'Introduction of Franchise Re-registration Restriction Period' to Prevent Fraudulent Distribution of Local Love Gift Certificates

Enforcement of the Amendment to the Enforcement Decree of the Local Love Gift Certificate Act Including Adjustment of Fine Imposition Standards

[Asia Economy Reporter Lim Cheol-young] The Ministry of the Interior and Safety announced on the 19th that the "Enforcement Decree Amendment of the Act on the Promotion of Local Love Gift Certificates" will take effect from the 20th.

This amendment introduces a restriction period for re-registration of affiliated stores and rationally adjusts the criteria for imposing fines to enhance the effectiveness of sanctions against illegal distribution, aiming to establish a sound distribution order for local love gift certificates.

The amendment to the enforcement decree specifies the re-registration restriction period for affiliated stores introduced by the legal revision. Previously, after the cancellation of registration as a local love gift certificate affiliated store, there was no legal basis to refuse re-registration applications from store owners, which reduced the effectiveness of the cancellation sanction. Accordingly, the amendment to the Act on the Promotion of Local Love Gift Certificates on October 19 last year established grounds to restrict re-registration within one year and delegated the authority to set the specific period by presidential decree.

Accordingly, the re-registration restriction period has been specified as 1 year for cases of illegal receipt and illegal exchange, 6 months for operating restricted business types, etc., with periods set at either 6 months or 1 year depending on the reason for cancellation. It also allows for a reduction of up to half of the period considering the details of the violation.

The criteria for imposing fines have also been adjusted more reasonably. Given the difficult business environment for small merchants due to COVID-19, imposing a fine of 10 million won even for minor violations was somewhat excessive. Therefore, the fine criteria for individual affiliated stores have been adjusted to better fit reality: 6 million won for the first violation instead of 10 million won, and 10 million won for the second violation instead of 15 million won.

Furthermore, considering the need for strong punishment for serious violations, a new provision has been established allowing fines to be increased by up to half in cases of intentional or gross negligence violations. Kim Jang-hoe, Director of the Local Finance and Economy Office at the Ministry of the Interior and Safety, stated, “Through this amendment to the enforcement decree, we have strengthened the effectiveness of sanctions against illegal distribution,” and added, “We will continue efforts to establish a sound distribution order for local love gift certificates.”

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