ENFORCEMENT DECREE OF THE FAIR AGENCY TRANSACTIONS ACT
Presidential Decree No. 27677, Dec. 22, 2016
Amended by Presidential Decree No. 28944, jun. 5, 2018
Presidential Decree No. 29393, Dec. 18, 2018
Presidential Decree No. 32274, Dec. 28, 2021
Presidential Decree No. 32682, jun. 7, 2022
Presidential Decree No. 34205, Feb. 6, 2024
CHAPTER I GENERAL PROVISIONS
CHAPTER II FAIR AGENCY TRANSACTION
| Article 2 (Matters to Be Provided for in Agency Transaction Contracts) |
| 1. | In cases of consignment sale transactions, matters concerning the scope of the business entrusted to the agency by the supplier; |
| 2. | In cases of consignment sales transactions, matters concerning the price to be paid by the supplier to the agency, irrespective of its name, such as commission. |
| Article 3 (Types of or Criteria for Conduct of Compelling Purchases) |
Conduct prohibited under Article 6 (1) of the Act shall be any of the following: | 1. | Compelling an agency to purchase any specific goods or services by compelling it to place an order or by creating a situation in which there is no choice but to place an order; |
| 2. | Supplying goods or services that an agency has no intention to purchase, by unilaterally modifying the details of an order placed by the agency; |
| 3. | Any other conduct determined and publicly notified by the Fair Trade Commission as conduct compelling to purchase goods or services against an agency’s intention. |
| Article 4 (Types of or Criteria for Conduct of Compelling Provision of Economic Benefits) |
Conduct prohibited under Article 7 (1) of the Act shall be any of the following: | 1. | Compelling an agency to bear the cost, provide human resource, etc. for a sales promotional event arranged in accordance with the needs of the supplier; |
| 2. | Compelling an agency to bear all or part of the labor costs for executive officers or employees employed by the supplier; |
| 3. | Compelling any executive officer or employee employed by an agency to work in the supplier's place of business, another place of business or similar place designated by the supplier; |
| 4. | Compelling an agency to provide economic benefits unrelated to agency transactions, irrespective of the name, such as donations or sponsorship; |
| 5. | Any other conduct determined and publicly notified by the Fair Trade Commission as conduct forcing an agency to provide money, goods, services, and other economic benefits against the agency’s intention. |
| Article 5 (Types of and Criteria for Conduct of Compelling Sales Target) |
Conduct prohibited under Article 8 (1) of the Act shall be any that compels an agency to achieve a sales target of goods or services supplied by the supplier by performing, or indicating the intention to perform, any of the following conduct: | 1. | Early terminating agency contract; |
| 2. | Suspending the supply of goods or services; |
| 3. | Failing to pay all or part of an amount payable to an agency; |
| 4. | Any other conduct determined and publicly notified by the Fair Trade Commission as conduct imposing disadvantages that interfere with the normal operation of an agency. |
| Article 6 (Types of or Criteria for Conduct of Imposing Disadvantages) |
Conduct prohibited under Article 9 (1) of the Act shall be any of the following conduct: | 1. | Concluding a contract interpreted in supplier’s favor, where the supplier and an agency fail to agree on the contents of the contract; |
| 2. | Altering any terms and conditions of transactions during the term of the contract, against the intention of an agency; |
| 3. | Preventing an agency from claiming damages even if the contract is terminated fully or partially; |
| 4. | Suspending or restricting the supply of goods or services or the sales support agreed with an agent, without any reasonable ground; |
| 5. | Reducing or failing to pay sales incentives even though an agent does not fall under any ground for restricting the payment of the sales incentives under the agency transaction contract; |
| 6. | Requiring an agency to compensate any equipment or fixtures leased to the agency at a price without considering depreciation, when they are lost or damaged due to any cause attributable to the agency; |
| 7. | Refusing to accept returned goods even though the goods have been destroyed or damaged due to a cause attributable to the supplier; |
| 8. | Requiring an agency to bear the cost of transport incurred for returning goods, even though the return is due to a cause attributable to the supplier; |
| 9. | Any other conduct determined and publicly notified by the Fair Trade Commission, as setting or altering any terms and conditions of transactions to be disadvantageous to, or imposing any disadvantage on, an agency in the course of implementing them. |
| Article 7 (Types of and Criteria for Interference in Management Activities) |
Conduct prohibited under Article 10 (1) of the Act shall be any of the following: | 1. | Requiring an agency to obtain a prior instruction or ex post facto consent from the supplier, where it appoints or dismisses any of its executive officers or employees or determines the working area or working conditions of such executive officer or employee; |
| 2. | Requesting an agency to provide information that constitutes business secrets, such as the status of its customers and details of sales, without any reasonable ground; |
| 3. | Requesting an agency to comply with a unilateral instruction issued by the supplier as to the customers, business hours, sales territory, sales promotional activities, etc. of the agency; |
| 4. | Any other conduct determined and publicly notified by the Fair Trade Commission as interfering with the management activities which an agency should decide and perform independently. |
| Article 7-2 (Criteria for Designating Entrusted Agencies for Affairs including Education) |
"The requirements in terms of facilities, human resources, and records on education as prescribed by Presidential Decree" in Article 12-4 (2) of the Act means the standards specified in attached Table 1. [This Article Newly Inserted on Jun. 7, 2022]
CHAPTER III MEDIATION OF DISPUTES
| Article 8 (Meetings of Council) |
| (1) | If the Chairperson of the Agency Dispute Mediation Council established under Article 13 of the Act (hereinafter referred to as "Council"; and the Chairperson thereof shall be referred to as "Chairperson") intends to convoke a meeting comprised of all members under Article 16 (1) of the Act, he or she shall inform the relevant members of the date and time; venue; and agenda for the meeting in writing (including an electronic document defined in subparagraph 1 of Article 2 the Framework Act on Electronic Documents and Transactions; hereinafter the same shall apply) not later than seven days before holding the meeting: Provided, That in cases of urgency, notification may be made not later than the day immediately before the meeting. |
| (2) | Paragraph (1) shall apply mutatis mutandis where a member representing the public interest under Article 14 (2) of the Act intends to convoke a subcommittee meeting referred to in Article 16 (1) of the Act. |
| (3) | Meetings of the Council shall not be disclosed: Provided, That when the Chairperson deems it necessary, parties to a dispute arising out of agency transactions which is subject to mediation (hereinafter referred to as "disputing parties") or other interested persons may be permitted to attend a meeting. |
| Article 9 (Applications for Dispute Mediation) |
| (1) | "Written application stating the matters prescribed by Presidential Decree" in Article 19 (1) of the Act means a written application stating the following: <Amended on Dec. 18, 2018; Feb. 6, 2024> |
| 1. | The names and addresses of the applicant and the respondent (if a disputing party is a corporation, referring to the name of the corporation, the location of its main office, and the name and address of its representative); |
| 2. | The name and address of a proxy, if any; |
| 3. | The purport and grounds for the application; |
| 4. | Where the disputing party has filed an application for dispute mediation on the same matter with a different council, the fact thereof; |
| 5. | Where the disputing party is notified of an application for dispute mediation on the same matter filed by the other disputing party pursuant to Article 19 (4) of the Act, the fact thereof. |
| 6. | The litigation case number (limited to cases where a lawsuit is filed for a case subject to the application for dispute mediation). |
| (2) | The written application under paragraph (1) shall be appended by the following documents: |
| 1. | A document substantiating the grounds for and facts of the application for the dispute mediation; |
| 2. | A power of attorney, if the application is filed by a proxy; |
| 3. | Any other evidential documents or data supporting the dispute mediation. |
| Article 10 (Selection of Representative) |
| (1) | Multiple disputing parties who jointly apply for mediation may select up to three representatives from among the applicants. |
| (2) | Where persons who have jointly applied for dispute mediation select no representative as prescribed in paragraph (1), the Chairperson may recommend them to select representatives. |
| (3) | When any representative is selected or replaced, the applicant shall notify the Chairperson of such fact without delay. |
| Article 11 (Supplementation of Applications for Dispute Mediation and Other Relevant Matters) |
| (1) | Where deemed necessary, the Chairperson may request the supplementation of a written application referred to in Article 9 (1) or documents referred to in paragraph (2) of that Article, specifying a reasonable period. |
| (2) | The period required for supplementation under paragraph (1) shall be excluded from the calculation of the period under Article 20 (5) 3 of the Act. |
| Article 12 (Appearance of Disputing Parties) |
| (1) | In requesting disputing parties to appear at a meeting pursuant to Article 20 (2) of the Act, the Council shall determine and notify the matters to be verified by disputing parties appearing, time and place for the disputing parties to appear, not later than seven days before the requested date of appearance: Provided, That this shall not apply in cases of urgency or where disputing parties give consent to such matters. |
| (2) | If any inevitable grounds exist that would prevent a disputing party in receipt of the notification under paragraph (1), from appearing at a meeting of the Council, the distributing party may submit his or her opinion in advance in writing on the matter that the Council intends to verify. |
| Article 13 (Grounds for Termination of Dispute Mediation) |
| (1) | "Any matter prescribed by Presidential Decree ... occurs" in Article 20 (4) 3 of the Act means any of the following cases: <Amended on Dec. 18, 2018; Dec. 28, 2021> |
| 1. | Where the applicant withdraws the application for mediation; |
| 2. | Where it is deemed inappropriate to mediate due to the nature of the dispute; |
| 3. | Where the applicant is deemed to have filed the application for the purpose of obtaining unfair advantage; |
| 4. | Where the applicant has filed applications for mediation at least twice with the same intention on the same matter; |
| 6. | Where the applicant fails to supplement the application for dispute mediation requested under Article 11 within the deadline without good cause; |
| 7. | Where the agency selects a different council to be in charge of mediation proceedings in accordance with Article 19 (3) of the Act. |
| (2) | Deleted. <Feb. 6, 2024> |
[Title Amended on Feb. 6, 2024]
| Article 13-2 (Notification of Filing of Lawsuit) |
| (1) | If a party to a dispute files a lawsuit regarding the case after applying for dispute mediation pursuant to Article 19 (1) of the Act, he or she shall notify the Chairperson of the fact without delay. The same also applies where a party to a dispute applies for arbitration under the Arbitration Act. |
| (2) | If the Committee is notified of the fact pursuant to the former part of paragraph (1) or confirms that a lawsuit has been filed in a case for which dispute mediation has been requested through a dispute mediation application submitted pursuant to Article 19 (1) of the Act, it may obtain the consent of the parties to the dispute and shall notify the court before which the litigation is pending of the following matters: |
| 1. | Names and addresses of the parties to the dispute (where a party to the dispute is a corporation, the corporation's name, location of its principal office, and its representative's name and address; hereafter in this Article the same shall apply); |
| 2. | Date the application for dispute mediation is filed; |
| 3. | The purport of, and the grounds for, the request for dispute mediation; |
| 4. | The litigation case number. |
| (3) | Where the court before which the litigation is pending suspends litigation procedures pursuant to Article 20-2 (1) of the Act, the parties to the dispute shall notify the Committee of such fact without delay. |
| (4) | The Committee shall dismiss an application for mediation without prejudice under Article 20 (3) of the Act with respect to a dispute mediation case in which the court before which the litigation pending has suspended litigation procedures pursuant to Article 20-2 (1) of the Act, or if the Committee terminates mediation proceedings under paragraph (4) or (5) of that paragraph, it shall notify the court of the following matters with the consent of the parties to the dispute: |
| 1. | Names and addresses of the parties to the dispute; |
| 2. | Grounds for dismissing the application for mediation without prejudice or for terminating the mediation procedure; |
| 3. | Results of mediation (limited to cases where mediation is successful); |
| 4. | The litigation case number. |
| (5) | Where the Committee suspends mediation procedures under Article 20-2 (2) and (3) of the Act, it shall notify the parties to the dispute thereof without delay. |
[This Article Newly Inserted on Feb. 6, 2024]
| Article 14 (Written Statement on Termination of Dispute Mediation) |
| (1) | Where the Council rejects an application for mediation pursuant to Article 20 (3) of the Act or terminates mediation proceedings pursuant to Article 20 (4) or (5) of the Act, it shall prepare a written statement on termination of dispute mediation, and make a report thereon and give notification in accordance with the following classification: <Amended on Dec. 28, 2021; Jun. 7, 2023> |
| 2. | Council established in the Special Metropolitan City, Metropolitan City, Special Self-Governing City, Do or Special Self-Governing Province: It shall report a written statement on termination of dispute mediation to the Fair Trade Commission and the relevant Special Metropolitan City Mayor, Metropolitan City Mayor, Special Self-Governing City Mayor, Do Governor or Special Self-Governing Province Governor (hereinafter referred to as "Mayor/Do Governor") respectively, and notify disputing parties of such written statement. |
| (2) | The Council shall mention the following in a written statement on termination of dispute mediation under paragraph (1): |
| 1. | General status of disputing parties; |
| 2. | Summary of agency transactions between disputing parties; |
| 5. | Grounds for rejecting an application for mediation or terminating mediation proceedings. |
[This Article Wholly Amended on Dec. 18, 2018]
| Article 15 (Protocol of Mediation) |
Where the mediation is completed, the Council shall prepare a protocol of mediation stating the following matters and submit a report thereon to the Fair Trade Commission together with a photocopy thereof and related documents: <Amended on Dec. 18, 2018>
| 1. | Matters set forth in subparagraph 1 through 4 of Article 14 (2); |
| 2. | Outcomes of the mediation. |
| Article 16 (Succession to Disputing Party's Status) |
| (1) | Where mediation proceedings are unable to progress due to the death or loss of ability of a disputing party or other reasons occur before the mediation proceedings are terminated, the Council may allow a person who has succeeded to his or her status in accordance with a relevant statute to succeed to the status of the relevant disputing party. |
| (2) | A person who intends to succeed to the status of a disputing party under paragraph (1) shall apply for succession to the status in writing to the Council. |
| (3) | Upon receipt of an application under paragraph (2), the Council shall deliberate on and determine whether to grant the succession without delay, and shall notify the details thereof to the applicant in writing. |
| Article 17 (Detailed Rules on Operation of Council) |
Except as otherwise provided for in this Decree, necessary matters concerning the organization, operation, mediation proceedings, etc. of the Council shall be determined by the Chairperson following a resolution by the Council.
CHAPTER IV PROCEDURES FOR FAIR TRADE COMMISSION TO HANDLE CASES
| Article 18 (Recommendation for Correction) |
A recommendation for correction under Article 24 (1) of the Act shall be made in writing, stating the following matters: | 1. | Details of the violation of the Act; |
| 3. | Deadline for making corrections; |
| 4. | Deadline for notification as to whether party accepts the recommendation; |
| 5. | Measures to be taken when the recommendation is refused. |
| Article 18-2 (Imposition of Charges for Compelling Compliance) |
| (1) | When the Fair Trade Commission imposes a charge for compelling compliance pursuant to Article 24-3 (1) of the Act, it shall ascertain compliance after the lapse of the deadline for the consent resolution (hereinafter referred to as "consent resolution") prescribed in Article 24-2 (1) of the Act, and shall determine the period for imposition of the charge for compelling compliance and the amount thereof based on the following dates: |
| 1. | Where a consent resolution is revoked: Date on which the consent resolution is revoked; |
| 2. | Where a supplier complies with a consent resolution in cases other than those falling under subparagraph 1: The date the consent resolution is complied with; |
| 3. | Where a supplier fails to implement a consent resolution in cases other than that falling under subparagraph 1: The date when the consent resolution is confirmed. |
| (2) | Even after the period for imposing a charge for compelling compliance determined under paragraph (1) 3, the Fair Trade Commission may re-impose the charge for compelling compliance, calculating from the date the period for imposing the charge for compelling compliance, determined under paragraph (1) 3, elapses. |
| (3) | Upon determining the period for imposing a charge for compelling compliance and the amount thereof pursuant to paragraph (1), the Fair Trade Commission shall notify the supplier who has applied for a consent resolution to pay such charge for compelling compliance in writing, including the following matters: |
| 1. | Amount of charges for compelling compliance (including a charge for compelling compliance per day and period of imposition); |
| 2. | Grounds for imposition of charges for compelling compliance; |
| 3. | Deadline for payment of charges for compelling compliance; |
| 4. | An institution receiving charges for compelling compliance; |
| 5. | Methods of raising an objection and agency with which an objection can be filed. |
| (4) | A supplier who has received a notice of payment under paragraph (3) shall pay the charge for compelling compliance by the deadline for payment under subparagraph 3 of that paragraph: Provided, That where it is impossible to pay the charges for compelling compliance by the deadline for payment due to an act of God or other unavoidable grounds, it shall be paid within 30 days from the date on which such grounds cease to exist. |
| (5) | Where the Fair Trade Commission demands payment of a charge for compelling compliance for collection thereof pursuant to Article 24-3 (2) of the Act, such demand shall be made in writing within 15 days after the deadline for payment of the charge for compelling compliance expires. |
| (6) | Where the Fair Trade Commission demands payment under paragraph (5), the deadline for payment of charges for compelling compliance in arrears shall be within 10 days from the date of issuance of the written demand. |
[This Article Newly Inserted on Jun. 7, 2022]
| Article 18-3 (Entrustment of Affairs Related to Disposition on Charges for Compelling Compliance in Arrears) |
| (1) | The Fair Trade Commission shall entrust the Commissioner of the National Tax Service with the affairs related to the disposition on charges for compelling compliance in arrears under Article 24-3 (1) and (2) of the Act pursuant to paragraph (3) of that Article. |
[This Article Newly Inserted on Jun. 7, 2022]
| Article 19 (Criteria for Imposition of Penalty Surcharges) |
| (1) | "Amount involved in the violation of the Act, prescribed by Presidential Decree" in the main clause of Article 25 (1) of the Act means the amount classified as follows: |
| 1. | Where Article 6 of the Act is violated: The value of the goods or services an agency is compelled to purchase; |
| 2. | Where Article 7 of the Act is violated: The sum of money; value of goods; services; or other economic benefits that an agency is compelled to provide; |
| 3. | The disadvantages imposed on an agency in violation of Article 9 of the Act, the amount of which is classified as follows: |
| (a) | Conduct referred to in subparagraph 5 of Article 6: The amount of sales incentives reduced or unpaid; |
| (b) | Conduct referred to in subparagraph 7 of Article 6: The value of the goods which the supplier has refused to accept the return thereof; |
| (c) | Conduct referred to in subparagraph 8 of Article 6: The expenses for return required to be borne by on an agency; |
| 4. | Any other violation of the Act, the amount involved in which can be calculated: The amount calculated. |
| (2) | The criteria for imposition of penalty surcharges under Article 25 (1) of the Act shall be as specified in attached Table 2. <Amended on Jun. 7, 2022> |
| (3) | Except as otherwise provided in this Decree, detailed criteria necessary for the imposition of penalty surcharges shall be determined and publicly notified by the Fair Trade Commission. |
| Article 19-2 (Payment of Monetary Awards) |
| (1) | Violations eligible for the payment of a monetary award (hereafter in this Article referred to as "monetary award") under Article 26-2 (1) of the Act shall be violations of the provisions falling under any of Articles 6 through 12 of the Act. |
| (2) | The Fair Trade Commission shall pay a monetary award to the first person who makes a report or provides information on a violation under paragraph (1) and submits evidentiary materials that may verify such violation: Provided, That the foregoing shall not apply to a supplier who commits the relevant violation and a person involved in the relevant violation as an executive officer or employee of such supplier. <Amended on Dec. 18, 2018> |
| (3) | Except in extenuating circumstances, the Fair Trade Commission shall pay a monetary award within three months from the date it decides to take measures, such as corrective measures, (where a formal objection is filed, referring to the date it makes a redecision) against a supplier who has committed a violation because it deems that the violation on which a report has been made or information has been provided constitutes a violation of law. |
| (3) | Except in exceptional circumstances, the Fair Trade Commission shall pay a monetary award within three months from the date it decides to take measures, such as corrective measures, (where a formal objection is filed, referring to the date it makes a redecision) against a supplier who has committed a violation because it deems that the violation on which a report has been made or information has been provided constitutes a violation of law. |
| (5) | The Fair Trade Commission shall determine and publicly notify specific standards for the payment of monetary awards by type of violations in consideration of the seriousness of violations, the levels of evidence, etc. |
| (6) | The Fair Trade Commission may establish the deliberative committee on monetary awards for reporting in order to deliberate on matters concerning the payment of monetary awards. |
| (7) | The Fair Trade Commission shall determine and publicly notify matters concerning the establishment and operation of the deliberative committee on monetary awards for reporting under paragraph (6) and other detailed matters concerning standards, procedures, etc. for the payment of monetary awards. |
[This Article Newly Inserted on Jun. 5, 2018]
| Article 19-3 (Delegation of Authority) |
The Fair Trade Commission shall delegate the authority to impose and collect administrative fines under Article 32 (1) 4 and 5 of the Act to Mayors/Do Governors pursuant to Article 28 of the Act. [This Article Newly Inserted on Jun. 7, 2023]
CHAPTER V PENALTY PROVISIONS
| Article 20 (Criteria for Imposition of Administrative Fines) |
The criteria for imposition of administrative fines under Article 32 (1) through (3) of the Act shall be as specified in attached Table 3. <Amended on Jun. 7, 2022>
ADDENDA <Presidential Decree No. 27677, Dec. 22, 2016>
This Decree shall enter into force on December 23, 2016.
ADDENDA <Presidential Decree No. 28944, Jun. 5, 2018>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation: Provided, That the amended provisions of Article 19-2 shall enter into force on July 17, 2018. Article 2 (Transitional Measures concerning Criteria for Imposing Penalty Surcharges)
Where the Fair Trade Commission imposes a penalty surcharge for a violation committed before this Decree enters into force, notwithstanding the amended provision of subparagraph 2 (b) of attached Table 1, the former provision thereof shall apply.
ADDENDUM <Presidential Decree No. 29393, Dec. 18, 2018>
This Decree shall enter into force on January 1, 2019: Provided, That the amended provisions of Article 19-2 (2) and attached Table 2 shall enter into force on the date of their promulgation.
ADDENDA <Presidential Decree No. 32274, Dec. 28, 2021>
Article 1 (Enforcement Date)
This Decree shall enter into force on December 30, 2021.
Articles 2 through 14 Omitted.
ADDENDUM <Presidential Decree No. 32682, Jun. 7, 2022>
This Decree shall enter into force on June 8, 2022.
ADDENDA <Presidential Decree No. 33520, Jun. 7, 2023>
Article 1 (Enforcement Date)
This Decree shall enter into force on January 1, 2024: Provided, That the amended provisions of subparagraph 2 (c) of attached Table 2 shall enter into force on the date of its promulgation.
Article 2 (Applicability to Imposition of Penalty Surcharges)
The amended provisions of subparagraph 2 (c) of attached Table 2 shall also apply where a penalty surcharge is imposed after the enforcement date with respect to an offense committed before the enforcement date under the proviso of Article 1 of the Addenda. Provided, That where the application of the amended provisions of subparagraph 2 (c) of attached Table 2 is more disadvantageous to an entrepreneur than the application of the previous provisions, the previous provisions shall apply.
ADDENDUM <Presidential Decree No. 34205, Feb. 6, 2024>
This Decree shall enter into force on the date of its promulgation.