Seungwon Kim of the Democratic Party Proposes “Three Laws to Eradicate Obstruction of KFTC Investigations”

"Strong Economic Sanctions for Non-Compliance with KFTC Investigations"

Administrative Fines Up to 1% of Sales

New 'Enforcement Penalty' Provision for Defiance of Orders

Seungwon Kim, member of the Democratic Party of Korea and a member of the National Assembly's Political Affairs Committee, announced on the 18th that he has sponsored the so-called "Three Laws to Eradicate Obstruction of Fair Trade Commission Investigations" (partial amendments to the Act on Fair Transactions in Large Retail Business, the Act on Fair Labeling and Advertising, and the Subcontracting Act), which would impose fines and enforcement penalties on companies that do not comply with investigations by the Fair Trade Commission (FTC).

The proposed amendments would allow the FTC to impose fines of up to 1% of sales on business operators or organizations that refuse or obstruct investigations.

Seungwon Kim, member of the Democratic Party of Korea.

If it is difficult to calculate the specific sales amount, the Act on Fair Transactions in Large Retail Business and the Act on Fair Labeling and Advertising allow for fines of up to 5 billion won, and the Subcontracting Act allows for fines of up to 10 billion won.

The amendments also include provisions allowing the FTC to impose "enforcement penalties" in cases where parties repeatedly fail to comply with investigation orders. From the day following the deadline for compliance, a daily penalty of up to 5% of the average daily sales can be imposed. If calculating sales is difficult, a maximum daily enforcement penalty of 20 million won may be imposed to strengthen the effectiveness of the sanctions.

Kim's office explained, "While the current law sets a maximum penalty of 200 million won to ensure the effectiveness of FTC investigations, this is insufficient to prevent large companies from systematically obstructing investigations. That is why this legislation has been introduced."

According to materials submitted by the FTC to Kim's office, in 2021, Apple Korea and Seah Besteel received only a total of 300 million won in fines (200 million won for non-compliance with on-site investigations and 100 million won for failure to submit materials) and a 100 million won corporate fine for their systematic obstruction of investigations. In the cases where staff from Wonmyeong Shipping and Hyundai Steel refused to appear, only a 2 million won fine was imposed, raising concerns that the current system is effectively toothless.

Kim emphasized, "Malicious practices are rampant in the market in which companies simply pay a minor fine to avoid a larger penalty by refusing to cooperate with investigations. Through this amendment, we will impose strong economic sanctions on companies that do not comply with FTC investigations and fundamentally block chronic obstruction of investigations."

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