Guidelines for Selection and Announcement Timing of Habitual Law-Violating Businesses

Fair Trade Commission Issues Administrative Notice on Draft Guidelines for Procedures on Public Disclosure of Habitual Law-Violating Businesses

Jongwook Cho, Chairman of the Korea Fair Trade Commission. / Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Moon Chaeseok] From now on, a list of habitual violators of the Subcontracting Act will be established, and habitual violators will be selected by the end of April each year. Businesses selected as preliminary violators will be given a 30-day opportunity to explain themselves, followed by an on-site inspection.

On the 22nd, the Fair Trade Commission announced an administrative notice until the 13th of next month regarding the establishment (draft) of the "Guidelines on the Procedures for Public Disclosure of Habitual Violators' List, etc." containing these details.

Since 2011, the Fair Trade Commission has annually selected businesses that habitually violate the "Act on the Fairness of Subcontracting Transactions" (Subcontracting Act) and publicly disclosed their names on the Fair Trade Commission website for one year.

The current Subcontracting Act stipulates criteria for selecting habitual violators, exceptions for public disclosure, the composition of the committee for reviewing the disclosure of habitual violators, and selection procedures.

However, it does not specify ▲ the timing for confirming the conclusion of appeal procedures for businesses undergoing appeals ▲ the review and timing of public disclosure for businesses determined to be habitual violators after the appeal procedures end ▲ the registration deadline in the Public Procurement Service's Nara Marketplace system.

Accordingly, the Fair Trade Commission has prepared draft guidelines covering follow-up procedures such as the selection of preliminary habitual violators, prior notification, notification to related agencies, and the review and timing of public disclosure for habitual violators whose appeal procedures have ended.

First, after deciding the list of preliminary habitual violators, the list is reviewed by the committee for public disclosure of habitual violators within 15 days, and preliminary habitual violators are selected by the end of April each year.

Businesses selected as preliminary violators are notified in writing and given a 30-day opportunity to submit explanations. Upon receiving explanatory materials, an on-site inspection is conducted to confirm cumulative penalty points.

Within 30 days after the on-site inspection, the agenda is submitted to the committee to finalize the list of habitual violators subject to public disclosure. The list is disclosed by June 30 each year and posted on the Fair Trade Commission website. The relevant companies are promptly notified in writing of the disclosure.

After promptly notifying the heads of related administrative agencies such as the Public Procurement Service about the businesses subject to disclosure, the list is registered in the Public Procurement Service's Nara Marketplace system within 30 days from the disclosure date.

These companies will receive deductions of 7 points and 2 points respectively in the credit evaluation items during the Public Procurement Service's pre-qualification screening for bidding and product purchase eligibility screening.

For businesses excluded from the list of habitual violators subject to public disclosure, results of objections and other matters are checked twice a year (April and October), and additional lists are disclosed at the end of the year.

Sung Kyung-je, Director of Corporate Transaction Policy Division at the Fair Trade Commission, said, "By supplementing the review of habitual violator status and disclosure timing for businesses whose appeal procedures have ended, this will help improve the efficiency of the disclosure work and increase predictability for businesses."

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