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FAIR TRANSACTIONS IN SUBCONTRACTING ACT

Act No. 3779, Dec. 31, 1984

Amended by Act No. 4198, Jan. 13, 1990

Act No. 4419, Dec. 14, 1991

Act No. 4514, Dec. 8, 1992

Act No. 4898, Jan. 5, 1995

Act No. 4860, Jan. 5, 1995

Act No. 5234, Dec. 30, 1996

Act No. 5386, Aug. 28, 1997

Act No. 5454, Dec. 13, 1997

Act No. 5507, Jan. 13, 1998

Act No. 5816, Feb. 5, 1999

Act No. 5756, Feb. 5, 1999

Act No. 6198, Jan. 21, 2000

Act No. 6893, May 29, 2003

Act No. 7107, Jan. 20, 2004

Act No. 7315, Dec. 31, 2004

Act No. 7488, Mar. 31, 2005

Act No. 7864, Mar. 3, 2006

Act No. 8539, Jul. 19, 2007

Act No. 9085, Mar. 28, 2008

Act No. 9616, Apr. 1, 2009

Act No. 9971, Jan. 25, 2010

Act No. 10250, Apr. 12, 2010

Act No. 10303, May 17, 2010

Act No. 10475, Mar. 29, 2011

Act No. 10719, May 24, 2011

Act No. 11461, jun. 1, 2012

Act No. 11842, May 28, 2013

Act No. 11938, Jul. 16, 2013

Act No. 12097, Aug. 13, 2013

Act No. 12709, May 28, 2014

Act No. 13451, Jul. 24, 2015

Act No. 14143, Mar. 29, 2016

Act No. 14456, Dec. 20, 2016

Act No. 14814, Apr. 18, 2017

Act No. 14839, Jul. 26, 2017

Act No. 15016, Oct. 31, 2017

Act No. 15362, Jan. 16, 2018

 Article 1 (Purpose)
The purpose of this Act is to contribute to the sound development of the national economy by establishing a fair order in subcontract transactions so that the prime contractor and subcontractor may complement each other and develop balance on equal terms.
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 2 (Definitions)
(1) Where a prime contractor entrusts a subcontractor with such tasks as manufacturing (including processing; hereinafter the same shall apply), repair, construction, or service or where a prime contractor, who is entrusted with such tasks (hereinafter referred to as “manufacturing, etc.”) by another business entity, re-entrusts a subcontractor with what he/she has been entrusted, such acts of a subcontractor as manufacturing, repairing, constructing, or providing service of what has been entrusted (hereinafter referred to as “subject matter, etc.") and delivering, transferring, or providing (hereinafter referred to as "delivery, etc.") the subject matter to a prime contractor and receiving a consideration in return (hereinafter referred to as "subcontract consideration"), shall be called "subcontract transactions."
(2) The term "prime contractor" in this Act means a person falling under any of the following subparagraphs: <Amended by Act No. 10475, Mar. 29, 2011; Act No. 12709, May. 28, 2014; Act No. 13451, Jul. 24, 2015>
1. A business entity, other than small and medium business entrepreneurs (referring to those specified in Article 2 (1) or (3) of the Framework Act on Small and Medium Enterprises, including small and medium enterprise cooperatives under the Small and Medium Enterprise Cooperatives Act; hereafter the same shall apply), who entrusts small or medium business entrepreneurs with manufacturing, etc.;
2. A small and medium business entrepreneur whose annual sales in the immediately preceding business year [referring to the total sum of the assessed amount of construction capability published (referring to the most recently published total sum thereof) as at the time a subcontract is concluded in cases of a transaction in which the assessed amount of construction capacity shall apply as prescribed in related Acts, and referring to the total amount of assets in cases of an absence of the annual sales or the assessed amount of construction capability; hereafter the same shall apply in this subparagraph] is more than the annual sales of the other small or medium business entrepreneur who is entrusted with manufacturing, etc., by the former small or medium business entrepreneur: Provided, That the foregoing shall not apply to a small or medium business entrepreneur whose annual sales are equal to the amount prescribed by Presidential Decree.
(3) The term "subcontractor" in this Act means a small or medium business entrepreneur who is entrusted with manufacturing, etc. by a prime contractor under the subparagraphs of paragraph (2).
(4) Where a business entity entrusts an affiliate company prescribed in subparagraph 3 of Article 2 of the Monopoly Regulation and Fair Trade Act with manufacturing, etc., and the affiliate company re-entrusts a third person with whole or considerable part of manufacturing, repair, construction, or performance of service that have been entrusted, and where the third party falls under paragraph (3) if he/she is deemed to have been entrusted with manufacturing, etc. directly from the business entity who has entrusted an affiliate company, even though the affiliate company does not fall under any of the subparagraphs of paragraph (2), the affiliate company and the third person shall be deemed a prime contractor and a subcontractor under this Act, respectively.
(5) Where a member company of a business group subject to limitations on cross shareholding under Article 9 (1) of the Monopoly Regulation and Fair Trade Act entrusts or is entrusted with manufacturing, etc., it shall be governed by the following subparagraphs:
1. Even though the company which entrusts manufacturing, etc. does not fall under any of the subparagraphs of paragraph (2), it shall be deemed a prime contractor under this Act;
2. Even though the company entrusted with manufacturing, etc., falls under paragraph (3), it shall not be deemed a subcontractor under this Act.
(6) The term "entrustment with manufacturing" in this Act means entrustment, by a business entity engaged in a business falling under any of the following subparagraphs, of manufacturing of goods from such business to another business entity. In such cases, the scope of goods resulting from such business shall be determined and publicly notified by the Fair Trade Commission:
1. Manufacturing of goods;
2. Sale of goods;
3. Repair of goods;
4. Construction.
(7) Paragraph (6) shall apply to the goods prescribed by Presidential Decree, limited to regions prescribed by Presidential Decree, including a Special Metropolitan City and Metropolitan City, notwithstanding paragraph (6).
(8) The term "entrustment with repair" in this Act means entrustment, by a business entity engaged in the business of repairing goods upon receipt of an order or the business of repairing goods that he/she is using, of all or part of his/her repair activities to another business entity.
(9) The term "entrustment with construction" in this Act means entrustment, by a business entity falling under any of the following subparagraphs (hereinafter referred to as “constructor”), of all or part of construction work from his/her business to another business entity, or entrustment, by a constructor, of the construction work prescribed by Presidential Decree to another business entity: <Amended by Act No. 10719, May 24, 2011>
1. A constructor under subparagraph 7 of Article 2 of the Framework Act on the Construction Industry;
2. A constructor under subparagraph 3 of Article 2 of the Electrical Construction Business Act;
3. An information and communications construction business entity under subparagraph 4 of Article 2 of the Information and Communications Construction Business Act;
4. A person who has obtained a registration of fire-fighting system installation business pursuant to Article 4 (1) of the Fire-Fighting System Installation Business Act;
5. Other business entities prescribed by Presidential Decree.
(10) The term "person placing an order" in this Act means a person who gives a contract for manufacturing, repair, construction, or service to a prime contractor: Provided, That in cases of re-subcontract, it means a prime contractor.
(11) The term "entrustment with service" in this Act means that a business entity (hereinafter referred to as "service provider") which engages in the business of preparing knowledge and information-related products or of supplying labor (hereinafter referred to as "service") entrusts all or part of performance of the service to another service provider.
(12) The term "knowledge and information-related products" in this Act means those falling under any of the following subparagraphs: <Amended by Act No. 10250, Apr. 12, 2010>
1. Information programs (referring to software under subparagraph 1 of Article 2 of the Software Industry Promotion Act, and those which are a combination of a series of instructions and commands embedded in a device having information processing capability, such as computer and electronic calculator, in order to obtain specific results);
2. Results comprised of movies, broadcasting programs and other images, voices or sounds;
3. Results comprised of a combination of characters, diagrams, and signs or of a combination of the foregoing and colors (including drawings under subparagraph 3 of Article 2 of the Certified Architects Act and drawings from among the engineering works under subparagraph 1 of Article 2 of the Engineering Industry Promotion Act);
4. Others corresponding to subparagraphs 1 through 3, determined and publicly notified by the Fair Trade Commission.
(13) The term "labor" in this Act means an activity corresponding to any of the following subparagraphs: <Amended by Act No. 10250, Apr. 12, 2010>
1. Engineering works (excluding design) under subparagraph 1 of Article 2 of the Engineering Industry Promotion Act;
2. Transporting cargo by making use of trucks or intermediating cargo, as prescribed by the Trucking Transport Business Act;
3. Maintaining and managing buildings, as prescribed by the Building Act;
4. Preventing danger, etc. to facilities, places, goods, etc. or preventing harm to the life and body of people and protecting them from danger, as prescribed by the Security Services Industry Act;
5. Other activities of providing labor to carry through the business entrusted by a prime contractor, which have been determined and publicly notified by the Fair Trade Commission.
(14) The term "means of payment in place of a bill" in this Act refers to the means of payment that is used in substitution for a bill when a prime contractor pays subcontract consideration, which falls under any of the following subparagraphs:
1. Exclusive-use card for business purchases: Credit card or debit card that a credit card company under the Specialized Credit Financial Business Act issues to a prime contractor for the payment of subcontract consideration, which is not usable at general credit card member stores, but is issued for the sole purpose of payment of subcontract consideration to the relevant subcontractor according to a contract among the prime contractor, subcontractor, and credit card company;
2. Loan against security of credit sales claims: Where a subcontractor lends money from a financial institution by offering the claims on credit sales to the prime contractor as security in order to receive subcontract consideration, and the prime contractor redeems the loan of the subcontractor from the financial institution with the subcontract consideration, in which case money is lent according to the terms and conditions determined by the Governor of the Bank of Korea;
3. Purchase loan: Where a prime contractor makes a contract of credit line with a financial institution and lends money therefrom, pays subcontract consideration to the subcontractor by means of information processing system, and redeems the loan to the financial institution on the due date;
4. Other means of payment used in place of a bill in the payment of subcontract consideration, which are determined and publicly notified by the Fair Trade Commission.
(15) The term "technical data" in this Act means data on the methods of manufacture, repair, construction, or delivery of service, that are kept confidential with reasonable efforts, and other data prescribed by Presidential Decree which are useful for business activities and have independent economic value. <Newly Inserted by Act No. 9971, Jan. 25, 2010; Act No. 15362, Jan. 16, 2018>
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 3 (Issuance and Retention of Documents)
(1) Where a prime contractor entrusts any manufacturing, etc., to a subcontractor and where a prime contractor, after having entrusted any manufacturing, etc., either entrusts other manufacturing, etc. which is not included in the content of a relevant contract, or makes an entrustment to change the content of the relevant agreement (hereafter the above-mentioned both types of entrustment shall be referred to as “the additional/changed entrustment” in this paragraph), the prime contractor shall issue the subcontractor a document specifying the matters referred to in paragraph (2) (including an electronic document under subparagraph 1 of Article 2 of the Framework Act on Electronic Documents and Transactions: hereafter the same shall apply in this Article) within the time-limit classified in the following subparagraphs: <Amended by Act No. 14143, Mar. 29, 2016>
1. Where the manufacturing is entrusted: Before the subcontractor commences any work for delivery of goods on the basis of the entrustment with manufacturing, etc. and the additional/changed entrustment;
2. Where the repair is entrusted: Before the subcontractor commences the act of the repair on the basis of the entrustment with manufacturing, etc. and the additional/ changed entrustment;
3. Where the construction is entrusted: Before the subcontractor commences the contracted construction work on the basis of the entrustment with manufacturing, etc. and the additional/changed entrustment;
4. Where the service is entrusted: Before the subcontractor commences the act of performing the service on the basis of the entrustment with manufacturing, etc. and the additional/changed entrustment.
(2) The document in paragraph (1) shall include the details of the subcontract, such as subcontract consideration and the method of the payment thereof, and the matters prescribed by Presidential Decree, such as the conditions, methods, procedures, etc. for adjusting the subcontract consideration when there is fluctuation in the supply costs of subject matters, etc. prescribed in Article 16-2 (1), and the prime contractor and subcontractor shall affix signature (including certified digital signature under subparagraph 3 of Article 2 of the Digital Signature Act; hereafter the same shall apply in this Article) or put name and seal thereon. <Amended by Act No. 9971, Jan. 25, 2010; Act No. 15362, Jan. 16, 2018>
(3) Notwithstanding paragraph (2), the prime contractor may issue a document without stating relevant details on the matters that are difficult to determine as at the time of entrustment, if justifiable causes exist, such as conducting emergency repair work due to a disaster or accident. In such cases, he/she shall state in the document the reason the relevant details have not been determined and the expected date on which such details are to be determined. <Newly Inserted by Act No. 9971, Jan. 25, 2010>
(4) Where a prime contractor issues a document without stating some details pursuant to paragraph (3), he/she shall issue, without delay, a new document stating the relevant details as soon as such details are determined. <Newly Inserted by Act No. 9971, Jan. 25, 2010>
(5) Where a prime contractor fails to issue a document stating matters referred to in paragraph (2) (including a document that does not contain some details pursuant to paragraph (3)) in entrusting manufacturing, etc., a subcontractor may request the prime contractor to verify the details of subcontract by notifying, in writing, him/her of the matters prescribed by Presidential Decree such as the details of subcontract, subcontract consideration and other relevant matters. <Newly Inserted by Act No. 9971, Jan. 25, 2010>
(6) A prime contractor shall send a written reply expressing whether he/she accepts or denies the details to a subcontractor within 15 days from the date he/she is notified thereof pursuant to paragraph (5), and if the prime contractor fails to send his/her reply within the said period, it is presumed that entrustment is made as notified by the subcontractor: Provided, That this shall not apply if it is impossible to send such a reply due to a natural disaster or other accidents. <Newly Inserted by Act No. 9971, Jan. 25, 2010>
(7) The notification under paragraph (5) and a reply thereto under paragraph (6) shall be signed and sealed respectively by the subcontractor and the prime contractor. <Newly Inserted by Act No. 9971, Jan. 25, 2010>
(8) Necessary matters concerning the notification under paragraph (5) and a reply thereto under paragraph (6) shall be prescribed by Presidential Decree. <Newly Inserted by Act No. 9971, Jan. 25, 2010>
(9) A prime contractor and a subcontractor shall retain documents concerning subcontract transactions, as prescribed by Presidential Decree. <Amended by Act No. 9971, Jan. 25, 2010>
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 3-2 (Preparation and Use of Standard Form Subcontract)
The Fair Trade Commission may recommend the preparation and use of standard form subcontract to business entities or business associations to which this Act applies.
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 3-3 (Entering into Agreements by Prime Contractor and Subcontractor)
(1) The Fair Trade Commission may recommend that a prime contractor and a subcontractor enter into an agreement stipulating that they comply with subcontract-related statutes and provide each other with mutual support and cooperation.
(2) To encourage a prime contractor and a subcontractor to fulfill an agreement when they enter into such an agreement pursuant to paragraph (1), the Fair Trade Commission shall establish and implement supporting measures, such as monetary rewards.
(3) The Fair Trade Commission shall stipulate necessary matters for the details of agreements under paragraph (1), procedures for entering into such agreements, evaluation of performance, supporting measures, etc.
[This Article Newly Inserted by Amended by Act No. 10475, Mar. 29, 2011]
 Article 3-4 (Prohibition against Unfair Special Agreements)
(1) No prime contractor shall attach terms and conditions that unfairly violate or restrict a subcontractor’s interests to a contract (hereinafter referred to as “unfair special agreement”).
(2) Any of the following agreements shall be deemed an unfair special agreement:
1. An agreement under which a prime contractor requires a subcontractor to bear expenses incurred when a prime contractor requires the subcontractor to do works not stated in a document prescribed in Article 3 (1);
2. An agreement under which a prime contractor requires a subcontractor to bear expenses incurred in relation to the settlement of civil complaints, industrial accidents, etc.;
3. An agreement under which a prime contractor requires a subcontractor to bear expenses incurred when a prime contractor requires the subcontractor to perform works not specified in the relevant tender documents;
4. Agreements specified by Presidential Decree, such as an agreement that restricts a subcontractor’s interests, which shall be protected by this Act, or that shifts an obligation imposed upon a prime contractor to a subcontractor.
[This Article Newly Inserted by Act No. 12097, Aug. 13, 2013]
 Article 4 (Prohibition against Fixing Unreasonable Subcontract Consideration)
(1) When a prime contractor entrusts a subcontractor with manufacturing, etc., he/she shall not fix an unreasonable consideration for a subcontract at a price lower than the consideration ordinarily paid for a subject matter identical with or similar to the subject matter of the subcontract (hereinafter referred to as "fixing unreasonable subcontract consideration") or compel the subcontractor to accept such subcontract. <Amended by Act No. 11842, May 28, 2013>
(2) Any of the following acts conducted by a prime contractor shall be deemed fixing unreasonable subcontract consideration: <Amended by Act No. 11842, May 28, 2013>
1. Fixing subcontract consideration by indiscriminately reducing the unit price without any justifiable reasons;
2. Fixing subcontract consideration by deducting an amount after allotting unilaterally such amount under some pretext, such as a request for cooperation, etc.;
3. Fixing subcontract consideration by discriminating against a specific subcontractor without any justifiable reasons;
4. Fixing subcontract consideration by causing a subcontractor to make an error regarding the terms and conditions of a transaction, such as order quantity, etc., or by deceiving a subcontractor in such a way as to show him/her the quotations of another business entity or false quotations to take advantage of it;
5. Fixing subcontract consideration unilaterally by a prime contractor at a low price;
6. Fixing subcontract consideration at a price lower than the total amount of direct construction expenses prescribed by Presidential Decree without any justifiable reasons when a private subcontract is concluded;
7. Fixing subcontract consideration at a price lower than the lowest tender price without any justifiable reasons in concluding a subcontract through competitive bidding;
8. Fixing subcontract consideration unfavorable to a subcontractor for a subcontract on continuing transactions on the pretext of an event for which no subcontractor shall be held liable, such as a prime contractor’s deficit in business or the fall of sale prices.
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 5 (Prohibition of Compelling Purchase of Goods, etc.)
In entrusting a subcontractor with manufacturing, etc, a prime contractor shall not compel the subcontractor, except with justifiable reasons, such as the maintenance, improvement, etc. of the quality of the subject matter, etc., to purchase or use (including utilization; hereinafter the same shall apply) any goods, equipment, supply of labor, etc. designated by him/her.
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 6 (Payment in Advance)
(1) Where a prime contractor who has entrusted a subcontractor with manufacturing, etc., receives advance payment from the person placing an order, he/she shall pay an advance to the subcontractor within 15 days after he/she received it (the day on which the prime contractor entrusted manufacturing, etc., if he/she had received it before he/she entrusted manufacturing, etc.) so that he/she may undertake manufacturing, repair, or construction, or service performance in accordance with the contents and ratio of the advance.
(2) Where a prime contractor pays an advance received from the person placing an order after the deadline under paragraph (1), he/she shall pay interest calculated by the interest rate determined and publicly notified by the Fair Trade Commission in consideration of economic circumstances, such as late-payment interest rates, applied by banks under the Banking Act, which is within 40/100 per annum for the period that has passed. <Amended by Act No. 10303, May 17, 2010>
(3) Article 13 (6), (7), (9), and (10) shall apply mutatis mutandis to bill discount charge, payment of fees, bill discount rate, and rate of fees where advance payment is made by bill or means of payment in place of a bill. In such cases, "60 days from the date of receipt of such subject matter, etc. have been received" shall be deemed "15 days from the date the prime contractor received advance payment from the person placing an order".
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 7 (Opening Local Letters of Credit)
(1) Where a prime contractor entrusts a subcontractor with manufacturing or service of the goods for export, he/she shall open a local letter of credit in favor of the subcontractor, within 15 days from the date of the entrustment, unless any justifiable reason exists to the contrary: Provided, That where a prime contractor entrusts manufacturing or service before he/she receives an original letter of credit in cases of export by letter of credit, he/she shall open a local letter of credit within 15 days after he/she received an original letter of credit.
(2) Where the prime contractor entrusts a subcontractor with manufacturing goods for export or providing service for export and complies with each of the following requirements, he/she shall issue the subcontractor a written confirmation purchase either in advance or ex post facto: <Newly Inserted by Act No. 15016, Oct. 31, 2017>
1. Where the prime contractor has difficulty in issuing a local letter of credit due to any justifiable cause, such as an insufficient credit limit;
2. Where the subcontractor requests to issue a written confirmation of purchase.
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 8 (Prohibition of Unreasonable Cancelation of Entrustment)
(1) No prime contractor shall perform an act falling under any of the following subparagraphs, unless any reason attributable to the subcontractor exists after entrusting the subcontractor with manufacturing, etc.: Provided, That where the supply of labor among the entrustment of service is entrusted, subparagraph 2 shall not apply:
1. Arbitrarily cancelling or altering the entrustment with manufacturing, etc.;
2. Refusing or delaying the receipt or takeover of the delivered, etc. subject matter, etc.
(2) Where the subject matter, etc. are delivered, etc, the prime contractor shall immediately issue a certificate of receipt to the subcontractor (immediately after the completion of inspection in cases of opening a local letter of credit pursuant to Article 7) even before an inspection except for cases of entrustment of supply of labor: Provided, That for entrustment with construction, he/she shall take over the object immediately after the inspection is completed.
(3) "Receipt" in paragraph (1) 2 means that the prime contractor places the subject matter, etc. under actual control, which have been delivered by the subcontractor: Provided, That where it is difficult to move the subject matter, etc., the time when the inspection commences shall be deemed the time of receipt.
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 9 (Criteria, Method and Time of Inspection)
(1) The criteria for and method of inspection of the subject matter, etc. delivered by the subcontractor shall be determined objectively, impartially, and reasonably by mutual agreement between the prime contractor and the subcontractor.
(2) Unless any justifiable reason exists to the contrary, the prime contractor shall notify the subcontractor of the result of inspection into the subject matter, etc. in writing within ten days from the date he/she received such subject matter, etc. (in cases of entrustment with manufacturing, it includes the date when the portion of manufacturing works performed was notified, and in cases of entrustment with construction, it refers to the date when the subcontractor notified the completion of construction works, or the portion of construction works completed). In the absence of such notification within the prescribed period, the subject matter, etc. shall be deemed to have passed the inspection: Provided, That where the supply of labor among entrustment with service is entrusted, the same shall not apply.
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 10 (Prohibition of Unreasonable Return of Goods)
(1) When a prime contractor has been supplied, etc. with the subject matter, etc. from a subcontractor, he/she shall not return them to the subcontractor, unless any reason attributable to the subcontractor exists (hereinafter referred to as "unreasonable return"): Provided, That where the supply of labor among entrustment with service is entrusted, the same shall not apply.
(2) Any act of the prime contractor which falls under any of the following subparagraphs shall be deemed unreasonable return:
1. Returning the subject matter, etc. by reason of cancellation of order from the other party to the transaction, or any change in economic circumstances, etc.;
2. Returning the subject matter, etc. by vaguely determining the criteria and method of inspection, and thereby judging unjustly that the subject matter, etc. failed to pass inspection;
3. Returning the subject matter, etc. although they have been judged to have failed to pass inspection due to the inferior quality of the raw materials supplied by the prime contractor;
4. Returning the subject matter, etc. by reason of delay in the supply, although it is caused by delay in the supply of raw materials by the prime contractor.
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 11 (Prohibition against Reduction)
(1) No prime contractor shall reduce the subcontract consideration fixed at the time of the entrustment of manufacturing, etc.: Provided, That a prime contract may reduce the subcontract consideration if he/she proves any justifiable cause to do so. <Amended by Act No. 10475, Mar. 29, 2011>
(2) Any of the following acts conducted by a prime contractor shall not be deemed an act with a justifiable ground: <Amended by Act No. 10475, Mar. 29, 2011; Act No. 11842, May 28, 2013>
1. Reducing subcontract consideration by citing unreasonable grounds, such as requests for cooperation, cancellation of an order by the other party to the transaction, change in economic circumstances, etc., after giving entrustment, in which the conditions, etc. for reduction in the subcontract consideration have not been specified at the time of giving entrustment;
2. Reducing subcontract consideration by applying the terms and conditions of a new agreement retroactively even to a portion already entrusted before the agreement, where the agreement is concluded with a subcontractor with regard to reduction of a unit price;
3. Reducing subcontract consideration excessively on the pretext that subcontract consideration is paid in cash or earlier than the due date for payment;
4. Reducing subcontract consideration by reason of a fault on the part of a subcontractor, which does not cause any substantial loss to a prime contractor;
5. Deducting an amount not less than the proper purchase price or proper rent from the subcontract consideration, where a prime contractor has had a subcontractor purchase from him/her the goods, etc. necessary for the manufacturing, repair, construction or service performance of the subject matter, etc. or use his/her equipment, etc.;
6. Reducing subcontract consideration on the grounds that the price of commodities or the price of materials, etc. at the time of payment of subcontract consideration has fallen compared with the price at the time of supply, etc.;
7. Reducing subcontract consideration unfairly for unreasonable reasons, such as loss from operations or reduced sale price, etc.;
8. Imposing on a subcontractor employment insurance premium, industrial safety and health management expenses, other expenses, etc., which should be borne by a prime contractor under the Act on the Collection of Insurance Premiums, etc. for Employment Insurance and Industrial Accident Compensation Insurance, the Occupational Safety and Health Act;
9. Other acts prescribed by Presidential Decree as equivalent to those referred to in subparagraphs 1 through 8.
(3) Where a prime contactor reduces the subcontract consideration pursuant to the proviso to paragraph (1), he/she shall, in advance, provide the relevant subcontractor with a document stating matters prescribed by Presidential Decree such as the reasons and standards for reduction and other details. <Newly Inserted by Act No. 10475, Mar. 29, 2011>
(4) Where a prime contractor pays a reduced price without any justifiable cause after the elapse of at least 60 days from the receipt of subject matter, etc., a prime contractor shall pay interest accrued for the period beyond 60 days in accordance with the interest rate fixed and publicly notified by the Fair Trade Commission by taking into account economic circumstances, such as late-payment interest rates, etc. applied by banks under the Banking Act within the limit of 40/100 per annum. <Amended by Act No. 10303, May 17, 2010; Act No. 10475, Mar. 29, 2011>
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 12 (Prohibition of Unfair Requests for Settlement of Purchase Price, etc.)
Where a prime contractor has had a subcontractor purchase goods, etc. necessary for the manufacturing, repair, construction, or service performance of subject matter, etc. from himself/herself, or use his/her equipment, etc., he/she shall not conduct an act falling under any of the following subparagraphs without justifiable grounds:
1. Having the subcontractor pay all or part of the purchase price or rent prior to the date of payment of subcontract consideration of the relevant subject matter, etc.;
2. Having the subcontractor pay the purchase price or rent on condition that is remarkably unfavorable compared with that on which the prime contractor purchases or uses the goods, etc., or supplies the goods, etc. to a third party.
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 12-2 (Prohibition of Unfair Requests for Economic Profits)
No prime contractor shall compel a subcontractor to provide money, goods, service, or other economic profits to himself/herself or third parties without justifiable grounds.
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 12-3 (Prohibition, etc. of Request to Provide Technical Data)
(1) No prime contractor shall request a subcontractor to provide him/her or any third person with the subcontractor's technical data: Provided, That a prime contractor may make such a request, if he/she proves any justifiable cause to do so. <Amended by Act No. 10475, Mar. 29, 2011>
(2) Where a prime contractor requests any technical data to a subcontractor pursuant to the proviso to paragraph (1), he/she shall consult, in advance, with the relevant subcontractor about matters prescribed by Presidential Decree, such as the purpose of request, confidentiality provisions, reversion of rights, a cost, etc., and provide the relevant subcontractor with a document stating the details thereof. <Newly Inserted by Act No. 10475, Mar. 29, 2011>
(3) No prime contractor shall abuse the acquired technical data for himself/herself or any third person. <Amended by Act No. 10475, Mar. 29, 2011>
[This Article Newly Inserted by Act No. 9971, Jan. 25, 2010]
 Article 13 (Payment, etc. of Subcontract Consideration)
(1) Where a prime contractor entrusts a subcontractor with manufacturing, etc., he/she shall pay the subcontract consideration by not later than the earliest date for payment fixed within the extent of 60 days from the date of receipt of subject matter, etc. (in cases of entrustment with construction, it refers to the date of taking over the subject matter, etc.; in cases of entrustment with service, the date the subcontractor has completed the performance of the service entrusted; and if the prime contractor and subcontractor agree to issue tax invoices on one or more occasions a month on certain days because of frequent delivery of goods, etc., it refers to such days; hereinafter the same shall apply): Provided, That this shall not apply to any of the following cases:
1. Where it is deemed that the prime contractor and subcontractor have fixed the date for payment on equal terms;
2. Where the date for payment is deemed reasonable in light of the characteristics of the business and economic conditions.
(2) Where the date for payment of subcontract consideration is not fixed, the date of receipt of subject matter, etc. shall be deemed the date for payment of the subcontract consideration, and where the date for payment is fixed past 60 days from the date of receipt of the subject matter, etc. (excluding cases falling under the proviso to paragraph (1)), the sixtieth day from the date of receipt of the subject matter, etc. shall be deemed the date for payment of the subcontract consideration, respectively.
(3) Where a prime contractor has entrusted a subcontractor with manufacturing, etc., he/she shall pay the subcontractor the subcontract consideration within 15 days from the date the work progress payment or amount completed, etc. was received (the date for payment, where the date for payment of the subcontract consideration arrives before then) when the prime contractor has received work progress payment, etc. following the completion of manufacturing, repair, construction or service performance from the person placing an order, and he/she shall pay the subcontractor an amount corresponding to the portion of manufacturing, repair, construction or service performance that has been performed within 15 days from the date the work progress payment or money corresponding to the completed portion of work, etc. was received (the date for payment, where the date for payment of the subcontract consideration arrives before then) when the prime contractor has received the completed portion, etc. according to the progress of manufacturing, repair, construction or service performance from the person placing an order.
(4) When a prime contractor pays the subcontract consideration to a subcontractor, he/she shall not pay less than the proportion of cash which he/she received from the person placing an order in connection with the entrustment of the manufacturing, etc. concerned.
(5) Where a prime contractor pays the subcontract consideration by a bill, he/she shall not draw a bill, the period of payment of which exceeds the period of payment (issuance date to due date) of the bill that the prime contractor has received from the person placing an order in connection with the entrustment of the manufacturing, etc. concerned.
(6) Where a prime contractor pays the subcontract consideration by a bill, the bill shall be one which can be discounted at any financial institution established by law and the discount commission for the period from the date of delivery and to the due date of the bill shall be paid to the subcontractor on the day on which the bill is delivered: Provided, That where the bill is delivered within 60 days after the subject matter, etc. are received (referring to the date for payment where the date for payment is fixed under the proviso to paragraph (1), and to the date referred to in paragraph (3) where work progress payment or money corresponding to the completed portion of work, etc. are received from the person placing an order; hereafter the same shall apply in this Article), the discount commission for the period from the date 60 days pass after the date when the subject matter, etc. are received to the due date of the bill shall be paid to the subcontractor within 60 days from the date the subject matter, etc. are received.
(7) Where a prime contractor pays the subcontract consideration by means of payment in place of a bill, he/she shall pay commission (including interest for loan; hereinafter the same shall apply) on the date for payment for the period from the date for payment (referring to the date of approval of card settlement in cases of exclusive-use card for business purchases, to the date of transmission of details of delivery, etc. of goods in cases of loan against of security of credit card sales claims, and to the date of settlement of purchase funds in cases of purchase loans; hereinafter the same shall apply) to the date of repayment of the subcontract consideration to the subcontractor: Provided, That where it is paid by means of payment in place of a bill within 60 days from the date of receipt of subject matter, etc., commission for the period from the day on which 60 days pass from the date of receipt of subject matter, etc. to the due date of the bill shall be paid to the subcontractor within 60 days from the date of receipt of subject matter, etc.
(8) Where a prime contractor pays the subcontract consideration after 60 days pass from the date of receipt of subject matter, etc., he/she shall pay interest calculated by the interest rate fixed within the limit of 40/100 per annum and publicly notified by the Fair Trade Commission for the days elapsed in consideration of economic circumstances, such as late-payment interest rates, etc. applied by banks under the Banking Act. <Amended by Act No. 10303, May 17, 2010>
(9) The discount rate applied in paragraph (6) shall be fixed within the limit of 40/100 per annum and publicly notified by the Fair Trade Commission in consideration of the discount rate for commercial bills applied by financial institutions established by law.
(10) The commission rate applied in accordance with paragraph (7) shall be the commission rate fixed under an arrangement on a settlement means alternative to a bill which a prime contractor concludes with a financial institution (including a credit card business entity under subparagraph 2-2 of Article 2 of the Specialized Credit Finance Business Act. <Amended by Act No. 13451, Jul. 24, 2015>
(11) The provisions of paragraphs (1) through (10) shall apply to a middle-standing enterprise under subparagraph 1 of Article 2 of the Special Act on the Promotion of Growth and the Strengthening of Competitiveness of Middle-Standing Enterprises, the annual sales of which is less than any of the amounts as prescribed by Presidential Decree (referring to three hundred billion won in cases of transacting with any company under subparagraph 1), where such middle-standing enterprise is entrusted with manufacturing, etc. by any of the following persons. In such cases, the person who entrusts the manufacturing, etc. shall be deemed a prime contractor when applying paragraphs (1) through (10), and Articles 19, 20, 23 (2), 24-4 (1), 24-5 (6), 25 (1) and (3), 25-2, 25-3 (1), 25-5 (1), 26 (2), 30 (1), 33 and 35 (1), and the middle-standing enterprise entrusted with manufacturing, etc. shall be deemed a subcontractor when applying paragraphs (1) through (10), and Articles 19, 21, 23 (2), 24-4 (1), 25-2, and 33: <Newly Inserted by Act No. 13451, Jul. 24, 2015; Act No. 14143, Mar. 29, 2016; Act No. 15362, Jan. 16, 2018>
1. A member company of a business group subject to limitations on cross shareholding under Article 9 (1) of the Monopoly Regulation and Fair Trade Act;
2. A business entity which is not a company under subparagraph 1 and the annual sales of which exceeds the amount prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 13-2 (Performance Guarantees for Construction Subcontracts and for Payment of Consideration)
(1) In cases of entrustment with construction, a prime contractor shall provide a subcontractor with a guarantee for payment of the construction consideration in accordance with the following classifications within 30 days from the date the subcontract is concluded (the period of guarantee shall be by the due date of the bill in cases of payment with a bill, and shall be by the date of repayment of the subcontract consideration to the subcontractor in cases of payment by the means of payment in place of a bill), while a subcontractor shall provide a guarantee for performance of a relevant contract by paying an amount equivalent to 10/100 of the contract value: Provided, That in a case where it is deemed that no guarantee is necessary or a guarantee is inappropriate in consideration of the financial status of a prime contractor or the scale, etc. of construction, which is prescribed by Presidential Decree, this shall not apply: <Amended by Act No. 12709, May 28, 2014>
1. Where the period of construction is four months or less: Amount calculated by subtracting advance payments from a contract price;
2. Where the period of construction exceeds four months, and the interval of payments for the completed portion of works does not exceed two months: Amount calculated according to the following formula:
Amount of Guarantee =Subcontract Price - Agreed Advance Payments×4
Period of Construction (Months)
3. Where the period of construction exceeds four months, and the interval of payments for the completed portion of work exceeds two months: Amount calculated according to the following formula:
Amount of Guarantee=Subcontract Price-Agreed Advance Payments×Interval of Payments for the Completed Portion of Work (Months)×2
Period of Construction (Months)
(2) Any of deemed reasons for which no guarantee is necessary or a guarantee is inappropriate referred to in the proviso to paragraph (1), with the exception of its subparagraphs, ceases to exist, a prime contractor shall provide a guarantee for payment of construction consideration referred to in paragraph (1) within 30 days from the date such reasons cease to exist: Provided, That where it is deemed that no guarantee is necessary, in consideration of the remaining period of a contract, actual completion rate of the entrusted business, amount of remaining payment, and other relevant matters, which is prescribed by Presidential Decree, this shall not apply. <Newly Inserted by Act No. 12709, May 28, 2014>
(3) Where a prime contractor, who has concluded a long-term continuing contract (referring to a long-term continuing contract prescribed in Article 21 of the Act on Contracts to Which the State Is a Party or in Article 24 of the Act on Contracts to Which a Local Government Is a Party, which is concluded annually for part of the total amount of a successful bid within the budget of each fiscal year: hereafter referred to as "long-term continuing contract for construction" in this Article) with any of the following persons for construction, entrusts the relevant construction by means of a long-term continuing contract for subcontracting construction, the prime contractor shall provide a subcontractor with a guarantee for payment of the consideration of construction pursuant to the main sentence of paragraph (1), with the exception of its subparagraphs, within 30 days from the date the long-term continuing contract for subcontracting construction is concluded, and the subcontractor shall provide the prime contractor with a guarantee for performance of the relevant contract by paying an amount equivalent to 10/100 of the total construction cost promised at the time of concluding the first long-term continuing contract for subcontracting construction: <Newly Inserted by Act No. 14456, Dec. 20, 2016>
1. The State or a local government;
2. A public institution or quasi-government agency prescribed in the Act on the Management of Public Institutions or a local government-invested public corporation or local government public corporation prescribed in the Local Public Enterprises Act.
(4) Upon completion of the performance of an annual contract of a long-term continuing contract for construction, the prime contractor who is provided with a guarantee for performance of contract by a subcontractor pursuant to paragraph (3) shall return the subcontractor the guarantee money, which corresponds to the annual long-term continuing contract for subcontracting construction, the performance of which is completed by the relevant subcontractor, within 30 days from the date the prime contractor is able to recover the contract deposit corresponding to such annual contract from any of the persons in the subparagraphs of the said paragraph. In such cases, a guarantee for performance of contract corresponding to a portion performance completed shall be considered invalid. <Newly Inserted by Act No. 14456, Dec. 20, 2016>
(5) The guarantee between a prime contractor and a subcontractor under paragraphs (1) through (3) shall be paid in cash (including by any bank check issued by offices of postal services or banks under the Banking Act) or by the delivery of a guarantee certificate issued by any of the following institutions: <Amended by Act No. 10303, May 17, 2010; Act No. 12709, May 28, 2014; Act No. 14456, Dec. 20, 2016>
1. Every mutual-aid association under the Framework Act on the Construction Industry;
2. Insurance companies under the Insurance Business Act;
3. The Korea Credit Guarantee Fund under the Credit Guarantee Fund Act;
4. Financial institutions under the Banking Act;
5. Other guarantee institutions prescribed by Presidential Decree.
(6) If a subcontractor files a claim with an institution referred to in paragraph (5) for the payment guaranteed pursuant to paragraph (1), along with documents required in the terms and conditions of the relevant guarantee, the institution shall pay it to the subcontractor within 30 days: Provided, That if there is a difference in opinions on whether the requirements for the payment guaranteed are satisfied or there is any other event or cause beyond control specified by Presidential Decree, the guarantor shall notify the subcontractor thereof and may defer the payment guaranteed for a period specified by Presidential Decree: <Newly Inserted by Act No. 12097, Aug. 13, 2013; Act No. 12709, May 28, 2014; Act No. 14456, Dec. 20, 2016>
1. If a prime contractor is unable to pay the subcontract consideration due to the suspension of transactions of checking accounts or the suspension of banking transactions;
2. If a prime contractor is unable to pay the subcontract consideration due to his/her default on checks, bankruptcy, permanent business closure, a petition filed for the commencement of proceedings for corporate rehabilitation, or any other similar event;
3. If a prime contractor is unable to pay the subcontract consideration because he/she has his/her license, registration, or such for the relevant business revoked and cancelled or has his/her business operations suspended;
4. If a prime contractor has failed to pay the subcontract consideration payable under Article 13 to a subcontractor twice or more;
5. If a prime contractor is unable to pay the subcontract consideration due to a cause or event specified by Presidential Decree as similar to incapability of payment referred to in subparagraph 1 through 4.
(7) Where a prime contractor delivers guarantee certificates in accordance with paragraph (5), the prime contractor may combine the guarantees for payment of all the construction works entrusted during the period of construction or the guarantees for payment for all the construction works entrusted in one fiscal year into one guarantee certificate for delivery. <Amended by Act No. 12097, Aug. 13, 2013; Act No. 12709, May 28, 2014; Act No. 14456, Dec. 20, 2016>
(8) In addition to matters prescribed in paragraphs (1) through (7), matters necessary for guarantees for performance of subcontract and guarantees for payment of subcontract consideration shall be prescribed by Presidential Decree. <Amended by Act No. 12097, Aug. 13, 2013; Act No. 12709, May 28, 2014; Act No. 14456, Dec. 20, 2016>
(9) Where a prime contractor fails to guarantee payment of the construction consideration referred to in the main sentence of paragraph (1), with the exception of its subparagraphs, the main sentence of paragraph (2), or paragraph (3), a subcontractor need not to guarantee the performance of the relevant contract. <Amended by Act No. 12097, Aug. 13, 2013; Act No. 12709, May 28, 2014; Act No. 14456, Dec. 20, 2016>
(10) A prime contractor may not exercise his/her right to require a subcontractor’s guarantee for performance of contract in accordance with paragraph (1) or (3) unless the relevant prime contractor provides a guarantee for payment of the construction consideration referred to in paragraphs (1) through (3): Provided, That this shall not apply where a guarantee for payment of the construction consideration is not provided in accordance with the proviso to paragraph (1), , with the exception of its subparagraphs, or the proviso to paragraph (2). <Newly Inserted by Act No. 12709, May 28, 2014; Act No. 14456, Dec. 20, 2016>
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 14 (Direct Payment of Subcontract Consideration)
(1) Where a ground falling under any of the following subparagraphs occurs, the person placing an order shall pay the subcontract consideration corresponding to the completed portion of manufacturing, repair, construction, or service performance directly to the subcontractor: <Amended by Act No. 12709, May 28, 2014>
1. When the subcontractor has requested direct payment of the subcontract consideration because the prime contractor’s payment has been suspended, the prime contractor is bankrupt, or other similar reasons exist, or because the prime contractor has become unable to pay the subcontract consideration due to revocation of permission, authorization, license, registration, etc. relating to the business;
2. When agreement has been made among the person placing an order, prime contractor, and subcontractor that the person placing an order shall pay the subcontract consideration directly to the subcontractor;
3. When the subcontractor has requested direct payment of the subcontract consideration where the prime contractor has failed to pay to the relevant subcontractor two or more installments of the subcontract consideration to be paid by the prime contractor as prescribed in Article 13 (1) or (3);
4. When the subcontractor has requested direct payment of the subcontract consideration where the prime contractor has failed to perform his/her obligation to guarantee the payment of subcontract consideration as prescribed in Article 13-2 (1) or (2).
(2) Where a ground prescribed in paragraph (1) occurs, the obligation of the person placing an order to pay consideration to the prime contractor and the obligation of the prime contractor to pay the subcontract consideration to the subcontract shall be deemed to have extinguished within such limit.
(3) Where a prime contractor requires suspension of direct payment of the relevant subcontract consideration with documents evidencing the fact that the subcontractor delays paying wages, price of materials, etc. in connection with the relevant subcontract, the person placing an order need not pay the subcontract consideration directly notwithstanding paragraph (1).
(4) When the person placing an order pays the subcontract consideration directly to the relevant subcontractor as prescribed in paragraph (1), he/she shall pay it minus the subcontract consideration that has already been paid by the person placing an order to the prime contractor.
(5) Where confirmation, etc. of a completed portion is necessary for the subcontractor to receive the subcontract consideration directly from the person placing an order as prescribed in paragraph (1), the prime contractor shall take necessary measures without delay.
(6) Matters necessary for the methods, procedures, etc. for payment where the subcontract consideration is paid directly as prescribed in paragraph (1) shall be prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 15 (Payment of Refund of Customs Duties, etc.)
(1) Where a prime contractor entrusts a subcontractor with manufacturing or service for goods to be exported and where he/she has customs duties, etc. refunded under the Act on Special Cases concerning the Refund of Customs Duties, etc. Levied on Raw Materials for Export, he/she shall pay the refund to the subcontractor in accordance with terms of the refund received within 15 days after he/she received it.
(2) Notwithstanding paragraph (1), the refundable amount of customs duties, etc. shall be paid to the subcontractor within 60 days from the date of receipt of subject matter, etc., unless any fault attributable to the subcontractor exists.
(3) Where a prime contractor pays the refundable amount of customs duties, etc. after the due date prescribed in paragraphs (1) and (2), he/she shall pay interest for such days overdue, calculated according to the interest rate fixed within the limit of 40/100 per annum in consideration of economic circumstances, such as late-payment interest rates, etc. applied by banks under the Banking Act and publicly notified by the Fair Trade Commission. <Amended by Act No. 10303, May 17, 2010>
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 16 (Adjustment of Subcontract Consideration due to Change in Design, etc.)
(1) Where a prime contractor falls under both of the following cases after entrusting manufacturing, etc., he/she shall increase subcontract consideration in accordance with the contents and rate of the increase in the contract value he/she has received from the person placing an order: Provided, That the prime contractor may decrease the subcontract consideration if the person placing an order has decreased the contract value, in accordance with the contents and rate of the decrease: <Amended by Act No. 9971, Jan. 25, 2010>
1. Where the contract value is increased due to any change in design or economic situation or other reasons;
2. Where additional costs are incurred in completing or finishing subject matter, etc. for the reasons referred to in subparagraph 1.
(2) Where subcontract consideration is increased or decreased pursuant to paragraph (1), the prime contractor shall notify the relevant subcontractor of the reasons for and details on such increase or decrease within 15 days from the date he/she receives an increase or decrease of the contract value from the person placing an order: Provided, That this shall not apply where the person placing an order directly notifies the relevant subcontractor of such reasons and details. <Newly Inserted by Act No. 9971, Jan. 25, 2010>
(3) An increase or decrease in the contract value under paragraph (1) shall be made within 30 days after the person placing an order has increased or decreased such consideration. <Amended by Act No. 9971, Jan. 25, 2010>
(4) If additional subcontract consideration is paid after 15 days from the date the prime contractor receives additional money from the person placing an order in accordance with the increase in the contract value under paragraph (1), Article 13 (8) shall apply mutatis mutandis to the interest, and if additional subcontract consideration is paid with a bill or means of payment in place of a bill, Article 13 (6), (7), (9), and (10) shall apply mutatis mutandis to the bill discount commission, payment of commission, discount rate for bill and commission rate. In such cases, "60 days from the date such subject matter, etc. have been received" shall be deemed "15 days from the date the additional money has been received". <Amended by Act No. 9971, Jan. 25, 2010>
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 16-2 (Adjustment of Subcontract Consideration due to Fluctuation in Supply Costs)
(1) Where adjustment of subcontract consideration is inevitable because the supply costs of subject matter, etc. have changed after a subcontractor is entrusted with manufacturing, etc., the subcontractor may request the prime contractor to adjust subcontract consideration. <Amended by Act No. 15362, Jan. 16, 2018>
(2) Where it is inevitable for a small and medium enterprise cooperative defined under Article 3 (1) 1 or 2 of the Small and Medium Enterprise Cooperatives Act (hereinafter referred to as "cooperative") to adjust subcontract consideration to be paid to any of its members as a subcontractor due to fluctuation in the supply costs of subject matter, etc. above the standards prescribed by Presidential Decree, the cooperative may negotiate with a prime contractor specified by Presidential Decree on the adjustment of the subcontract consideration upon receipt of a request therefor from the subcontractor: Provided, That the foregoing shall not apply where both the prime contractor and the subcontractor are members of one and the same cooperative. <Amended by Act No. 11842, May 28, 2013; Act No. 15362, Jan. 16, 2018>
(3) Upon receipt of an application under the main sentence of paragraph (2), a cooperative shall request a prime contractor to adjust the subcontract consideration within 20 days from the filing date of the application. <Amended by Act No. 11842, May 28, 2013; Act No. 14143, Mar. 29, 2016>
(4) If a subcontractor who has made a request for the adjustment of subcontract consideration pursuant to paragraph (1) files an application for negotiations under paragraph (2), the request made under paragraph (1) shall be deemed suspended, and if the negotiations for adjustment under paragraph (1) or (3) are completed, neither subcontractor nor cooperative may request negotiations for adjustment under any provision of paragraphs (1) through (3) on the basis of the same cause, unless there is a fundamental change of circumstances. <Amended by Act No. 11842, May 28, 2013>
(5) Upon receipt of an application under paragraph (2), no cooperative shall resolve to discontinue the supply of goods, place any unreasonable restriction on competitions, or unfairly restrict the relevant business entity’s scope of business or business activities. <Amended by Act No. 11842, May 28, 2013>
(6) Matters necessary for events beyond control referred to in the main sentence of paragraph (2) and the requirements, procedures, and methods for filing an application by a subcontractor and for exercising a cooperative’s power to negotiate shall be prescribed by Presidential Decree. <Newly Inserted by Act No. 11842, May 28, 2013>
(7) A prime contractor shall commence negotiations for the adjustment of subcontract consideration with a subcontractor or cooperative who has made a request for adjustment or the competent cooperative within ten days from the date of a request under paragraph (1) or (3) and shall not reject or neglect consultations without any justifiable ground. <Newly Inserted by Act No. 11842, May 28, 2013>
(8) A prime contractor or subcontractor (including a cooperative in the case of negotiations for adjustment under paragraph (3); hereafter the same shall apply in this Article) may file a request for mediation with a subcontract dispute mediation council established under Article 24 in any of the following cases: Provided, That no cooperative under paragraph (3) shall file an application for adjustment with the subcontract dispute mediation council established in the Korea Federation of Small and Medium Business under the Small and Medium Enterprise Cooperatives Act: <Newly Inserted by Act No. 11842, May 28, 2013>
1. Where a prime contractor fails to commence negotiations for the adjustment of subcontract consideration even after the lapse of ten days from the date a request under paragraph (1) or (3) is made;
2. Where the parties fail to reach an agreement on the adjustment of subcontract considerations within 30 days from the date a request under paragraph (1) or (3) is made;
3. Where the parties are obviously anticipated to fail to reach an agreement due to any of the causes specified by Presidential Decree, such as cases where either the prime contractor or the subcontractor manifests his/her intention to discontinue negotiations after negotiations are commenced in response to a request made pursuant to paragraph (1) or (3).
[This Article Newly Inserted by Act No. 9616, Apr. 1, 2009]
 Article 17 (Prohibition against Unreasonable Payment in Substitutes)
(1) No prime contractor shall make payment in kind as the consideration for any subcontract: Provided, That the foregoing shall not apply where he/she has any of the following causes: <Amended by Act No. 12097, Aug. 13, 2013; Act No. 14814, Apr. 18, 2017>
1. Where a bill or a check issued by a prime contractor becomes dishonored or prime contractor's current deposit transaction is suspended or prohibited;
2. Where a petition for bankruptcy, commencement of rehabilitation or commencement of simplified rehabilitation prescribed in the Debtor Rehabilitation and Bankruptcy Act is filed against a prime contractor;
3. Where a cause prescribed by Presidential Decree by which it is deemed that a prime contractor cannot help but make payment in kind as the consideration for a subcontract occurs and a subcontractor requests such payment in kind.
(2) A prime contractor shall present to a subcontractor documents with which the subcontractor can verify rights and obligations on the goods to be delivered for payment in substitutes, such as ownership and whether offered as security, before making the payment in kind as referred to in the proviso to paragraph (1). <Newly Inserted by Act No. 12097, Aug. 13, 2013; Act No. 14814, Apr. 18, 2017>
(3) Documents that shall be presented for each type of goods, the method and procedure for the presentation of documents, and other necessary matters shall be prescribed by Presidential Decree. <Newly Inserted by Act No. 12097, Aug. 13, 2013>
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 18 (Prohibition of Unreasonable Intervention in Management)
(1) No prime contractor shall intervene in the management of a subcontractor by means of regulating the volume of subcontract transactions, etc. <Amended by Act No. 15362, Jan. 16, 2018>
(2) Any of the following activities of a prime contractor shall be considered as unreasonable intervention in management: <Newly Inserted by Act No. 15362, Jan. 16, 2018>
1. Restraining a subcontractor from exporting technical data abroad without any justifiable grounds or restricting transactions on the ground of exporting technical data;
2. Restraining a subcontractor to trade with him/her or business operators he/she designates without any justifiable grounds;
3. Requesting a subcontractor to provide management information the Fair Trade Commission publicly notifies, such as cost data, without any justifiable grounds.
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 19 (Prohibition on Retaliatory Measures)
No prime contractor shall limit a subcontractor’s opportunities to receive an order, suspend transactions with a subcontractor, or give any other disadvantages to a subcontractor on the pretext that the subcontractor or the competent cooperative conducted any of the following acts: <Amended by Act No. 10475, Mar. 29, 2011; Act No. 11842, May 28, 2013; Act No. 13451, Jul. 24, 2015; Act No. 15362, Jan. 16, 2018>
1. Reporting to the competent authority, etc. that a prime contractor has violated this Act;
2. Requesting a prime contractor under Article 16-2 (1) or (2) for adjustment to subcontract consideration or requesting mediation to the subcontract dispute mediation council established under paragraph (8) of the same Article;
2-2. Rendering cooperation for investigations conducted by the competent authority;
3. Submitting data required by the Fair Trade Commission to conduct a documentary fact-finding investigation on the current situation of a relevant subcontract transaction pursuant to Article 22-2 (2).
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 20 (Prohibition of Evasion of this Act)
No prime contractor shall perform any act to evade the actual application of this Act relating to a subcontract transaction (including transactions to which Article 13 (11) applies). <Amended by Act No. 13451, Jul. 24, 2015>
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 21 (Matters to Be Observed by Subcontractors)
(1) Where a subcontractor has been entrusted with manufacturing, etc. by a prime contractor, the subcontractor shall fulfill the details of the entrustment in good faith.
(2) No subcontractor shall cooperate with a prime contractor in any offense against this Act.
(3) A subcontractor shall, upon making a report as prescribed by this Act, present documentary evidence, etc. to the Fair Trade Commission without delay.
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 22 (Reporting, etc. on Violations)
(1) Where a violation of this Act is deemed to have occurred, anyone may report it to the Fair Trade Commission. In this case, the Fair Trade Commission shall, where the reporter gives consent as prescribed by Presidential Decree, notify the prime contractor of the fact that it has received the relevant report. <Amended by Act No. 14143, Mar. 29, 2016>
(2) When a report has been made under the former part of paragraph (1), or a violation of this Act is deemed to have occurred, the Fair Trade Commission may make a necessary investigation. <Amended by Act No. 14143, Mar. 29, 2016>
(3) Where the Fair Trade Commission notifies a prime contractor of such fact pursuant to the latter part of paragraph (1), peremptory notice under Article 174 of the Civil Act shall be deemed given: Provided, That this shall not apply where any reported fact is not subject to this Act or the Fair Trade Commission decides not to proceed with procedures for deliberation on the reported fact due to the elapse of the allowable period of investigation on the relevant transaction which would be subject to the investigation under the main body of Article 23 (1); where the Fair Trade Commission decides that the reported fact is free from suspicion; or where the reporter withdraws the report. <Amended by Act No. 14143, Mar. 29, 2016>
(4) Where the corresponding period specified in the following categories has elapsed, the Fair Trade Commission shall not issue an order to take a corrective measure under Article 25 (1) or impose a penalty surcharge under Article 25-3: Provided, That the foregoing shall not apply where, as a result of the canceling the order to take a corrective measure or the disposition to impose a penalty surcharge on the basis of a court’s judgement, the Commission disposition in compliance with the reason for the judgement: <Newly Inserted by Act No. 13451, Jul. 24, 2015; Act No. 14143, Mar. 29, 2016>
1. Where the Fair Trade Commission, upon receipt of a report pursuant to the former part of paragraph (1), commences an investigation on a violation of this Act pursuant to paragraph (2): Three years from the date of report;
2. Where the Fair Trade Commission commences an investigation on any violation of this Act pursuant to paragraph (2), except for the cases falling under subparagraph 1: Three years from the commencement date of investigation.
(5) The Fair Trade Commission may, within budgetary limits, pay monetary rewards to a person who makes a report or provides information on any violation of Article 4, 8 (1), 10, 11 (1) or (2), or 12-3 (3) and also presents data evidencing that violation. <Newly Inserted by Act No. 13451, Jul. 24, 2015>
(6) Necessary matters concerning the scope of persons eligible for monetary rewards under paragraph (5), and standards, procedures, etc. for payment of monetary rewards shall be prescribed by Presidential Decree. <Newly Inserted by Act No. 13451, Jul. 24, 2015>
(7) The Fair Trade Commission shall, where a fact falling under any of the following cases has been found after paying monetary rewards pursuant to paragraph (5), notify the person paid the monetary rewards of the amount to be retuned, and he/she shall return it within 30 days from the date of receipt of the notification: <Newly Inserted by Act No. 13451, Jul. 24, 2015>
1. Cases of receiving monetary rewards in any unjustifiable manners such as evidence collection by improper means, false reporting, false statement, and evidence forgery;
2. Cases of receiving monetary rewards, etc. pursuant to any other statute on the same ground;
3. Cases of being mistakenly paid monetary rewards due to any other ground, such as error.
(8) Where a person who is obliged to return monetary rewards pursuant to paragraph (7) fails to return it, the Fair Trade Commission may collect it in the same manner as delinquent national taxes are collected. <Newly Inserted by Act No. 13451, Jul. 24, 2015>
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 22-2 (Documentary Fact-Finding Investigations on Subcontract Transactions)
(1) The Fair Trade Commission shall conduct a documentary fact-finding investigation on any subcontract transaction and announce the results thereof to establish a fair order in subcontract transactions. <Amended by Act No. 10475, Mar. 29, 2011>
(2) Where the Fair Trade Commission intends to conduct the documentary fact-finding investigation pursuant to paragraph (1), it shall prepare a plan covering the scope of persons to be investigated, the period and details of, methods and procedures for investigations, the scope of announcement on investigation results, and other relevant matters, and may request the persons to be investigated to present necessary data for the investigation, such as a document on the current status of subcontract transactions. <Amended by Act No. 10475, Mar. 29, 2011>
(3) Where the Fair Trade Commission requests the presentation of data pursuant to paragraph (2), it shall notify, in writing, the person to be investigated of the scope of and details on such data, the reason for request, the deadline for presentation, and other relevant matters.
[This Article Newly Inserted by Act No. 9971, Jan. 25, 2010]
 Article 23 (Limitation on Transactions subject to Investigation)
(1) Subcontract transactions (including transactions to which Article 13 (11) applies; hereafter the same shall apply in this Article) subject to the investigation by the Fair Trade Commission as prescribed in Article 22 (2) shall be limited to those for which three years have not passed from the date the transaction was completed: Provided, That in cases of any subcontract transaction which is reported within three years from the date the transaction was completed pursuant to the former part of Article 22 (1) or any subcontract transaction over which a party to the dispute who falls under Article 24-4 (1) 1 or 2 requests dispute mediation, an investigation may be made even after three years have passed from the date the transaction was completed. <Amended by Act No. 9971, Jan. 25, 2010; Act No. 13451, Jul. 24, 2015; Act No. 15362, Jan. 16, 2018>
(2) "Date the transaction was completed" in paragraph (1) means; the date a subcontractor delivers and hands over the subject matter, etc. to a prime contractor in cases of entrustment with manufacturing, entrustment with repair, or the preparation of knowledge and information-related products among entrustment with service; the date a subcontractor completes the supply of the entrusted labor to a prime contractor in cases of the supply of labor among entrustment with service; and the date on which the construction work, which a prime contactor has entrusted to a subcontractor, is completed in cases of entrustment with construction: Provided, That if a subcontract is revoked before completion or a subcontract transaction is suspended, it means the date of the revocation or suspension. <Newly Inserted by Act No. 9971, Jan. 25, 2010>
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 24 (Establishment, Composition, etc. of Subcontract Dispute Mediation Councils)
(1) The Fair Trade Mediation Agency under Article 48-2 of the Monopoly Regulation and Fair Trade Act (hereinafter referred to as the "Mediation Agency") shall establish a subcontract dispute mediation council (hereinafter referred to as “council"). <Amended by Act No. 10475, Mar. 29, 2011; Act No. 13451, Jul. 24, 2015>
(2) A business association may establish such a council with the approval of the Fair Trade Commission <Newly Inserted by Act No. 13451, Jul. 24, 2015>
(3) The council established by the Mediation Agency shall be comprised of not more than nine members, including one chairperson, with an equal number of members representing the public interest, members representing a prime contractor, and members representing a subcontractor, and the number of members of the council established by a business association shall be determined by the relevant business association with the approval of the Fair Trade Commission. <Amended by Act No. 13451, Jul. 24, 2015>
(4) The chairperson of the council established by the Mediation Agency shall be elected by the council from among the members representing the public interest, and the chairperson of the council established by a business association shall be elected by the council from the members thereof. The chairperson elected by any council shall represent the relevant council. <Amended by Act No. 13451, Jul. 24, 2015>
(5) The term of office of a member of the council established by the Mediation Agency shall be two years, and the term of office of a member of the council by a business association shall be determined by the business association with the approval of the Fair Trade Commission. <Amended by Act No. 13451, Jul. 24, 2015>
(6) The persons commissioned by the Chairperson of the Fair Trade Commission, from among the persons recommenced by the President of the Mediation Agency and the persons falling under any of the following, shall be the members of the council established under the Mediation Agency: <Newly Inserted by Act No. 10475, Mar. 29, 2011; Act No. 13451, Jul. 24, 2015>
1. A person who majored in jurisprudence, economics, or business administration in college or university and is or was in the position of associate professor or higher or in a position equivalent thereto at either a school under subparagraph 1, 2, or 5 of Article 2 of the Higher Education Act, or an accredited research institute;
2. A person who is or was in the position of judge or prosecutor, or a person who is qualified as an attorney-at-law;
3. A person who has experience in affairs related to antitrust or fair trade and is or was in the position of public official of Grade Ⅳ or higher (including a public official in general service as a member of the Senior Executive Service).
(7) The members of a council established under a business association shall be commissioned by the head of the business association which has established the council, but the head thereof shall, prior to such commission, make a report thereon to the Fair Trade Commission: Provided, That where several business associations intend to jointly establish a council, the heads of the relevant business associations shall jointly commission the members thereof. <Amended by Act No. 10475, Mar. 29, 2011; Act No. 13451, Jul. 24, 2015>
(8) The members representing the public interest shall be commissioned from among persons who have extensive knowledge and experience in subcontract transactions, but neither a person who conducts any business falling within any of the business categories which are covered for dispute mediation by the relevant council, nor a person who is an executive officer or employee of a business entity falling under any of such business categories, may be a member representing the public interest.
<Amended by Act No. 10475, Mar. 29, 2011; Act No. 13451, Jul. 24, 2015>
(9) Where a person commissioned as a member representing the public interest becomes either a person who conducts any business falling within any of the business categories which are covered for dispute mediation by the relevant council, or an executive officer or employee of a business entity falling under any of such business categories, the Chairperson of the Fair Trade Commission shall immediately dismiss such person from the position of a member of the council. <Amended by Act No. 10475, Mar. 29, 2011; Act No. 13451, Jul. 24, 2015>
(10) The State may fully or partially subsidize expenses to be incurred for the operation of the councils within budgetary limits. <Newly Inserted by Act No. 12709, May 28, 2014; Act No. 13451, Jul. 24, 2015>
[This Article Wholly Amended by Act No. 9971, Jan. 25, 2010]
 Article 24-2 (Exclusion of, Challenge to, or Recusal by Member)
(1) Members shall be excluded from mediating a case in any of the following cases:
1. Where a member, or a person who is or was his/her spouse becomes a disputing party or is a joint title holder or co-obligor of the case;
2. Where a member has or had kinship with a disputing party;
3. Where a member or a corporation to which the member belongs acts as a consultant or an advisor to a disputing party for legal affairs, business administration, etc.;
4. Where a member or a corporation to which the member belongs is or was involved in the case as an agent of a party, or has given a testimony or appraisal in connection with the case.
(2) When a member's circumstances make it difficult to be fair in the mediation, a disputing party may file with the council an application to challenge the member.
(3) Where a member falls under any of the cases referred to in paragraph (1) or (2), he/she may voluntarily recuse himself/herself from the mediation of the relevant case.
[This Article Newly Inserted by Act No. 9971, Jan. 25, 2010]
 Article 24-3 (Meetings of Councils)
(1) Meetings of any of the councils shall be classified into a meeting composed of all the members thereof (hereinafter referred to as a “plenary meeting”) and a meeting composed of one member representing the public interest, one member representing a prime contractor, and one member representing a subcontractor, respectively (hereinafter referred to as a “sub-committee meeting”): Provided, That a council established by a business association need not to compose a sub-committee meeting.
(2) A sub-committee meeting shall deliberate and decide on matters delegated by a plenary meeting and pass a resolution thereon.
(3) A plenary meeting shall be presided over by the chairperson of the council and be commenced with the presence of a majority of the incumbent members, and any resolution of a plenary meeting shall require the concurring votes of a majority of those present.
(4) A sub-committee meeting shall be presided over by a member representing the public interest, and shall adopt a resolution with the attendance of all the constituent members thereof and by an affirmative vote of all the members present. In such cases, a resolution of a sub-committee meeting shall be deemed a resolution of the council, but the results of such sub-committee meeting shall be reported to a plenary meeting.
(5) Where the chairperson of the council is unable to perform his/her duties due to any inevitable reason, the member nominated by the chairperson from among the members representing the public interest shall act on behalf of the chairperson.
[This Article Wholly Amended by Act No. 14143, Mar. 29, 2016]
 Article 24-4 (Requests for Dispute Mediation and Other Related Matters)
(1) Any party to a dispute who falls under any of the following subparagraphs may request a council to mediate in the dispute over a subcontract transaction between the prime contractor and the subcontractor. In this regard, where each of the disputing parties has filed the respective request for dispute mediation with each different council, the council to whom the subcontractor or the cooperative prescribed in subparagraph 3 has filed the request for dispute mediation shall undertake the dispute mediation:
1. The prime contractor;
2. The subcontractor;
3. The cooperative prescribed in Article 16-2 (8).
(2) The Fair Trade Commission may request the councils to mediate disputes over subcontract transactions between prime contractors and subcontractors.
(3) Where any of the councils receives a request for dispute mediation from the disputing parties pursuant to paragraph (1), it shall report the details thereof to the Fair Trade Commission without delay.
(4) A request for dispute mediation filed under paragraph (1) shall have the effect of interrupting prescription: Provided, That the same shall not apply where such request is withdrawn or dismissed pursuant to Article 24-5 (3).
(5) The prescription interrupted under the main sentence of paragraph (4) commences to run anew in any of the following cases:
1. Where a proposal of mediation is prepared after the mediation is successfully concluded;
2. Where the mediation process ends failing to mediate the dispute.
(6) In cases falling under the proviso to paragraph (4), if any judicial claim, participation in procedures for bankruptcy, attachment or provisional attachment, or provisional disposition occurs within six months, prescription shall be deemed interrupted by the initial request for dispute mediation filed.
[This Article Wholly Amended by Act No. 15362, Jan. 16, 2018]
 Article 24-5 (Mediation, etc.)
(1) Each council may recommend the disputing parties to come to an agreement on the matter in dispute on their own, or may prepare a proposal of mediation and suggest the mediation proposal to the disputing parties.
(2) Each council may, if necessary to confirm the facts regarding the matter in dispute, conduct investigations or request the disputing parties to submit data or appear before the council.
(3) Each council shall dismiss a request for mediation in any of the following cases:
1. Where the request for mediation is filed by a person who has no direct interest in the details of the request for mediation;
2. Where the request for mediation is filed for a matter not subject to the application of this Act;
3. Where the request for mediation is filed in connection with a case in respect of which the Fair Trade Commission has commenced an investigation pursuant to Article 22 (2) before the request for mediation is filed.
(4) Each council shall terminate mediation process in any of the following cases:
1. Where the mediation is successfully concluded as the disputing parties accept the recommendation or proposal of mediation of the council or they have reached an agreement on their own;
2. Where the mediation fails even though 60 days (90 days where both the disputing parties agree to the extension of the period) elapse from the date a request for mediation is filed under Article 24-4 (1) or the mediation is requested under paragraph (2) of the same Article;
3. Where there is no practical benefit in proceeding with the mediation process as one party to the dispute refuses mediation or files a legal suit with the court on the relevant matter in dispute.
(5) Where each council dismisses a request for mediation or terminates mediation process, the council shall report the details of the mediation; grounds for dismissing the request for mediation or terminating the procedures of mediation, etc. to the Fair Trade Commission along with relevant documents in writing without delay as prescribed by Presidential Decree, and shall notify the disputing parties of such fact.
(6) The Fair Trade Commission shall not issue an order to take corrective measures prescribed in Article 25 (1), or make a recommendation for correction prescribed in Article 25-5 (1), regarding the matter in dispute, to the prime contractor who is a party to the relevant dispute until the mediation process ends: Provided, That the same shall not apply to cases in respect of which the Fair Trade Commission is conducting investigations pursuant to Article 22 (2).
[This Article Newly Inserted by Act No. 15362, Jan. 16, 2018]
 Article 24-6 (Preparation of Proposal of Mediation and Validity thereof)
(1) When a case is mediated, the council shall prepare a proposal of mediation signed or sealed by the members who have participated and the disputing parties. <Amended by Act No. 15362, Jan. 16, 2018>
(2) Where the disputing parties have voluntarily settled their dispute and request for the preparation of the proposal of mediation before the mediation process begins, the council shall prepare a proposal for the mediation. <Amended by Act No. 15362, Jan. 16, 2018>
(3) The disputing parties shall perform the details of the proposal of mediation prepared pursuant to paragraph (1) or (2), and submit the results of such compliance to the Fair Trade Commission. <Newly Inserted by Act No. 14143, Mar. 29, 2016; Act No. 15362, Jan. 16, 2018>
(4) Where the proposal of mediation is prepared pursuant to paragraph (1) or (2) and the parties to the dispute perform the matters indicated in the proposal of mediation, the Fair Trade Commission shall neither take a corrective measure as required under Article 25 (1) nor make a recommendation for correction under Article 25-5 (1). <Newly Inserted by Act No. 14143, Mar. 29, 2016; Act No. 15362, Jan. 16, 2018>
(5) Where a proposal of mediation is prepared pursuant to paragraph (1) or (2), the proposal of mediation shall have the same effect as a court settlement. <Newly Inserted by Act No. 15362, Jan. 16, 2018>
[This Article Newly Inserted by Act No. 9971, Jan. 25, 2010]
 Article 24-7 (Operational Rules of Councils)
Except as provided for in this Act, matters necessary for the operation and organizational structure of the councils shall be determined by the councils upon obtaining approval from the Fair Trade Commission.
[This Article Newly Inserted by Act No. 9971, Jan. 25, 2010]
 Article 25 (Corrective Measures)
(1) The Fair Trade Commission may order a person placing an order or a prime contractor who violates any provision of Articles 3 (1) through (4) and (9), 3-4, 4 through 12, 12-2, 12-3, 13, 13-2, 14 through 16, 16-2 (7), and 17 through 20 to pay subcontract consideration, etc., to stop the violation, to delete or modify special terms and conditions, or to take other measures necessary for preventing recurrence of such violation or rectifying such violation. <Amended by Act No. 9971, Jan. 25, 2010; Act No. 10475, Mar. 29, 2011; Act No. 11842, May 28, 2013; Act No. 12097, Aug. 13, 2013; Act No. 14143, Mar. 29, 2016>
(2) Deleted. <by Act No. 14143, Mar. 29, 2016>
(3) Where the Fair Trade Commission has ordered a corrective measure pursuant to paragraph (1), it may order a prime contractor who has been ordered to do publish the fact that he/she has been so ordered. <Amended by Act No. 14143, Mar. 29, 2016>
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 25-2 (Deposit)
Where a subcontractor does not receive repayment or is unable to receive repayment, a person placing an order or a prime contractor against whom a corrective order has been imposed under Article 25 (1) or accepts a corrective recommendation made under Article 25-5 (1) may, by depositing the object of repayment for the subcontractor, be exempted from the obligation to comply with the corrective measure or corrective recommendation. The same shall apply where it is impossible for the person placing an order or the prime contractor to identify who the subcontractor is without fault on his/her part. <Amended by Act No. 14143, Mar. 29, 2016>
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 25-3 (Penalty Surcharges)
(1) The Fair Trade Commission may impose upon any of the following person placing an order, prime contractor, and subcontractor a penalty surcharge not exceeding the subcontract consideration for the manufacturing, etc. entrusted to the subcontractor or a penalty surcharge not exceeding double the subcontract consideration for the manufacturing, etc. entrusted by the person placing the order or prime contractor: <Amended by Act No. 9971, Jan. 25, 2010; Act No. 10475, Mar. 29, 2011; Act No. 11842, May 28, 2013; Act No. 12097, Aug. 13, 2013>
1. A prime contractor who violates Article 3 (1) through (4);
2. A person who fails to preserve documents in violation of Article 3 (9), or a prime contractor or subcontractor who prepares and issues false documents concerning subcontract transactions;
3. A prime contractor who violates any provision of Articles 3-4, 4 through 12, 12-2, 12-3, 13 and 13-2;
4. A person placing an order, who violates Article 14 (1);
5. A prime contractor who violates Article 14 (5);
6. A prime contractor who violates any provision of Articles 15, 16, 16-2 (7), and 17 through 20.
(2) Articles 55-3 through 55-7 of the Monopoly Regulation and Fair Trade Act shall apply mutatis mutandis to penalty surcharges under paragraph (1).
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 25-4 (Publication of Lists of Habitual Violators)
(1) Notwithstanding Article 62 of the Monopoly Regulation and Fair Trade Act which is applied mutatis mutandis pursuant to Article 27 (3), the Chairperson of the Fair Trade Commission shall publish a list of the business entities (hereinafter referred to as "habitual violator") whose penalty points under Article 26 (2) exceed the criteria prescribed by Presidential Decree, out of those who have violated this Act and received warnings, corrective measures imposed under Article 25 (1), or corrective recommendations made under Article 25-5 (1), three times or more, from the Fair Trade Commission for the past three years from the immediately preceding year: Provided, That any corrective measure shall be excluded from the foregoing if an objection is raised to the measure or any other petition of dissatisfaction is filed. <Amended by Act No. 14143, Mar. 29, 2016>
(2) The Chairperson of the Fair Trade Commission shall additionally disclose the list of persons falling under both of the following cases upon the completion of the petition of dissatisfaction referred to in the proviso to paragraph (1):
1. A person in whose case a warning or corrective measure is not revoked;
2. A person who would have been a habitual violator if he/she had not filed the petition of dissatisfaction against the warning or corrective measure.
(3) The Deliberative Committee on Publication of Lists of Habitual Violators comprised of members who are public officials and members who are not public officials (hereafter referred to as "Deliberative Committee" in this Article) shall be established in the Fair Trade Commission to deliberate on whether to publish the lists of habitual violators under paragraphs (1) and (2). <Amended by Act No. 15362, Jan. 16, 2018>
(4) The Fair Trade Commission shall notify any business entity on whom the Deliberative Committee has deliberated that he/she is to be included in the list of habitual violators so that he/she will be provided with the opportunity to vindicate himself/herself, and one month after such notification, the Fair Trade Commission shall order the Deliberative Committee to re-deliberate on whether to publish the list and thereby select those to be included in the list.
(5) Publications under paragraphs (1) and (2) shall be posted in the Official Gazette or on the website of the Fare Trade Commission.
(6) The organizational structure of the Deliberative Committee and other necessary matters concerning the publication of the lists of habitual violators shall be prescribed by Presidential Decree. <Amended by Act No. 15362, Jan. 16, 2018>
[This Article Newly Inserted by Act No. 9971, Jan. 25, 2010]
 Article 25-5 (Corrective Recommendation)
(1) The Fair Trade Commission may determine a correction plan and recommend a person placing an order or a prime contractor who has violated this Act to comply therewith. In this case, the Fair Trade Commission shall also notify the purport that in case where the person placing an order or the prime contractor accepts the relevant recommendation, it shall be deemed that the Fair Trade Commission has taken a corrective measure.
(2) A person placing an order or a prime contractor, in receipt of a recommendation under paragraph (1), shall notify the Fair Trade Commission of whether to accept the recommendation within ten days from the date of receipt of the recommendation.
(3) If a person placing an order or a prime contractor, in receipt of a recommendation under paragraph (1), accepts the recommendation, it shall be deemed to have received a corrective measure issued under Article 25 (1).
[This Article Newly Inserted by Act No. 14143, Mar. 29, 2016]
 Article 26 (Cooperation from Heads of Relevant Administrative Agencies)
(1) Where it is deemed necessary for implementing this Act, the Fair Trade Commission may hear the opinions of, or request provision of human resources for investigation or other necessary cooperation from, the heads of relevant administrative agencies.
(2) The Fair Trade Commission shall impose penalty points prescribed by Presidential Decree on a prime contractor or subcontractor who violates any provision of Articles 3 (1) through (4) and (9), 3-4, 4 through 12, 12-2, 12-3, 13, 13-2, 14 through 16, 16-2 (7), and 17 through 20 in consideration of the degree of the violation and damage and shall request the heads of relevant administrative agencies to place limitations on participation in bidding, suspend business operations under Article 82 (1) 7 of the Framework Act on the Construction Industry, or take other measures necessary to ensure fair subcontract transactions, if such penalty points exceed the criteria prescribed by Presidential Decree. <Amended by Act No. 9971, Jan. 25, 2010; Act No. 10475, Mar. 29, 2011; Act No. 10719, May 24, 2011; Act No. 11842, May 28, 2013; Act No. 12097, Aug. 13, 2013>
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 27 (Monopoly Regulation and Fair Trade Act to Be Applied Mutatis Mutandis)
(1) Articles 42, 43, 43-2, 44, 45, and 52 of the Monopoly Regulation and Fair Trade Act shall apply mutatis mutandis to the deliberation and decision of the Fair Trade Commission under this Act while Articles 53, 53-2, 53-3, 54, 55, and 55-2 of the same Act shall apply mutatis mutandis to the exclusive jurisdiction over raising an objection, filing a lawsuit, or filing an objection to any disposition rendered by the Fair Trade Commission.
(2) Articles 50, 50-2, and 53-3 of the Monopoly Regulation and Fair Trade Act shall apply mutatis mutandis to the investigation, hearing of opinion, etc., of the Fair Trade Commission necessary to implement this Act. <Amended by Act No. 14143, Mar. 29, 2016>
(3) Article 62 of the Monopoly Regulation and Fair Trade Act shall apply mutatis mutandis to persons falling under the following subparagraphs:
1. Members or public officials of the Fair Trade Commission who perform or have performed the duties prescribed by this Act;
2. Persons who are or have been in charge of the mediation of disputes arising from subcontract transactions at the councils.
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 28 (Relation to the Monopoly Regulation and Fair Trade Act)
Article 23 (1) 4 of the Monopoly Regulation and Fair Trade Act shall not apply to matters concerning subcontract transactions to which this Act applies.
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 29 (Penalty Provisions)
Any person who violates Article 62 of the Monopoly Regulation and Fair Trade Act, which shall apply mutatis mutandis pursuant to Article 27 (3), shall be punished by imprisonment with labor for not more than two years or by a fine not exceeding twenty million won. <Amended by Act No. 11842, May 28, 2013>
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 30 (Penalty Provisions)
(1) Any of the following prime contractors shall be punished by a fine not exceeding the amount equivalent to double the subcontract consideration for the manufacturing, etc. entrusted to a subcontractor by a prime contractor: <Amended by Act No. 9971, Jan. 25, 2010; Act No. 10475, Mar. 29, 2011; Act No. 11842, May 28, 2013; Act No. 12097, Aug. 13, 2013; Act No. 12709, May 28, 2014; Act No. 14456, Dec. 20, 2016>
1. A person who violates any provision of Article 3 (1) through (4) and (9) and Articles 3-4, 4 through 12, 12-2, 12-3, and 13;
2. A person who fails to guarantee payment of the construction consideration, in violation of Article 13-2 (1) through (3);
3. A person who violates any provision of Articles 15, 16 (1), (3) and (4), and 17;
4. A person who refuses consultations without any justifiable ground, in violation of Article 16-2 (7).
(2) A person who falls under subparagraph 1 shall be punished by a fine not exceeding 300 million won, and a person who falls under subparagraph 2 or 3 shall be punished by a fine not exceeding 150 million won: <Amended by Act No. 11842, May 28, 2013>
1. A person who takes an unfavorable measure against another person, in violation of Article 19;
2. A person who violates Article 18 or 20;
3. A person who fails to comply with an order issued under Article 25.
(3) A person who makes a false appraisal under Article 50 (1) 2 of the Monopoly Regulation and Fair Trade Act applied mutatis mutandis pursuant to Article 27 (2) shall be punished by a fine not exceeding 30 million won.
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 30-2 (Administrative Fines)
(1) In any of the following cases, a business entity or business association shall be punished by an administrative fine not exceeding 100 million won, and an executive officer or employee of the business entity or business association or any other person interested shall be punished by an administrative fine not exceeding 10 million won: <Amended by Act No. 9971, Jan. 25, 2010>
1. If he/she/it fails to appear without justifiable grounds, in violation of Article 50 (1) 1 of the Monopoly Regulation and Fair Trade Act applied mutatis mutandis pursuant to Article 27 (2);
2. If he/she/it fails to report or submit necessary materials or things, or reports or submits false materials or things prescribed in Article 50 (1) 3 or (3) of the Monopoly Regulation and Fair Trade Act applied mutatis mutandis pursuant to Article 27 (2);
3. Deleted. <by Act No. 9971, Jan. 25, 2010>
(2) A business entity or business association shall be punished by an administrative fine not exceeding 200 million and executives, an employee of the business entity or business association, or any other person interested shall be punished by an administrative fine not exceeding 50 million won, if he/she/it refuses, obstructs, or evades investigations under Article 50 (2) of the Monopoly Regulation and Fair Trade Act applied mutatis mutandis pursuant to Article 27 (2). <Newly Inserted by Act No. 9971, Jan. 25, 2010>
(3) A prime contractor who fails to present data in accordance with Article 22-2 (2) or presents false data shall be punished by an administrative fine not exceeding five million won. <Newly Inserted by Act No. 9971, Jan. 25, 2010>
(4) A person who fails to comply with the orders to maintain good order prescribed in Article 43-2 of the Monopoly Regulation and Fair Trade Act applied mutatis mutandis pursuant to Article 27 (1) shall be punished by an administrative fine not exceeding one million won.
(5) The Fair Trade Commission shall impose and collect administrative fines provided for in paragraphs (1) through (4) in accordance with the standards prescribed by Presidential Decree. <Amended by Act No. 9971, Jan. 25, 2010; Act No. 15016, Oct. 31, 2017>
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 31 (Joint Penalty Provisions)
Where a representative of a juristic person, or an agent, employee, or any other servant of a juristic person or individual commits an offence under Article 30 in connection with the business of the juristic person or individual, in addition to the punishment of such offender, the juristic person or individual shall be punished by a fine under each relevant Article: Provided, That where such juristic person or individual has not been negligent in giving due attention and supervision concerning the relevant duties to prevent such offence, this shall not apply.
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 32 (Criminal Charge)
(1) Prosecution for a crime prescribed in Article 30 may be initiated only when a criminal charge is filed by the Fair Trade Commission.
(2) Where the Fair Trade Commission acknowledges that the severity of any crime referred to in Article 30 is objectively obvious and grave enough to considerably hamper subcontract transaction practices, it shall file a criminal charge with the Prosecutor General. <Newly Inserted by Act No. 10475, Mar. 29, 2011>
(3) The Prosecutor General may notify the Fair Trade Commission that there exist facts fulfilling the requirements for filing a criminal charge under paragraph (2) and request it to file a criminal charge. <Newly Inserted by Act No. 10475, Mar. 29, 2011>
(4) Irrespective of a ruling made by the Fair Trade Commission that a case does not meet the requirement for filing a criminal charge under paragraph (2), the Chairperson of the Board of Audit and Inspection or the Minister of SMEs and Startups may request the Fair Trade Commission to file a criminal charge on any other ground, such as ripple effects to the society or the degree of damage to a subcontractor. <Newly Inserted by Act No. 11938, Jul. 16, 2013; Act No. 14839, Jul. 26, 2017>
(5) Upon receipt of a request to file a criminal charge under paragraph (3) or (4), the Chairperson of the Fair Trade Commission shall file a criminal charge with the Prosecutor General. <Newly Inserted by Act No. 11938, Jul. 16, 2013>
(6) The Fair Trade Commission may not withdraw a criminal charge once the prosecution is initiated. <Newly Inserted by Act No. 10475, Mar. 29, 2011; Act No. 11938, Jul. 16, 2013>
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 33 (Comparative Negligence)
Where a subcontractor is responsible for any offense against this Act committed by a prime contractor, it may be taken into consideration when taking corrective measures, filing a criminal charge, or applying penalty provisions under this Act.
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 34 (Relationship to Other Acts)
Where any of the provisions of the Act on the Promotion of Collaborative Cooperation between Large Enterprises and Small-Medium Enterprises, the Electrical Construction Business Act, the Framework Act on the Construction Industry, and the Information and Communication Construction Business Act is contrary to this Act, such provision shall be governed by this Act.
[This Article Wholly Amended by Act No. 9616, Apr. 1, 2009]
 Article 35 (Liability for Losses)
(1) A prime contractor shall be liable to compensate a person who sustains an injury or loss as a consequence of a prime contractor’s violation of any of the provisions of this Act for the injury or loss inflicted upon the person: Provided, That the foregoing shall not apply where the prime contractor proves that such injury or loss has not been caused by an intentional act or negligence of the prime contractor. <Amended by Act No. 11842, May 28, 2013>
(2) If a prime contractor inflicts an injury or loss upon a person by violating Articles 4, 8 (1), 10, 11 (1) or (2), 12-3 (3) and 19, the prime contractor shall be liable to compensate the injury or loss to the extent not exceeding three times the injury or loss inflicted upon the person: Provided, That the foregoing shall not apply where the prime contractor proves that such injury or loss has not been caused by an intentional act or negligence of the prime contractor. <Amended by Act No. 11842, May 28, 2013; Act No. 15362, Jan. 16, 2018>
(3) A court shall take the following matters into consideration when it determines the amount of compensation in accordance with paragraph (2): <Newly Inserted by Act No. 11842, May 28, 2013>
1. The degree of perception of intention or possibility of causing an injury or loss;
2. The severity of the damage inflicted upon a subcontractor and third parties by the violation;
3. Economic benefit that the prime contractor acquired by the violation;
4. The fine and penalty surcharge imposed for the violation;
5. The duration, frequency, etc. of relevant violations;
6. The prime contractor’s financial standing;
7. The degree of the prime contractor’s efforts to remedy injuries and losses.
(4) Articles 56-2 and 57 of the Monopoly Regulation and Fair Trade Act shall apply mutatis mutandis to a lawsuit filed for claiming compensation pursuant to paragraph (1) or (2). <Amended by Act No. 11842, May 28, 2013>
[This Article Newly Inserted by Act No. 10475, Mar. 29, 2011]
 Article 36 (Legal Fiction of Public Officials for Purposes of Penalty Provisions)
Any member of the Deliberative Committee prescribed in Article 25-4 (3) who is not a public official shall be deemed as a public official for purposes of applying Articles 127, and 129 through 132 of the Criminal Act.
[This Article Newly Inserted by Act No. 15362, Jan. 16, 2018]
ADDENDUM
This Act shall enter into force three months after the date of its promulgation.
ADDENDA <Act No. 4198, Jan. 13, 1990>
Article 1 (Enforcement Date)
This Act shall enter into force on April 1, 1990.
Articles 2 through 5 Omitted.
ADDENDA <Act No. 4419, Dec. 14, 1991>
Article 1 (Enforcement Date)
This Act shall enter into force on July 1, 1992. (Proviso Omitted.)
Articles 2 through 8 Omitted.
ADDENDA <Act No. 4514, Dec. 8, 1992>
(1) (Enforcement Date) This Act shall enter into force on April 1, 1993.
(2) (Transitional Measures) The amended provisions of Articles 6, 7, 13, and 15 shall not apply to any subcontract that has already been concluded as at the time this Act enters into force.
(3) Omitted.
ADDENDA <Act No. 4860, Jan. 5, 1995>
(1) (Enforcement Date) This Act shall enter into force on April 1, 1995.
(2) (Transitional Measures) Notwithstanding the amended provisions of Articles 2, 13 (4), and 16 (2), the previous provisions shall govern a subcontract transaction for which a subcontract has already been concluded as at the time this Act enters into force.
ADDENDA <Act No. 4898, Jan. 5, 1995>
Article 1 (Enforcement Date)
This Act shall enter into force on July 1, 1995.
Articles 2 through 11 Omitted.
ADDENDA <Act No. 5234, Dec. 30, 1996>
(1) (Enforcement Date) This Act shall enter into force on April 1, 1997.
(2) (Transitional Measures for Subcontract Transaction for which Subcontract has been Concluded) Notwithstanding the amended provisions of Articles 13-2 and 25-3, the previous provisions shall govern a subcontract transaction for which a subcontract has already been concluded as at the time this Act enters into force.
ADDENDA <Act No. 5386, Aug. 28, 1997>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 1998. (Proviso Omitted.)
Articles 2 through 8 Omitted.
ADDENDUM <Act No. 5454, Dec. 13, 1997>
This Act shall enter into force on January 1, 1998. (Proviso Omitted.)
ADDENDA <Act No. 5507, Jan. 13, 1998>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Article 2 Omitted.
ADDENDA <Act No. 5756, Feb. 5, 1999>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 7 Omitted.
ADDENDA <Act No. 5816, Feb. 5, 1999>
(1) (Enforcement Date) This Act shall enter into force on April 1, 1999.
(2) (Transitional Measures concerning Subcontract Transaction for which Subcontract has been Concluded) Notwithstanding the amended provisions of Article 13, the previous provisions shall govern a subcontract transaction for which a subcontract has already been concluded as at the time this Act enters into force.
ADDENDA <Act No. 6198, Jan. 21, 2000>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 7 Omitted.
ADDENDA <Act No. 6893, May 29, 2003>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 6 Omitted.
ADDENDA <Act No. 7107, Jan. 20, 2004>
(1) (Enforcement Date) This Act shall enter into force three months after the date of its promulgation.
(2) (Applicability to Penalty Provisions) The amended provisions of Article 30 (1) 3-2 shall apply beginning with the subcontract which is first concluded after this Act enters into force.
ADDENDA <Act No. 7315, Dec. 31, 2004>
Article 1 (Enforcement Date)
This Act shall enter into force on April 1, 2005. (Proviso Omitted.)
Articles 2 through 10 Omitted.
ADDENDA <Act No. 7488, Mar. 31, 2005>
(1) (Enforcement Date) This Act shall enter into force three months after the date of its promulgation.
(2) (Applicability to Subcontract Transactions of Entrustment with Service) The amended provisions of Article 2 (1) and (11) shall apply starting from the first subcontract transaction for which the contract for subcontract of entrustment with service is to be concluded after this Act enters into force.
(3) (Applicability to Additional Payment for Refund of Penalty Surcharges) The amended provisions of Article 25-3 (2) shall apply starting from the first penalty surcharges refunded after this Act enters into force.
(4) (Transitional Measures concerning Subcontract Transaction for which Subcontract has been Concluded) Notwithstanding the amended provisions of Articles 2 (1) and (11), 12-2, and 13-2 (5), the previous provisions shall govern a subcontract transaction for which a subcontract has already been concluded as at the time this Act enters into force.
ADDENDA <Act No. 7864, Mar. 3, 2006>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation.
Articles 2 through 11 Omitted.
ADDENDUM <Act No. 8539, Jul. 19, 2007>
This Act shall enter into force three months after the date of its promulgation.
ADDENDUM <Act No. 9085, Mar. 28, 2008>
This Act shall enter into force six months after the date of its promulgation.
ADDENDUM <Act No. 9616, Apr. 1, 2009>
This Act shall enter into force on the date of its promulgation.
ADDENDA <Act No. 9971, Jan. 25, 2010>
(1) (Enforcement Date) This Act shall enter into force six months after the date of its promulgation.
(2) (Applicability to Issuance of Documents and Requests, etc. for Verification of Details of Entrustment) The amended provisions of Article 3 shall apply starting from the entrustment with manufacturing, etc. first made after this Act enters into force.
ADDENDA <Act No. 10250, Apr. 12, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 9 Omitted.
ADDENDA <Act No. 10303, May 17, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 10 Omitted.
ADDENDA <Act No. 10475, Mar. 29, 2011>
(1) (Enforcement Date) This Act shall enter into force three months after the date of its promulgation.
(2) (Applicability to Amendment of Definitions) The amended provisions of Article 2 (2) shall apply starting from the subcontract to be concluded first after this Act enters into force.
ADDENDA <Act No. 10719, May 24, 2011>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 6 Omitted.
ADDENDA <Act No. 11461, Jun. 1, 2012>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation.
Articles 2 through 10 Omitted.
ADDENDA <Act No. 11842, May 28, 2013>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Article 2 (Applicability to Liability for Damages)
The amended provisions of Article 35 shall apply starting from the violation that first occurs after this Act enters into force.
ADDENDUM <Act No. 11938, Jul. 16, 2013>
This Act shall enter into force six months after the date of its promulgation.
ADDENDUM <Act No. 12097, Aug. 13, 2013>
This Act shall enter into force six months after the date of its promulgation.
ADDENDUM <Act No. 12709, May 28, 2014>
This Act shall enter into force six months after the date of its promulgation.
ADDENDA <Act No. 13451, Jul. 24, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation: Provided, That the amended provisions of Article 19 shall enter into force on the date of its promulgation.
Article 2 (Applicability concerning Transactions between both Member Company of Business Group Subject to Limitations on Cross Shareholding or Business Entity Prescribed by Presidential Decree and Middle-Standing Enterprise)
The amended provisions of Article 13 (11) shall apply beginning with the entrustment with manufacturing, etc., which is first made after this Act enters into force.
Article 3 (Applicability concerning Limited Period For Disposition Imposed for Violation of This Act)
The amended provisions of Article 22 (4) shall apply beginning with the violation of this Act on which an investigation is first commenced after this Act enters into force.
Article 4 (Applicability concerning Payment of Monetary Rewards)
The amended provisions of Article 22 (5) through (8) shall apply beginning with the cases where a report is made, or information is provided, and data evidencing the violation are presented pursuant to such amended provisions after this Act enters into force.
Article 5 (Applicability concerning Exemption from Limitation on Transactions Subject to Investigation)
The amended provisions of the proviso to Article 23 (1) shall apply beginning with the first case where a party to a dispute who falls under Article 24-4 (1) 1 or 2 requests the mediation of the dispute after this Act enters into force.
Article 6 (Transitional Measures concerning Prime Contractor)
With respect to subcontract transactions for which a subcontract has been concluded before this Act enters into force, the previous provisions of Article 2 (2) 2 shall apply notwithstanding the amended provisions thereof.
Article 7 (Transitional Measures concerning Commission Rate, etc. of Settlement Means Alternative to Bill)
With respect to subcontract transactions for which a subcontract has been concluded before this Act enters into force, the previous provisions of Article 13 (10) shall apply notwithstanding the amended provisions thereof.
Article 8 (Transitional Measures concerning Councils Established by Business Associations)
(1) A council established by a business association pursuant to the previous Article 24 (1), as at the time this Act enters into force, shall be deemed established by a business association pursuant to the amended provisions of Article 24 (2).
(2) Mediation of disputes and other acts conducted by and requests for mediation of disputes and other acts conducted to a council which a business association has established pursuant to the previous Article 24 (1), as at the time this Act enters into force, shall be deemed conducted by and to a council which a business association has established pursuant to the amended provisions of Article 24 (2).
ADDENDA <Act No. 14143, Mar. 29, 2016>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Article 2 (Applicability concerning Period for Dispute Mediation)
The amended provisions of Article 24-4 (3) and (4) shall apply beginning with the case in which a request for the mediation of a dispute is first made pursuant to Article 24-4 (1) after this Act enters into force.
Article 3 (Applicability concerning Presentation of Results of Compliance with Matters Agreed through Mediation)
The amended provisions of Article 24-5 (3) and (4) shall apply beginning with the case of which the proposal of mediation is first prepared pursuant to Article 24-5 (1) and (2) after this Act enters into force.
Article 4 (Transitional Measures concerning Corrective Recommendation)
A corrective recommendation made under the previous Article 25 (1), as at the time this Act enters into force, shall be deemed made by the Fair Trade Commission pursuant to the amended provisions of Article 25-5.
ADDENDA <Act No. 14456, Dec. 20, 2016>
Article 1 (Enforcement Date)
This Act shall enter into force three months after its promulgation.
Article 2 (Applicability to Return of Guarantee Deposits for Performance of Subcontracting)
The amended provisions of Article 13-2 shall apply starting from the entrustment of construction which is first made after this Act enters into force by a prime contractor who has concluded a long-term continuing contract for construction with any of the persons in the subparagraphs of Article 13-2 (3) to a subcontractor by means of a long-term continuing contract for subcontracting construction.
ADDENDA <Act No. 14814, Apr. 18, 2017>
Article 1 (Enforcement Date)
This Act shall enter into force six months after its promulgation.
Article 2 (Applicability to Prohibition of Unreasonable Payment in Substitutes)
The amended provisions of Article 17 shall apply starting from the subcontract first concluded after this Act enters into force.
ADDENDA <Act No. 14839, Jul. 26, 2017>
Article 1 (Enforcement Date)
(1) This Act shall enter into force on the date of its promulgation: Provided, That the amended provisions of an Act which was promulgated before this Act enters into force but the enforcement date of which has yet to arrive, among Acts to be amended under Article 5 of this Addenda, shall enter into force on the enforcement date of the relevant Act.
Articles 2 through 6 Omitted.
ADDENDA <Act No. 15016, Oct. 31, 2017>
Article 1 (Enforcement Date)
This Act shall enter into force six months after its promulgation.
Article 2 (Applicability to Issuance of Written Confirmations of Purchase)
The amended provisions of Article 7 (2) shall apply starting from the subcontract transaction in which a prime contractor first entrusts a subcontractor with manufacturing of goods for export or providing service for export after this Act enters into force.
ADDENDA <Act No. 15362, Jan. 16, 2018>
Article 1 (Enforcement Date)
This Act shall enter into force six months after its promulgation: Provided, That the amended provisions of Articles 25-4 and 36 shall enter into force on the date of their promulgation.
Article 2 (Applicability to Requests, etc. for Adjusting Subcontract Consideration Resulting from Fluctuation in Costs of Subject Matter, etc.)
The amended provisions of Articles 3 and 16-2 shall apply starting from the subcontract first concluded, modified, or renewed after this Act enters into force.
Article 3 (Applicability to Requests for Dispute Mediation and Related Matters)
The amended provisions of Articles 24-4 through 24-6 shall apply beginning with the case where a prime contractor, a subcontractor, or the cooperative prescribed in Article 16-2 (8) first files a request for dispute mediation after this Act enters into force.
Article 4 (Applicability to Liability for Damage)
The amended provisions of Article 35 shall apply the offense that first occurs after this Act enters into force.