Page 209 - 2020 Defence White Paper

posture. Defense cost sharing is an exception to Article 5 of the SOFA, which states
4)
that the US bears all expenditures incident to the maintenance of the USFK, and the
ROK started its contribution in 1991 based on a Special Measures Agreement
5)
6)
(SMA) .
The defense cost sharing consists of three categories–labor cost, ROK-funded
construction, and logistics cost. The ROK and the US divide and allocate the total
amount of annual defense cost sharing to the three categories and spend the budget 4)
Article 5 of the SOFA
in accordance with the procedures agreed upon by both sides during the signing of (Facilities and Areas-Cost
and Maintenance) provides
the SMA. The total amount of the annual defense cost sharing is set to a reasonable the following:
and fair level via close consultations between the two countries with comprehensive • 1: The United States will
bear, without cost to the
considerations of the USFK’s contribution to the defense of the Korean Peninsula Republic of Korea, all
expenditures incident
and the need to provide a stable stationing environment for the USFK, the ROK’s to the maintenance of
the United States armed
f nancial capacity, and the security situation on the Korean Peninsula. forces in the Republic of
Korea, without cost to the
Since August 2019, the ROK and the US have been negotiating to conclude a United States, all facilities
and areas.
new SMA, and the ROK government is doing its best to derive reasonable, fair • 2: The ROK will furnish,
without cost to the United
States, all facilities and
areas.
[Chart 6-1] Annual Defense Burden Sharing Amount Agreed Upon by the ROK and the
United States 5) Chapter 6
(Unit: USD 100 million) The US not only covered
Round 1st, 2nd 3rd 4th 5th all expenditures for the
maintenance of the USFK
Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 following Article 5 of the
SOFA but also funded and
Amount 1.5 1.8 2.2 2.6 3.0 3.3 3.6 3.9 3.3 3.9 4.4 4.7 5.5 6.2 constructed most of the
facilities that the ROK was
(Unit: KRW 100 million) supposed to provide in
6th 7th 8th 9th 10th consideration of the ROK
government’s financial
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 conditions. Due to the
deterioration of the US
6,804 6,804 7,255 7,415 7,600 7,904 8,125 8,361 8,695 9,200 9,320 9,441 9,507 9,602 10,389 financial situation and the
ROK’s economic growth,
Since the 6th SMA, the currency for payment has been switched to Korean won. the two countries signed
the SMA in 1991. Since
then, the ROK has shared
[Chart 6-2] Defense Burden Sharing Status (as of 2019) a portion of the USFK’s
stationing costs.
36% 6)
The official title of the
16% SMA is the "Agreement
Construction support to ROK funded Between the United
the USFK facilities including construction States and the Republic of
barracks and surrounding KRW 371 Logistics cost Munitions storage, aircraft Korea Concerning Special
facilities (All support, except billion KRW 167.4 maintenance, railroad Measures Related to Article
12% of design and construction billion and vehicle transportation V of the Agreement Under
oversight costs, paid in kind)
support, as well as other Article IV of the Mutual
types of provisions of Defense Treaty Between
48% Labor cost materials and services the United States and
KRW 500.5 billion (All paid in kind) the Republic of Korea,
Regarding Facilities and
Salaries support for the ROK Areas and the Status of
employees to the USFK (All the United States Armed
paid in cash) Forces in the Republic of
Korea."

Chapter 6. Developing a Robust ROK–US Alliance that is Mutually Complementary and Promoting Defense Exchanges and Cooperation