Han Ki-jung: "We will provide incentives to ensure early adoption of the subcontract payment linkage system"

Fair Trade Commission Chairman - Meeting with Small and Medium Business Owners

Han Ki-jung, Chairman of the Fair Trade Commission, stated, "In order to create a transaction environment where small and medium-sized enterprises (SMEs) receive compensation commensurate with their efforts, incentives prepared at the pan-government level will be provided to ensure the early establishment of the subcontract payment linkage system."

According to the Fair Trade Commission on the 23rd, Chairman Han Ki-jung spent time communicating with Kim Ki-moon, Chairman of the Korea Federation of SMEs, as well as representatives from industry-specific SME cooperatives and associations at the Korea Federation of SMEs. This meeting marks the second occasion for Chairman Han to engage with the SME sector since December of last year.

[Image source=Yonhap News]

Chairman Han said, "We will ensure that the subcontract payment linkage system, scheduled to be implemented in October, is established early in the market, and that companies without mandatory linkage obligations can voluntarily participate in the linkage system." He added, "Incentives prepared at the pan-government level will be provided, including reductions in penalty points and fines under the Subcontracting Act for participating companies, additional points for linkage-excellent companies in fair trade agreement performance evaluations and selection of exemplary subcontracting companies, extra points in various support projects by the Ministry of SMEs and Startups, and interest rate reductions by the Korea Development Bank."

He also explained, "We will introduce a system through the Subcontract Payment Linkage Support Headquarters to provide close on-site support to companies participating in the linkage system. We will actively support the early establishment of the linkage system in the market by alleviating anticipated industry difficulties and conflict factors in the initial phase."

Furthermore, Chairman Han stated, "We are also promoting institutional improvements for effective damage relief along with strict sanctions against technology theft." He explained that based on the dedicated department established last year to eradicate technology misappropriation and the increased sanction levels, they will continuously monitor industries where technology is a core competitive factor and strictly sanction legal violations. He also announced plans to continuously work on raising the punitive damages cap, currently set at up to three times the damage amount, to deter violations of the law.

At the meeting, SME representatives proposed ▲ early establishment and activation support for the delivery price linkage system, ▲ activation of the subcontract payment adjustment negotiation system, and ▲ differentiation of penalty rates by company size. Chairman Han stated, "We will continuously monitor the operation status after the introduction of the linkage system and collect industry opinions in various ways," adding, "We plan to continuously review specific matters to be stipulated by subordinate regulations such as enforcement decrees and the need for system improvements."

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