'Delivery Payment Linkage System' Takes First Step... 6-Month Pilot Operation Underway

Minister Lee Young, Ministry of SMEs and Startups [Photo by Yonhap News]

[Asia Economy Reporter Donghyun Choi] The Ministry of SMEs and Startups announced that on the 14th, it held the 'Voluntary Promotion Agreement Ceremony for the Delivery Payment Linkage System' at the KT Umyeon Research Center in Umyeon-dong, Seocho-gu, Seoul, together with the Korea Fair Trade Commission.

This agreement ceremony was organized to declare the official launch of the pilot operation of the delivery payment linkage system and to pledge that the government and participating companies in the pilot operation will actively play roles to establish the linkage system as a corporate culture.

The pilot operation of the linkage system is a project where consignor and consignee companies enter into a linkage agreement using a special delivery payment linkage agreement (or subcontract payment linkage contract), adjust delivery payments according to the contents of the linkage agreement, and receive incentives based on the adjustment performance. About 150 people attended the ceremony, including Minister Lee Young of the Ministry of SMEs and Startups, Vice Chairman Yoon Soo-hyun of the Fair Trade Commission, participating companies in the pilot operation, members of the National Assembly, and related cooperative organizations.

Minister Lee said, "Today is the day to respond to the 14 years of persistent efforts by small and medium enterprises," adding, "Thanks to the businesspeople participating in the pilot operation, we can proclaim the historic start of the delivery payment linkage system." He continued, "The Ministry of SMEs and Startups plans to closely analyze this pilot operation process and continuously prepare measures to ensure the linkage system takes root in the field," and said, "We will maintain interest and take the lead so that the linkage system spreads in the field and becomes a pillar for small and medium enterprises."

Vice Chairman Yoon said, "Today’s agreement ceremony is the first step toward the autonomous spread of linkage contracts," and added, "The spread of linkage contracts will be an opportunity for subcontracting relationships in Korea to shift from risk-shifting to risk-sharing." He further stated, "We plan to prepare incentives with related ministries to ensure the continuous spread of linkage contracts," and said, "I hope that this start of autonomous operation will root a culture where small and medium subcontractors can receive fair prices."

At the ceremony, congratulatory remarks were given by Yoon Kwan-seok, Chairman of the Industry, Trade, and SMEs Committee; Lim Jeong-bae, CEO of Daesang Corporation, the first applicant company for the pilot operation; Lee Dong-wook, Vice President of Hyundai Doosan Infracore Co., Ltd., which participated in the pilot operation with the largest number of consignee companies; and Moon Kwang-sik, CEO of Dabo Precision Co., Ltd., a consignee company conducting the delivery payment linkage system with Hyundai Doosan Infracore.

At the main event of the ceremony, the Ministry of SMEs and Startups, the Fair Trade Commission, 30 consignor companies participating in the pilot operation, and 24 companies representing consignee companies signed the 'Business Agreement for the Pilot Operation of the Delivery Payment Linkage System.'

Minister Lee and Vice Chairman Yoon, wishing for the faithful observance of the agreements by participating businesspeople, signed a total of 54 agreements together with 54 companies attending the ceremony.

Starting with this agreement ceremony, companies participating in the pilot operation plan to formally implement the linkage system by signing delivery payment linkage agreements and adjusting delivery payments according to fluctuations in raw material prices.

The Ministry of SMEs and Startups and the Fair Trade Commission will provide incentives such as exemption from regular surveys on subcontracting transactions based on the pilot operation performance of consignor companies, awarding ministerial commendations, reflecting results in the Win-Win Growth Index and Fair Trade Agreement compliance evaluations, preferential treatment in government awards, reduction of penalty points under the Subcontracting Act, additional points when selecting exemplary subcontracting companies, consideration during mandatory reporting reviews, expansion of loan limits for SME policy funds, and additional points when selecting smart factories. Furthermore, through consultations with related ministries, additional incentives will be prepared to offer various benefits to companies that conclude linkage agreements.

Meanwhile, the Ministry of SMEs and Startups and the Fair Trade Commission have unified the application window for the linkage system support project under the Ministry of SMEs and Startups and are accepting applications from consignor companies wishing to participate in the linkage system on an ongoing basis. Companies wishing to apply can refer to the Ministry of SMEs and Startups website and submit their application forms to the Foundation for Cooperation between Large, Small, and Medium Enterprises and Agriculture and Fisheries.

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