Ministry of SMEs and Startups Revises and Implements Guidelines for Fairness in Consignment and Subcontracting Transactions

[Asia Economy Reporter Moon Hyewon] From now on, consigning companies will be able to easily verify whether their actions constitute illegal acts prohibited under the Win-Win Cooperation Act through more than 100 cases.

The Ministry of SMEs and Startups announced that it has revised the "Fair Transaction Guidelines for Consignment and Subcontracting Transactions," which includes examples of violations of compliance obligations for consigning companies stipulated in the "Act on the Promotion of Mutual Growth between Large Enterprises and Small and Medium Enterprises" (hereinafter referred to as the Win-Win Cooperation Act), and will implement it from the 24th.

Since November 2018, the Ministry of SMEs and Startups has been establishing and operating the Fair Transaction Guidelines to present interpretation standards for the fair transaction regulations on consignment and subcontracting under the Win-Win Cooperation Act, aiming to prevent corporate legal violations in advance and enhance the efficiency of law enforcement.

The purpose of this revision of the Fair Transaction Guidelines is to help companies more easily understand and voluntarily comply with the compliance requirements stipulated in the Win-Win Cooperation Act. Instead of difficult terminology, it features abundant examples of frequently occurring violations in consignment and subcontracting transactions.

The Ministry reflected recent court rulings and administrative sanctions, significantly supplementing the guidelines with over 100 examples of unfair corporate practices that are increasingly diverse and complex.

For example, regarding the "obligation to issue an agreement" under Article 21, Paragraph 1 of the Act, specific violation cases were presented for easier understanding, such as "issuing an agreement containing false information different from the actual consignment transaction" and "failing to issue an additional agreement before starting additional high-difficulty construction work when subcontracting additional work beyond the original construction."

The Ministry of SMEs and Startups expects that this revision of the Fair Transaction Guidelines will clarify the compliance requirements under the Win-Win Cooperation Act, thereby increasing the speed and consistency of law enforcement. It also anticipates that unfair trade practices in consignment and subcontracting transactions will be prevented and the rights and interests of small and medium enterprises, startups, and small business owners will be strengthened.

Park Jong-chan, Director of the Win-Win Cooperation Policy Division at the Ministry of SMEs and Startups, said, "We plan to fully inform the purpose and content of the revised Fair Transaction Guidelines through education to create a culture where companies voluntarily comply with fair trade order and establish a fair culture." He added, "We will continue to promote revisions by supplementing cases so that prohibited and recommended matters under the law are easy for anyone to understand."

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