[2023 National Audit] "Without Reviewing the Miyeondong Agreement, It Is Difficult to Establish the Delivery Payment Linkage System"

Ministry of SMEs Plans 3-Year Retention Requirement for Non-Linked Agreements
No Penalty Cases for Violations in Past 5 Years

The government is focusing on recruiting partner companies until the end of the year to ensure the on-site establishment of the Delivery Price Linkage System, but it has been pointed out that the proactive inspection plan regarding the exemption clauses, which were a key issue when the system was introduced, is insufficient. The exemption provisions of the Delivery Price Linkage System allow the omission of matters related to delivery price linkage in the agreement if the consignment company is a small business, the contract is short-term within 90 days, or the transaction amount is less than 100 million KRW. If companies agree not to link delivery prices between them, the purpose and reasons must be explicitly stated in the agreement. Violations that evade these regulations are subject to fines of up to 50 million KRW.

According to data submitted by the Ministry of SMEs and Startups to the office of Assemblyman Kim Kyung-man of the National Assembly’s Industry, Trade, Energy, Small and Medium Enterprises and Startups Committee, regarding methods to detect illegal acts of not drafting non-linkage agreement documents, the Ministry responded that "non-linkage agreement documents will also be required to be kept for three years." However, in the past five years, there has been no case where the Ministry imposed fines for violations of document retention obligations.

Assemblyman Kim Kyung-man

Additionally, the Ministry stated that it can verify whether non-linkage agreement documents were issued when a dispute mediation request is made by the consignment company. The number of dispute mediation requests made by consignment companies to the Ministry was only 59 cases in 2021, 45 cases in 2022, and 54 cases from January to August this year. Considering the culture where consignment companies avoid applying for mediation due to concerns about transaction termination, the Ministry’s plan to investigate illegal acts through mediation requests by consignment companies is regarded by the Assemblyman’s office as a very passive measure.

Furthermore, the Ministry also revealed plans to include non-linkage agreement items in the regular survey of consignment and subcontract transactions. However, this survey is conducted once a year with a sample composed of 3,000 randomly selected consignment companies of medium size or larger and about 10,000 subcontract companies submitted by the consignment companies, making it limited in its ability to inspect illegal acts related to delivery price linkage.

Assemblyman Kim Kyung-man said, "To properly establish the Delivery Price Linkage System on-site, the government must officially declare that it will thoroughly monitor to prevent illegal acts related to exemption clauses," adding, "The government should not take a lax approach such as just including the item in the survey or investigating only when a consignment company reports it." He continued, "There is no government plan to actively inspect the field as much as when explaining the necessity of exemption clauses during the passage of the law, and there is no plan for a full survey of partner companies receiving incentives, which raises serious concerns."

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