Dongwon Loex Penalized by Fair Trade Commission for Lowering Subcontract Payments

Issuance of Administrative Order and Imposition of 18 Million Won Fine

[Image source=Yonhap News]

Logistics company Dongwon Roex has been sanctioned by the Fair Trade Commission for unfair subcontract payment determination practices.

On the 27th, the Fair Trade Commission announced that it imposed a corrective order and a fine of 18 million KRW on Dongwon Roex for violating the "Act on the Fairness of Subcontract Transactions" (hereinafter referred to as the Subcontract Act).

In April 2021, Dongwon Roex signed a subcontract agreement with a contractor selected through competitive bidding for Burger King logistics unloading, determining the subcontract payment at an amount lower than the lowest bid price.

Article 4, Paragraph 2, Subparagraph 7 of the Subcontract Act considers it an unfair subcontract payment determination practice when the original contractor sets the subcontract payment lower than the lowest bid price without justifiable reasons in a subcontract contract based on competitive bidding.

Accordingly, the Fair Trade Commission imposed a recurrence prevention order and a fine for Dongwon Roex's unfair subcontract payment determination practice.

The Fair Trade Commission stated, "This measure is significant in restoring the rightful profits of subcontractors and establishing a fair subcontract transaction order by sanctioning unfair trade practices where the original contractor unfairly determines subcontract payments at excessively low amounts."

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