[2020 National Audit] Mandatory Reporting Requests for SME Damage Have a 9.4% Prosecution Rate... "Must Be Actively Exercised"

System to Eradicate Unfair Practices

Source=Ministry of SMEs and Startups

[Asia Economy Reporter Kim Daeseop] The effectiveness of the 'Mandatory Prosecution Request' system, aimed at eradicating unfair practices, has been found to be insufficient.

According to data submitted by the Ministry of SMEs and Startups to Shin Jeong-hoon, a member of the National Assembly's Industry, Trade, Energy, and SMEs Committee from the Democratic Party of Korea, out of a total of 362 cases received from 2014 to July 2020, only 34 cases were prosecuted, resulting in a prosecution rate of 9.4%. Non-prosecution accounted for 318 cases (87.8%), making up the majority.

Furthermore, although the operational regulations stipulate that prosecution requests are mandatory for cases with a violation score of 2.0 or higher, it was found that during the same period, 6 cases with scores of 2.0 or above were not even submitted to the review committee.

According to Article 3 of the operational regulations, the Minister of SMEs and Startups must review whether to prosecute based on official notifications received from the Fair Trade Commission regarding actions taken on legal violations. If the review results in a decision to request prosecution from the Fair Trade Commission, the request must be made within six months from the date of notification unless there are special circumstances. However, among the 362 cases received, 191 cases (52.8%) were processed beyond the 180-day deadline stipulated by the operational regulations.

The mandatory prosecution request right is a system whereby the Fair Trade Commission is obligated to prosecute cases to the prosecution that were not prosecuted by the Fair Trade Commission but for which the Ministry of SMEs and Startups, Public Procurement Service, or Board of Audit and Inspection have requested prosecution.

Assemblyman Shin Jeong-hoon stated, "The purpose of granting the Ministry of SMEs and Startups the mandatory prosecution request right is to represent the position of relatively weaker SMEs and to more closely examine the damage suffered by SMEs that the Fair Trade Commission may have overlooked, based on the ministry's expertise." He added, "The Ministry of SMEs and Startups should keep this in mind and exercise the mandatory prosecution request right more proactively."

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