Ministry of SMEs and Startups Conducts Regular Survey on Consignment and Subcontract Transactions

From the 4th, a comprehensive investigation into unfair trade practices such as non-payment of delivery fees and non-issuance of agreements targeting 3,000 consigned companies

The Ministry of SMEs and Startups (Minister Lee Young) announced that it will conduct the '2023 Regular Survey on Consignment Transactions' starting from the 4th to rectify unfair trade practices occurring in the process of consignment transactions between companies.

Consignment transactions refer to transactions where, according to the "Act on the Promotion of Mutual Cooperation between Large and Small Enterprises," a business engaged in manufacturing, construction, processing, repair, sales, or services entrusts the manufacturing, construction, processing, repair, services, or technology development of goods, parts, semi-finished products, and raw materials to another small or medium-sized enterprise (SME), and the entrusted SME professionally manufactures the goods, etc.

This year's survey by the Ministry of SMEs and Startups targets 15,000 companies involved in consignment transactions (3,000 consignors and 12,000 consignees) and will cover unfair trade practices between companies, such as non-payment of delivery fees and failure to issue agreements, for consignment transactions conducted in the first half of this year.

The main survey items include the obligations and compliance matters of consignor companies stipulated in Articles 21 to 25 of the "Mutual Cooperation Act," such as ▲issuance of agreements ▲payment of delivery fees ▲observance of delivery fee payment deadlines ▲prohibition of unfair reduction of delivery fees ▲prohibition of unfair price determination ▲prohibition of unfair demands for technical data, etc.

The survey will be conducted in three stages: Stage 1 - investigation of consignor companies' transaction status, Stage 2 - survey of consignee companies, and Stage 3 - on-site investigation of companies suspected of violating the law. Companies found to have violated the Mutual Cooperation Act based on the survey results will be subject to administrative measures such as improvement orders.

Considering the increasing financial difficulties faced by SMEs due to recent high interest rates, the survey will focus on whether consignor companies pay delivery fees to consignee SMEs properly and on time.

In particular, since this is the first survey conducted after the legalization of the delivery fee linkage system, guidance will be provided on-site to encourage the conclusion of linkage agreements for continuous transactions requiring special delivery fee linkage agreements discovered during the survey process. Additionally, the survey will focus on improving major unfair trade practices in the software industry, such as arbitrary changes to contract terms and demands for additional tasks not included in contracts, which have been conducted under the pretext of custom.

The Ministry of SMEs and Startups plans to actively encourage voluntary damage relief by exempting consignor companies from penalties if they voluntarily improve before the on-site investigation during this survey.

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