Up to 5 Bonus Points in 'Fair Trade Agreement Compliance Evaluation' When Supporting Partners Struggling Due to COVID-19 Crisis

KFTC Revises 'Fair Trade Agreement Implementation Evaluation Criteria' in Subcontracting Sector

Support for Partners Relocating Factories Domestically Recognized as 'Degree of Efficiency Improvement' Performance

[Sejong=Asia Economy Reporter Joo Sang-don] The Korea Fair Trade Commission (KFTC) announced that it will grant up to 5 additional points in the fair trade agreement implementation evaluation to companies that support partner firms struggling due to the COVID-19 pandemic.

The KFTC announced on the 2nd that it has revised the 'Fair Trade Agreement Implementation Evaluation Criteria' to include this provision.

The Fair Trade Agreement is a system implemented since 2007, where large corporations and small and medium-sized partner companies pre-agree and implement detailed measures annually in the form of an agreement to prevent unfair practices and strengthen competitiveness. The KFTC evaluates the results. In the subcontracting sector, companies with excellent evaluation grades receive incentives such as exemption from KFTC's ex officio investigations for up to two years, reduction of subcontracting penalty points by up to 3 points, designation as model subcontracting companies, and related benefits from government ministries.

First, companies supporting partner firms facing difficulties due to the COVID-19 pandemic can receive up to 5 additional points. Cases such as advance payment of subcontracting fees and interest-free loans can already be recognized under the existing 'financial support' category, but this revision considers the urgent need for support to partner firms in crisis situations like COVID-19.

Additionally, support measures for partner firms relocating production sites from overseas to domestic locations to reduce shocks from external variables will be recognized as contributing to the growth of the materials, parts, and equipment industry, and will be acknowledged as performance under the 'degree of efficiency improvement' category (up to 6-7 points depending on the industry).

Along with this, to encourage active financial support from large corporations to partner firms facing difficult management conditions, the scoring for the financial support category has been increased. For manufacturing, construction, information services, telecommunications, advertising, and internet platform industries, the score changes from 7 to 9 points; for the food industry, from 6 to 8 points; and for mid-sized companies, the additional points increase from 3 to 4 points.

The revised evaluation criteria will apply to agreements concluded after January 1 of this year. However, considering the urgency of COVID-19 related emergency support, the changes will be immediately reflected starting from this year's evaluation of 2019 agreement implementation performance.

A KFTC official stated, "This is intended to promote companies' win-win cooperation efforts to overcome the COVID-19 crisis early," and added, "We plan to thoroughly inform and promote the revised evaluation criteria to the evaluated companies and continue to encourage active win-win efforts."

This content was produced with the assistance of AI translation services.