application for examination of the latest technology shall be examined within 30 days of its receipt.
Article 8. Latest technologies shall be examined by involving specialists and experts in the relevant sector.
Article 9. When the examination of a latest technology has been completed, an examination report shall be prepared. The examination report shall contain the relevant information and be accompanied by the result of the assessment.
Article 10. Where the central organ of administrative guidance over science and technology has concluded that a technology introduced by a foreign-invested enterprise qualifies as a latest technology, it shall register the technology, issue a certificate of introduction of the latest technology to the enterprise, and notify the central trade guidance organ, the central financial organ and the central customs organ of the result.
A certificate of introduction of the latest technology shall state the name of the foreign-invested enterprise, name of the latest technology introduced, date and number of registration and the like.

Chapter 3. Preferential Treatment

Article 11. Preferential treatment shall be granted to a foreign-invested enterprise that has been issued a certificate of introduction of the latest technology.
Article 12. Preferential treatment shall apply only to the categories of business and indices in which the latest technology has been introduced.
Article 13. The period of preferential treatment shall be calculated from the date of receipt of the certificate of introduction.
Article 14. Preferential treatment shall be granted in the form of reduction of or exemption from taxes and the like.
Article 15. For a foreign-invested enterprise that has received a certificate of introduction of the latest technology, the enterprise income tax rate shall be 10 per cent of the net profit in the categories of business and indices in which the latest technology has been introduced. Where an enterprise that has introduced a latest technology is to operate for longer than 10 years or where the annual net profit in the categories of business and indices in which a patent or technical know-how has been introduced is greater than 70 per cent of the total net profit of the foreigner-invested enterprise, it shall be exempted from enterprise income tax for 3 years from the first profit-making year and entitled to a reduction of the tax by up to 50 per cent for the following 2 years.
Article 16. Where a foreign-invested enterprise has received a certificate of introduction of a latest technology in the field of information industry, scientific research and other priority sectors, it shall be exempted from enterprise income tax for 3 years from the first profit-making year and entitled to a reduction of the tax by up to 50 per cent for the following 2 years.
Article 17. Where products made through the introduction of a latest technology are sold in the territory of the DPRK upon request by the State, the enterprise shall be exempted from the turnover tax payable on the products so sold and the customs duty payable on the imported materials used for the making of the products.
Article 18. Where products made through an introduction of a latest technology are sold in the territory of the DPRK because no market can be found although their quality has reached that of the goods of the same kind traded in the international market, the enterprise shall be exempted from the customs duty and turnover tax for 1 year to be followed by exemption from only the customs duty for the next 2 years.
Article 19. Funds created as a result of exemption from customs duty and turnover tax may be used for the development and introduction of new technologies by the foreign-invested enterprise.

Chapter 4. Supervision and Control

Article 20. Where the central trade guidance organ discovers that a foreign-invested enterprise that has received a certificate of introduction of a latest technology has failed to conduct its business activities as stipulated in the certificate, it shall notify the central organ of administrative guidance over science and technology of the situation and take relevant measures.
Article 21. Any disagreement arising in connection with the introduction of latest technologies shall be resolved through consultation.
Any dispute that cannot be resolved through consultation shall be brought before an arbitration body or a court of the DPRK for settlement.
Article 22. In case of a violation of these regulations, administrative sanctions shall be imposed depending on the degree of violation such as fine, suspension of preferential treatment and withdrawal of the certificate of introduction. In case of a grave violation, criminal punishment shall be applied.


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