Board of Audit and Inspection: "Review the Appropriateness of Safety Certification Fees for Electrical and Household Products"

Audit of "Operation Status of Industrial Certification System"... "Safety Certification Fees Applied Without Change for Over 20 Years"

[Asia Economy Reporter Ryu Jeong-min] The Board of Audit and Inspection has released an audit report stating that a review is necessary regarding the appropriateness of safety certification fees for electrical and household products.

On the 25th, the Board of Audit and Inspection announced an audit report on the "Operation Status of Industrial Certification Systems."

According to Article 4 of the Price Stabilization Act and related regulations, fees collected by non-profit organizations entrusted by the government to perform tasks must be calculated at a level that compensates for costs, and should not include profits (operating income excluding material costs, labor costs, and expenses).

The Board of Audit and Inspection pointed out, "The Ministry of Trade, Industry and Energy needs to periodically analyze certification costs to manage and ensure that non-profit testing and certification organizations calculate and collect fees at an appropriate level," adding, "Despite the Ministry applying unchanged safety certification fees for electrical and household products for over 20 years across seven certification bodies including the Korea Testing Laboratory (KTL), it has not reviewed the appropriateness of these fees."

The Board explained, "An analysis of KTL's 2019 financial statements revealed that the electrical and household products safety certification business generated an annual operating profit of about 1 billion KRW, and six major certification businesses generated operating profits totaling approximately 5.6 billion KRW," further stating, "The operating profit margin related to certifications in 2019 was about 23.5%, which increased by 8.4 percentage points compared to 15.1% in 2000."

The Board of Audit and Inspection notified the Minister of Trade, Industry and Energy to establish measures to periodically analyze the costs of testing and certification organizations to ensure that certification fees are calculated and collected at an appropriate level.

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