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
Act No. 15612, Apr. 17, 2018
Act No. 16415, Apr. 30, 2019
Act No. 16423, Apr. 30, 2019
Act No. 16649, Nov. 26, 2019
Act No. 17354, jun. 9, 2020
Act No. 17348, jun. 9, 2020
Act No. 17799, Dec. 29, 2020
Act No. 18434, Aug. 17, 2021
Act No. 18757, Jan. 11, 2022
Act No. 19562, Jul. 18, 2023
Act No. 20241, Feb. 6, 2024
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 on Apr. 1, 2009]
| (1) | The term "subcontract transaction" in this Act means an act to manufacture, repair, construct or provide services of what has been entrusted (hereinafter referred to as "subject matter, etc.") and to deliver, transfer or provide the subject matter (hereinafter referred to as "delivery, etc.") to a prime contractor and receive a consideration in return (hereinafter referred to as "subcontract price") 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 or she has been entrusted. |
| (2) | The term "prime contractor" in this Act means any of the following persons: <Amended on Mar. 29, 2011; May 28, 2014; Jul. 24, 2015> |
| 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 in this subparagraph, the same shall apply) 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 this 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 12 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 or 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. <Amended on Dec. 29, 2020> |
| 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) | "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; |
| (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 or she is using, of all or part of his or 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 or her business to another constructor, or entrustment, by a constructor, of the construction work prescribed by Presidential Decree to another business entity: <Amended on May 24, 2011; Apr. 30, 2019> |
| 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 any of the following subparagraphs: <Amended on Apr. 12, 2010; Jun. 9, 2020> |
| 1. | Information programs (referring to software under subparagraph 1 of Article 2 of the Software 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; |
| 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 on Apr. 12, 2010> |
| 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 price, 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 price, which is not usable at general credit card member stores, but is issued for the sole purpose of payment of subcontract price 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 price, and the prime contractor redeems the loan of the subcontractor from the financial institution with the subcontract price, 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 price 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 price, 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 performance of service that are kept confidential and other data prescribed by Presidential Decree which are useful for business activities and have independent economic value. <Newly Inserted on Jan. 25, 2010; Jan. 16, 2018; Aug. 17, 2021> |
| (16) | The term "major raw materials" in this Act means raw materials used for manufacturing, repairing, or constructing subject matters, etc. or performing services for them in subcontract transactions, the cost of which is at least 10/100 of the subcontract price. <Newly Inserted on Jul. 18, 2023> |
| (17) | The term "subcontract price adjustment system" in this Act means a system of adjusting subcontract price in proportion to the fluctuation of the prices of major raw materials, in cases where the prices vary by at least the ratio determined by negotiations between a principal contractor and a subcontractor as not more than 10/100. <Newly Inserted on Jul. 18, 2023> |
[This Article Wholly Amended on 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 in this paragraph, the above-mentioned both types of entrustment shall be referred to as "additional/changed entrustment"), 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 in this Article, the same shall apply) within the time-limit classified in the following subparagraphs: <Amended on 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) | A document under paragraph (1) shall include the following details, and the relevant prime contractor and subcontractor shall sign thereon [including digital signature (referring to one that can identify the real name of a signer) defined in subparagraph 2 of Article 2 of the Digital Signature Act; hereafter in this Article the same shall apply] or shall affix their names and seals thereto: <Amended on Jan. 25, 2010; Jan. 16, 2018; Nov. 26, 2019; Jun. 9, 2020; Jul. 18, 2023> |
| 1. | The terms and conditions of the subcontract agreement, such as the subcontract price and the methods of paying such payment; |
| 2. | Requirements, methods, and procedures for adjusting the subcontract price under Article 16-2 (1); |
| 3. | Details prescribed by Presidential Decree regarding the subcontract price adjustment system, such as the name and main raw materials of, the adjustment requirements for, and the standard indices and formulas of, subject matters, etc. subject to the subcontract price adjustment system; |
| 4. | Other details prescribed by Presidential Decree which are required to be included in the document. |
| (3) | When a prime contractor makes an entry of the details specified in paragraph (2) 3, he or she shall faithfully negotiate with the subcontractor to ensure that unfair details contrary to the interests of the subcontractor are not included. <Newly Inserted on Jul. 18, 2023> |
| (4) | A prime contractor need not make an entry of the details specified in paragraph (2) 3 in a document, in any of the following cases: Provided, That in the case of subparagraph 4, the prime contractor and the subcontractor shall clearly state the purport and reasons in a document: <Newly Inserted on Jul. 18, 2023> |
| 2. | Where the subcontract transaction period is within the period prescribed by Presidential Decree not exceeding 90 days; |
| 3. | Where the subcontract price is not more than the amount prescribed by Presidential Decree not exceeding 100 million won; |
| 4. | Where the prime contractor and the subcontractor agree on the non-adoption of the subcontract price adjustment system. |
| (5) | No prime contractor shall abuse his or her superior bargaining position or engage in any act to avoid the application of this Article by fraud or other improper means, in relation to the subcontract price adjustment system. <Newly Inserted on Jul. 18, 2023> |
| (6) | 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 good cause exists, such as conducting emergency repair work due to a disaster or accident. In such cases, he or 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 on Jan. 25, 2010; Jul. 18, 2023> |
| (7) | Where a prime contractor issues a document without stating some details pursuant to paragraph (6), he or she shall issue, without delay, a new document stating the relevant details as soon as such details are determined. <Newly Inserted on Jan. 25, 2010; Jul. 18, 2023> |
| (8) | 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 (6)) in entrusting manufacturing, etc., a subcontractor may request the prime contractor to verify the details of subcontract by notifying, in writing, him or her of the matters prescribed by Presidential Decree such as the details of subcontract and the subcontract price. <Newly Inserted on Jan. 25, 2010; Jul. 18, 2023> |
| (9) | A prime contractor shall send a written reply expressing whether he or she accepts or denies the details to a subcontractor within 15 days from the date he or she is notified thereof under paragraph (8), and if the prime contractor fails to send his or her reply within such 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 on Jan. 25, 2010; Jul. 18, 2023> |
| (10) | The notification under paragraph (8) and a reply thereto under paragraph (9) shall be signed and sealed respectively by the subcontractor and the prime contractor. <Newly Inserted on Jan. 25, 2010; Jul. 18, 2023> |
| (11) | Matters necessary for the notification under paragraph (8) and a reply thereto under paragraph (9) shall be prescribed by Presidential Decree. <Newly Inserted on Jan. 25, 2010; Jul. 18, 2023> |
| (12) | A prime contractor and a subcontractor shall retain documents concerning subcontract transactions, as prescribed by Presidential Decree. <Amended on Jan. 25, 2010; Jul. 18, 2023> |
[This Article Wholly Amended on Apr. 1, 2009]
| Article 3-2 (Formulation, Amendment, and Use of Standard Subcontract) |
| (1) | The Fair Trade Commission may formulate or amend a standard subcontract and may recommend that business entities or business associations governed by this Act (hereafter in this Article referred to as "business entities, etc.") use it. |
| (2) | Notwithstanding paragraph (1), the Fair Trade Commission shall formulate or amend a standard subcontract regarding the details specified in Article 3 (2) 3 and the proviso, with the exception of the subparagraphs, of Article 3 (4) and shall recommend that business entities, etc. use it. <Newly Inserted on Jul. 18, 2023> |
| (3) | In order to facilitate sound subcontracting practices and prevent the use of unfair contracts, business entities, etc. may prepare proposals for the formulation or amendment of a standard subcontract that can be used in a certain field of subcontracting and may request that the Fair Trade Commission review whether the details thereof are in violation of this Act. <Amended on Jul. 18, 2023> |
| (4) | The Fair Trade Commission may recommend that business entities, etc. prepare proposals for the formulation or amendment of a standard subcontract and request a review thereof, in any of the following cases: <Amended on Jul. 18, 2023> |
| 1. | Where damage occurs, or is likely to occur, to multiple subcontractors in a certain field of subcontracting; |
| 2. | Where it is necessary to revise the standard subcontract due to the amendment of this Act, etc. |
| (5) | If business entities, etc. fail to take necessary measures within a reasonable period from the date of receipt of the recommendation under paragraph (4), the Fair Trade Commission may formulate or amend a standard subcontract and recommend that the business entities, etc. use it. <Amended on Jul. 18, 2023> |
| (6) | Where formulating or amending a standard subcontract, the Fair Trade Commission shall hear the opinions of business entities, etc. who are parties to transactions in the relevant field. <Amended on Jul. 18, 2023> |
| (7) | If deemed necessary for performing tasks related to the formulation and amendment of a standard subcontract, the Fair Trade Commission may appoint advisors. <Amended on Jul. 18, 2023> |
| (8) | The appointment of advisors under paragraph (7) and other necessary matters shall be prescribed by Presidential Decree. <Amended on Jul. 18, 2023> |
[This Article Wholly Amended on Jan. 11, 2022]
| 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 determine matters necessary for the details, conclusion procedures, implementation evaluation, and supporting measures, etc. of an agreement prescribed in paragraph (1). |
[This Article Newly Inserted on 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 on Aug. 13, 2013]
| Article 3-5 (Disclosure of Results of Bidding for Construction Subcontracts) |
If intending to enter into a subcontract through competitive bidding, a business entity entrusted with construction work prescribed by Presidential Decree for which a comprehensive review is required in terms of each bidder's bid price, construction performance capacity, social responsibility, etc. under Article 10 (2) of the Act on Contracts to Which the State Is a Party, as a construction bidding ordered by the State or by public enterprises or quasi-governmental institutions under Article 5 of the Act on the Management of Public Institutions, shall inform the bidders of the following matters regarding the construction subcontract bidding as prescribed by Presidential Decree: | 2. | Successful bid amount and successful bidder (including trade name, representative, and location of a business office); |
| 3. | Where a successful bidder has failed to appear, the reasons therefor. |
[This Article Newly Inserted on Jan. 11, 2022]
| Article 3-6 (Selection of and Support for Exemplary Enterprises Adopting Subcontract Payment Adjustment System) |
| (1) | In order to disseminate the subcontract price adjustment system, the Fair Trade Commission may formulate and implement support policy measures, such as selecting and awarding exemplary enterprises adopting the subcontract price adjustment system and persons who have contributed to disseminating the system (hereinafter referred to as "exemplary enterprise, etc. adopting subcontract price adjustment"). |
| (2) | Matters necessary for the methods and procedures for selecting exemplary enterprises, etc. adopting the subcontract price adjustment system and the support policy measures for such enterprises, etc. shall be prescribed by Presidential Decree. |
[This Article Newly Inserted on Jul. 18, 2023]
| Article 3-7 (Designation of Headquarters for Supporting Dissemination of Subcontract Payment Adjustment System) |
| (1) | In order to support the dissemination of the subcontract price adjustment system, the Fair Trade Commission may designate a relevant institution or organization as a headquarters for supporting the dissemination of the subcontract price adjustment system (hereinafter referred to as "adjustment support headquarters"). |
| (2) | An adjustment support headquarters shall conduct the following programs: |
| 1. | Provision of information on prices of raw materials and key price indices; |
| 2. | Confirmation of the introduction of the subcontract price adjustment system and the adjustment results; |
| 3. | Provision of education and consulting related to the subcontract price adjustment system; |
| 4. | Other matters prescribed by Presidential Decree as necessary for disseminating the subcontract price adjustment system. |
| (3) | The Fair Trade Commission may provide an adjustment support headquarters with support necessary for conducting the projects specified in the subparagraphs of paragraph (2). |
| (4) | Where an adjustment support headquarters falls under any of the following, the Fair Trade Commission may revoke the designation thereof or issue an order to fully or partially suspend its services for a specified period not exceeding six months: Provided, That where it falls under subparagraph 1, the Commission shall revoke the designation thereof: |
| 1. | Where it has been designated by fraud or other improper means; |
| 2. | Where it ceases to meet the criteria for designation under paragraph (5); |
| 3. | Where it fails to conduct the programs specified in the subparagraphs of paragraph (2) for at least one month without good cause. |
| (5) | Details regarding the standards, procedures, etc. for the designation and revocation of designation of an adjustment support headquarters shall be prescribed by Presidential Decree. |
[This Article Newly Inserted on Jul. 18, 2023]
| Article 4 (Prohibition against Fixing Unreasonable Subcontract Payment) |
| (1) | When a prime contractor entrusts a subcontractor with manufacturing, etc., he or 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 price") or compel the subcontractor to accept such subcontract. <Amended on May 28, 2013> |
| (2) | Any of the following acts conducted by a prime contractor shall be deemed fixing unreasonable subcontract price: <Amended on May 28, 2013> |
| 1. | Fixing subcontract price by indiscriminately reducing the unit price without good cause; |
| 2. | Fixing subcontract price by deducting an amount after allotting unilaterally such amount under some pretext, such as a request for cooperation, etc.; |
| 3. | Fixing subcontract price by discriminating against a specific subcontractor without good cause; |
| 4. | Fixing subcontract price 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 or her the quotations of another business entity or false quotations to take advantage of it; |
| 5. | Fixing subcontract price unilaterally by a prime contractor at a low price; |
| 6. | Fixing subcontract price at a price lower than the total amount of direct construction expenses prescribed by Presidential Decree without good cause when a private subcontract is concluded; |
| 7. | Fixing subcontract price at a price lower than the lowest tender price without good cause in concluding a subcontract through competitive bidding; |
| 8. | Fixing subcontract price 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 on Apr. 1, 2009]
| Article 5 (Prohibition of Compelling Purchase of Goods) |
In entrusting a subcontractor with manufacturing, etc., a prime contractor shall not compel the subcontractor, without good cause, 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 or her.
[This Article Wholly Amended on 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 or she shall pay an advance to the subcontractor within 15 days after he or she received it (the day on which the prime contractor entrusted manufacturing, etc., if he or she had received it before he or she entrusted manufacturing, etc.) so that he or 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 or 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 on 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 under paragraph (1) 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 on 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 or she shall open a local letter of credit in favor of the subcontractor, within 15 days from the date of the entrustment, unless good cause exists: Provided, That where a prime contractor entrusts manufacturing or service before he or she receives an original letter of credit in cases of export by letter of credit, he or she shall open a local letter of credit within 15 days after he or she received an original letter of credit. <Amended on Oct. 31, 2017> |
| (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 or she shall issue the subcontractor a written confirmation purchase either in advance or ex post facto: <Newly Inserted on Oct. 31, 2017> |
| 1. | Where the prime contractor has difficulty in issuing a local letter of credit due to good cause, such as an insufficient credit limit; |
| 2. | Where the subcontractor requests to issue a written confirmation of purchase. |
[This Article Wholly Amended on Apr. 1, 2009]
| Article 8 (Prohibition of Unreasonable Cancellation 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 canceling 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 or 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 on 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 negotiations between the prime contractor and the subcontractor. |
| (2) | Unless good cause exists, the prime contractor shall notify the subcontractor of the result of inspection into the subject matter, etc. in writing within 10 days from the date he or 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 on 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 or 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 on Apr. 1, 2009]
| Article 11 (Prohibition against Reduction) |
| (1) | No prime contractor shall reduce the subcontract price fixed at the time of the entrustment of manufacturing, etc.: Provided, That a prime contract may reduce the subcontract price if he or she proves any good cause. <Amended on Mar. 29, 2011> |
| (2) | Any of the following acts conducted by a prime contractor shall not be deemed an act with good cause: <Amended on Mar. 29, 2011; May 28, 2013> |
| 1. | Reducing subcontract price 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 price have not been specified at the time of giving entrustment; |
| 2. | Reducing subcontract price 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 price excessively on the pretext that subcontract price is paid in cash or earlier than the due date for payment; |
| 4. | Reducing subcontract price 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 price, where a prime contractor has had a subcontractor purchase from him or her the goods, etc. necessary for the manufacturing, repair, construction or service performance of the subject matter, etc. or use his or her equipment, etc.; |
| 6. | Reducing subcontract price on the grounds that the price of commodities or the price of materials, etc. at the time of payment of subcontract price has fallen compared with the price at the time of supply, etc.; |
| 7. | Reducing subcontract price unfairly for unreasonable reasons, such as loss from operations or reduced sale price, etc.; |
| 9. | Other acts prescribed by Presidential Decree as equivalent to those referred to in subparagraphs 1 through 8. |
| (3) | Where a prime contractor reduces the subcontract price pursuant to the proviso of paragraph (1), he or 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 on Mar. 29, 2011> |
| (4) | Where a prime contractor pays a reduced price without good 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 on May 17, 2010; Mar. 29, 2011> |
[This Article Wholly Amended on Apr. 1, 2009]
[Title Amended on Mar. 29, 2011]
| Article 12 (Prohibition of Unfair Requests for Settlement of Purchase Price) |
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 or herself, or use his or her equipment, etc., he or she shall not conduct an act falling under any of the following subparagraphs without good cause:
| 1. | Having the subcontractor pay all or part of the purchase price or rent prior to the date of payment of subcontract price 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 on 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 or herself or third parties without good cause.
[This Article Wholly Amended on Apr. 1, 2009]
| Article 12-3 (Prohibition of Request to Provide Technical Data) |
| (1) | No prime contractor shall request a subcontractor to provide him or her or any third person with the subcontractor's technical data: Provided, That a prime contractor may make such a request, if he or she proves any good cause to do so. <Amended on Mar. 29, 2011> |
| (2) | Where a prime contractor requests any technical data to a subcontractor pursuant to the proviso of paragraph (1), he or she shall negotiate, in advance, with the relevant subcontractor about matters prescribed by Presidential Decree, such as the purpose of request, reversion of rights, a cost, etc., and provide the relevant subcontractor with a document stating the details thereof. <Newly Inserted on Mar. 29, 2011; Aug. 17, 2021> |
| (3) | Where a subcontractor provides technical data to a prime contractor, the prime contractor shall, by the date of receiving the technical data, enter into a confidentiality contract with the subcontractor, which shall contain matters prescribed by Presidential Decree, such as the scope of the relevant technical data, the list of executive officers and employees who will receive and retain the technical data, the duty to maintain confidentiality and prohibition of use for purposes other than the intended purpose, and the compensation for violations. <Newly Inserted on Aug. 17, 2021> |
| (4) | A prime contractor shall not unfairly engage in any of the following acts (including acts performed before the conclusion of a subcontract) with respect to the technical data acquired from a subcontractor: <Amended on Apr. 17, 2018; Aug. 17, 2021; Jan. 11, 2022> |
| 1. | Using them for himself or herself or for a third party; |
| 2. | Providing them to a third party. |
| (5) | The Fair Trade Commission may recommend formulating and using a standard contract for the confidentiality contract to be entered into under paragraph (3). <Newly Inserted on Aug. 17, 2021> |
[This Article Newly Inserted on Jan. 25, 2010]
[Title Amended on Mar. 29, 2011]
| Article 13 (Payment of Subcontract Payment) |
| (1) | Where a prime contractor entrusts a subcontractor with manufacturing, etc., he or she shall pay the subcontract price 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 price is not fixed, the date of receipt of subject matter, etc. shall be deemed the date for payment of the subcontract price, 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 of paragraph (1)), the 60th day from the date of receipt of the subject matter, etc. shall be deemed the date for payment of the subcontract price, respectively. |
| (3) | Where a prime contractor has entrusted a subcontractor with manufacturing, etc., he or she shall pay the subcontractor the subcontract price 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 price 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 or 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 price 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 price to a subcontractor, he or she shall not pay less than the proportion of cash which he or 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 price by a bill, he or 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 price 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 of 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 in this Article, the same shall apply), 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 price by means of payment in place of a bill, he or 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 price 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 price after 60 days pass from the date of receipt of subject matter, etc., he or 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 on 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 on 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 on Jul. 24, 2015; Mar. 29, 2016; Jan. 16, 2018; Dec. 29, 2020> |
| 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 on 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 a bill in cases of payment with a bill, and shall be by the date of repayment of the subcontract price 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 structure of a prime contractor or the scale, etc. of construction, which is prescribed by Presidential Decree, this shall not apply: <Amended on 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 work does not exceed two months: Amount calculated according to the following formula: |
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| 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: |
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| (2) | Any of deemed reasons for which no guarantee is necessary or a guarantee is inappropriate referred to in the proviso of paragraph (1), with the exception of the 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 on 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 in this Article referred to as "long-term continuing contract for construction") 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 clause of paragraph (1), with the exception of the 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 on Dec. 20, 2016> |
| 1. | The State or a local government; |
| (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 that paragraph. In such cases, a guarantee for performance of contract corresponding to a portion performance completed shall be considered invalid. <Newly Inserted on 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 on May 17, 2010; May 28, 2014; Dec. 20, 2016> |
| 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 on Aug. 13, 2013; May 28, 2014; Dec. 20, 2016> |
| 1. | Where the prime contractor is unable to pay the subcontract price due to the suspension of current account transactions or financial transactions; |
| 2. | Where it is impossible to pay the subcontract price due to the prime contractor's insolvency, bankruptcy, closure of business, application for commencement of company rehabilitation procedures, etc.; |
| 3. | Where the prime contractor is unable to pay the subcontract price due to the revocation or cancellation of his or her license, registration, etc. for the relevant business or suspension of business, etc.; |
| 4. | If a prime contractor has failed to pay the subcontract price payable under Article 13 to a subcontractor twice or more; |
| 5. | If a prime contractor is unable to pay the subcontract price 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 on Aug. 13, 2013; May 28, 2014; 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 price shall be prescribed by Presidential Decree. <Amended on Aug. 13, 2013; May 28, 2014; Dec. 20, 2016> |
| (9) | If a prime contractor fails to guarantee the payment of the construction consideration under the main clause, with the exception of the subparagraphs, of paragraph (1), the main clause of paragraph (2), or the provisions, with the exception of the subparagraphs, of paragraph (3), the subcontractor need not guarantee the performance of the contract. <Amended on Aug. 13, 2013; May 28, 2014; Dec. 20, 2016> |
| (10) | A prime contractor may not exercise his or 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 of paragraph (1), with the exception of the subparagraphs, or the proviso of paragraph (2). <Newly Inserted on May 28, 2014; Dec. 20, 2016> |
[This Article Wholly Amended on Apr. 1, 2009]
| Article 13-3 (Disclosure of Payment Conditions of Subcontract Payment) |
| (1) | A prime contractor belonging to a business group subject to disclosure designated under the former part of Article 31 (1) of the Monopoly Regulation and Fair Trade Act shall disclose matters regarding a subcontract price dispute mediation body, etc. established by the prime contractor in his or her company to handle disputes, etc. raised by the subcontractor over the subcontract price method, payment amount, payment period (referring to the period from the date the prime contractor receives the subject matter, etc. until the date the subcontract price is paid to the subcontractor), or subcontract price, as prescribed by Presidential Decree. |
| (3) | Matters necessary for the timing of, methods and procedures for, disclosure under paragraph (1) shall be prescribed by Presidential Decree. |
[This Article Newly Inserted on Jan. 11, 2022]
| Article 14 (Direct Payment of Subcontract Payment) |
| (1) | Where a ground falling under any of the following subparagraphs occurs, the person placing an order shall pay the subcontract price corresponding to the completed portion of manufacturing, repair, construction, or service performance directly to the subcontractor: <Amended on May 28, 2014> |
| 1. | When the subcontractor has requested direct payment of the subcontract price 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 price 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 price directly to the subcontractor; |
| 3. | When the subcontractor has requested direct payment of the subcontract price where the prime contractor has failed to pay to the relevant subcontractor two or more installments of the subcontract price 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 price where the prime contractor has failed to perform his or her obligation to guarantee the payment of subcontract price 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 price to the subcontract shall be deemed to have extinguished within such limit. |
| (3) | Where a prime contractor requests suspension of direct payment of the relevant subcontract price by appending documents evidencing the fact that the subcontractor delays paying wages, price of materials, etc. in connection with the relevant subcontract (excluding where the delay in payment has occurred due to causes attributable to the prime contractor), the person placing an order shall not pay the subcontract price directly, notwithstanding paragraph (1). <Amended on Apr. 30, 2019> |
| (4) | When the person placing an order pays the subcontract price directly to the relevant subcontractor as prescribed in paragraph (1), he or she shall pay it minus the subcontract price 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 price 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 price is paid directly as prescribed in paragraph (1) shall be prescribed by Presidential Decree. |
[This Article Wholly Amended on Apr. 1, 2009]
| Article 15 (Payment of Refund of Customs Duties) |
| (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 or 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 on May 17, 2010> |
[This Article Wholly Amended on Apr. 1, 2009]
| Article 16 (Adjustment of Subcontract Payment due to Change in Design) |
| (1) | Where a prime contractor falls under both of the following cases after entrusting manufacturing, etc., he or she shall increase subcontract price in accordance with the contents and rate of the increase in the contract value he or she has received from the person placing an order: Provided, That the prime contractor may decrease the subcontract price if the person placing an order has decreased the contract value, in accordance with the contents and rate of the decrease: <Amended on Jan. 25, 2010; Nov. 26, 2019> |
| 1. | Where the contract value is increased due to any change in design, timing for delivery, etc. of the subject matter, etc., 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 price 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 or 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 on 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 on Jan. 25, 2010> |
| (4) | If additional subcontract price 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 price 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 on Jan. 25, 2010> |
[This Article Wholly Amended on Apr. 1, 2009]
| Article 16-2 (Adjustment of Subcontract Payment Due to Fluctuations in Supply Costs) |
| (1) | Where adjustment of subcontract price is inevitable in any of the following cases after a subcontractor is entrusted with manufacturing, etc., the subcontractor may request the prime contractor to adjust subcontract price: <Amended on Jan. 16, 2018; Nov. 26, 2019; Jan. 11, 2022> |
| 1. | Where the supply costs of subject matter, etc. have changed; |
| 2. | Where the timing for the delivery, etc. of the subject matter, etc. is delayed due to a cause not attributable to the subcontractor, causing any change to expenses other than the supply costs, such as management expenses. |
| 3. | Where a contract is concluded whereby the subcontract price decreases in stages as the contract period elapses in anticipation of a decrease in the supply cost or other costs of the subject matter, but the supply cost or other costs do not decrease or the rate of decrease is lower than the reduction rate of the subcontract price for reasons not attributable to the subcontractor, such as the prime contractor reducing the quantity or scale of the subject matter. |
| (2) | Where the supply cost of the subject matter, etc. has changed, a small and medium enterprise cooperative defined in Article 3 (1) 1 or 2 of the Small and Medium Enterprise Cooperatives Act (hereinafter referred to as "cooperative") may negotiate with a prime contractor prescribed by Presidential Decree on the adjustment of the subcontract price upon receipt of a request therefor from its member subcontractor: Provided, That this shall not apply if the prime contractor and the subcontractor are members of the same cooperative. <Amended on May 28, 2013; Jan. 16, 2018; Jan. 11, 2022; Jul. 18, 2023> |
| (3) | A cooperative shall request a prime contractor to adjust the subcontract price within 20 days from the receipt of a request under the main clause of paragraph (2): Provided, That this shall not apply if the cooperative requests negotiations for adjustment under paragraph (4) within the relevant period to the Korea Federation of Small and Medium Business (hereinafter referred to as the "Central Federation") under Article 3 (1) 4 of the Small and Medium Enterprise Cooperatives Act. <Amended on May 28, 2013; Mar. 29, 2016; Jan. 11, 2022> |
| (4) | If it is deemed necessary before or after requesting the prime contractor to adjust the subcontract price under the main clause of paragraph (3), the cooperative may, with the consent of the subcontractor, request the Central Federation to negotiate with the prime contractor for the adjustment of the subcontract price. <Newly Inserted on Jan. 11, 2022> |
| (5) | The Central Federation shall request the prime contractor to adjust the subcontract price within 15 days from the receipt of an application under paragraph (4). <Newly Inserted on Jan. 11, 2022> |
| (6) | Where a subcontractor who has requested adjustment of subcontract price under paragraph (1) requests negotiation for adjustment under paragraph (2), the request under paragraph (1) shall be deemed withdrawn and where the cooperative that has requested adjustment of subcontract price under the main clause of paragraph (3) requests negotiation for adjustment under paragraph (4), the request under the main clause of paragraph (3) shall be deemed withdrawn. <Newly Inserted on Jan. 11, 2022> |
| (7) | Where negotiations for adjustment under paragraph (1), the main clause of paragraph (3), or paragraph (5) are completed, the subcontractor, cooperative, or Central Federation may not request adjustment under paragraphs (1) through (5) for the same reason, unless there is a change in circumstances. <Amended on May 28, 2013; Jan. 11, 2022> |
| (8) | A cooperative or the Central Federation that has received a request under paragraph (2) or (4) shall not engage in any act that unreasonably restricts competition or unreasonably restricts the business operations or activities of a business entity, such as passing a resolution to suspend delivery. <Amended on May 28, 2013; Jan. 11, 2022> |
| (9) | Matters necessary for the request by subcontractors and the procedures and methods for negotiations by the cooperative under the main clause of paragraph (2) and the main clause of paragraph (3), the request by the cooperative and the procedures and methods for negotiations by the Central Federation under paragraphs (4) and (5), and other matters shall be prescribed by Presidential Decree. <Amended on Jan. 11, 2022> |
| (10) | A prime contractor shall, within 10 days from the date a request is made under paragraph (1), the main clause of paragraph (3), or paragraph (5), initiate negotiations for the adjustment of subcontract price with the subcontractor, cooperative, or Central Federation that has requested such adjustment and shall not refuse or neglect the negotiations without good cause. <Newly Inserted on May 28, 2013; Jan. 11, 2022> |
| (11) | A prime contractor or subcontractor (including the cooperative or the Central Federation in cases of negotiation for adjustment under the main clause of paragraph (3) or paragraph (5); hereafter in this paragraph, the same shall apply) may apply for mediation to the subcontract dispute mediation council under Article 24 in any of the following cases: Provided, That the cooperative or the Central Federation may not apply for mediation to the subcontract dispute mediation council established in the Central Federation: <Newly Inserted on May 28, 2013; Jan. 11, 2022> |
| 1. | Where a prime contractor fails to initiate negotiations for the adjustment of subcontract price even after 10 days have elapsed from the date a request is made under paragraph (1), the main clause of paragraph (3), or paragraph (5); |
| 2. | Where an agreement on the adjustment of the subcontract price is not reached within 30 days from the date a request is made under paragraph (1), the main clause of paragraph (3), or paragraph (5); |
| 3. | Where it is obvious that an agreement will not be reached for reasons prescribed by Presidential Decree, such as where a prime contractor or subcontractor expresses intent to suspend negotiations after the initiation of negotiations in response to a request made under paragraph (1), the main clause of paragraph (3), or paragraph (5). |
[This Article Newly Inserted on Apr. 1, 2009]
[Title Amended on Jan. 16, 2018; Nov. 26, 2019]
| 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 this shall not apply where he or she has any of the following causes: <Amended on Aug. 13, 2013; 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 of paragraph (1). <Newly Inserted on Aug. 13, 2013; 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 on Aug. 13, 2013> |
[This Article Wholly Amended on 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 on Jan. 16, 2018> |
| (2) | Any of the following activities of a prime contractor shall be considered as unreasonable intervention in management: <Newly Inserted on Jan. 16, 2018> |
| 1. | Restraining a subcontractor from exporting technical data abroad without good cause or restricting transactions on the ground of exporting technical data; |
| 2. | Restraining a subcontractor to trade with him or her or business operators he or she designates without good cause; |
| 3. | Requesting a subcontractor to provide management information the Fair Trade Commission publicly notifies, such as cost data, without good cause. |
[This Article Wholly Amended on 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, the competent cooperative, or the Central Federation conducted any of the following acts: <Amended on Mar. 29, 2011; May 28, 2013; Jul. 24, 2015; Jan. 16, 2018; Jan. 11, 2022>
| 1. | Reporting to the competent authority, etc. that a prime contractor has violated this Act; |
| 2. | Making a request under Article 16-2 (1) through (5) or applying for mediation to the subcontract dispute mediation council under paragraph (11) 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 on Apr. 1, 2009]
| Article 20 (Prohibition of Evasion of this Act) |
| (1) | No prime contractor shall perform any act to practically avoid the application of this Act through circumventive means in relation to a subcontract transaction (including transactions to which Article 13 (11) applies). <Amended on Jul. 24, 2015; Jul. 18, 2023> |
| (2) | Notwithstanding paragraph (1), Article 3 (5) shall take precedence with respect to an act by a prime contractor that intends to abuse his or her superior bargaining position or avoid the application of Article 3 by fraud or other improper means, in relation to the subcontract price adjustment system. <Newly Inserted on Jul. 18, 2023> |
[This Article Wholly Amended on 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 on Apr. 1, 2009]
| Article 22 (Reporting on Violations) |
| (1) | Where a violation of this Act is deemed to have occurred, anyone may report it to the Fair Trade Commission. In such cases, 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 on 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 on 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 clause 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 on 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 this 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 judgment, the Commission disposition in compliance with the reason for the judgment: <Newly Inserted on Jul. 24, 2015; 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 the budget, 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 (4) and also presents data evidencing that violation. <Newly Inserted on Jul. 24, 2015; Aug. 17, 2021> |
| (6) | Matters necessary for 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 on 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 returned, and he or she shall return it within 30 days from the date of receipt of the notification: <Newly Inserted on 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. | Where the person receives the monetary award, etc. on the same grounds under other statutes or regulations; |
| 3. | Any other cases where the monetary award is given in error due to a mistake, etc. |
| (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 on Jul. 24, 2015> |
[This Article Wholly Amended on 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 on 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 on 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. |
| (4) | No prime contractor shall prevent a subcontractor from presenting data referred to in paragraph (2) or request a subcontractor to present false data. <Newly Inserted on Apr. 17, 2018> |
[This Article Newly Inserted on Jan. 25, 2010]
| Article 23 (Limitation on Transactions Subject to Investigation) |
| (1) | Subcontract transactions (including transactions to which Article 13 (11) applies; hereafter in this Article, the same shall apply) 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 (in cases of violation of Article 12-3, seven years from the date the transaction was completed; hereafter in this Article, the same shall apply): 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 commenced even after three years have passed from the date the transaction was completed. <Amended on Jan. 25, 2010; Jul. 24, 2015; Jan. 16, 2018; Apr. 17, 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 contractor 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 on Jan. 25, 2010> |
[This Article Wholly Amended on Apr. 1, 2009]
| Article 24 (Establishment and Composition of Subcontract Dispute Mediation Councils) |
| (1) | The Fair Trade Mediation Agency under Article 72 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 on Mar. 29, 2011; Jul. 24, 2015: Dec. 29, 2020> |
| (2) | A business association may establish such a council with the approval of the Fair Trade Commission <Newly Inserted on Jul. 24, 2015> |
| (3) | The council established at the Mediation Agency (hereinafter referred to as the “Council of the Mediation Agency”) shall be comprised of up to 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 president of the Council of the Mediation Agency shall be a full-time member. <Amended on Jul. 24, 2015; Aug. 8, 2023> |
| (4) | The number of members of a council established by a trade association shall be determined by the relevant council with approval from the Fair Trade Commission. <Newly Inserted on Aug. 8, 2023> |
| (5) | The chairperson of the Council of the Mediation Agency shall be elected by the Chairperson of the Fair Trade Commission 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 of a council shall represent the relevant council. <Amended on Jul. 24, 2015; Aug. 8, 2023> |
| (6) | The term of office of a member of the Council of the Mediation Agency shall be three years, and the term of office of a member of the council established by a business association shall be determined by the business association with the approval of the Fair Trade Commission. <Amended on Jul. 24, 2015; Aug. 8, 2023> |
| (7) | Members of the Council of the Mediation Agency shall be appointed or commissioned by the Chairperson of the Fair Trade Commission on the recommendation of the president of the Mediation Agency from among the following persons: <Newly Inserted on Mar. 29, 2011; Jul. 24, 2015; Aug. 8, 2023> |
| 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). |
| 4. | A person who has extensive knowledge of and experience in subcontract transactions and dispute mediation. |
| (8) | 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 on Mar. 29, 2011; Jul. 24, 2015; Aug. 8, 2023> |
| (9) | 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 on Mar. 29, 2011; Jul. 24, 2015; Aug. 8, 2023> |
| (10) | 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 on Mar. 29, 2011; Jul. 24, 2015; Aug. 8, 2023> |
| (11) | The State may fully or partially subsidize expenses to be incurred for the operation of the councils within the budget. <Newly Inserted on May 28, 2014; Jul. 24, 2015; Aug. 8, 2023> |
| (12) | 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> |
| (14) | 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 (13). <Newly Inserted on Feb. 6, 2024> |
[This Article Wholly Amended on Jan. 25, 2010]
[Title Amended on May 28, 2014]
| 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 or her spouse becomes a disputing party or is a joint title holder or co-obligor of the case; |
| 2. | If the member is or was a relative of a disputing party to the case brought for mediation; |
| 3. | Where the member or a corporation to whom he or she belongs is a consultant or advisor on legal affairs, management, etc. of a party to the dispute; |
| 4. | If the member or a corporation to which the member belongs is or was involved in the dispute brought for mediation as an agent of a disputing party or has ever testified as a witness or an expert witness with regard to the dispute. |
| (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 or she may voluntarily recuse himself or herself/herself from the mediation of the relevant case. |
[This Article Newly Inserted on 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 or 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 on 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 such cases, where each of the disputing parties has filed the respective request for dispute mediation with each different council, the council to whom the subcontractor, the cooperative, or the Central Federation has filed the request for dispute mediation shall undertake the dispute mediation: <Amended on Jan. 11, 2022> |
| 3. | The cooperative or Central Federation that has applied for mediation to the council under Article 16-2 (11). |
| (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 clause 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 of 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 on Jan. 16, 2018]
| (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 application for mediation is filed by a person who has no direct interest in the dispute to be mediated; |
| 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: <Amended on Jan. 11, 2022> |
| 1. | Where the mediation is successfully concluded because the disputing parties accept the Council's recommendation or mediation proposals, or mediate on their own, etc.; |
| 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 for reasons such as refusal of mediation by one of the parties to the 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 on Jan. 16, 2018]
[Previous Article 24-5 moved to Article 24-6 <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 on 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 on 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 on Mar. 29, 2016; 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 on Mar. 29, 2016; 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 on Jan. 16, 2018> |
[This Article Newly Inserted on Jan. 25, 2010]
[Moved from Article 24-5; previous Article 24-6 moved to Article 24-7 <Jan. 16, 2018>]
| Article 24-7 (Operational Rules of Councils) |
Except as provided 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 on Jan. 25, 2010]
[Moved from Article 24-6 <Jan. 16, 2018>]
| Article 24-8 (Relationship with Litigation) |
| (1) | If a lawsuit is filed against a case for which mediation is applied for, before or after such application, and the lawsuit is in progress, the court may suspend the legal proceedings until the mediation is completed. |
| (2) | If the legal proceedings are not suspended under paragraph (1), the council shall suspend the mediation procedure for the relevant case. |
| (3) | The council may suspend the mediation procedure by its decision if a lawsuit is in progress for the same type of case or a similar case involving multiple persons for the same cause as the case for which the mediation is applied for. |
[This Article Newly Inserted on Jan. 11, 2022]
| Article 24-9 (Resolution of Consent) |
| (1) | A prime contractor, etc. for whom investigation or deliberation by the Fair Trade Commission is in progress (hereafter in this Article referred to as "applicant") may apply to the Fair Trade Commission for a resolution of consent under paragraph (3) in order to voluntarily resolve unfair transaction practices, etc. resulting from any act subject to such investigation or deliberation (hereinafter referred to as the "relevant act"), to relieve damage sustained by the subcontractor, or to improve the transaction order: Provided, That if the relevant act falls under any of the following cases, the Fair Trade Commission shall proceed with the deliberation procedure under this Act without a resolution of consent: |
| 1. | Where it meets the requirements for criminal charge under Article 32 (2); |
| 2. | Where the applicant cancels the application before a resolution of consent is reached. |
| (2) | Where filing an application under paragraph (1), the applicant shall do so in writing stating the following: |
| 1. | Facts that can specify the relevant act; |
| 2. | Corrective measures necessary for restoring order in competition or proactively improving order in subcontracting such as suspension of the relevant act, restoration to the original state, etc.; |
| 3. | Other corrective measures necessary for relieving or preventing damage to subcontractors, other business entities, etc. |
| (3) | Where determining that the corrective measures under paragraph (2) 2 and 3 (hereinafter referred to as "corrective measures") meet all of the following requirements after completing an investigation into the facts of the relevant act, the Fair Trade Commission may suspend the deliberation process related to the relevant act and make a resolution to the same effect as the corrective measures (hereinafter referred to as the "resolution of consent"). In such cases, the corrective measures may be amended after negotiations with the applicant: |
| 1. | There shall be a balance between the relevant act and the corrective measures and other sanctions expected to follow if the relevant act is found to be in violation of this Act; |
| 2. | The corrective measures shall be recognized as appropriate to restore fair and free competition or order in subcontracting, or to protect subcontractors, etc. |
| (4) | The Fair Trade Commission's resolution of consent does not mean that the relevant act violates this Act, and no one may claim that the relevant act violates this Act on the grounds that the applicant has obtained the resolution of consent. |
[This Article Newly Inserted on Jan. 11, 2022]
| Article 24-10 (Procedure for and Revocation of the Resolution of Consent) |
Articles 90 and 91 of the Monopoly Regulation and Fair Trade Act shall apply mutatis mutandis to the procedure for, and revocation of, the resolution of consent. In such cases, "consumer" in Article 90 (1) of the same Act shall be construed as "subcontractor", and "Articles 124 through 127" in the proviso of paragraph (3) of the same Article shall be construed as "Articles 29 and 30 of the Act". [This Article Newly Inserted on Jan. 11, 2022]
| Article 24-11 (Charges for Compelling Compliance) |
| (1) | On those who fail to comply with the resolution of consent without good cause by the implementation deadline set at the time of the resolution of consent, the Fair Trade Commission may impose charges for compelling compliance of not more than 2 million won per day from the date the deadline has elapsed until the resolution of consent is implemented or revoked. |
[This Article Newly Inserted on Jan. 11, 2022]
| 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 (7) and (12), 3-4, 3-5, 4 through 12, 12-2, 12-3, 13, 13-2, 13-3, 14 through 16, 16-2 (10), and 17 through 20 to pay subcontract price, etc., to fulfill the obligation of disclosure and correct the details of disclosure, 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 on Jan. 25, 2010; Mar. 29, 2011; May 28, 2013; Aug. 13, 2013; Mar. 29, 2016; Jan. 11, 2022; Jul. 18, 2023> |
| (2) | Deleted. <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 or she has been so ordered. <Amended on Mar. 29, 2016> |
[This Article Wholly Amended on Apr. 1, 2009]
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 or her part. <Amended on Mar. 29, 2016> [This Article Wholly Amended on 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 price for the manufacturing, etc. entrusted to the subcontractor or a penalty surcharge not exceeding double the subcontract price for the manufacturing, etc. entrusted by the person placing the order or prime contractor: <Amended on Jan. 25, 2010; Mar. 29, 2011; May 28, 2013; Aug. 13, 2013; Apr. 30, 2019; Jan. 11, 2022; Jul. 18, 2023> |
| 1. | A prime contractor who violates Article 3 (1), (2) (excluding subparagraph 3), (6), or (7); |
| 2. | A person who fails to retain documents in violation of Article 3 (12), 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) and (3); |
| 5. | A prime contractor who violates Article 14 (5); |
| 6. | A prime contractor who violates any provision of Articles 15, 16, 16-2 (10), and 17 through 20. |
| (2) | Where deeming it difficult for a person subject a penalty surcharge in excess of the amount prescribed by Presidential Decree to pay the full amount of the penalty surcharge at once for any of the following reasons, the Fair Trade Commission may delay the payment deadline or have it paid in installments. In such cases, collateral may be required as necessary: <Newly Inserted on Jan. 11, 2022> |
| 1. | If the person obligated to pay a penalty surcharge sustained a serious economic loss due to a disaster, theft, or other similar event; |
| 2. | If the business of the person obligated to pay a penalty surcharge is in a critical crisis due to the deterioration of business conditions; |
| 3. | If it is anticipated that he or she is likely to face severe hardship in his or her financial circumstances when the penalty surcharge should be paid in lump sum; |
| 4. | In other cases equivalent to those listed in subparagraphs 1 through 3. |
| (3) | Where the Fair Trade Commission intends to delay the payment deadline for penalty surcharges or to allow payment in installments under paragraph (2), it shall consider the matters prescribed by Presidential Decree with respect to the following: <Newly Inserted on Jan. 11, 2022> |
| 1. | Net loss for the relevant term; |
| 3. | Other matters necessary for checking financial positions. |
[This Article Wholly Amended on Apr. 1, 2009]
| Article 25-4 (Publication of Lists of Habitual Violators) |
| (1) | Notwithstanding Article 119 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 on Mar. 29, 2016; Dec. 29, 2020> |
| (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 of 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 or 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 in this Article referred to as the "Deliberative Committee") 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 on Jan. 16, 2018> |
| (4) | The Fair Trade Commission shall notify any business entity on whom the Deliberative Committee has deliberated that he or she is to be included in the list of habitual violators so that he or she will be provided with the opportunity to vindicate himself or 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 Fair 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 on Jan. 16, 2018> |
[This Article Newly Inserted on 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 such cases, 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 10 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 on 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 (7) and (12), 3-4, 4 through 12, 12-2, 12-3, 13, 13-2, 14 through 16, 16-2 (10), and 17 through 20 in consideration of the severity 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 on Jan. 25, 2010; Mar. 29, 2011; May 24, 2011; May 28, 2013; Aug. 13, 2013; Jan. 11, 2022; Jul. 18, 2023> |
[This Article Wholly Amended on Apr. 1, 2009]
| Article 27 (Monopoly Regulation and Fair Trade Act to Be Applied Mutatis Mutandis) |
| (1) | Articles 64 through 68 and 93 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 96 through 98, 98-2, 98-3, and 99 through 101 of that 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. <Amended on Dec. 29, 2020; Feb. 6, 2024> |
| 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 on Apr. 1, 2009]
| Article 28 (Relationship to the Monopoly Regulation and Fair Trade Act) |
[This Article Wholly Amended on Apr. 1, 2009]
| Article 29 (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 20 million won: |
| 1. | A person who violates an order issued under Article 35-3 (1) without good cause domestically or overseas; |
| (2) | Without a complaint by a person who has applied for an order under Article 35-3 (1), no prosecution may be instituted against a crime under paragraph (1) 1. |
[This Article Wholly Amended on Aug. 17, 2021]
| 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 price for the manufacturing, etc. entrusted to a subcontractor by the prime contractor: <Amended on Jan. 25, 2010; Mar. 29, 2011; May 28, 2013; Aug. 13, 2013; May 28, 2014; Dec. 20, 2016; Jan. 11, 2022; Jul. 18, 2023> |
| 1. | A person who violates any provision of Article 3 (1), (2) (excluding subparagraph 3), (6), (7), and (12), 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 negotiations without good cause, in violation of Article 16-2 (10). |
| (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 on May 28, 2013> |
| 1. | A person who takes an unfavorable measure against another person, in violation of Article 19; |
| 3. | A person who fails to comply with an order issued under Article 25. |
[This Article Wholly Amended on Apr. 1, 2009]
| Article 30-2 (Administrative Fines) |
| (1) | In any of the following cases, a business entity or business association shall be subject to 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 subject to an administrative fine not exceeding 10 million won: <Amended on Jan. 25, 2010; Dec. 29, 2020; Jan. 11, 2022> |
| 1. | Where failing to make disclosure under Article 13-3, or omitting or falsely making disclosure of major details; |
| (2) | A business entity or business association shall be subject to an administrative fine not exceeding 200 million, and an executive officer or employee of the business entity or business association or any other person interested shall be subject to an administrative fine not exceeding 50 million won, if he or she/it refuses, obstructs, or evades investigations under Article 81 (2) and (3) of the Monopoly Regulation and Fair Trade Act applied mutatis mutandis pursuant to Article 27 (2). <Newly Inserted on Jan. 25, 2010; Dec. 29, 2020> |
| (3) | A prime contractor shall be subject to an administrative fine not exceeding 50 million won, and an executive officer or employee of the prime contractor or any other person interested shall be subject to an administrative fine not exceeding 5 million won, if he or she/it prevents a subcontractor from presenting data or requests a subcontractor to present false data in violation of Article 22-2 (4). <Newly Inserted on Apr. 17, 2018> |
| (4) | A prime contractor who abuses his or her superior bargaining position, in violation of Article 3 (5), or engages in any act to avoid the application of that Article by fraud or other improper means, shall be subject to an administrative fine not exceeding 50 million won. <Newly Inserted on Jul. 18, 2023> |
| (5) | Any of the following persons shall be subject to an administrative fine not exceeding 10 million won: <Newly Inserted on Jan. 11, 2022; Jul. 18, 2023> |
| 1. | A business entity who fails to make an entry of the details regarding the adoption of the subcontract price adjustment system, in violation of Article 3 (2) 3; |
| 2. | A business entity who fails to notify the matters specified in the subparagraphs of Article 3-5, in violation of that Article, or notifies false information on such matters. |
| (6) | A prime contractor who fails to present data in accordance with Article 22-2 (2) or presents false data shall be subject to an administrative fine not exceeding five million won. <Newly Inserted on Jan. 25, 2010; Apr. 17, 2018; Jan. 11, 2022; Jul. 18, 2023> |
| (7) | A person who fails to comply with the orders to maintain good order prescribed in Article 66 of the Monopoly Regulation and Fair Trade Act applied mutatis mutandis pursuant to Article 27 (1) shall be subject to an administrative fine not exceeding one million won. <Amended on Jan. 25, 2010; Apr. 17, 2018; Dec. 29, 2020; Jan. 11, 2022; Jul. 18, 2023> |
| (8) | The Fair Trade Commission shall impose and collect administrative fines provided for in paragraphs (1) through (7) in accordance with the standards prescribed by Presidential Decree. <Amended on Jan. 25, 2010; Oct. 31, 2017; Apr. 17, 2018; Jan. 11, 2022; Jul. 18, 2023> |
[This Article Wholly Amended on Apr. 1, 2009]
| Article 31 (Joint Penalty Provisions) |
If the representative of a legal entity or an agent, employee, or servant of a legal entity or an individual commits an offense under Article 30 in the scope of the business of the legal entity or the individual, not only shall such offender be punished accordingly, but the legal entity or the individual shall be punished by the fine prescribed in the applicable provisions: Provided, That this shall not apply where the legal entity or private individual has not neglected to take due care and supervision of the business to prevent such offense. [This Article Wholly Amended on 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 on 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 on 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 on Jul. 16, 2013; Jul. 26, 2017> |
| (5) | Upon receipt of a request to file a complaint made under paragraph (3) or (4), the Chairperson of the Fair Trade Commission shall file a complaint to the Prosecutor General. <Newly Inserted on Jul. 16, 2013> |
| (6) | The Fair Trade Commission may not withdraw a criminal charge once the prosecution is initiated. <Newly Inserted on Mar. 29, 2011; Jul. 16, 2013> |
[This Article Wholly Amended on 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 on Apr. 1, 2009]
| Article 34 (Relationship to Other Statutes) |
[This Article Wholly Amended on 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 this 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 on 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 (4) 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 this 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 on May 28, 2013; Jan. 16, 2018; Aug. 17, 2021> |
| (3) | A court shall take the following matters into consideration when it determines the amount of compensation in accordance with paragraph (2): <Newly Inserted on May 28, 2013> |
| 1. | The degree of awareness of intention or likelihood of occurrence of damage; |
| 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. | Fines and penalty surcharges against the offense; |
| 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. |
[This Article Newly Inserted on Mar. 29, 2011]
| Article 35-2 (Submission of Data) |
| (1) | In a claim for damages resulting from an act in violation of this Act, the court may, upon a request of a party, order the other party to prove the damage or to submit data necessary for the calculation of the amount of damage: Provided, That this shall not apply if the person ordered to submit has good cause for refusing to do so. |
| (2) | Where a person who has received an order to submit under paragraph (1) asserts that there is a good cause for refusing to do so, the court may order the presentation of data in order to determine whether such assertion is valid. In such cases, the court shall not allow others to view the data. |
| (3) | Even if the data subject to submission under paragraph (1) are trade secrets under subparagraph 2 of Article 2 of the Unfair Competition Prevention and Trade Secret Protection Act (hereinafter referred to as "trade secrets"), if the data are absolutely necessary in proving damage or calculating the amount of damage, it shall not be deemed that there is good cause under the proviso of paragraph (1). In such cases, the court shall determine the scope or persons allowed to peruse within the extent not deviating from the purpose of the submission order. |
| (4) | Where a person who has been ordered to submit under paragraph (1) fails to comply without justifiable reasons, the court may recognize as true the assertions of the applicant about the entries contained in the data. In such cases, when there are circumstances in which it is significantly difficult for the applicant to assert in detail the entries in the data and it is difficult to expect the facts intended to be proved with the data to be proved with other evidence, the assertion about the facts that the applicant intends to prove by the entries in the data may be recognized as true. |
[This Article Newly Inserted on Aug. 17, 2021]
| Article 35-3 (Confidentiality Orders) |
| (1) | In a claim for damages resulting from an act in violation of this Act, the court may order the following persons not to use the trade secrets held by the party for any purpose other than proceeding with the relevant lawsuit, by a decision upon the request of a party, or not to disclose to a person who has not received an order under this paragraph by an order related to the trade secrets: Provided, That this shall not apply where the following persons have acquired the trade secrets by means other than the perusal of briefs or discovery prior to the application: |
| 1. | The other party (referring to the representative in the case of a corporation); |
| 2. | A person who represents the party in the relevant lawsuit; |
| 3. | Any other person who has become aware of the trade secrets through the lawsuit. |
| (2) | A person who applies for an order under paragraph (1) (hereinafter referred to as "confidentiality order") shall account for all of the following points: |
| 1. | That the trade secrets are included in any of the following data: |
| (a) | Briefs that have already been submitted or need to be submitted; |
| (b) | Evidence that has already been examined or needs to be examined; |
| (c) | Data that have been submitted or need to be submitted under Article 35-2 (1); |
| 2. | That it is likely to impede the business of the relevant party if the trade secrets contained in the data listed in subparagraph 1 are used or disclosed for purposes other than proceeding with the relevant lawsuit, and to prevent that, it is necessary to restrict the use or disclosure of the trade secrets. |
| (3) | An application for a confidentiality order shall be made in writing stating the following: |
| 1. | The person to whom the confidentiality order is to be issued; |
| 2. | Facts sufficient to specify the trade secret to be subject to the confidentiality order; |
| 3. | Facts falling under the subparagraphs of paragraph (2). |
| (4) | Where a decision is made to issue a confidentiality order, the court shall serve the written decision on the person to whom the confidentiality order is to be issued. |
| (5) | The confidentiality order takes effect from the time the written decision under paragraph (4) is served. |
| (6) | An immediate appeal may be filed against a judgment that dismisses, with or without prejudice, an application for a confidentiality order. |
[This Article Newly Inserted on Aug. 17, 2021]
| Article 35-4 (Revocation of Confidentiality Orders) |
| (1) | Where there are facts or circumstances that do not correspond to the points in the subparagraphs of Article 35-3 (2), the person who has applied for a confidentiality order or the person who has received a confidentiality order may request the court that keeps the litigation records (if there is no court keeping the records, it refers to the court that issued the confidentiality order) to revoke the confidentiality order. |
| (2) | Where a court makes a decision on a request for revocation of a confidentiality order, it shall serve the written decision on the person who made the request and the other party. |
| (3) | An immediate appeal may be filed against the court's decision on a request for revocation of the confidentiality order. |
| (4) | The court's decision to revoke the confidentiality order takes effect only when it becomes final and conclusive. |
| (5) | If there is a person who has received a confidentiality order regarding a trade secret, other than the person who has requested the revocation of the confidentiality order and the other party, the court that has made a decision to revoke the confidentiality order shall immediately notify the person of the fact that the decision has been made to revoke the confidentiality order. |
[This Article Newly Inserted on Aug. 17, 2021]
| Article 35-5 (Notification of Request for Perusal of Litigation Records) |
| (1) | Where there has been a court ruling to limit the applicant for perusal, etc. to the parties under Article 163 (1) of the Civil Procedure Act with respect to the records of the litigation for which a confidentiality order was issued (excluding lawsuits for which confidentiality orders have been entirely revoked) and a party has applied for the perusal, etc., but has taken the procedure through a person who has not received a confidentiality order, a court administrative officer, junior court administrative officer, chief court clerk, or senior court clerk (hereinafter referred to as "junior court administrative officer, etc.") shall immediately notify the party who has requested the restriction of the perusal, etc. under the same paragraph (those who have applied for the perusal, etc. are excluded; the same shall apply in the proviso of paragraph (2) below) of the fact that the application for perusal, etc. has been made. |
| (2) | The junior court administrative officer, etc. shall not allow a person who has taken the application procedure for perusal, etc. to peruse, etc. the parts containing trade secrets until two weeks from the date an application for the perusal, etc. is made under paragraph (1) (referring to the time until the judgment on the application for a confidentiality order becomes final and conclusive in cases where an application for a confidentiality order is made within the relevant period for the person who has taken the application procedure for perusal, etc.): Provided, That the perusal, etc. may be allowed even before the elapse of such period under the main clause if all parties who have applied for the restriction of perusal, etc. under Article 163 (1) of the Civil Procedure Act agree to the perusal, etc. of the parts containing trade secrets by the person who has taken the application procedure for such perusal, etc. |
[This Article Newly Inserted on Aug. 17, 2021]
| Article 36 (Regarding as Public Officials for Purposes of Penalty Provisions) |
[This Article Newly Inserted on Jan. 16, 2018]
ADDENDUM <Act No. 3779, Dec. 31, 1984>
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 subcontract transactions for which a subcontract has already been concluded as at the time this Act enters into force. |
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 begin to apply to subcontracts 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 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 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 the offense 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 the date of 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 the date of 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.
ADDENDA <Act No. 15612, Apr. 17, 2018>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation: Provided, That the amended provisions of Articles 12-3 (3) and 23 (1) shall enter into force on the date of their promulgation. Article 2 (Applicability to Prohibition of Unlawful Use of Technical Data)
The amended provisions of Article 12-3 (3) shall also apply to a subcontract transaction for which a subcontract has not been terminated as at the time the same amended provisions enter into force. Article 3 (Applicability to Limitation on Transactions Subject to Investigation)
The amended provisions of Article 23 (1) shall apply, beginning with a subcontract transaction for which three years have not passed from the date the transaction was completed as at the time the same amended provisions enter into force.
ADDENDA <Act No. 16415, Apr. 30, 2019>
Article 1 (Enforcement Date)
| (1) | This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.) |
Article 2 Omitted.
Article 3 Omitted.
ADDENDA <Act No. 16423, Apr. 30, 2019>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Article 2 (Applicability to Limitation on Direct Payment of Consideration)
The amended provisions of Article 14 (3) shall apply, beginning with the first case where a subcontract is concluded after this Act enters into force.
ADDENDA <Act No. 16649, Nov. 26, 2019>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Article 2 (Applicability to Adjustment of Subcontract Consideration)
The amended provisions of Articles 16 (1) and 16-2 (1) shall begin to apply to manufacturing, etc. entrusted by a prime contractor after this Act enters into force.
ADDENDA <Act No. 17348, Jun. 9, 2020>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 15 Omitted.
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 30 Omitted.
ADDENDA <Act No. 18434, Aug. 17, 2021>
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 2 shall enter into force on the date of its promulgation. Article 2 (Applicability to Entering into Confidentiality Contract)
The amended provisions of Article 12-3 (3) shall begin to apply to a case where a subcontractor provides technical data to a prime contractor after this Act enters into force. Article 3 (Applicability to Orders for Submission of Data in Claims for Damages)
The amended provisions of Articles 35-2 through 35-5 shall begin to apply to a claim for damages filed after this Act enters into force.
ADDENDA <Act No. 18757, Jan. 11, 2022>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation: Provided, That the amended provisions of Articles 3-2, 12-3 (4), 24-5 (4), 24-8 through 24-11, and 36 shall enter into force six months after the date of its promulgation. Article 2 (Applicability to Disclosure of Results of Bidding for Construction Subcontracts)
Article 3 (Applicability to Disclosure of Payment Conditions of Subcontract Payment)
The amended provisions of Article 13-3 shall begin to apply to a case where a subcontract is concluded after this Act enters into force. Article 4 (Applicability to Adjustment of Subcontract Payment)
| (1) | The amended provisions of Article 16-2 (1) 3 shall begin to apply to a subcontract concluded, changed, or renewed after this Act enters into force. |
| (2) | The amended provisions of Article 16-2 (3) through (5) shall also apply to a case where a subcontractor requests the cooperative for negotiations for the adjustment of the subcontract price before this Act enters into force and the procedure therefor is in progress at the time this Act enters into force. |
Article 5 (Applicability to Suspension of Litigation and Mediation Procedures)
The amended provisions of Article 24-8 shall begin to apply to the first application for mediation filed after this Act enters into force. Article 6 (Transitional Measures concerning Standard Subcontract)
The standard subcontract under previous Article 3-2 as at the time this Act enters into force shall be deemed the standard subcontract formulated or amended by the Fair Trade Commission under the amended provisions of Article 3-2. Article 7 Omitted.
ADDENDA <Act No. 19562, Jul. 18, 2023>
Article 1 (Enforcement Date)
This Act shall enter into force on October 4, 2023: Provided, That the amended provisions of Articles 2 (16) and (17), 3-6, 3-7, and 16-2 shall enter into force on the date of its promulgation. Article 2 (Applicability to Subcontract Payment Adjustment System)
The amended provisions of Article 3 shall begin to apply to subcontracts concluded or renewed after the date this Act enters into force. Article 3 (Applicability to Deletion of Requirements for Requesting Adjustment Negotiation)
The amended provisions of Article 16-2 (2) shall begin to apply to requests for adjustment negotiation made after those amended provisions enter into force.
ADDENDA <Act No. 19619, 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 subcontract dispute mediation council newly organized after this Act enters into force.
ADDENDA <Act No. 20239, Feb. 6, 2024>
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. 20241, 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.