Up to 50% Reduction in 'Subcontracting Penalty Points' Based on Voluntary Damage Relief Degree

Fair Trade Commission Announces Administrative Notice on Amendment to 'Guidelines for Fair Subcontracting Transactions'

[Sejong=Asia Economy Reporter Joo Sang-don] If damages are voluntarily remedied, penalty points for violations of the Subcontracting Transactions Act can be reduced by up to 50% depending on the damage relief ratio.

The Fair Trade Commission (FTC) announced on the 28th that it has prepared an amendment to the 'Guidelines for Fair Subcontracting Transactions' containing this content and will issue an administrative notice for 20 days from the 29th to May 20th.

Previously, according to the amendment to the Enforcement Decree of the Subcontracting Act, four items were added to the criteria for penalty point reduction: damage relief, disclosure of bidding information, model subcontracting companies, and excellent companies in fair trade compliance. The guidelines stipulate detailed enforcement standards for the reasons for reduction newly established or revised in the amended Enforcement Decree.

According to the amended Enforcement Decree, if all damages are remedied, 25 to 50% of the penalty points can be reduced, and if more than 50% of the damages are remedied, up to 25% of the penalty points can be reduced. At this time, the damage relief ratio is calculated as the amount of voluntary damage relief compared to the total damage amount. Damage relief ordered by the FTC's corrective orders or court rulings is excluded.

In addition, with the establishment of the subcontracting policy cooperation network regulation in the amended Enforcement Decree, the FTC can notify relevant ministries of evaluation results it has conducted, and if the ministries provide incentives or other measures, the FTC can request details of those measures. Accordingly, the amendment to the guidelines specifies the types of evaluations subject to notification to relevant ministries (such as excellent companies in fair trade agreement evaluations, model subcontracting companies, habitual violators, etc.) and the details of requested measures (such as lists of targeted companies, timing of measures, and specific contents of measures).

The FTC plans to finalize and implement the amendment after fully collecting opinions from stakeholders during the administrative notice period.

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