What Changed — Passed on August 20, Approved by the Cabinet on September 8
An amendment to Korea's National R&D Innovation Act passed the National Assembly on August 20, 2026, and the Cabinet approved its promulgation on September 8. The Ministry of Science and ICT (MSIT) says the law is scheduled to take effect in March 2027. Please confirm the exact promulgation and effective dates at the Korea Law Information Center.
The amendment continues MSIT's research administration reforms. Having widened researcher autonomy, the government is now strengthening accountability to match.
Two Higher Ceilings — A 20-Year Ban and a 30x Surcharge
Both figures are ceilings. MSIT describes them as aimed at malicious or habitual misuse of research funds. The targets are serious misconduct such as skimming student researchers' wages or diverting funds for private use. Not every violation will draw a 30x surcharge.
The criteria for each type of violation will be set in the Enforcement Decree. MSIT has said it will revise the decree and gather feedback from the field in time for the effective date. As of October 2026, the detailed criteria are not yet finalized.
Not Only Tougher — Protection for Ambitious Research and More Flexible Spending
The amendment also protects ambitious research.
The line between "honest failure" and "misconduct" therefore matters more than before. Failure itself is protected, but only if your records can show how the work was actually done.
Where SMEs Actually Run Into Trouble
Researcher labor costs
Materials and equipment
Subcontracting and outsourcing
Intent is not always required for a problem to arise. Typical cases include labor costs that kept being charged for months after someone left, or research materials purchased together with production materials without separation. Even plain mismanagement can be judged as misuse if you cannot explain it with evidence.
What to Check Before the Law Takes Effect
Does It Apply to Ongoing Projects? — Check the Transitional Provisions
Whether the higher ceilings apply to violations committed before the effective date must be confirmed in the amendment's supplementary provisions. Korea's Framework Act on Administration applies the law in force at the time of the violation as a general rule, but a specific statute can provide otherwise. Conduct that continues across the effective date needs separate analysis.
If you receive notice of a detailed settlement audit or special evaluation from a funding agency, respond in this order.
Missing a deadline forfeits your chance to contest the decision, so check the dates in the notice first.
Preparing With KITIM
The Korea Institute of Technology Innovation Management (KITIM) supports SMEs in managing R&D funds at every stage. We advise on budgeting at the agreement stage, run mid-project self-checks, and help organize evidence ahead of settlement. If you would like to review your management system before the law takes effect, please request a consultation through the KITIM website. We will tailor our guidance to your current projects.