National Assembly Industry Committee Passes Law Expanding Delivery Price Linkage System and KEPCO Bond Issuance

[Asia Economy Reporter Oh Ju-yeon] On the 24th, the National Assembly's Industry, Trade, Energy, Small and Medium Enterprises and Startups Committee passed the so-called 'Delivery Price Linkage System' bill in a plenary session, which ensures that increases in raw material prices are reflected in delivery prices in transactions between primary contractors and subcontractors.

[Image source=Yonhap News]

The amendment to the 'Delivery Price Linkage System' includes provisions that require reflecting price changes if there is a main raw material accounting for more than 10% of the delivery payment in consignment contracts. The consignor company must make it mandatory to record the agreed increase rate of the delivery price in the contract.

The bill also includes exemptions from applying the delivery price linkage system if the consignor company is a small business, if the delivery payment is a small contract under 100 million KRW, or if the contract period is a short-term contract within 90 days.

Additionally, a partial amendment to the Korea Electric Power Corporation Act was approved to raise the issuance limit of KEPCO bonds from the current 2 times to 5 times. Currently, KEPCO, which is operating at a loss, cannot issue more corporate bonds under current law once large net losses are reflected in its reserves. This bill aims to prevent KEPCO from facing management difficulties by restricting additional bond issuance.

Furthermore, a total of 46 bills were passed, including the 'Partial Amendment to the Act on the Protection and Support of Small Businesses,' which establishes the basis for compensation support for small business owners affected by COVID-19, and the 'Partial Amendment to the Act on Promotion of Venture Investment.'

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