skip to main contents skip to main menu

National Assembly Legislation

  • Act on the Promotion of Collaborative Cooperation between Large Enterprises and Small-Medium Enterprises
    • Competent Ministry : Ministry of SMEs and Startups
    • Advance Publication of Legislation : 2020-06-23
    • Opinion Submission Deadline : 2020-07-07
Reasons for Proposal

The current Act requires that a commissioning enterprise determines the payment date for delivered goods for the commissioned enterprise as soon as possible within 60 days from the date of receiving goods, etc., and pays interest if it makes the payment after 60 days. However, when a commissioning enterprise pays the unreasonably reduced price of delivered goods, since there is no provision for the commissioning party to pay interest, the economic burden of the commissioned enterprise is increasing. 

In addition, to improve unfair trade practices between commissioned and commissioning enterprises, the current Act requires checking periodically the obligations, etc., of a commissioning enterprise and requests the enterprise to improve the matters that need to be improved, but it has been suggested to clarify the basis for correction orders in the Act because there is an interpretative confusion as to whether the correction orders, such as the payment of delivered goods, are included in the request for improvement.

Therefore, this amendment aims to require commissioning enterprises to pay interest on the unfairly reduced price of delivered goods and provide a basis for ordering corrective measures, such as the payment of delivered goods and suspension of violations of the Act, to a commissioning enterprise that has committed unfair trade practices.

Details

A. When a commissioning enterprise pays the price of delivered goods reduced through the act of paragraph (1) 1 after 60 days from the date of receipt of goods, etc., require the enterprise to pay interest up to the annual rate of 40/100 on the excess period (Article 25 (3) newly inserted) 

B. Add the violation not to pay interest on an unfairly reduced payment for delivered goods to the request for measures to the Fair Trade Commission (Article 26 (1)) 

C. Allow the Minister of SMEs and Startups to order measures, such as paying the price of delivered goods, the suspension of illegal acts, etc., which is necessary for the correction to a commissioning enterprise that violates the obligations, etc., and to publish its names and a summary of the corrective order if the commissioning enterprise does not comply with the order (Article 27) 

D. Stipulate that a person who has not fulfilled the correction order until one month has passed after publishing the name and summary of the enterprise that did not follow the correction order shall be sentenced to imprisonment with labor for up to one year or fined up to 50 million won (Article 41 (3) 1-2 newly inserted) 


Major Provisions

Pay the price of delivered goods (Article 22), Obligations (Article 25), Improve unfair trade practices between commissioned and commissioning enterprises (Article 27), Education order (Article 28-2)

Go to the Bill