(1) Reasons for Proposal

To ensure efficient management of matters reported under the Tobacco Business Act (transfer of a manufacturing business, discontinuation or suspension of business of a sales business, price), the Amendment prescribes that the management/supervisory institution shall review the appropriateness of the reported information and accept it if it conforms to the law. The Amendment also strengthens control over the manufacturing and sale of hand-rolled tobacco by prohibiting the provision of tobacco manufacturing equipment for profit-making purposes. To curb tobacco consumption, the Amendment prohibits consumer promotion and retailer name lending. It prescribes legal grounds for matters concerning prioritized retailer designation, which is being operated under a subordinate law. It prescribes that certificates of fire-prevention performance shall be submitted to the actual management/supervisory agency and clearly specifies the submission deadline.

The Amendment also addresses a number of weaknesses in the current Act, such as conflicting provisions requiring a tobacco manufacturing business license or tobacco sales business registration to be revoked in the event that tobacco has been sold without submitting a certificate of fire-prevention performance, while also subjecting such businesses to business suspension.

(2) Major Provisions

A. Clearly prescribe the acceptance of matters reported in relation to tobacco businesses, and strengthen control (Article 11-3, Article 18, and Article 22-2)

Allow reports on the succession to the license and status of a manufacturing businesses, reports on the suspension or discontinuation of a tobacco sales business, reports on the selling price of tobacco, etc., to be reviewed for appropriateness, etc., by the management/supervisory institution and accepted if conforming to the law; and require relevant information to be submitted when filing an initial report or change report on tobacco prices

B. Prohibit the provision of tobacco manufacturing equipment (Article 20-2 newly inserted and Article 27-2)

To prevent the manufacture and sale of hand-rolled tobacco that does not have an indication of tobacco ingredients and has not been certified for fire-prevention performance, prohibit the free or paid-for provision of equipment that can be used to manufacture tobacco for profit-making purposes to any other person, and prescribe penalties for non-compliance

C. Increase the scope of the prohibition on the provision of money and goods, etc., to promote tobacco sales (Article 25-4)

Prohibit manufacturers, import and sale business entities, and wholesalers from providing money or goods, etc., to tobacco consumers as well as tobacco retailers for the purpose of promoting tobacco sales

D. Specify in the Act the persons eligible for prioritized retailer designation, and the prohibition on succession of retailer status (Article 16 and Article 16-2)

Prescribe legal grounds for the prioritized retailer designation scheme for “persons who have rendered distinguished service to the State, persons with disabilities, and their families,” which is currently operated in accordance with the Enforcement Rule of the Tobacco Business Act, and the prohibition on succession of tobacco retailer status, which is currently operated by authoritative interpretation

E. Prohibit the retailer's name lending (Article 16, Article 17, and Article 27-2)

Prescribe that a person who has been designated as a retailer shall not lend his or her name to any other person; and prescribe revocation of retailer designation and penalties for non-compliance

F. Organize the system for submitting certificates of fire-prevention performance (Article 11-5)

Currently, tobacco manufacturers and import and sale business entities are required to obtain a quarterly fire-prevention performance certification for the tobacco sold, but there are no provisions on the submission deadline for certificates. Accordingly, specify the deadline as the last day of each quarter, and require tobacco maufacturers to submit certificates to the Ministry of Strategy and Finance, and import and sales business entities to the competent Si/Do

G. Modify penal provisions (Article 11-4 and Article 15)

Tobacco manufacturers/import and sale business entities that have sold tobacco without submitting a certificate of fire-prevention performance are subject to revocation of the manufacturing business license or tobacco sales business registration and subject to business suspension under a number of provisions. Address the conflicting provisions by modifying them to state that such tobacco manufacturers/import and sale business entities shall be punishable by revocation of the license or registration