Joint Yuchang Thermal System Fined 40 Million Won for Requesting Technical Data Without Providing Required Documentation

Requested Three Sets of Drawings Without Prior Consultation or Written Documentation
Corrective Order and Fine Imposed for Violating the Subcontracting Act

Joint Yuchang Thermal System has been sanctioned by the Korea Fair Trade Commission (KFTC) with a corrective order and an administrative fine of 40 million won for requesting mold drawings from subcontractors without issuing the legally required written documents stipulated under the Subcontracting Act.

On April 15, the KFTC announced its decision to impose a corrective order and a fine of 40 million won on Joint Yuchang Thermal System for requesting technical data from subcontractors while outsourcing the manufacturing of molds, without issuing the statutory written documents.

According to the KFTC, Joint Yuchang Thermal System commissioned subcontractors to manufacture molds necessary for producing building piping connectors and, during the course of receiving the products, requested three sets of internal mold drawings via email. However, the company did not provide the written request for technical data as required by the Subcontracting Act.

The drawings in question contain detailed information such as the shapes, dimensions, materials, and manufacturing methods of components like punches and cylinders installed inside the molds. These are considered technical data with independent economic value due to their technical usefulness.

Article 12-3, Paragraph 2 of the Subcontracting Act stipulates that when a principal contractor requests technical data from a subcontractor, the purposes of the request, confidentiality obligations, ownership of rights, and compensation must be discussed in advance, and these details must be documented and provided to the subcontractor in writing. However, Joint Yuchang Thermal System requested the data without any prior discussion or provision of the legally required written documents.

The KFTC determined that, even if the purpose was to identify defects in the delivered molds, failing to provide the statutory documents still constitutes a violation of the Subcontracting Act.

The KFTC stated, "This action is significant because it clearly establishes that failure to comply with the obligation to provide written documents when requesting technical data will result in sanctions. We will continue to closely monitor violations of these procedures in order to fundamentally prevent the misappropriation of technical data."

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