FAIR AGENCY TRANSACTIONS ACT
Act No. 13614, Dec. 22, 2015
Amended by Act No. 14839, Jul. 26, 2017
Act No. 15013, Oct. 31, 2017
Act No. 15361, Jan. 16, 2018
Act No. 15548, Mar. 27, 2018
Act No. 16177, Dec. 31, 2018
Act No. 16648, Nov. 26, 2019
Act No. 17354, jun. 9, 2020
Act No. 17799, Dec. 29, 2020
Act No. 18570, Dec. 7, 2021
Act No. 19509, jun. 20, 2023
Act No. 19616, Aug. 8, 2023
Act No. 20238, Feb. 6, 2024
CHAPTER I GENERAL PROVISIONS
The purpose of this Act is to contribute to the sound growth of the national economy by establishing a fair trading order for agency transactions and by ensuring the mutually complementary and balanced growth of suppliers and agencies on equal grounds.
The terms used in this Act are defined as follows:
| 1. | The term "agency transactions" means transactions conducted between a supplier and an agency for the resale or consignment sale of goods or services which are provided repeatedly by entering into a contract with a fixed period; |
| 2. | The term "supplier" means a business entity that supplies produced or purchased goods or services to agencies; |
| 3. | The term "agency" means a business entity that is supplied with goods or services by a supplier and resells or sells them on consignment to many and unspecified retailers or consumers; |
| 4. | The term "return" means all acts by which an agency returns goods supplied by a supplier to the supplier, practically exchanges such goods with other goods of the supplier, etc., irrespective of formalities; |
| 5. | The term "sales incentive" means an economic benefit a supplier provides to an agency to promote sale of goods, irrespective of the name. |
| (1) | This Act shall not apply in any of the following cases: |
| 2. | Where an agency is not a small and medium entrepreneur; |
| 3. | Where a supplier is not acknowledged as holding a superior position to an agency. In such cases, whether a supplier holds a superior position to an agency in transactions shall be determined after the following matters are taken into a comprehensive consideration: |
| (a) | Structures of the commodity market and distribution market; |
| (b) | Business capability gap between the suppler and the agency; |
| (c) | Dependence of the agency on trade with the supplier; |
| (d) | Characteristics of goods or services to be traded. |
| (2) | This Act shall not apply to any of the following transactions: |
| 4. | Other transactions prescribed by Presidential Decree as requiring to be excluded from agency transactions, taking into consideration their nature, need for the protection of agency, etc. |
| Article 4 (Relationship to other Statutes) |
CHAPTER II FAIR AGENCY TRANSACTION
| Article 5 (Duty to Prepare Agency Transaction Contract) |
| (1) | Immediately after concluding a contract with an agency, the supplier shall provide the agency with a written contract (including an electronic document defined in subparagraph 1 of Article 2 of the Framework Act on Electronic Documents and Transactions; hereinafter the same shall apply) in which the following matters are specified (hereinafter referred to as "agency transaction contract"): |
| 1. | The forms, items, and period of transactions; |
| 2. | The methods, places, and dates and time of delivery; |
| 3. | The means and timing to pay price of goods; |
| 4. | The conditions for return of goods; |
| 5. | The transfer of business; |
| 6. | The grounds and procedures for termination of the contract; |
| 7. | The payment of sales incentives; |
| 8. | Other matters regarding the rights and obligations of the parties to the agency transaction contract, as prescribed by Presidential Decree. |
| (2) | A supplier and an agency shall respectively put their signatures [including digital signature defined in subparagraph 2 of Article 2 of the Digital Signature Act (referring to the one that can identify the real name of a signer); hereinafter the same shall apply] or names and seals on an agency transaction contract. <Amended on Jun. 9, 2020> |
| (3) | A supplier shall retain the agency transaction contract for three years from the date the agency transactions conducted with the agency terminate. |
| (4) | Deleted. <Dec. 7, 2021> |
| Article 5-2 (Standard Agency Contracts) |
| (1) | The Fair Trade Commission may prepare a standard form contract for agency transactions by type of business (hereinafter referred to as "standard agency contract") to establish sound practices in agency transactions and to allow parties to a contract to enter into the contract on equal terms, and may recommend business entities governed by this Act or trade associations consisting of business entities to use such standard agency contract. |
| (2) | Business entities and trade associations referred to in paragraph (1) may request the Fair Trade Commission to formulate or amend the standard agency contract. |
| (3) | Where necessary for formulating or amending the standard agency contract, the Fair Trade Commission may hear opinions of interested persons, experts with extensive knowledge of and experience in agency transactions, or other persons. |
| (4) | Except as provided in paragraphs (1) through (3), details necessary for formulating or amending the standard agency contract shall be determined and publicly notified by the Fair Trade Commission. |
[This Article Newly Inserted on Dec. 7, 2021]
| Article 6 (Prohibition on Compelled Purchases) |
| (1) | No supplier shall compel an agency to purchase any goods or services that the agency has no intention to purchase by unduly taking advantage of his or her position in a transaction, or cause his or her affiliated company or any other business entity to engage in such conduct. |
| (2) | The types of and criteria for such conduct referred to in paragraph (1) shall be prescribed by Presidential Decree. |
| Article 7 (Prohibition on Compelled Provision of Economic Benefits) |
| (1) | No supplier shall compel an agency to provide money, goods, services, or other economic benefits for him or her by unduly taking advantage of his or her position in a transaction, or cause his or her affiliated company or any other business entity to engage in such conduct. |
| (2) | The types of and criteria for such conduct referred to in paragraph (1) shall be prescribed by Presidential Decree. |
| Article 8 (Prohibition on Compulsion of Meeting Sales Targets) |
| (1) | No supplier shall compel an agency to achieve a trade target of the goods or services supplied by him or her after proposing it to the agency by unduly taking advantage of his or her position in a transaction, or cause his or her affiliated company or any other business entity to engage in such conduct. |
| (2) | The types of and criteria for such conduct referred to in paragraph (1) shall be prescribed by Presidential Decree. |
| Article 9 (Prohibition on Imposing Disadvantages) |
| (1) | No supplier shall establish or alter any terms and conditions of transactions to give any disadvantage to an agency or impose any disadvantage on the agency in the course of implementing the transactions in any way other than the conduct falling under Articles 6 through 8 by unduly taking advantage of his or her position in a transaction, or cause his or her affiliated company or any other business entity to engage in such conduct. |
| (2) | The types of and criteria for such conduct referred to in paragraph (1) shall be prescribed by Presidential Decree. |
| Article 10 (Prohibition on Interference with Management Activities) |
| (1) | No supplier shall interfere in the management activities of an agency by unduly taking advantage of his or her position in a transaction, or cause his or her affiliated company or any other business entity to engage in such conduct. |
| (2) | The types of and criteria for such conduct referred to in paragraph (1) shall be prescribed by Presidential Decree. |
| Article 11 (Prohibition on Refusal or Evasion of Requests for Confirmation of Details of Orders Placed) |
No supplier shall refuse or evade a reasonable request of an agency to verify details of an order, such as product and quantity that the agency has offered or expressed his or her intention to purchase by unduly taking advantage of his or her position in a transaction, or cause his or her affiliated company or any other business entity to engage in such conduct.
| Article 12 (Prohibition on Retaliation) |
No supplier shall suspend any transaction, reduce any quantity, or give any other disadvantage to an agency which engages in any of the following conduct, for reasons of having conducted such conduct, or cause his or her affiliated company or any other business entity to engage in such conduct: <Amended on Jan. 16, 2018; Dec. 29, 2020>
| 1. | Filing an application for mediation of a dispute under Article 19; |
| 4. | Cooperation in written fact-finding investigations conducted by the Fair Trade Commission pursuant to Article 27-2 (2). |
| Article 12-2 (Conclusion of Agreement between Supplier and Agency) |
| (1) | The Fair Trade Commission may recommend that a supplier and an agency conclude a voluntary agreement to comply with statutes and regulations relating to agencies and to pledge mutual assistance and cooperation. |
| (2) | Where a supplier and an agency conclude an agreement pursuant to paragraph (1), the Fair Trade Commission shall formulate and implement assistance policy including rewards to encourage the implementation thereof. |
| (3) | The Fair Trade Commission shall prescribe necessary matters for the details, conclusion procedures, implementation evaluation, and assistance policy relating to an agreement prescribed in paragraph (1). |
[This Article Newly Inserted on Dec. 31, 2018]
| Article 12-3 (Recommendation for Transaction Standards by Type of Business) |
Where necessary for establishing fair practices in agency transactions, the Fair Trade Commission may determine desirable transaction standards by type of business and recommend that suppliers comply with such standards.
[This Article Newly Inserted on Dec. 7, 2021]
| Article 12-4 (Education on Agency Transactions) |
| (1) | In order to establish fair practices in agency transactions, the Fair Trade Commission may perform the following business affairs: |
| 1. | Offering education and training opportunities to suppliers and agencies; |
| 2. | Dissemination and diffusion of voluntary compliance programs for fair transactions, aimed to encourage suppliers to voluntarily observe this Act (referring to internal compliance systems, such as education and supervision, which are established and operated autonomously by a business entity to comply with regulations related to fair transactions); |
| 3. | Publicity on systems for a balanced development between suppliers and agencies; |
| 4. | Other business affairs necessary for establishing fair practices in agency transactions. |
| (2) | The Fair Trade Commission may designate an institution or organization that meets the requirements in terms of facilities, human resources, and records on education as prescribed by Presidential Decree to entrust it with the business affairs referred to in the subparagraphs of paragraph (1). |
| (3) | Where any institution or organization designated under paragraph (2) falls under any of the following cases, the Fair Trade Commission may revoke the designation or suspend the validity of the designation for a specified period not exceeding three months: |
| 1. | Where it fails to faithfully perform the business affairs entrusted pursuant to paragraph (2); |
| 2. | Where it ceases to meet the requirements for designation prescribed in paragraph (2). |
| (4) | Details necessary for procedures and methods for designation, the performance of entrusted business affairs, etc. under paragraph (2) shall be determined and publicly notified by the Fair Trade Commission. |
[This Article Newly Inserted on Dec. 7, 2021]
CHAPTER III MEDIATION OF DISPUTES
| Article 13 (Establishment of Agency Dispute Mediation Council) |
| (1) | The Agency Dispute Mediation Council (hereinafter referred to as "Council") shall be established in the Korea Fair Trade Mediation Agency (hereinafter referred to as "Mediation Agency") under Article 72 (1) of the Monopoly Regulation and Fair Trade Act with the aim of mediating disputes over agency transactions. <Amended on Mar. 27, 2018; Dec. 29, 2020> |
| (2) | The Special Metropolitan City Mayor, the Mayor of each Metropolitan City, the Mayor of each Special Self-Governing City, the Governor of each Do and the Governor of the Special Self-Governing Province (hereinafter referred to as "Mayor/Do Governor") may establish the Council in the Special Metropolitan City, in each Metropolitan City, in each Special Self-Governing City, in each Do and in the Special Self-Governing Province (hereinafter referred to as "City/Do"). <Newly Inserted on Mar. 27, 2018> |
| (3) | The Fair Trade Commission may determine operational guidelines necessary for maintaining consistency in dispute mediation and give public notice thereof. <Newly Inserted on Dec. 7, 2021> |
| Article 14 (Composition of Council) |
| (1) | The Council shall be comprised of nine members, including one chairperson. |
| (2) | The Council shall be comprised of the same number of seats, each for members representing the public interest, members representing the suppliers' interest, and members representing the agencies' interest. |
| (3) | From among any of the following persons, those appointed or commissioned by the Chairperson of the Fair Trade Commission upon recommendation of the President of the Mediation Agency shall become members of the Council established in the Mediation Agency (hereinafter referred to as "Council of the Mediation Agency"), and from among any of the following persons, those appointed or commissioned by the Mayor/Do Governor shall become members of the Council established in each City/Do (hereinafter referred to as "Council of the City/Do"): <Amended on Mar. 27, 2018; Aug, 8, 2023> |
| 1. | Any person who majored in law, economics, business administration at a university or college, and holds or has held the position of associate professor or a higher position or an equivalent position at a school provided for in subparagraph 1, 2, or 5 of Article 2 of the Higher Education Act or an authorized research institute; |
| 2. | Any person who served or has served as a judge or prosecutor or any person qualified as an attorney-at-law; |
| 3. | Any person who has experience in monopoly regulation and fair trade affairs and serves or has served as a public official of at least Grade IV (including a public official in general service of the Senior Executive Service); |
| 4. | Other persons with extensive knowledge and experience in agency transactions and mediation of disputes. |
| (4) | The chairperson of the Council of the Mediation Agency shall be appointed or commissioned by the Chairperson of the Fair Trade Commission from among the members representing the public interest, and the chairperson of the Council of the City/Do shall be appointed or commissioned by the Mayor/Do Governor from among the members representing the public interest. In such cases, the chairperson of the Council of the Mediation Agency shall be full-time. <Amended on Mar. 27, 2018; Aug. 8, 2023> |
| (5) | The term of office of the members of the Council shall be three years, and may be consecutively renewed. |
| (6) | In the event of a vacancy by a member of the Council, a supplementary member shall be appointed or commissioned pursuant to paragraph (3), and the term of office of such supplementary member shall be the remainder of his or her predecessor's term of office. |
| (7) | The chairperson of the Council of the Mediation Agency shall not engage in any for-profit business affairs other than his or her duties. <Newly Inserted on Feb. 6, 2024> |
| (9) | The chairperson of the Council of the Mediation Agency may concurrently conduct non-profit business affairs subject to examination by the Chairperson of the Fair Trade Commission as to whether it falls under the for-profit business affairs under paragraph (8). <Newly Inserted on Feb. 6, 2024> |
| Article 15 (Restrictions on Commissioning Members Representing Public Interest) |
| (1) | No member representing the public interest shall be commissioned from among persons who serve as an executive officer or employee of a supplier or agency as of the commissioning date. |
| (2) | The Chairperson of the Fair Trade Commission and the Mayor/Do Governor shall immediately dismiss any person commissioned as a member representing the public interest if the person becomes an executive officer or employee of a supplier or agency. <Amended on Mar. 27, 2018> |
| Article 16 (Meetings of Council) |
| (1) | Meetings of the Council shall be classified into a meeting comprised of all members (hereinafter referred to as "plenary meeting") and a meeting comprised of each member from those representing the public interest, those representing the suppliers' interest, and those representing the agencies' interest (hereinafter referred to as "subcommittee meeting"). |
| (2) | A subcommittee meeting shall deliberate on and adopt resolutions on matters delegated by a plenary meeting. |
| (3) | A plenary meeting shall be chaired by the chairperson; and a majority of all the incumbent members shall constitute a quorum, and any decision thereof shall require the concurring vote of a majority of those present. |
| (4) | A subcommittee meeting shall be chaired by a member representing the public interest; and the attendance of all the incumbent members shall constitute a quorum, and any decision thereof shall require the concurring vote of all the members present. In such cases, resolutions adopted by a subcommittee meeting shall be deemed resolutions adopted by the Council, and the outcomes thereof shall be reported in a plenary meeting. |
| (5) | When the chairperson is unable to perform his or her duties due to any extenuating circumstances, a member designated by the Chairperson of the Fair Trade Commission or the Mayor/Do Governor from among members representing the public interest shall act on behalf of the chairperson. <Amended on Mar. 27, 2018> |
| (6) | Any party to a dispute arising out of agency transactions which is subject to mediation (hereinafter referred to as "disputing party") may appear at a meeting of the Council to state his or her opinion or submit relevant documents. |
| Article 17 (Disqualification of, Challenge to, or Refrainment by, a Member) |
| (1) | A member who falls under any of the following cases shall be disqualified from mediation on the relevant matters for dispute mediation: |
| 1. | Where a member or his or her current or former spouse becomes a disputing party to the case brought for mediation or is related thereto as a joint holder of any right or liability; |
| 2. | Where a member is currently or formerly in a blood relationship with a disputing party to the case brought for mediation; |
| 3. | Where a member or a corporation to which a member belongs performs any consultative or advisory role relating to the legal matters, business administration, etc. of a disputing party; |
| 4. | Where a member or a corporation to which a member belongs is involved or has been involved in the relevant matters brought for mediation as a proxy of a disputing party or has given testimony thereto or conducted appraisal thereof. |
| (2) | If any ground exists for which it would be difficult to expect any member to conduct impartial mediation of the Council, a disputing party may file a request for the challenge to the relevant member with the Council. |
| (3) | Any member of the Council may, if falling under paragraph (1) or (2), refrain from mediating the relevant matters brought for mediation. |
| Article 18 (Matters Subject to Mediation by Council) |
The Council shall mediate disputes related to the provisions of Articles 5 through 12 at the request of the Fair Trade Commission or a disputing party.
| Article 19 (Application for Dispute Mediation) |
| (1) | In connection with the matters subject to mediation under Article 18, any disputing party may file an application for dispute mediation with the Council by submitting a written application stating the matters prescribed by Presidential Decree (hereinafter referred to as "application for dispute mediation"). <Amended on Dec. 29, 2020; Jun. 20, 2023> |
| (2) | The Fair Trade Commission may request the Council to mediate disputes arising from agency transactions. |
| (3) | Where disputing parties file an application for dispute mediation with different Councils or with several Councils in an overlapping manner, the Council selected by an agency from among the following Councils shall be in charge of dispute mediation: <Newly Inserted on Mar. 27, 2018> |
| 1. | The Council of the Mediation Agency; |
| 2. | The Council of the City/Do where the principal place of business of the agency is located; |
| 3. | The Council of the City/Do where the principal place of business of the supplier is located. |
| (4) | Upon receipt of an application for dispute mediation under paragraph (1), the Council shall immediately notify disputing parties of the matters brought for mediation; the Council of the Mediation Agency shall inform the Fair Trade Commission of such matters; and the Council of the City/Do shall inform the Fair Trade Commission and the City/Do thereof. <Amended on Mar. 27, 2018; Dec. 7, 2021> |
| (5) | An application for dispute mediation filed under paragraph (1) shall have the effect of interruption of the extinctive prescription: Provided, That the same shall not apply where the application is withdrawn or rejected. <Amended on Mar. 27, 2018> |
| (6) | In cases falling under the proviso to paragraph (5), if any judicial claim, participation in bankruptcy procedures, seizure or provisional seizure, or provisional disposition occurs within six months, the period of prescription shall be deemed interrupted by the initial application for dispute mediation. <Amended on Mar. 27, 2018> |
| (7) | Extinctive prescription interrupted under the main sentence of paragraph (5) shall be run anew in any of the following cases: <Amended on Mar. 27, 2018> |
| 1. | Where the members who have participated in mediation under Article 21 (1) and disputing parties prepare a mediation protocol affixing their names and seals thereon; |
| 2. | Where mediation proceedings are terminated, failing to mediate the dispute. |
| (1) | The Council may recommend disputing parties to mediate the matter in question on their own or prepare and present a proposal of mediation. |
| (2) | Where necessary to confirm the facts related to the relevant matters subject to mediation, the Council may conduct an investigation or request disputing parties to submit related materials or to appear at a meeting. |
| (3) | The Council shall reject an application for mediation in any of the following cases; in such cases, the Council shall obtain confirmation from the Fair Trade Commission as to whether the act or case for which the application for dispute mediation is filed falls under subparagraph 3: <Amended on Jun. 20, 2023> |
| 1. | Where the application for mediation is filed by a person not directly interested in the matters brought for mediation; |
| 2. | Where the application for mediation is filed for the matters not subject to the application of this Act or mediation under Article 18; |
| 3. | Where the application for mediation is filed for a case for which the Fair Trade Commission has initiated an investigation under Article 80 of the Monopoly Regulation and Fair Trade Act, which applies mutatis mutandis pursuant to Article 27 (2), before the application is filed: Provided, That this shall not apply where such application for dispute mediation is filed after the Fair Trade Commission has issued an order to take corrective measures, etc. |
| (4) | The Council may terminate mediation proceedings in any of the following cases: <Amended on Jun. 20, 2023> |
| 1. | Where either of the disputing parties refuses mediation while mediation proceedings are in progress; |
| 2. | Where the disputing parties file an application for arbitration pursuant to the Arbitration Act after the filing of an application for mediation; |
| 3. | Other cases where any matter prescribed by Presidential Decree as having no practical benefit in advancing mediation occurs. |
| (5) | The Council shall terminate mediation proceedings in any of the following cases: |
| 1. | Where the mediation is completed by the acceptance of the recommendation or mediatory suggestion of the Council by disputing parties or by reaching agreement between them on the mediation; |
| 2. | Where the mediation is incomplete because either of the disputing parties does not accept the recommendation or mediatory suggestion of the Council; |
| 3. | Where the mediation remains incomplete until after the lapse of 60 days (90 days if both disputing parties agree to extend the period) from the date the application for the mediation has been received under Article 19 (1) or the mediation is requested under paragraph (2) of the same Article. |
| (6) | Where the Council rejects an application for mediation or terminates mediation proceedings pursuant to paragraphs (3) through (5), the Council of the Mediation Agency shall, without delay, report in writing on the details of mediation, grounds for rejection of the application for mediation or for the termination of mediation proceedings, and other matters to the Fair Trade Commission and the Council of the City/Do to the Fair Trade Commission and the City/Do along with the related documents, and they shall notify the disputing parties of such fact, as prescribed by Presidential Decree. <Amended on Mar. 27, 2018; Dec. 7, 2021> |
| (7) | With regard to matters brought for mediation for which an order to take corrective measures, etc. is not issued before the commencement of the mediation proceedings, the Fair Trade Commission shall not issue an order to take corrective measures under Article 23 or make a recommendation for correction under Article 24 (1) to disputing parties until the mediation proceedings are terminated. <Amended on Dec. 29, 2020; Jun. 20, 2023> |
| Article 20-2 (Relationship to Lawsuits) |
| (1) | Where a lawsuit is instituted with respect to a case for which an application for mediation has been filed under Article 19 (1) before or after the filling of the application, and the lawsuit is underway, the court of the lawsuit may suspend the legal proceedings until the mediation is completed. |
| (2) | Where the legal proceedings are not suspended under paragraph (1), the Council shall suspend mediation proceedings for the relevant case. |
| (3) | Where a lawsuit is underway for an identical type of case or a similar case involving multiple persons for the same reason as the case for which an application for mediation has been filed, the Council may suspend mediation proceedings by its decision. |
[This Article Newly Inserted on Jun. 20, 2023]
| Article 21 (Preparation of Mediation Protocol and Its Effect) |
| (1) | Where the mediation of a dispute is completed, the Council shall prepare a mediation protocol affixed with names and seals of the members who have participated and the disputing parties. <Amended on Dec. 7, 2021> |
| (2) | Where disputing parties mediate matters brought for mediation on their own before the commencement of the mediation proceedings and request for preparation of a mediation protocol, the Council shall prepare such mediation protocol. |
| (3) | Disputing parties shall perform the matters agreed upon during mediation and submit the outcomes of the performance to the Fair Trade Commission. |
| (4) | With regard to matters brought for dispute mediation for which an order to take corrective measures, etc. is not issued before the commencement of the mediation proceedings, the Fair Trade Commission shall neither issue an order to take corrective measures under Article 23 nor make a recommendation for correction under Article 24 (1), where an agreement has been reached as provided for in paragraph (1) or (2) and it is performed. <Amended on Dec. 7, 2021; Jun. 20, 2023> |
| (5) | A mediation protocol prepared pursuant to paragraph (1) or (2) shall have the same effect as a court settlement. <Newly Inserted on Dec. 7, 2021> |
| Article 22 (Provisions Governing Organization of Council) |
Except as provided in Articles 13 through 20, 20-2, and 21, matters necessary for the organization, operation, mediation proceedings, etc. shall be prescribed by Presidential Decree. <Amended on Jun. 20, 2023>
CHAPTER IV PROCEDURES FOR FAIR TRADE COMMISSION TO HANDLE CASES
| Article 23 (Corrective Measures) |
In the event of any violation of any of Articles 6 through 12, the Fair Trade Commission may order the relevant business entity to discontinue the relevant violation, to publish the fact that it has received a corrective order, and to take other necessary measures to correct the violation.
| Article 24 (Recommendation for Correction) |
| (1) | In the event of a violation of this Act, the Fair Trade Commission may determine a scheme for correction and recommend the relevant business entity to comply therewith. |
| (2) | A business entity that has received a recommendation under paragraph (1) shall notify the Fair Trade Commission within 10 days from the date the relevant recommendation is received, as to whether it accepts the recommendation. |
| (3) | When a business entity that has received a recommendation for correction under paragraph (1) accepts the recommendation, it shall be construed that an order for corrective measures under Article 23 has been received thereby. |
| Article 24-2 (Consent Resolutions) |
| (1) | A supplier subject to investigation or deliberation by the Fair Trade Commission may file with the Fair Trade Commission a written application for a resolution to the same effect as a scheme for correction specified in subparagraph 2 or 3 (hereinafter referred to as "consent resolution"), stating the following matters, for such purposes as voluntarily addressing unfairness in transactions, etc. resulting from an act subject to such investigation or deliberation (hereafter in this Article referred to as the "relevant act"), remedying damage suffered by agencies, and improving transaction practices: |
| 1. | Facts that specify the relevant act; |
| 2. | A scheme for correction necessary for restoring competition practices by such means as suspension of the relevant act or reinstatement, or for actively improving transaction practices; |
| 3. | A scheme for correction necessary for remedying or preventing damage caused to agencies, etc. |
| (2) | Where the Fair Trade Commission in receipt of an application under paragraph (1) deems that a scheme for correction referred to in paragraph (1) 2 or 3 (hereinafter referred to as "scheme for correction") satisfies all of the following requirements after investigating facts with regard to the relevant act, it may adopt a consent resolution without commencing procedures for deliberation on the relevant act or after suspending the procedures. In such cases, the scheme for correction may be revised following consultation with the supplier who has filed an application for a consent resolution (hereinafter referred to as "applicant"): |
| 1. | The scheme for correction shall be in balance with corrective measures and other sanctions to be imposed if the relevant act is found to violate this Act; |
| 2. | The scheme for correction shall be deemed appropriate to restore fair and free competition practices or transaction practices or to achieve the complementary and balanced development for suppliers, agencies, etc. |
| (3) | Where the relevant act falls under any of the following, the Fair Trade Commission shall proceed with the procedures for investigation or deliberation under this Act without adopting a consent resolution: |
| 1. | Where the requirement for filing a criminal charge under Article 33 (2) is met; |
| 2. | Where the applicant withdraws his or her application before a consent resolution is adopted. |
| (4) | Any consent resolution does not mean that the relevant act is recognized as a violation of this Act, and no one shall assert that the relevant act violates this Act on the grounds that an applicant is issued a consent resolution. |
| (5) | The Fair Trade Commission shall determine whether to commence the procedures for consent resolutions in overall consideration of the necessity for prompt measures and for direct compensation for damage caused to agencies, and other matters. |
[This Article Newly Inserted on Dec. 7, 2021]
| Article 24-3 (Charges for Compelling Compliance) |
| (1) | The Fair Trade Commission may impose on a person, who fails to comply with a consent resolution without good reason within the period for compliance determined when the consent resolution is adopted, a charge for compelling compliance not exceeding two million won per day from the date such period expires until the consent resolution is complied with or revoked. |
| (2) | The imposition, payment, collection, and refund of charges for compelling compliance and other necessary matters shall be prescribed by Presidential Decree: Provided, That charges for compelling compliance in arrears shall be collected in the same manner as national taxes are compulsorily collected. |
| (3) | The Fair Trade Commission may entrust the Commissioner of the National Tax Service with business affairs related to the collection of charges for compelling compliance or dispositions on delinquency under paragraphs (1) and (2), as prescribed by Presidential Decree. |
[This Article Newly Inserted on Dec. 7, 2021]
| Article 25 (Penalty Surcharges) |
| (1) | In the event of a violation of any of Articles 6 through 12, the Fair Trade Commission may impose a penalty surcharge on the relevant business entity to the extent of not exceeding the amount associated with the violation of the Act prescribed by Presidential Decree: Provided, That where it is impractical to calculate the amount associated with the violation of the Act, etc., the Fair Trade Commission may impose a penalty surcharge to the extent of not exceeding 500 million won. |
| Article 26 (Cooperation of Heads of Relevant Administrative Agencies) |
If the Fair Trade Commission deems it necessary for enforcing this Act, it may seek opinions from the heads of relevant administrative agencies or request them to conduct necessary investigations or to provide necessary materials.
| Article 26-2 (Payment of Monetary Awards) |
| (1) | The Fair Trade Commission may pay a monetary award, within the budget, to a person who makes a report, or provides information, on any violation under this Act and also presents relevant evidentiary materials. |
| (2) | The scope of persons eligible for a monetary award under paragraph (1), criteria and procedures for the payment thereof, and other necessary matters shall be prescribed by Presidential Decree. |
| (3) | Where a fact falling under any of the following cases becomes known after the payment of a monetary award pursuant to paragraph (1), the Fair Trade Commission shall notify the person paid the monetary award of the amount to be returned, and he or she shall return it within 30 days from the receipt of such notification: |
| 1. | Where he or she has received the monetary award by improper means, such as evidence collection by illegal or unfair means, false reporting, false statement, evidence fabrication; |
| 2. | Where he or she has received the monetary award under other statutes and regulations on the same ground; |
| 3. | Where he or she has mistakenly received the monetary award due to an error, etc. |
| (4) | Where a person who is obliged to return a monetary award pursuant to (3) fails to do so until the deadline for payment, the Fair Trade Commission may collect it in the same manner as delinquent national taxes are collected. |
[This Article Newly Inserted on Jan. 16, 2018]
| Article 27 (Mutatis Mutandis Application of the Monopoly Regulation and Fair Trade Act) |
| (3) | Articles 96 through 101 of the Monopoly Regulation and Fair Trade Act shall apply mutatis mutandis to an objection against a disposition made by the Fair Trade Commission under this Act or a disposition made by a Mayor/Do Governor with authority delegated under Article 28, suspending execution of an order to take measures for rectification, the filing of a lawsuit, and exclusive jurisdiction over an appeal. <Amended on Mar. 27, 2018; Dec. 29, 2020> |
| (4) | Article 119 of the Monopoly Regulation and Fair Trade Act shall apply mutatis mutandis to commissioners and public officials of the Fair Trade Commission who perform or have performed their duties under this Act or persons who are or have been in charge of the business affairs related to the dispute mediation in the Council. <Amended on Dec. 29, 2020> |
| Article 27-2 (Written Fact-Finding Investigations) |
| (1) | The Fair Trade Commission shall conduct written fact-finding investigations and publish the findings thereof to establish fair trading practices in transactions between suppliers and agencies, etc. |
| (2) | Where the Fair Trade Commission intends to conduct a fact-finding investigation pursuant to paragraph (1), it shall formulate a plan including the scope of persons to be investigated; period and details of investigation; methods and procedures for investigation; scope of publication of investigation results; and other relevant matters, and may request the persons to be investigated to present materials necessary for the fact-finding investigation. |
| (3) | Where requiring submission of materials pursuant to paragraph (2), the Fair Trade Commission shall notify, in writing, the person to be investigated of the scope and details of such materials; ground for such request; deadline for submission; and other relevant matters. |
[This Article Newly Inserted on Jan. 16, 2018]
| Article 28 (Delegation and Entrustment of Authority) |
Part of the authority granted to the Fair Trade Commission pursuant to this Act may be delegated to the heads of its affiliated agencies or the Mayor/Do Governor or may be entrusted to the heads of other administrative agencies, as prescribed by Presidential Decree.
The Fair Trade Commission may require a person delegated or entrusted with administrative affairs pursuant to Article 28, to make a necessary report.
CHAPTER V PENALTY PROVISIONS
| Article 30 (Penalty Provisions) |
| (1) | Any of the following persons shall be punished by imprisonment with labor for not more than two years or by a fine not exceeding 150 million won: <Amended on Mar. 27, 2018> |
| 1. | A person who compels purchases, in violation of Article 6; |
| 2. | A person who compels provision of economic benefits, in violation of Article 7; |
| 3. | A person who compels sales targets, in violation of Article 8; |
| 4. | A person who gives any disadvantage, in violation of Article 9; |
| 5. | A person who interferes with management activities, in violation of Article 10; |
| 6. | A person who refuses or evades requests for verification of details of orders placed, in violation of Article 11; |
| 7. | A person who imposes any disadvantage, in violation of Article 12; |
| 8. | A person who fails to comply with an order to take corrective measures, in violation of Article 23. |
| (2) | A person who discloses any confidential information or who uses any confidential information for any purpose other than for the enforcement of this Act, in violation of Article 119 of the Monopoly Regulation and Fair Trade Act which applies mutatis mutandis pursuant to Article 27 (4), shall be punished by imprisonment with labor for not more than two years or by a fine not exceeding 20 million won: <Amended on Nov. 26, 2019; Dec. 29, 2020> |
| (3) | The punishments of imprisonment with labor and fines referred to in paragraph (1) may be imposed concurrently. |
| Article 31 (Joint Penalty Provisions) |
Where the representative of a corporation or an agent or employee of, or other persons employed by, a corporation or individual commits any violation described in Article 30 in conducting the business affairs of the corporation or individual, the corporation or individual shall be fined as prescribed in the relevant Article, in addition to punishing the violator accordingly: Provided, That the same shall not apply where such corporation or individual has not neglected to exercise due care and supervision concerning the relevant duties in order to prevent such violation.
| Article 32 (Administrative Fines) |
| (1) | A supplier shall be punished by an administrative fine not exceeding 200 million won, if he or she falls under subparagraph 1; by an administrative fine not exceeding 100 million won, if he or she falls under subparagraph 2 or 3; by an administrative fine not exceeding 50 million won, if he or she falls under subparagraph 4; by an administrative fine not exceeding 10 million won, if he or she falls under subparagraph 5; or by an administrative fine not exceeding 20 million won, if he or she falls under subparagraph 6: <Amended on Jan. 16, 2018; Dec. 29, 2020> |
| 4. | A person who violates Article 5 (1) or (2); |
| 6. | A person who fails to submit materials as provided for in Article 27-2 (2) or submits false materials. |
| (2) | An executive officer or employee of a supplier or any other interested person shall be punished by an administrative fine not exceeding 50 million won, if he or she falls under paragraph (1) 1; by an administrative fine not exceeding 10 million won, if he or she falls under subparagraph 2 or 3 of the same paragraph; or by an administrative fine not exceeding 5 million won, if he or she falls under subparagraph 6. <Amended on Jan. 16, 2018> |
| (4) | Administrative fines provided for in paragraphs (1) through (3) shall be imposed and collected by the Fair Trade Commission, as prescribed by Presidential Decree. |
| Article 33 (Criminal Charge) |
| (1) | Prosecution for an offense under Article 30 (1) may be initiated only where the Fair Trade Commission files a criminal charge. |
| (2) | If an offense under Article 30 (1) is objectively deemed obvious and serious, the Fair Trade Commission shall file a criminal charge in relation thereto with the Prosecutor General. |
| (3) | The Prosecutor General may notify the Fair Trade Commission that facts exist constituting a criminal charge under paragraph (2) and request it to file a criminal charge in relation thereto. |
| (4) | Even if the Fair Trade Commission determines that the gravity of an offense does not meet the requirements for 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 social ripple effects or the degree of losses caused to agencies. <Amended on Jul. 26, 2017> |
| (5) | Where the Chairperson of the Fair Trade Commission receives a request to file a criminal charge under paragraph (3) or (4), he or she shall file a criminal charge with the Prosecutor General. |
| (6) | The Fair Trade Commission shall not cancel its filing of a criminal charge after the prosecution is initiated. |
| Article 34 (Liability for Loss) |
| (1) | If a supplier violates any of the provisions of this Act and thereby causes an agency any loss, he or she shall be liable to compensate the agency for such loss: Provided, That the same shall not apply where the supplier proves that he or she has violated any of the provisions of this Act by intent or negligence. |
| (2) | Notwithstanding paragraph (1), if a supplier violates Article 6, 7, or 12 and thereby causes an agency any loss, he or she shall be liable to compensate for such loss within the limit of three times the loss suffered by the agency: Provided, that the same shall not apply where the supplier proves that the loss was caused neither by intent nor negligence. <Amended on Dec. 7, 2021> |
| (3) | In determining damages in accordance with paragraph (2), the court shall take the following matters into consideration: |
| 1. | The degree of perception of intention or the likelihood of occurrence of a loss; |
| 2. | Extent of the damage suffered by the agency due to the violation; |
| 3. | Economic benefits that the supplier acquired by committing the violation; |
| 4. | The fine or penalty surcharge imposed for the violation; |
| 5. | The duration, frequency, etc. of the violation; |
| 6. | The supplier's financial standing; |
| 7. | The degree of the supplier's efforts to remedy damage. |
ADDENDA <Act No. 13614, Dec. 22, 2015>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Article 2 (Applicability)
This Act shall begin to apply from the first contract concluded or renewed between a supplier and an agency 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 amendments to Acts promulgated before this Act enters into force, but for which the effective date has not yet arrived, among the Acts amended pursuant to Article 5 of the Addenda, shall enter into force from the enforcement date of the relevant Act. |
Articles 2 through 6 Omitted.
ADDENDUM <Act No. 15013, Oct. 31, 2017>
This Act shall enter into force on the date of its promulgation.
ADDENDA <Act No. 15361, Jan. 16, 2018>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation: Provided, That the amended provisions of Article 26-2 shall enter into force six months after the date of its promulgation. Article 2 (Applicability to Payment of Monetary Awards)
The amended provisions of Article 26-2 shall begin to apply from the first case where a reporting, or provision of information, on violation, is made, and also relevant evidentiary materials are submitted after such amendment enters into force.
ADDENDA <Act No. 15548, Mar. 27, 2018>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2019: Provided, That the amended provisions of Article 30 shall enter into force on the date of its promulgation. Article 2 (Applicability to Application for Dispute Mediation)
The amended provisions of Articles 19 and 20 shall begin to apply from the first case where disputing parties file the first application for dispute mediation after this Act enters into force.
ADDENDUM <Act No. 16177, Dec. 31, 2018>
This Act shall enter into force six months after the date of its promulgation.
ADDENDUM <Act No. 16648, Nov. 26, 2019>
This Act shall enter into force six months after the date of its promulgation.
ADDENDA <Act No. 17354, Jun. 9, 2020>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 8 Omitted.
ADDENDA <Act No. 17799, Dec. 29, 2020>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 27 Omitted.
ADDENDA <Act No. 18570, Dec. 7, 2021>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Article 2 (Applicability to Effect of Mediation Protocol)
The amended provisions of Article 21 (5) shall begin to apply where a disputing party files an application for mediation with the Council or where the Fair Trade Commission requests the Council to conduct mediation on or after the date this Act enters into force. Article 3 (Applicability to Compensation for Loss)
The amended provisions of Article 34 (2) shall begin to apply where a supplier causes an agency any loss in violation of Article 12 on or after the date this Act enters into force.
ADDENDA <Act No. 19509, Jun. 20, 2023>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation: Provided, That the amended provisions of Articles 20 (4) and 20-2 shall enter into force six months after the date of their promulgation. Article 2 (Applicability to Application for Dispute Mediation)
The amended provisions of Article 20 (3) shall begin to apply to applications for dispute mediation filed after this Act enters into force. Article 3 (Applicability to Suspension of Legal or Mediation Proceedings)
The amended provisions of Article 20-2 shall begin to apply to applications for mediation filed after that amended provisions enter into force.
ADDENDA <Act No. 19616, Aug. 8, 2023>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Article 2 (Applicability to Council)
This Act shall begin to apply to the Council newly organized after this Act enters into force.
ADDENDA <Act No. 20238, Feb. 6, 2024>
Article 1 (Enforcement Date)
This Act shall enter into force on February 9, 2024.
Article 2 (Applicability)
This Act shall begin to apply to the Council of the Mediation Agency newly organized after this Act enters into force.