Delivery Price Linkage System Passes Industry Committee Subcommittee... Mandatory Disclosure of Price Increase Range

Exceptions Applied When Contracting Parties Agree

[Image source=Yonhap News]

[Asia Economy Reporter Park Jun-yi] The so-called 'Delivery Price Linkage System' bill, which ensures that raw material price increases are reflected in delivery prices in transactions between primary contractors and subcontractors, passed the National Assembly's Industry, Trade, Energy, Small and Medium Enterprises Committee's bill review subcommittee on the 23rd.

The Industry Committee's bill subcommittee passed the 'Partial Amendment to the Act on the Promotion of Mutual Cooperation between Large and Small Enterprises' on the same day through bipartisan agreement.

The core of the bill is to mandate that the extent of delivery price increases due to raw material price hikes be recorded in the contract. According to the bill, the linkage system will be introduced for major raw materials that account for 10% or more of the delivery payment.

If the entrusted company is a small enterprise, or if the delivery payment is a small contract of 100 million won or less, or if the contract period is a short-term contract within 90 days, the delivery price linkage system does not have to be applied.

If the entrusted company abuses its transactional position to avoid the linkage system, it must pay a fine of up to 50 million won.

The main provisions of the amendment will take effect nine months after promulgation, with a three-month grace period.

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