Reasons for Proposal
Due to the spread of COVID-19, demand for sanitary aid products such as masks and hand sanitizers has increased rapidly. In accordance with the increase in demand, unfair practices such as hoarding masks and hand sanitizers to resell them for profit have occurred. Also, there have been violations of emergency supply and demand adjustment measures to ensure stability in supply of masks, hand sanitizers, etc. From the date the first patient was diagnosed with COVID-19 until the end of June 2020, there have been 777 cases of crackdowns on unfair practices and 5,090,708 hoarded goods confiscated.
In a situation where there are concerns of a resurgence in the spread of COVID-19, hoarding and reselling sanitary aids necessary in everyday disease prevention such as masks and hand sanitizers, are acts of market disturbance that threaten the public’s right to life. The current Act prescribes emergency supply and demand adjustment measures and prohibits cornering and hoarding practices, but penalties are weak and only sanctions comparable to administrative guidance are possible, such that masks procured through crackdowns are not redistributed but neglected. Therefore, this Act aims to prescribe that when there is a violation of emergency supply and demand adjustment measures or prohibition on cornering and hoarding practices, the competent Minister may confiscate, punish, and collect unfair profits, and also aims to strengthen penalties, etc., thereby ensuring the effectiveness of regulations against unfair practices regarding sanitary aids such as masks and hand sanitizers in order to protect public livelihood, rights, and interests.
Details
A. A person who profits unfairly by trading in excess of a price ceiling set by the Government, violates emergency supply and demand adjustment measures or profits unfairly from cornering and hoarding practices shall be subject to penalty surcharges (Article 2-2 (1)).
B. When both a violation of the price ceiling and prohibition on cornering and hoarding practices of the same item occur, provisions applicable to the violation of the price ceiling shall be applied (Article 2-2 (2)).
C. A person who violates emergency supply and demand adjustment measures shall be subject to imprisonment for up to 3 years or a fine not exceeding 100 million won, and the competent Minister shall confiscate the items in violation (Article 25 (1), (2)).
D. A person who violates the prohibition on cornering and hoarding practices shall be subject to imprisonment of up to 3 years or a fine not exceeding 100 million won, and the competent Minister shall confiscate the items in violation (Article 26 (1), (2)).
E. The competent Minister may sell, publicly sell, donate, destroy or otherwise dispose of the items confiscated in accordance with this Act (Article 26-2 newly inserted).
