Non-payment of Daegum and Sanctions Even for Procedural Violations... Normalization of Subcontract Transactions

Fair Trade Commission. / Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Moon Chaeseok] Primary contractors must be careful not only about non-payment but also about the document delivery process. Sanctions have been strengthened against the practice of shifting managerial burdens onto subcontractors as a matter of routine.

Along with the enforcement of the Serious Accident Punishment Act, regulations strengthening the non-financial management obligations of primary contractors are being applied.

According to the Fair Trade Commission on the 10th, after the revision of the Subcontracting Act Enforcement Decree passed the Cabinet meeting on the 5th, two companies that violated the Subcontracting Act were sanctioned.

First, through the revision of the enforcement decree, not only large corporations but also medium-sized enterprises can apply for subcontract payment adjustments through small and medium enterprise cooperatives.

Since then, sanctions have been imposed twice just last week. Regardless of the level of fines, the details of the sanctions have been subdivided.

Notably, the Fair Trade Commission imposed a corrective order and a fine of 16 million won on cosmetics retailer MAP Company on the 6th.

This company became the first in the cosmetics industry to be sanctioned by the Fair Trade Commission for failing to provide a written request for technical data.

They did not provide the technical data that must be given to subcontractors under the Subcontracting Act while outsourcing the manufacturing of key products.

The Fair Trade Commission made it clear that the company violated the law regardless of whether it was aware of it or not, making it subject to sanctions.

Now, primary contractors will find it difficult to claim ignorance as a reason for illegal acts and request leniency.

Moon Jongsuk, head of the Fair Trade Commission’s Technology Misappropriation Monitoring Team, said, "The Fair Trade Commission will strengthen monitoring not only of technology misappropriation acts by industry but also of procedural violations occurring during the process of primary contractors requesting technical data."

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