708 Consignment Companies Caught for Non-Payment of Delivery Fees

Ministry of SMEs and Startups Announces 2022 Regular Survey Results on Consignment and Entrustment Transactions

The Ministry of SMEs and Startups detected 708 companies suspected of violating the Act on the Promotion of Mutual Cooperation between Large and Small Enterprises through the '2022 Regular Survey on Consignment and Subcontract Transactions' conducted since December last year.

The Ministry of SMEs and Startups announced the results of the regular survey conducted on 3,000 consignor companies and 12,000 consignee companies on the 26th. In accordance with Article 27 of the Mutual Cooperation Act, the Ministry conducts an annual regular survey to rectify unfair trade practices occurring during consignment and subcontract transactions.

Through administrative guidance by the Regional Small and Medium Venture Business Administration, 697 of the detected companies voluntarily improved by paying 9.89 billion KRW in unpaid delivery payments to consignee companies. The Ministry took administrative measures such as improvement requests against 9 companies that did not voluntarily improve. Through administrative measures, an additional company paid approximately 3 million KRW in damages to a consignee company.

For the 8 companies that did not comply with the final improvement request and corrective action, the Ministry of SMEs and Startups publicly announced their company names and violations of the Mutual Cooperation Act on its website on the same day. It also requested the Fair Trade Commission to take measures related to violations of the Act on the Fair Transactions in Subcontracting.

Jeong Ki-hwan, Director of the Mutual Cooperation Policy Division at the Ministry of SMEs and Startups, said, "More than 98% of companies suspected of violating the Mutual Cooperation Act voluntarily improved, which is the result of continuous policy efforts encouraging voluntary damage relief," adding, "This action contributed to improving the financial situation of small and medium enterprises that were struggling due to unpaid payments." Director Jeong added, "Through the 2023 regular survey on consignment and subcontract transactions, which started this month, we plan to strengthen continuous on-site monitoring to establish a fair trading culture where payments are made timely and at the right price."

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