Reasons for Proposal
Recently, there have been frequent violations of origin labeling (label switching), whereby clothes, handmade shoes, bags, etc., manufactured and imported at low prices from China, Vietnam, etc., are passed off as made in Korea, such that the livelihood of small urban manufacturers is being threatened.
Such violations of origin labeling not only lead to loss of jobs for small urban manufacturers, but also degrades the brand value of “made in Korea” products, thereby bringing about the collapse of manufacturing businesses, disruptions in distribution order, and infringement of consumers’ right to know, such that countermeasures are urgently needed.
Currently, violations of origin labeling are enforced and punished based on the Foreign Trade Act, but most violations are considered crimes committed for livelihood, and so subject only to suspension of indictment or minor fines, such that there are limits to eradicating label switching through the current Act and system.
Therefore, this proposal aims to enact the Act on Origin Labeling for Protection of Small Urban Manufacturers to eradicate violations of origin labeling and protect the benefit and interest of small urban manufacturers and consumers.
Details
A. Manufacturing businesses which most small urban manufacturers are involved in such as clothing, handmade shoes, leather products, jewelry, and accessory businesses recognized by the Minister of Trade, Industry and Energy and the Minister of Small and Medium-sized Enterprises and Startups as needing origin labeling and publicly notified in accordance with Article 7 shall be defined as “Small Urban Manufacturing Businesses,” and goods relevant to Small Urban Manufacturing Businesses shall be defined as “Small Urban Manufacturing Goods” (Article 2, subparagraphs 2 and 3).
B. In order to deliberate on matters related to origin labeling, etc., of Small Urban Manufacturing Goods, a Deliberation Committee on Origin Labeling of Small Urban Manufacturing Goods shall be formed under the Minister of Small and Medium-sized Enterprises and Startups (Article 5).
C. The Minister of Small and Medium-sized Enterprises and Startups shall conduct a field survey every year to understand the status of origin labeling, etc., of Small Urban Manufacturing Goods and, in consultation with the Minister of Trade, Industry and Energy and after passing deliberation of the Deliberation Committee based on the field survey results, determine and publicly notify Small Urban Manufacturing Businesses (Articles 6 and 7).
D. A person who stores or displays Small Urban Manufacturing Goods for import, export, production, processing or sale purposes shall label the origin of the Small Urban Manufacturing Goods (Article 8).
E. False labeling, misleading labeling, damaging or changing origin labeling, transaction, etc., of goods with origin labeling violation shall be prohibited (Article 9).
F. The Minister of Trade, Industry and Energy, the Minister of Small and Medium-sized Enterprises and Startups, the Commissioner of the Korea Customs Service or the head of a si or do shall prescribe that competent public officials collect or investigate Small Urban Manufacturing Goods to check the appropriateness of their origin labeling, labeled matters, labeling method, etc. (Article 10).
G. The Minister of Trade, Industry and Energy, the Minister of Small and Medium-sized Enterprises and Startups, the Commissioner of the Korea Customs Service, the head of a si, do or a special self-governing province may punish a person in violation of the prohibition on false origin labeling, etc., by imposing and collecting penalty surcharges up to 5 times the amount in violation, and may punish a person with 2 or more counts of violation within 2 years by imposing and collecting penalty surcharges up to 10 times the amount in violation (Article 11).
H. The Minister of Trade, Industry and Energy, the Minister of Small and Medium-sized Enterprises and Startups, the Commissioner of the Korea Customs Service or the head of a si or do may issue corrective orders to persons in violation of origin labeling, etc., such as orders to implement, change or delete, and may prohibit transactions such as the sale of goods with origin labeling violations (Article 12 (1)).
I. When the origin of Small Urban Manufacturing Goods has not been labeled 2 or more times or, due to false origin labeling, a corrective order has been issued or a prohibition on transactions has been confirmed, matters regarding such measures shall be publicly notified (Article 12 (2)).
J. The Minister of Trade, Industry and Energy, the Minister of Small and Medium-sized Enterprises and Startups, the Commissioner of the Korea Customs Service or the head of a si or do shall order that a person subject to a corrective order or prohibition on transaction due to origin labeling violation shall complete education on origin labeling of Small Urban Manufacturing Goods (Article 13).
K. An honorary control officer may be designated to instruct, promote or educate matters regarding origin labeling of Small Urban Manufacturing Goods and to report violations, etc. (Article 15).
L. Legal basis for providing rewards or awards to a person who reports origin labeling violators to a competent agency or investigation authority shall be provided (Article 16).
M. A person who commits an origin labeling violation shall be subject to imprisonment not exceeding 5 years or fines up to 100 million won which may be concurrently imposed, and a person who commits another violation within 5 years shall be subject to a term of imprisonment from 6 months up to 10 years or fines of from 5 million won up to 150 million won which may be concurrently imposed (Article 18).
