The Korea Fair Trade Commission plans to impose a penalty surcharge calculated as a set percentage of the related supply price, instead of a flat penalty surcharge, on businesses that violated the Act on Fair Transactions in Large Retail Business but for whom it is difficult to calculate the violation amount.
On the 27th, the Korea Fair Trade Commission (FTC) issued a legislative and administrative notice of proposed amendments to the Enforcement Decree of the Act on Fair Transactions in Large Retail Business and the Public Notice on Standards for Imposition of Penalty Surcharges on Businesses Violating the Act on Large Retail Business, with this content at the core. The notice period runs until Oct. 6 for the enforcement decree and until Sept. 16 for the penalty surcharge public notice.
Currently, when the Act on Large Retail Business is violated, in principle, the penalty surcharge is calculated by multiplying the violation amount by the standard imposition rate. When it is difficult to calculate the violation amount, a flat penalty surcharge is imposed. It is said that over the past 10 years, a considerable number of cases received flat penalty surcharges because calculating the violation amount was difficult. The flat penalty surcharge varies by the standard imposition amount for each type of violation, but is capped at 500 million won. Regardless of the scale of the violation, the method imposes the amount set by law.
The Korea Fair Trade Commission (FTC) plans to change the system so that even when it is difficult to calculate the violation amount, the penalty surcharge will be calculated based on the related supply price instead of a flat penalty surcharge. A certain n% of the related supply price will be imposed as the penalty surcharge.
The n% above, which determines the size of the penalty surcharge, that is, the standard imposition rate, will also be raised. The current standard imposition rates based on violation amount by seriousness are ▲ very serious violations 140% ▲ serious violations 100% ▲ less serious violations 60%. The Korea Fair Trade Commission (FTC) will raise these rates to ▲ very serious violations no less than 180% and no more than 200% ▲ serious violations no less than 150% and less than 180% ▲ less serious violations no less than 80% and less than 150%.
The standard imposition rates based on the related supply price were newly established at ▲ very serious violations no less than 9% and no more than 10% ▲ serious violations no less than 7.5% and less than 9% ▲ less serious violations no less than 1% and less than 7.5%. If the law is violated repeatedly, the penalty surcharge, which was previously increased by up to 50%, will be raised to up to 100%.
An official at the Korea Fair Trade Commission (FTC) said, "After reviewing opinions from stakeholders and relevant ministries during the notice period, we plan to complete the revision within the year through procedures such as examination by the Ministry of Government Legislation."