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ENFORCEMENT DECREE OF THE MOBILE DEVICE DISTRIBUTION IMPROVEMENT ACT

Presidential Decree No. 28210, Jul. 26, 2017

Amended by Presidential Decree No. 28282, Sep. 5, 2017

 Article 1 (Purpose)
The purpose of this Decree is to prescribe matters delegated by the Mobile Device Distribution Improvement Act and matters necessary for the enforcement thereof.
 Article 2 (Scope of Related Parties)
"Person having special relationship prescribed by Presidential Decree" in subparagraph 8 of Article 2 of the Mobile Device Distribution Improvement Act (hereinafter referred to as the "Act") means an affiliated company defined in subparagraph 3 of Article 2 of the Monopoly Regulation and Fair Trade Act (hereinafter referred to as "related party").
 Article 3 (Types of and Criteria for Unreasonably Discriminative Subsidy Payment)
Cases of payment of unreasonably discriminative subsidy referred to in Article 3 (1) of the Act means where a subsidy is paid or proposed to be paid differently case by case during the same period of public announcement made under Article 4 (3) of the Act for the same type of mobile communications terminal devices: Provided, That any of the following cases shall be excluded herefrom: <Amended by Presidential Decree No. 28210, Jul. 26, 2017>
1. Where a subsidy is paid in accordance with the payment standard of rate system by mobile communications services publicly announced by the Minister of Science and ICT, based upon the expected earnings by rate system, changes in market environment, etc., following consultation with the Korea Communication Commission;
2. Where a subsidy is paid under Article 4 (5) of the Act;
3. Where a subsidy is paid under any other Act.
 Article 4 (Standards, etc. for Emergency Order for Suspension)
(1) Pursuant to Article 11 (1) of the Act, the Korea Communications Commission may issue an order to suspend the relevant offense or issue an order necessary to suspend an offense, such as the restriction on transferring a phone number, new subscription, or replacement of a terminal device, within a fixed period not exceeding 30 days based on the level of subsidy or incentive payment, market environment including the status of switching a phone number, scale of damage of users, etc.
(2) A person who is dissatisfied with an order issued under Article 11 (1) of the Act shall file an appeal with the Korea Communications Commission by stating the matters to be objected, and details of and the grounds for raising an objection, and appending thereto materials substantiating the contents of and grounds for filing an appeal.
(3) Except as otherwise expressly prescribed in paragraphs (1) and (2), detailed matters concerning the procedures for issuance of an order, and the procedures, methods, etc. of raising an objection, shall be determined and publicly announced by the Korea Communications Commission.
 Article 5 (Submission and Keeping of Data)
(1) Pursuant to Article 12 (1) of the Act, a mobile communications business operator (including a related party; hereafter the same shall apply in this Article) shall submit the following data monthly, respectively, to the Minister of Science and ICT and the Korea Communications Commission within 45 days after the end of each month: <Amended by Presidential Decree No. 28210, Jul. 26, 2017>
1. Sales quantity and sales amount of, and incentive for, each mobile communications terminal device classified by mobile communications service;
2. Ex-factory price of each mobile communications terminal device;
3. Scale of the subsidy paid to agents or sales stores (referring to that prepared by classifying it into financial resources and recipients);
4. Data publicly announced under Article 4 (3) of the Act.
(2) Pursuant to Article 12 (2) of the Act, a mobile communications terminal device manufacturer shall submit the following data monthly, respectively, to the Minister of Science and ICT and the Korea Communications Commission within 45 days after each month: <Amended by Presidential Decree No. 28210, Jul. 26, 2017>
1. Scale of incentive directly paid to agents or sales stores (referring to that prepared by classifying it into recipients);
2. Ex-factory price of each mobile communications terminal device that a user purchases without going through a mobile communications business operator.
(3) A mobile communications business operator and a mobile communications terminal device manufacturer shall keep the data submitted under paragraphs (1) and (2) for three years from the date it is submitted.
(4) Preparation forms of monthly data under paragraphs (1) and (2), the methods of submitting them, and other necessary matters shall be determined and publicly announced by the Minister of Science and ICT following consultation with the Korea Communications Commission. <Amended by Presidential Decree No. 28210, Jul. 26, 2017>
 Article 6 (Report, etc. on Offenses)
(1) Where a mobile communications business operator is deemed to have committed any offense against Article 6 (1) or 7 (1) of the Act, any person may report such offense to the Minister of Science and ICT. <Amended by Presidential Decree No. 28210, Jul. 26, 2017>
(2) Where a mobile communications business operator (including a related party), an agent, sales store, or mobile communications terminal device manufacturer is deemed to have committed any offense against Article 3 (1), 4 (2) through (6), 5 (1), 7 (2) or (3), 8 (3) or (4), or 9 (2) or (3) of the Act, any person may report such fact to the Korea Communications Commission.
(3) A person who intends to file a report under paragraph (1) or (2) shall submit a document stating the following matters:
1. Name (in cases of a corporation, the corporate name and the representative's name) and address of the reporter;
2. The trade name and name (in cases of a corporation, the corporate name and the representative's name) of the person being reported;
3. Details of the offense.
(4) Where any supplementation of a reporting document received under paragraph (3) is deemed necessary, the Minister of Science and ICT or the Korea Communications Commission may request the reporter to supplement it within a fixed period sufficient for the supplementation. <Amended by Presidential Decree No. 28210, Jul. 26, 2017>
(5) Except as prescribed in paragraphs (1) through (4), matters necessary for the procedures, etc. for processing the reports shall be respectively determined and publicly announced by the Minister of Science and ICT or the Korea Communications Commission. <Amended by Presidential Decree No. 28210, Jul. 26, 2017>
 Article 7 (Methods of Publishing Receipt of Corrective Orders)
In ordering publication of the receipt of a corrective order under Article 14 (2) 5 of the Act, the Korea Communications Commission shall determine and state the details, method, etc. of publication in consideration of the following:
1. Details and seriousness of the violation;
2. Period and instances of the violation.
 Article 8 (Corrective Orders, etc.)
(1) "Matters prescribed by Presidential Decree" in Article 14 (2) 8 of the Act means any of the following:
1. Submission of an implementation plan to implement the measures referred to in Article 14 (2) 1 through 7 of the Act;
2. Report on the results of implementation of the measures referred to in Article 14 (2) 1 through 7 of the Act.
(2) "Period prescribed by Presidential Decree" in the main sentence of Article 14 (3) of the Act means the period specified in attached Table 1.
 Article 9 (Methods of Computing Penalty Surcharges)
(1) "Sales amount prescribed by Presidential Decree" in the main sentence of Article 15 (1) of the Act means the sales amount classified as follows: Provided, That where three years have not passed since the commencement of the current business as at the first day of the relevant business year, it refers to the amount obtained by converting the sales amount accrued from the commencement of the relevant business to the end of the immediately preceding business year, into an annual average sales amount; where the business is commenced in the relevant business year, it refers to the amount obtained by converting the sales amount accrued from the commencement date of the business to the date the offense was committed into an annual sales amount:
1. In cases of a mobile communications business operator (including a related party): Average annual sales amount of telecommunication services related to the offense for three immediately preceding business years;
2. In cases of a mobile communications terminal device manufacturer: Average annual domestic sales amount of mobile communications terminal devices related to the offense, for the three immediately preceding business years.
(2) "Cases prescribed by Presidential Decree" in the proviso to Article 15 (1) of the Act means any of the following:
1. Where no business is commenced, or where there is no business performance due to suspension, etc. of business;
2. Other cases where it is impracticable to compute an objective sales amount.
 Article 10 (Criteria for Imposition, etc. of Penalty Surcharges)
The upper limit of the imposition of a penalty surcharge by type of offense subject to the imposition of penalty surcharge under Article 15 (1) and (2) of the Act and the criteria for calculation thereof shall be as specified in attached Table 2.
 Article 11 (Imposition and Payment of Penalty Surcharges)
(1) When the Korea Communications Commission intends to impose a penalty surcharge under Article 15 of the Act, it shall specify the type of offense, the amount of the relevant penalty surcharge, and the method, period, etc. for raising objections to give a written notice to a person subject to the penalty surcharge requiring him/her to pay it. <Amended by Presidential Decree No. 28282, Sep. 5, 2017>
(2) A person in receipt of a notice under paragraph (1) shall pay the penalty surcharge to a collecting agency designated by the Korea Communications Commission within 20 days from the date of receiving the notice: Provided, That where he/she is unable to pay the penalty surcharge within such period due to a natural disaster or any other extenuating circumstance, he/she shall pay it within seven days from the date on which such circumstance ceases to exist.
(3) A collecting agency in receipt of a penalty surcharge under paragraph (2) shall issue a receipt to a person who has paid the penalty surcharge.
 Article 12 (Demanding)
(1) Demands issued pursuant to Article 15 (5) of the Act shall be made in writing within seven days after the lapse of the deadline for payment.
(2) In issuing a written demand under paragraph (1), the deadline for payment of a delinquent penalty surcharge shall not exceed 10 days from the date of issuance.
 Article 13 (Extension of Deadlines for Payment of Penalty Surcharges and Installment Payment thereof)
(1) A person who intends to extend the deadline for payment of a penalty surcharge or pay it in installments pursuant to Article 16 (1) of the Act shall file an application therefor with the Korea Communications Commission, appending the documents substantiating the grounds for extension of the deadline for payment and the installment payment, by not later than 10 days prior to the payment deadline.
(2) "Amount prescribed by Presidential Decree" in the former part of the part other than the subparagraphs of Article 16 (1) of the Act means an amount obtained by
multiplying the sales amount referred to in Article 9 by 1/100, or 300 billion won.
(3) No extended deadline for payment of a penalty surcharge under Article 16 (1) of the Act shall exceed one year from the day following the payment deadline.
(4) In making installment payments under Article 16 (1) of the Act, no interval between each deadline for installment payment shall exceed four months, and the number of installments shall not exceed three times.
(5) Where a person who is liable to pay a penalty surcharge granted an extended payment deadline or installment payment of which is granted under Article 16 (1) of the Act falls under any of the following cases, the Korea Communications Commission may revoke the extension of the deadline for payment or approval for installment payment, and collect it in lump sum:
1. Where he/she fails to pay the penalty surcharge decided to be paid in installments by the deadline for payment;
2. Where he/she fails to comply with an order of the Korea Communications Commission necessary for the change of security or other perpetuation of security;
3. Where it is deemed impossible to collect all or remaining portion of the penalty surcharge due to such reasons as compulsory execution, commencement of an auction, adjudication of bankruptcy, dissolution of the corporation, or disposition for arrears of a national tax or local tax, etc.
 Article 14 (Types, Assessment, etc. of Security)
 Article 15 (Delegation and Entrustment of Authority)
(1) The Minister of Science and ICT shall delegate all of the following authority to the Director General of the Central Radio Management Service pursuant to Article 19 of the Act: Provided, That the excluded herefrom, shall be the following authority over common telecommunications business operators referred to in Article 6 of the Telecommunications Business Act: <Amended by Presidential Decree No. 28210, Jul. 26, 2017>
1. Corrective orders issued under Article 14 (1) of the Act;
2. Imposition and collection of administrative fines under Article 22 (5) of the Act.
(2) Pursuant to Article 10 (3) of the Act, the Minister of Science and ICT shall entrust the affairs related to the verification of lost or stolen mobile communications terminal devices under Article 10 (2) of the Act to the Korea Association for ICT Promotion established under Article 15 of the Framework Act on Broadcasting Communications Development. <Amended by Presidential Decree No. 28210, Jul. 26, 2017>
 Article 16 (Reexamination of Regulations)
(1) The Minister of Science and ICT and the Korea Communications Commission shall mutually consult and examine the appropriateness of the standards for payment of discriminative incentives under Article 3 every year counting from January 1, 2015 (referring to before every anniversary from January 1), and shall take improvement measures, etc. <Amended by Presidential Decree No. 28210, Jul. 26, 2017>
(2) The Korea Communications Commission shall examine the appropriateness of orders necessary for suspension of any offense under Article 4 (1) every year from January 1, 2015 (referring to before every anniversary from January 1), and shall take improvement measures, etc.
(3) The Korea Communications Commission shall examine the appropriateness of the upper limit for the imposition of a penalty surcharge by type of offense and the calculation standard thereof under Article 10 and attached Table 2 every three years counting from January 1, 2015 (referring to before every third anniversary from January 1), and shall take improvement measures, etc.
 Article 17 (Criteria for Imposition of Administrative Fines)
The criteria for imposition of administrative fines under Article 22 (1) through (4) of the Act shall be as specified in attached Table 3.
ADDENDUM
This Decree shall enter into force on October 1, 2014.
ADDENDA <Presidential Decree No. 28210, Jul. 26, 2017>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 6 Omitted.
ADDENDA <Presidential Decree No. 28282, Sep. 5, 2017>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability to Calculation of Penalty Surcharges)
The amended provisions of attached Table 2 shall also apply to the calculation of penalty surcharges against violations committed before this Decree enters into force.