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ENFORCEMENT DECREE OF THE FAIR AGENCY TRANSACTIONS ACT

Presidential Decree No. 27677, Dec. 22, 2016

CHAPTER I GENERAL PROVISIONS
 Article 1 (Purpose)
The purpose of this Decree is to prescribe matters delegated by the Fair Agency Transactions Act and those necessary to enforce said Act.
CHAPTER II FAIR AGENCY TRANSACTION
 Article 2 (Matters to Be Provided for in Agency Transaction Contracts)
"Matters prescribed by Presidential Decree" in Article 5 (1) 8 of the Fair Agency Transactions Act (hereinafter referred to as the "Act") means the following:
1. In cases of consignment sale transactions, matters concerning the scope of the business entrusted to the agency by the supplier;
2. In cases of consignment sales transactions, matters concerning the price to be paid by the supplier to the agency, irrespective of its name, such as commission.
 Article 3 (Types of or Criteria for Conduct of Compelling Purchases)
Conduct prohibited under Article 6 (1) of the Act shall be any of the following:
1. Compelling an agency to purchase any specific goods or services by compelling it to place an order or by creating a situation in which there is no choice but to place an order;
2. Supplying goods or services that an agency has no intention to purchase, by unilaterally modifying the details of an order placed by the agency;
3. Any other conduct determined and publicly notified by the Fair Trade Commission as conduct compelling to purchase goods or services against an agency’s intention.
 Article 4 (Types of or Criteria for Conduct of Compelling Provision of Economic Benefits)
Conduct prohibited under Article 7 (1) of the Act shall be any of the following conduct:
1. Compelling an agency to bear the cost, provide human resource, etc. for a sales promotional event arranged in accordance with the needs of the supplier;
2. Compelling an agency to bear all or part of the labor costs for executive officers or employees employed by the supplier;
3. Compelling any executive officer or employee employed by an agency to work in the supplier's place of business, another place of business or similar place designated by the supplier;
4. Compelling an agency to provide economic benefits unrelated to agency transactions, irrespective of the name, such as donations or sponsorship;
5. Any other conduct determined and publicly notified by the Fair Trade Commission as conduct forcing an agency to provide money, goods, services, and other economic benefits against the agency’s intention.
 Article 5 (Types of and Criteria for Conduct of Compelling Sales Target)
Conduct prohibited under Article 8 (1) of the Act shall be any that compels an agency to achieve a sales target of goods or services supplied by the supplier by performing, or indicating the intention to perform, any of the following conduct:
1. Early terminating agency contract;
2. Suspending the supply of goods or services;
3. Failing to pay all or part of an amount payable to an agency;
4. Any other conduct determined and publicly notified by the Fair Trade Commission as conduct imposing disadvantages that interfere with the normal operation of an agency.
 Article 6 (Types of or Criteria for Conduct of Imposing Disadvantages)
Conduct prohibited under Article 9 (1) of the Act shall be any of the following conduct:
1. Concluding a contract interpreted in supplier’s favor, where the supplier and an agency fail to agree on the contents of the contract;
2. Altering any terms and conditions of transactions during the term of the contract, against the intention of an agency;
3. Preventing an agency from claiming damages even if the contract is terminated fully or partially;
4. Suspending or restricting the supply of goods or services or the sales support agreed with an agent, without any reasonable ground;
5. Reducing or failing to pay sales incentives even though an agent does not fall under any ground for restricting the payment of the sales incentives under the agency transaction contract;
6. Requiring an agency to compensate any equipment or fixtures leased to the agency at a price without considering depreciation, when they are lost or damaged due to any cause attributable to the agency;
7. Refusing to accept returned goods even though the goods have been destroyed or damaged due to a cause attributable to the supplier;
8. Requiring an agency to bear the cost of transport incurred for returning goods, even though the return is due to a cause attributable to the supplier;
9. Any other conduct determined and publicly notified by the Fair Trade Commission, as setting or altering any terms and conditions of transactions to be disadvantageous to, or imposing any disadvantage on, an agency in the course of implementing them.
 Article 7 (Types of and Criteria for Interference in Management Activities)
Conduct prohibited under Article 10 (1) of the Act shall be any of the following conduct:
1. Requiring an agency to obtain a prior instruction or ex post facto consent from the supplier, where it appoints or dismisses any of its executive officers or employees or determines the working area or working conditions of such executive officer or employee;
2. Requesting an agency to provide information that constitute business secrets, such as the status of its customers and details of sales, without any reasonable ground;
3. Requesting an agency to comply with a unilateral instruction issued by the supplier as to the customers, business hours, sales territory, sales promotional activities, etc. of the agency;
4. Any other conduct determined and publicly notified by the Fair Trade Commission as interfering with the management activities which an agency should decide and perform independently.
CHAPTER III MEDIATION OF DISPUTES AND RELEVANT MATTERS
 Article 8 (Meetings of Council)
(1) If the Chairperson of the Agency Dispute Mediation Council established under Article 13 of the Act (hereinafter referred to as "Council"; and the Chairperson thereof shall be referred to as "Chairperson") intends to convoke a meeting comprised of all members under Article 16 (1) of the Act, he/she shall inform the relevant members of the date and time; venue; and agenda for the meeting in writing (including an electronic document defined in subparagraph 1 of Article 2 of the Framework Act on Electronic Documents and Transactions; hereinafter the same shall apply) by not later than seven days before holding the meeting: Provided, That in cases of urgency, notification may be made by not later than the day immediately before the meeting.
(2) Paragraph (1) shall apply mutatis mutandis where a member representing the public interest under Article 14 (2) of the Act intends to convoke a subcommittee meeting referred to in Article 16 (1) of the Act.
(3) Meetings of the Council shall not be disclosed: Provided, That when the Chairperson deems it necessary, parties to a dispute arising out of agency transactions which is subject to mediation (hereinafter referred to as "disputing parties") or other interested persons may be permitted to attend a meeting.
 Article 9 (Applications for Dispute Mediation)
(1) "Written application stating the matters prescribed by Presidential Decree" in the main sentence of Article 19 (1) of the Act, means a written application stating the following:
1. The names and addresses of the applicant and the respondent (if a disputing party is a corporation, referring to the name of the corporation, the location of its main office, and the name and address of its representative);
2. The name and address of a proxy, if any;
3. The purport and grounds for the application.
(2) The written application under paragraph (1) shall be appended by the following documents:
1. A document substantiating the grounds for and facts of the application for the dispute mediation;
2. A power of attorney, if the application is filed by a proxy;
3. Any other evidential documents or data supporting the dispute mediation.
 Article 10 (Selection of Representative)
(1) Multiple number of disputing parties who jointly apply for mediation may select up to three representatives from among the applicants.
(2) Where persons who have jointly applied for dispute mediation select no representative as prescribed in paragraph (1), the Chairperson may recommend them to select representatives.
(3) When any representative is selected or replaced, the applicant shall notify the Chairperson of such fact without delay.
 Article 11 (Supplementation of Applications for Dispute Mediation and Other Relevant Matters)
(1) Where deemed necessary, the Chairman may request the supplementation of a written application referred to in Article 9 (1) or documents referred to in paragraph (2) of the same Article, specifying a reasonable period.
(2) The period required for supplementation under paragraph (1) shall be excluded from the calculation of the period under Article 20 (5) 3 of the Act.
 Article 12 (Appearance of Disputing Parties)
(1) In requesting disputing parties to appear at a meeting pursuant to Article 20 (2) of the Act, the Council shall determine and notify the matters to be verified by disputing parties appearing, time and place for the disputing parties to appear, by not later than seven days before the requested date of appearance: Provided, That this shall not apply in cases of urgency or where disputing parties give consent to such matters.
(2) If any inevitable grounds exist that would prevent a disputing party in receipt of the notification under paragraph (1), from appearing at a meeting of the Council, the distributing party may submit his/her opinion in advance in writing on the matter that the Council intends to verify.
 Article 13 (Grounds for Termination of Dispute Mediation and Other Relevant Matters)
(1) "Any matter prescribed by Presidential Decree ... occurs" in Article 20 (4) 3 of the Act means any of the following cases:
1. Where the applicant withdraws the application for mediation;
2. Where it is deemed inappropriate to mediate due to the nature of the dispute;
3. Where the applicant is deemed to have filed the application for the purpose of obtaining unfair advantage;
4. Where the applicant has filed applications for mediation at least twice with the same intention on the same matter;
5. Where the applicant reported a case which is the same as the dispute mediation already rejected or terminated to the Fair Trade Commission in accordance with Article 49 (2) of the Monopoly Regulation and Fair Trade Act which applies mutatis mutandis pursuant to Article 27 (2) of the Monopoly Regulation and Fair Trade Act has requested the Council to mediate the case under Article 19 (2) of the Act;
6. Where the applicant fails to supplement the application for dispute mediation requested under Article 11 within the deadline without just cause.
(2) Where a disputing party, before or after filing an application for dispute mediation of a case, files a lawsuit or an application for arbitration under the Arbitration Act on the same subject-matter, he/she shall notify the Council of such fact without delay.
 Article 14 (Written Statement on Termination of Dispute Mediation)
Where the Council rejects an application for mediation pursuant to Article 20 (3) of the Act or terminates mediation proceedings pursuant to Article 20 (4) or (5) of the Act, it shall prepare a written statement on termination of dispute mediation, stating the following matters; report it to the Fair Trade Commission without delay; and notify disputing parties of such fact:
1. General status of disputing parties;
2. Summary of agency transactions between disputing parties;
3. Issues of the mediation;
4. Details of the mediation;
5. Reasons for rejecting the application for mediation or terminating mediation proceedings.
 Article 15 (Protocol of Mediation)
Where the mediation is completed, the Council shall prepare a protocol of mediation stating the following matters and submit a report thereon to the Fair Trade Commission together with a photocopy thereof and related documents:
1. Matters set forth in subparagraph 1 through 4 of Article 14;
2. Outcomes of the mediation.
 Article 16 (Succession to Disputing Party's Status)
(1) Where mediation proceedings are unable to progress due to the death or loss of ability of a disputing party or other reasons occur before the mediation proceedings are terminated, the Council may allow a person who has succeeded to his/her status in accordance with a relevant statute to succeed to the status of the relevant disputing party.
(2) A person who intends to succeed to the status of a disputing party under paragraph (1) shall apply for succession to the status in writing to the Council.
(3) Upon receipt of an application under paragraph (2), the Council shall deliberate on and determine whether to grant the succession without delay, and shall notify the details thereof to the applicant in writing.
 Article 17 (Detailed Rules on Operation of Council)
Except as otherwise provided for in this Decree, necessary matters concerning the organization, operation, mediation proceedings, etc. of the Council shall be determined by the Chairperson following a resolution by the Council.
CHAPTER IV PROCEDURES, ETC. FOR FAIR TRADE COMMISSION TO HANDLE CASES
 Article 18 (Recommendation for Correction)
A recommendation for correction under Article 24 (1) of the Act shall be made in writing, stating the following matters:
1. Details of the violation of the Act;
2. Recommendation;
3. Deadline for making corrections;
4. Deadline for notification as to whether party accepts the recommendation;
5. Measures to be taken when the recommendation is refused.
 Article 19 (Criteria for Imposition of Penalty Surcharges)
(1) "Amount involved in the violation of the Act, prescribed by Presidential Decree" in the main sentence of Article 25 (1) of the Act means the amount classified as follows:
1. Where Article 6 of the Act is violated: The value of the goods or services an agency is compelled to purchase;
2. Where Article 7 of the Act is violated: The sum of money; value of goods; services; or other economic benefits that an agency is compelled to provide;
3. The disadvantages imposed on an agency in violation of Article 9 of the Act, the amount of which is classified as follows:
(a) Conduct referred to in subparagraph 5 of Article 6: The amount of sales incentives reduced or unpaid;
(b) Conduct referred to in subparagraph 7 of Article 6: The value of the goods which the supplier has refused to accept the return thereof;
(c) Conduct referred to in subparagraph 8 of Article 6: The expenses for return required to be borne by on an agency;
4. Any other violation of the Act, the amount involved in which can be calculated: The amount calculated.
(2) The criteria for imposition of penalty surcharges under Article 25 (1) of the Act shall be as specified in attached Table 1.
(3) Except as otherwise provided for in this Decree, detailed criteria necessary for the imposition of penalty surcharges shall be determined and publicly notified by the Fair Trade Commission.
CHAPTER V PENALTY PROVISIONS
 Article 20 (Criteria for Imposition of Administrative Fines)
The criteria for imposition of administrative fines under Article 32 (1) through (3) of the Act shall be as specified in attached Table 2.
ADDENDUM
This Decree shall enter into force on December 23, 2016.