'Fair Trade Compliance' Model Companies Receive Up to 20% Reduction in Penalties

Han Ki-jung, Chairman of the Fair Trade Commission, is responding to lawmakers' questions at the National Assembly's Political Affairs Committee audit on the 16th. Photo by Kim Hyun-min kimhyun81@

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Companies that operate the 'Compliance Program (CP)' for fair trade autonomously will be eligible for a reduction of up to 20% in fines.

On the 5th, the Korea Fair Trade Commission announced that it will publicly notify the draft amendment to the Enforcement Decree of the Monopoly Regulation and Fair Trade Act until the 15th of next month, and the draft establishment of the 'Regulations on CP Operation and Evaluation' will be administratively notified until the 25th.

This amendment to the Enforcement Decree and the establishment of the notice are follow-up measures to the amendment of the Fair Trade Act, which stipulates the grounds for reducing fines for companies excelling in CP operation.

The main contents of the Enforcement Decree amendment include CP evaluation criteria and procedures, reduction of fines up to 20% according to evaluation grades, and designation of evaluation agencies (such as the Korea Fair Trade Mediation Agency). The notice establishment regulates necessary matters such as evaluation criteria, procedures, costs, and incentives based on CP evaluation results.

According to this, a business operator who meets the CP introduction requirements and has operated it for more than one year can receive a 10-15% reduction in fines once within the validity period (2 years) based on the evaluation grade if they receive an AA grade or higher. If the business operator proves that they detected and stopped the violation of the law through CP operation before the investigation began, an additional 5% reduction can be applied, allowing for a maximum reduction of up to 20%.

However, cases where the CP officer was involved in the violation, the violation occurred before the introduction of CP, unfair joint acts with significant competition restrictions such as price-fixing, or where senior executives were directly involved in the violation are excluded from the fine reduction.

The Fair Trade Commission stated, "After collecting opinions from stakeholders and related ministries during the public notification period, we plan to complete the amendment and establishment of the Enforcement Decree and notice within the first half of this year through legislative review by the Ministry of Government Legislation and other related legislative procedures."

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