[2020 National Audit] "Up to 15 Months Until Designation of Suitable Business Types for Small Business Owners' Livelihood"

Assemblyman Shin Jeong-hoon: "Need to Shorten Legal Review Period, etc."

Shin Jeong-hoon, member of the Democratic Party of Korea. Photo by Office of Representative Shin.

[Asia Economy Reporter Moon Hyewon] Concerns have been raised that an excessive amount of time may be required to designate small business livelihood-suitable industries, and that the system's shortcomings are insufficient to protect small business owners.

On the 8th, according to an analysis of data submitted by the Ministry of SMEs and Startups by Shin Jeonghoon, a member of the National Assembly's Industry, Trade, Energy, SMEs and Startups Committee from the Democratic Party of Korea, since the implementation of the small business livelihood-suitable industry system (December 13, 2018) until August of this year, a total of 24 types of industries and items have been applied for, among which 8 types?bookstores, LPG retail, vending machine operation, tofu, soy sauce, gochujang, doenjang, and cheonggukjang?have been designated as livelihood-suitable industries.

Industries that withdrew their applications without designation due to voluntary agreements and coexistence pacts after applying for livelihood-suitable industry status include buckwheat flour, bakeries, sweet bean paste products, hamburger buns, fish cakes, flower retail, traditional rice cakes, lunch boxes, and Makgeolli. Three types?used car sales, automobile repair, and offset printing?are under review preparation by the Ministry of SMEs and Startups, while three types of noodles and waste wood recycling are currently under fact-finding investigation by the Fair Trade Commission.

In 2018, the National Assembly enacted the "Special Act on the Designation of Small Business Livelihood-Suitable Industries." The purpose is to designate industries suitable for small business owners to sustain their livelihoods and to protect and foster them, thereby promoting management stability and income improvement for small business owners.

However, under the current system, it can take up to 15 months from the application by small business organizations for designation as a livelihood-suitable industry until the designation is made, and there is no institutional measure to prevent large corporations from acquiring, starting, or expanding businesses during the review period, according to Representative Shin's criticism.

Representative Shin stated, "Protecting and fostering small-scale small business owners through the designation of livelihood-suitable industries and mediating and alleviating conflicts over business areas between large corporations and small business owners is a very meaningful policy," adding, "From the moment an application for livelihood-suitable industry designation is in progress, participation by large corporations should be restricted, the legal review period shortened, and sanctions imposed for violations of recommended business scope restrictions to enhance the effectiveness of the system. We plan to propose related amendments after the National Assembly audit."

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