1. Reasons for Amendment

Provisions regarding participant eligibility, procedures, etc. for tariff rate quota auction and distribution are currently prescribed as internal regulations of Korea Fishery Trade Association, the recommendation agency for tariff rate quota auction and distribution. The Amendment transfers these provisions to a Ministry of Oceans and Fisheries Notice while also newly inserting grounds on which a business that has been allocated an import quota may commission another business to import on its behalf, prescribing grounds on which to penalize misconduct among tariff rate quota distribution participants, and otherwise addresses and improves upon a number of weaknesses that have emerged from the operation of the current system.

2. Major Provisions

A. Newly insert quota auction participant eligibility, auction procedures, etc. (Article 13, Article 14, Articles 16 through 19, and Article 22 newly inserted)

  Transfer provisions on quota auction participant eligibility, formulation of quota auction plans, reserve price setting, quota auction participant application procedures, bid bond payment, quota auction and successful bidder determination method, and auction fee payment from internal regulations of the Korea Fishery Trade Association to a Ministry of Oceans and Fisheries Notice

B. Newly insert provisions on import agents, etc. (Article 21 (4) and Article 31 (4) newly inserted)

  Allow tariff rate quotas allocated through a quota auction or distribution to be used for third party importing while prohibiting third party importers from importing on behalf of two or more successful bidders or distributees from an auctioned or distributed quota under the same free trade agreement, item name, and session; and prohibiting successful bidders and distributees from commissioning two or more individuals to import on their behalf for an auctioned or distributed quota under the same free trade agreement, item name, and session

C. Newly insert penalties against underfill and misconduct (Article 21 (6) and (7), Article 24 (6) and (7), Article 31 (5) and (6), and Article 33 (5) and (6) newly inserted)

 Prescribe that any business where a representative or employee is the representative of a business that has been prohibited from participating in quota auctions and quota distributions due to underfill or misconduct shall also be prohibited from participating in quota auctions and quota distributions for the same period of prohibition, and that any business that has been prohibited from participating in quota auctions and quota distributions due to underfill or misconduct shall not import on behalf of any other business that has successfully bid for or has been distributed with a quota

D. Newly insert quota distribution participant eligibility and distribution procedures, etc. (Article 26, Article 27, and Article 29 newly inserted)

  Transfer provisions on quota distribution participant eligibility, formulation of quota distribution plans, and quota distribution participant application procedures from internal regulations of the Korea Fishery Trade Association to a Ministry Notice

E. Newly insert provisions on penalties for misconduct by quota distribution participants (Article 33 newly inserted)

Restrict quota distribution for a period of up to two years for any quota distribution participant who is found to have engaged in misconduct such as collusion, document falsification, duplicate participation, or provision of money or entertainment

F. Newly insert obligations for the designated allocation method supervision institution to report on import fulfillment plans, etc. (Article 35 newly inserted)

Require the designated allocation method supervising institution to report to the Minister of Oceans and Fisheries each year on tariff rate quota import fulfillment plans, fulfillment results, and profit management plans