CHAPTER I GENERAL PROVISIONS
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| Article 1 (Purpose) |
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The purpose of this Act is to contribute to the balanced growth and development of the national economy by establishing fair transactional regularities in the large franchise and retail business and by enabling large franchise and retail business operators and suppliers or sales floor tenants to prosper on an equal footing by complementing one another.
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| Article 2 (Definitions) |
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The terms used in this Act shall be defined as follows:
| 1. |
The term "large franchise and retailbusiness operator" means a person falling under any of the following from among persons (including "franchisers" prescribed in subparagraph 2 of Article 2 of the Fair Transactions in Franchise Business Act) who sell goods to be used by consumers after having been supplied with such goods by many business operators: |
| (a) |
A person whose retail sales (referring to total sales, in cases of a business operator who recognizes revenues by a net method according to the corporate accounting standards, and in cases of a franchiser, referring to the amount obtained by adding retail sales and sales of goods sold to franchisees: Provided, That where the period of business of the immediately previous business year is less than one year, an amount obtained by converting sales for such period into sales for 12 months shall be the sales) for the immediately previous business year are not less than 100 billion won; |
| (b) |
A person who uses a store of which the total size of a sales floor (referring to the size calculated by multiplying the floor space of a sales floor by 95/100) is 3,000 square meters or more for retail business; |
| 2. |
The term "supplier" means a person who supplies goods to be sold by a large franchise and retailbusiness operator to another large franchise and retail business operator (including cases in which a supplier supplies goods directly to consumers, which have been sold by a large franchise and retailbusiness operator) irrespective of the type of a transaction; |
| 3. |
The term "sales floor tenant" means a person engaged ina business in which he/she rents part of a sales floor from a large franchise and retailbusiness operator, sells goods to be used by consumers using such sales floor and pays the sales to the large franchise and retailbusiness operator; |
| 4. |
The term "direct purchase" means a transaction in which a large franchise and retail business operator purchases goods from a supplier while taking responsibility for the sale of unsold goods from among the goods he/she purchases; |
| 5. |
The term "purchase under a special contract" means a transaction in which a large franchise and retailbusiness operator purchases goods on credit from a supplier on condition that he/she is allowed to return unsold goods from among the goods that he/she purchases, and pays a sales amount after subtracting profit of a specific margin or of a specific amount after selling such goods; |
| 6. |
The term "consignment sale" means a transaction in which a large franchise and retailbusiness operator sells goods under his/her name supplied by a supplier and pays a sales amount after subtracting a service charge of a specific profit margin or of specific amount after selling such goods; |
| 7. |
The term "return" means all acts by which a large franchise and retailbusiness operator returns goods to a supplier which have been supplied by such supplier, exchanges such goods with other goods of such supplier, etc. irrespective of formalities; |
| 8. |
The term "sales promotion" means all events or activities performed for the purpose of increasing sales by expanding demand for goods irrespective of name or formalities; |
| 9. |
The term "sales incentive" means an economic benefit a supplier pays to a large franchise and retailbusiness operator according to a condition indicated in the annual basic transaction agreement for sales promotion in the direct purchase irrespective of a name; |
| 10. |
The term "fresh agricultural, marine and stock farm products" means agricultural, marine and stock farm products in a fresh state which are apt to rot by nature with the passage of time, and are not processed, such as drying and seasoning. |
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| Article 3 (Exclusion from Application) |
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| (1) |
This Act shall not apply to transactions in which a large franchise and retailbusiness operator is not recognized tobe in a superior bargaining position to a supplier or sales floor tenant (hereinafter referred to as "supplier, etc."). |
| (2) |
Whether a large franchise and retailbusiness operator is ina superior bargaining position shall be decided in comprehensive consideration of matters in the following subparagraphs: |
| 1. |
Structure of a distribution market; |
| 2. |
Actual state of consumption by consumers; |
| 3. |
Business capability gap among a large franchise and retailbusiness operator and a supplier, etc.; |
| 4. |
Dependence of a supplier, etc. on transactions with a large franchise and retailbusiness operator; |
| 5. |
Characteristics of goods to be traded; |
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| Article 4 (Relationship with other Acts) |
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This Act shall apply to transactions among large franchise and retail business operators and suppliers, etc. in preference to Article 23 (1) 4 and 5 (excluding acts which obstruct the business activities of other business operators) of the Monopoly Regulation and Fair Trade Act: Provided
, That in cases where transactions among large franchise and retailbusiness operators and suppliers, etc. fall under entrustment with manufacturing prescribed in Article 2 (6) of the Fair Transactions in Subcontracting Act, such Act shall apply prior to this Act.
CHAPTER II FAIR TRANSACTIONS IN LARGE FRANCHISE AND RETAIL BUSINESS
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| Article 5 (Principle of Good Faith) |
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Large franchise and retailbusiness operators, suppliers, etc. shall perform their obligations in transactions in good faith.
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| Article 6 (Delivery and Preservation of Documents, etc.) |
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| (1) |
Immediately after a large franchise and retailbusiness operator enters into a contract with a supplier, etc., he/she shall deliver a document (including electronic documents prescribed in subparagraph 1 of Article 2 of the Framework Act on Electronic Transactions; hereafter the same shall apply in this Act) clarifying matters of a contract prescribed by Presidential Decree, such as the form of a transaction, etc. to the supplier, etc. |
| (2) |
Large franchise and retailbusiness operators, suppliers, etc. shall put a signature (including certified electronic signatures prescribed in subparagraph 3 of Article 2 of the Digital Signature Act; hereafter the same shall apply in this Act) or name and seal on the document prescribed in paragraph (1). |
| (3) |
Large franchise and retailbusiness operators shall not cause suppliers to manufacture goods to be supplied or place an order therefor, or request suppliers to prepare facilities and equipment for goods to be supplied until they deliver a document prescribed in paragraph (1) to the suppliers: Provided, That in cases wherelarge franchise and retailbusiness operators make a request for such matters in writing on which a signature or name and a seal are placed, this shall not apply. |
| (4) |
Where large franchise and retailbusiness operators fail to deliver a document prescribed in paragraph (1), suppliers, etc. may notify large franchise and retailbusiness operators of the contractual matters prescribed by Presidential Decree prescribed in paragraph (1) in writing and request them to confirm the details of thecontract. |
| (5) |
Large franchise and retailbusiness operators shall dispatch a written reply clarifying whether they recognize or disapprove the contents of notification prescribed in paragraph (4) within 15 days from the date they receive such notification, and where they fail to dispatch a reply within such period, a contract shall be presumed to have been concluded as the contents of notification the suppliers, etc. send as prescribed in paragraph (4): Provided, That in cases where sending a reply is impossible due to a natural disaster or calamity, this shall not apply. |
| (6) |
Suppliers, etc. shall place their signatures or names and seals on the notification prescribed in paragraph (4) and large franchise and retailbusiness operators shall place their signatures or names and seals on the reply prescribed in paragraph (5), respectively. |
| (7) |
Matters necessary for the notification prescribed in paragraph (4) and a reply prescribed in paragraph (5) shall be prescribed by Presidential Decree. |
| (8) |
Large franchise and retailbusiness operators shall preserve documents prescribed by Presidential Decree concerning transactions among large franchise and retailbusiness operators, suppliers, etc. for five years from the date a contract with suppliers, etc. terminates. |
| (9) |
The Fair Trade Commission may recommend large franchise and retailbusiness operators to whom this Act applies or an business operators' organization consisting of large franchise and retail business operators to prepare and use a standard transaction contract. |
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| Article 7 (Prohibition of Reduction in Price of Goods) |
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| (1) |
Alarge franchise and retail business operators shall not reduce the price of goods being supplied: Provided, That wherejustifiable reasons exist, such as that the goods being supplied are different from the contracted goods, are damaged or are spoiled for reasons for which the supplier is responsible, etc. and the price of goods is reduced within a period recognized as resonable in the relevant trade, this shall not apply. |
| (2) |
Where reduction in the price of goods prescribed in the proviso to paragraph (1) is for fresh agricultural, marine and stock farm products, reduction shall be made within the period prescribed by Presidential Decree. |
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| Article 8 (Payment of Sales of Goods) |
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| (1) |
Large franchise and retailbusiness operators shall pay the sales of the relevant goods within 40 days from the monthly closing date, in any of the following cases: |
| 1. |
Where goods supplied according to a purchase transaction under a special contract are sold; |
| 2. |
Where they receive the sales amount of sales floor tenants and manage such sales amount; |
| 3. |
Where they are entrusted with the sale of goods by suppliers, and receive and manage the sales amount. |
| (2) |
Where large franchise and retailbusiness operators pay sales amount prescribed in paragraph (1) after 40 days from the monthly closing date, they shall pay an interest at an interest rate, within the extent of 40/100 per year for the overdue period, determined and publicly notified by the Fair Trade Commission in consideration of economic conditions, etc. such as the rate of interest on overdue payments, etc. applied by banks pursuant to the Banking Act. |
| (3) |
A large franchise and retail business operators shall pay the sales amount and interest prescribed in paragraphs (1) and (2) by merchandise coupons or articles. |
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| Article 9 (Prohibition of Refusal or Delay of Receipt of Goods) |
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After a large franchise and retailbusiness operator and a supplier enters into a contract concerning the supply of goods, the large franchise and retail business operator shall not refuse or delay receipt of all or any of the relevant goods: Provided, That in cases where reasons, such as that the supplied goods have been damaged due to a reason for which the supplier is responsible, etc., which are prescribed by Presidential Decree occur, this shall not apply.
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| Article 10 (Prohibition of Return of Goods) |
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| (1) |
A large franchise and retail business operator shall not return all or any of supplied goods without justifiable reasons: Provided, That in any of the following cases in which the goods are returned within a period recognized as reasonable in the relevant trade, a justifiable reason shall be presumed to be in existence: |
| 1. |
Where conditions of return have been agreed in detail at the time of concluding a contract and a document clarifying such conditions of return is delivered to the supplier in cases of a purchase under a special contract; |
| 2. |
In cases of consignment sale; |
| 3. |
Where the goods being supplied are damaged or spoiled due to the supplier's fault; |
| 4. |
Where the goods being supplied are different from the contracted goods; |
| 5. |
Where the large franchise and retail business operator voluntarily assumes the loss incurred from return and obtains approval therefor from the relevant supplier; |
| 6. |
Where conditions of return have been agreed in detail at the time of concluding a contract for goods (excluding fresh agricultural, marine and stock farm products) which are sold concentratedly during a certain period or season and a document clarifying such conditions of return is delivered to the supplier in cases of a direct purchase transaction; |
| 7. |
Where the supplier voluntarily makes a written request for the return of goods, accompanied by objective grounds that the return of goods is directly beneficial to him/her before the date of return in cases of a direct purchase; |
| 9. |
Where justifiable reasons corresponding to the provisions of subparagraphs 3 through 8 exist in cases of a direct purchase. |
| (2) |
The fresh agricultural, marine and stock farm products prescribed in paragraph (1) 3 and 4 shall be returned within the period prescribed by Presidential Decree. |
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| Article 11 (Prohibition on Unjustly Shifting Burden of Sales Promotional Expenses) |
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| (1) |
Unless the assumption of expenses incurred in a sales promotional event (hereafter referred to as "sales promotional expenses" in this Article) is agreed upon as prescribed by Presidential Decree before any sales promotional event is held, nolarge franchise and retail business operator shall perform an act making a supplier, etc. assume such expenses. |
| (2) |
The contract pursuant to paragraph (1) shall be made in writing bearing respective signatures or names and seals of a large franchise and retailbusiness operator and a supplier, etc., and the large franchise and retailbusiness operator shall deliver such document to the supplier, etc. as soon as such contract is concluded. |
| (3) |
The rate of sharing sales promotional expenses pursuant to paragraphs (1) and (2) shall be determined according to the rate of economic interest (hereafter referred to as "expected interest" in this Article) a large franchise and retail business operator and a supplier, etc. are expected to directly garner through respective sales promotional event, however, where the rate of expected interest for large franchise and retailbusiness operator, supplier, etc. is incalculable, the expected interest of the large franchise and retail business operator, supplier, etc. is presumed to be equal. |
| (4) |
The share of sales promotional expenses pursuant to paragraph (3) to be assumed by a supplier, etc. shall not exceed 50/100. |
| (5) |
Where a supplier, etc. intends to hold a sales promotional event separately from other suppliers, etc. by voluntarily making a request to a large franchise and retailbusiness operator, the large franchise and retail business operator may consult with the supplier, etc. and determine the share of sales promotional expenses. In such cases, the provisions of paragraphs (1) through (4) shall not apply. |
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| Article 12 (Prohibition, etc. against Use of Employees by Suppliers, etc.) |
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| (1) |
A large franchise and retailbusiness operator shall not request a supplier, etc. to dispatch employees or other human resources employed by such supplier, etc. (hereafter referred to as "employees, etc.") to him/her and work in his/her place of business: Provided, That in cases falling under any of the following subparagraphs, in which the large franchise and retailbusiness operator, the supplier, etc. agree on the terms of dispatch in writing and have such dispatched employees engage in the sale and management of goods supplied by the supplier, etc. who employ such employees, etc., this shall not apply: |
| 1. |
Where large franchise and retailbusiness operators assume all the expenses, such as labor costs of the dispatched employees, etc., as prescribed by Presidential Decree; |
| 2. |
Where the suppliers, etc. request large franchise and retailbusiness operators that they shall voluntarily dispatch employees, etc. employed by them according to a document clarifying the details of expected profits and expenses following the dispatch of employees, etc. and grounds for calculation, which is prepared objectively and in a material way; |
| 3. |
Where skilled employees, etc. who have special sales skills or ability are dispatched; |
| 4. |
Where employees, etc. are dispatched to the sales floor operated at all times by suppliers, etc., who have business relations of purchase transaction under a special contract, in order to sell and manage the types of goods determined and publicly notified by the Fair Trade Commission that specialized knowledge is important with regard to the special qualities of such goods. |
| (2) |
A large franchise and retailbusiness operator, a supplier, etc. shall place his/her signature or name and seal on a document prescribed in the proviso to paragraph (1), and the supplier, etc. shall place his/her signature or name and seal on the document prescribed in paragraph (1) 2, respectively. |
| (3) |
Alarge franchise and retailbusiness operator shall notcause a supplier, etc. to assume the labor costs of persons employed by himself/herself. |
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| Article 13 (Prohibition of Compelling Exclusive Transactions) |
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Alarge franchise and retail business operator shall not unduelycause a supplier, etc. to have exclusive transactions or interfere with the supplier, etc. in their transactions with other business operators.
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| Article 14 (Prohibition of Request for Supply of Management Information) |
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| (1) |
Alarge franchise and retailbusiness operator shall not unduly request a supplier, etc. to supply information falling under any of the following subparagraphs: |
| 1. |
Information concerning the supplier's terms (including supply price) of supplying goods to other business operators; |
| 2. |
Information concerning the terms (including rent) of opening a sales floor in other business operators; |
| 3. |
Information corresponding to subparagraphs 1 and 2 concerning the supplier, etc. or parties to a transaction of the supplier, etc., being management information prescribed by Presidential Decree. |
| (2) |
Where a large franchise and retailbusiness operator requests a supplier, etc. for management information falling under any of the subparagraphs of paragraph (1), he/she shall provide the supplier, etc. with a document stating the purpose of a request, matters concerning the maintenance of confidentiality, etc. before he/she requests management information. |
| (3) |
A large franchise and retail business operator, a supplier, etc. shall place their signature or name and seal on the document prescribed in paragraph (2). |
| (4) |
Where a large franchise and retailbusiness operator requests a supplier, etc. for management information, he/she shall make a request within the minimum extent necessary for the purpose of such request. |
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| Article 15 (Prohibition of Requests for Provision of Economic Profits) |
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| (1) |
Alarge franchise and retail business operator shallcausea supplier, etc. to provide money, articles, services or other economic profits to him/her or a third party without justifiable reasons. |
| (2) |
Notwithstanding the provisions of paragraph (1), alarge franchise and retail business operator may agree with a supplier on the details of an annual basic contract, including the purpose of paying a sales incentive, timing for payment, frequency of payment, rate and amount of sales incentive, etc. as prescribed by Presidential Decree and receive a sales incentive from the supplier. In such cases, the sales incentive shall not exceed the extent recognized as reasonable in the relevant transaction. |
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| Article 16 (Compensation for Costs of Equipment for Sales Floor) |
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Where a large franchise and retail business operator performs an act falling under any of the following subparagraphs, the large franchise and retail business operator shall pay an amount more than the amount obtained by multiplying the total amount of costs of equipment for the relevant sales floor paid by a supplier, etc. by the percentage of a total contract period (where the contract period is less than one year, it shall be deemed one year; hereafter the same shall apply in this Article) occupied by the period from the date an act falling under any of the following subparagraphs is committed until the end of the contract period as compensation for costs of equipment for the relevant sales floor:
| 1. |
Interrupting or rejecting a transaction with the supplier, etc.; |
| 2. |
Changing the location, size or facilities of the sales floor of the supplier, etc. |
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| Article 17 (Prohibition, etc. against Requests for Purchase of Merchandise Coupons) |
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Large franchise and retailbusiness operatorshall not perform an act falling under any of the following subparagraphs to a supplier, etc. without justifiable grounds:
| 1. |
Causing the supplier, etc to purchase merchandise coupons or articles; |
| 2. |
Causing the supplier, etc to supplygoods at a price remarkably lower than the price at which such goods are supplied to ordinary markets; |
| 3. |
Causing the supplier, etc to supply a remarkably higher quantity than normal quantity in order to conduct a sales promotional event; |
| 4. |
Causing the supplier, etc to participate in a sales promotional event contrary to the will of the supplier, etc.; |
| 5. |
Failing to restore the supply price, of which reduction has been agreed upon for a limited period, to the ordinary price even after such period passes, or delaying restoration; |
| 6. |
Causing the supplier, etc. to advertise goods contrary to their will; |
| 7. |
Interfering with the supplier, etc. in leaving the sales floor of a certain store or causing the supplier, etc. to set up a sales floor in another store of his/hers contrary to the will of the supplier, etc.; |
| 8. |
Changing the location, size or facilities of a sales floor of the supplier, etc. during contract period; |
| 9. |
Changing the terms of a contract prescribed by Presidential Decree, such as the rate of sales incentive during a contract period; |
| 10. |
Other acts corresponding to the provisions of subparagraphs 1 through 9 that give disadvantages to the supplier, etc. or cause the supplier, etc. to provide advantages. |
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| Article 18 (Prohibition, etc. of Giving Disadvantages) |
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For the reason that a supplier, etc. reports or notifies the relevant agency of an illegal act of a large franchise and retail business operator, thelarge franchise and retail business operator shall not change the terms of a contract to the disadvantage of the supplier, etc., restrict the supplier, etc. from the opportunity of supplying goods or renting a sales floor, or give any disadvantage in the course of implementing the contract.
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| Article 19 (Concluding Agreements among Large Franchise and RetailBusiness Operators and Suppliers, etc.) |
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| (1) |
The Fair Trade Commission may recommend a large franchise and retailbusiness operator, a supplier, etc. to conclude an agreement promising the observance of Acts and subordinate statutes relating to large franchise and retail business, mutual assistance and cooperation. |
| (2) |
Where a large franchise and retailbusiness operator, a supplier, etc. conclude an agreement pursuant to paragraph (1), the Fair Trade Commission shall prepare and implement measures for assistance, such as granting a reward, etc. in order to encourage the implementation thereof. |
| (3) |
The Fair Trade Commission shall determine matters necessary for the details and procedures of concluding an agreement prescribed in paragraph (1), evaluation of implementation results, measures for assistance, etc. |
CHAPTER III MEDIATION OF DISPUTES, ETC.
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| Article 20 (Establishment and Organization of Dispute Settlement Council) |
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| (1) |
In order to settle disputes betweenlarge franchise and retailbusiness operators and suppliers, etc., a dispute mediation council for transactions in large franchise and retailbusiness (hereinafter referred to as the "council") shall be established in the Korea Fair Trade Mediation Agency (hereinafter referred to as the "Mediation Agency") pursuant to Article 48-2 (1) of the Monopoly Regulation and Fair Trade Act. |
| (2) |
The council shall consist of nine members including one chairperson. |
| (3) |
The members shall be classified into members representing public interest, members representing the interest of large franchise and retailbusiness operators and members representing the interest of suppliers, etc., and each group shall be of the same number of members. |
| (4) |
Persons appointed or entrusted by the Chairperson of the Fair Trade Commission from among the persons recommended by the head of the Mediation Agency and the persons falling under any of the following subparagraphs shall become its members: |
| 1. |
Persons who have majored in jurisprudence, economics, business administration or studies relating to distribution in a university, and hold or have held the position of an associate professor or higher in a school pursuant to subparagraph 1, 2, 4 or 5 of Article 2 of the Higher Education Act or a publicly certified research institution or a position corresponding thereto; |
| 2. |
Persons who hold or have held the position of a judge or public prosecutor, or persons who have an attorney license; |
| 3. |
Persons who hold or have held the position of a public official of Grade 4 or higher (including public officials in the general service belonging to the Senior Civil Service) having experience in the duties of monopoly regulation and fair trade; |
| 4. |
Persons who have abundant knowledge and experience concerning transactions and dispute resolution in the field of large franchise and retailbusiness. |
| (5) |
The chairperson shall be appointed or entrusted by the Chairperson of the Fair Trade Commission from among members representing public interest. |
| (6) |
The term of office of the members shall be three years, and they may be reappointed. |
| (7) |
If a vacancy among members occurs, a member filling the vacancy shall be appointed or entrusted as prescribed in paragraph (4) and the term of office of such member shall be the remaining term of office of his/her predecessor. |
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| Article 21 (Restrictions on Entrusting Persons with Membership Representing Public Interest) |
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| (1) |
Executivesor employees of a large franchise and retail business operator, supplier, etc. as at the date of entrustment shall not be entrusted with the membership representing public interest. |
| (2) |
Where a person entrusted with the membership representing public interest is an executive or employee of a large franchise and retailbusiness operator or a supplier, etc., the Chairperson of the Fair Trade Commission shall immediately revoke such entrustment. |
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| Article 22 (Meetings of Council) |
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| (1) |
The meetings of the council shall be classified into a meeting consisting of all the members (hereafter referred to as "plenary meeting" in this Article) and a meeting consisting of a member representing public interest, a member representing the interest of large franchise and retail business operators and a member representing the interest of suppliers, etc. (hereafter referred to as "small meeting" in this Article). |
| (2) |
The plenary meeting shall deliberate and decide on the following matters: |
| 1. |
Matters that are not decided by the small meeting or are decided by the small meeting that such matters be handled by the plenary meeting; |
| 2. |
Matters concerning formulation of and amendment to internal regulations of the council; |
| 3. |
Other matters that the chairperson deems it necessary for the plenary meeting to handle, which are submitted to the plenary meeting. |
| (3) |
The caucus shall deliberate and decide on matters other than those in the subparagraphs of paragraph (2). |
| (4) |
The chairperson shall have charge of the plenary meeting which opens with a majority of the members in attendance and decisions shall be made with the approval of a majority of members in attendance. |
| (5) |
A member representing public interest shall have charge of the caucus, at which decisions shall be made with a majority of the members in attendance and with the approval of a majority of members in attendance. |
| (6) |
If the chairperson of the council is unable to perform duties due to inevitable reasons, the member designated by the Chairperson of the Fair Trade Commission from among members representing public interest shall perform such duties by proxy. |
| (7) |
A business operator who is a party to a dispute subject to mediation (hereinafter referred to as "party to a dispute") may attend the meetings of the council and state his/her opinion or submit relevant data. |
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| Article 23 (Exclusion, Challenge or Recusal of Members) |
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| (1) |
If a member falls under any of the following subparagraphs, he/she shall be excluded from the mediation of the relevant matters to be mediated: |
| 1. |
Where a member, his/her spouse or a person who has been his/her spouse becomes a party to a dispute of the relevant matters to be mediated, or is a joint holder of a right or liability; |
| 2. |
Where a member is a relative or has been a relative of a party to a dispute of the relevant matters to be mediated; |
| 3. |
Where a member, or corporation or law firm with which a member is affiliated is giving counsel or advice on legal matters, business management, etc. to a party to a dispute; |
| 4. |
Where a member, or corporation or law firm with which a member is affiliated participates or has participated in the relevant matters to be mediated as an agent of the party to a dispute, or has given evidence or an expert opinion. |
| (2) |
Where a member has a reason for which he/she is unable to conduct mediation impartially, parties to a dispute may make a written challenge of such member to the council. |
| (3) |
Where the application for challenge prescribed in paragraph (2) is contrary to the method prescribed in paragraph (2) or is evidently aimed at delaying mediation, such challenge shall be rejected by a decision of the chairperson. |
| (4) |
Where resonable grounds exist in the application for challenge pursuant to paragraph (2), relevant member shall be excluded from mediation. |
| (5) |
Where a member falls under a reason prescribed in paragraph (1) or (2), he/she may recuse himself/herself from the mediation of matters to be mediated with the permission of the chairperson. |
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| Article 24 (Matters to Be Mediated by Council) |
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The council shall mediate matters requested by the Fair Trade Commission or applied for by parties to a dispute, which are related to the provisions of Articles 5 through 18.
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| Article 25 (Application for Mediation, etc.) |
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| (1) |
Parties to a dispute may apply for mediation to the council by submitting a document stating matters prescribed by Presidential Decree which are related to the matters to be mediated pursuant to Article 24: Provided, That in cases where the Fair Trade Commission is examining a case as prescribed in Article 29 before an application for mediation is filed, such case shall be made an exception. |
| (2) |
The Fair Trade Commission may request the council to mediate a case relating to a dispute between a large franchise and retailbusiness operator and a supplier, etc. |
| (3) |
When the Council receives an application for mediation as prescribed in paragraph (1), it shall immediately notify the parties to a dispute of such application for mediation. |
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| Article 26 (Mediation, etc.) |
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| (1) |
The Council may recommend the parties to a dispute to reach an agreement on the matters of dispute to be mediated by themselves, or prepare a draft statement for mediation and present it to the parties to a dispute. |
| (2) |
In order to confirm the fact concerning the relevant matters of dispute to be mediated, the Council may make an inspection if necessary, or request the parties to a dispute to submit data or to appear in person. |
| (3) |
The Council shall reject an application for mediation, in cases falling under any of the following subparagraphs: |
| 1. |
Where an application for mediation is filed by a person who does not have direct interest in the contents of the application for mediation; |
| 2. |
Where an application for mediation is filed, to which this Act does not apply or for a case which is not a matter to be mediated falling under Article 24; |
| 3. |
Where an application for mediation is filed, even though it falls under the proviso to Article 25 (1). |
| (4) |
The Council may conclude the mediation processes, in cases falling under any of the following subparagraphs: |
| 1. |
Where a party to a dispute refuses mediation in the middle of mediation processes; |
| 2. |
Where parties to a dispute file a lawsuit in the court before or after filing an application for mediation, or file an application for arbitration as prescribed by the Arbitration Act; |
| 3. |
Where matters prescribed by Presidential Decree occur, of which mediation is of no practical use. |
| (5) |
The Council shall conclude the mediation processes, in cases falling under any of the following subparagraphs: |
| 1. |
Where parties to a dispute accept recommendation or mediation proposals of the Council, or agree to mediation and the dispute is mediated; |
| 2. |
Where parties to a dispute do not accept recommendation or mediation proposals of the Council, and consequently the dispute is not mediated; |
| 3. |
Where a dispute is not mediated even after 60 days (90 days where both parties to a dispute agree to the extension of a period) pass from the date an application for mediation is notified. |
| (6) |
Where the Council rejects an application for mediation as prescribed in the provisions of paragraphs (3) through (5), the Council shall, without delay, report the details of mediation, reasons for the rejection of an application for mediation, reasons for concluding the mediation processes , etc. accompanied by relevant documents to the Fair Trade Commission as prescribed by Presidential Decree, and notify the parties to a dispute of such fact. |
| (7) |
The Fair Trade Commission shall not issue a corrective order pursuant to Article 32 or make a corrective recommendation pursuant to Article 33 (1) to the relevant parties to a dispute until mediation processes concerning the matters in dispute to be mediated areconcluded:Provided, That in cases where the Fair Trade Commission is already making an inspection as prescribed in Article 29, this shall not apply. |
law view
| Article 27 (Preparation of Mediation Protocol and Validity thereof) |
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| (1) |
Where matters in dispute to be mediated are mediated, the Council shall prepare a mediation protocol in which members of the Council and parties to the dispute who participate in the mediation place their name and seal. In such cases, an agreement on the same terms as those of the mediation protocol shall be deemed to have been reached between parties to the dispute. |
| (2) |
Where parties to a dispute mediate matters in dispute to be mediated by themselves and request the council to prepare a mediation protocol, it may prepare a mediation protocol. |
| (3) |
Parties to a dispute shall implement matters agreed upon at the mediation and submit the result of implementation to the Fair Trade Commission. |
| (4) |
Where an agreement pursuant to paragraph (1) or (2) and implementation thereof is made, the Fair Trade Commission shall not make a corrective order pursuant to Article 32 or corrective recommendation pursuant to Article 33 (1), except in extenuating circumstances. |
law view
| Article 28 (Organization, Operation, etc. of Council) |
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Matters necessary for the organization, operation, mediation processes, etc. of the Council in addition to the matters prescribed in Articles 20 through 27 shall be prescribed by Presidential Decree.
CHAPTER IV PENAL PROVISIONS
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| Article 29 (Inspection of Violations, etc.) |
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| (1) |
Any person who recognizes any violation of this Act may report such fact to the Fair Trade Commission. |
| (2) |
If the Fair Trade Commission suspects a violation of this Act, it may make an inspection ex officio. |
| (3) |
Where the Fair Trade Commission makes an inspection pursuant to paragraph (1) or (2), it shall give the parties to the relevant case a written notice of the result (where it intends to take measures, such as a corrective order, etc. as a result of inspection, the details of such measures shall be included in such notice). |
| (4) |
The Fair Trade Commission may award a prize within budgetary limits to a person who makes a report or gives information on the violations of this Act and submits evidential data verifying such report or information. |
| (5) |
Matters necessary for the extent of violations for which a prize is paid and the extent of persons to whom a prize is paid as prescribed in paragraph (4), standards, procedures, etc. for awarding a prize shall be prescribed by Presidential Decree. |
law view
| Article 30 (Documentary Inspection of Actual Condition) |
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| (1) |
In order to establish fair order in transactions in the large franchise and retail business, the Fair Trade Commission shall conduct a documentary inspection of actual condition of transactions betweenlarge franchise and retail business operators and suppliers, etc. and make public the result of such inspection. |
| (2) |
Where the Fair Trade Commission intends to conduct a documentary inspection of actual condition as prescribed in paragraph (1), it shall establish a plan on the scopes of persons to be inspected, inspection period, inspection details, inspection methods, inspection procedures, extent of publicizing the result of inspection, etc. and may request the persons to be inspected to submit data necessary for the inspection of actual condition of transactions, etc. |
| (3) |
Where the Fair Trade Commission requests the persons to be inspected to submit data as prescribed in paragraph (2), it shall clarify the extent and details of data, reasons for requests, deadlines for submission, etc. to the persons to be inspected. |
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| Article 31 (Restrictions on Violations Subject to Disposition) |
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Where five years elapse from the date the violation of this Act ceases, the Fair Trade Commission shall not issue a corrective order, impose penalty surcharges, etc. pursuant to this Act for the relevant violation: Provided, That in cases where a corrective order or disposition of imposing penalty surcharges is revoked according to a judicial decision, and new disposition is issued by reason of such judicial decision, this shall not apply.
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| Article 32 (Corrective Orders) |
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The Fair Trade Commission may order a large franchise and retail business operator who violates the provisions of Article 6 (1) through (3), Articles 7 through 10, Article 11 (1) through (4) and Articles 12 through 18 to suspend violations of this Act, to prevent further violations, to pay the sales of goods, to compensate for expenses for equipment on the sales floor, to expurgate or correct contract clauses, to publicize the fact of having been issued a corrective order, to notify the receipt of a corrective order to a supplier, etc. who is a party to transaction, to report plans or acts necessary for the correction of violations or to take other measures necessary for correction.
law view
| Article 33 (Recommendation for Corrective Measures) |
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| (1) |
The Fair Trade Commission may recommend a large franchise and retail business operator to prepare corrective measures as prescribed by Presidential Decree and comply therewith. The Fair Trade Commission shall also notify the large franchise and retail business operator of the gist that if he/she accepts such recommendation, it is deemed that the Fair Trade Commission has issued a corrective order. |
| (2) |
A large franchise and retail business operator who receives a recommendation pursuant to paragraph (1) shall notify the Fair Trade Commission within ten days from the date he/she receives such recommendation whether he/she accepts such recommendation. |
| (3) |
If a large franchise and retail business operator who receives a recommendation pursuant to paragraph (1) accepts such recommendation, it is deemed that he/she has been issued a corrective order pursuant to Article 32. |
law view
| Article 34 (Deposits) |
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If repayment to a supplier, etc. is not made or is not possible, a large franchise and retailbusiness operator who receives a corrective order pursuant to Article 32 or accepts a recommendation for corrective measures pursuant to Article 33 (1) shall deposit the subject matter of repayment for the supplier, etc. and thus be released from the fulfillment of the obligation. The same shall apply to cases in which the supplier, etc. is unknown to the large franchise and retailbusiness operator.
law view
| Article 35 (Penalty Surcharges) |
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| (1) |
The Fair Trade Commission may impose a penalty surcharge on a large franchise and retailbusiness operator who violates Article 6 (1) through (3), Articles 7 through 10, Article 11 (1) through (4) and Articles 12 through 18 within the extent not exceeding the amount of supplied goods according to the calculation method prescribed by Presidential Decree or annual rents: Provided, That wherethe calculation of sales is not possible, etc., the Commission may impose a penalty surcharge within the extent not exceeding 500 million won. |
| (2) |
The penalty surcharge pursuant to paragraph (1) shall be calculated for each violation prescribed herein, however, the total shall not exceed the amount of supplied goods according to the calculation method prescribed by Presidential Decree or annual rents. |
law view
| Article 36 (Timing for Judgement on Violations) |
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Where the Fair Trade Commission decides on violation of this Act, it shall make a decision, based on facts which have occurred until the date on which examination of such act is concluded.
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| Article 37 (Cooperation from Heads of Relevant Administrative Agencies) |
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| (1) |
Where the Fair Trade Commission deems it necessary for the implementation of this Act, it may hear the opinions of the heads of relevant administrative agencies. |
| (2) |
Where the Fair Trade Commission recognizes it necessary for the implementation of this Act, it may request the heads of relevant administrative agencies to make necessary inspections or to provide necessary data. |
| (3) |
Where the Fair Trade Commission recognizes it necessary for the guarantee of implementation of this Act, it may request the heads of relevant administrative agencies for necessary cooperation. |
law view
| Article 38 (Monopoly Regulation and Fair Trade Act to Be Applied mutatis mutandis) |
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| (5) |
Article 62 of the Monopoly Regulation and Fair Trade Act shall apply mutatis mutandis to the commissioners and public officials of the Fair Trade Commission who perform or have performed a duty pursuant to this Act or to persons who perform or have performed a duty of mediation of disputes at the Council. |
CHAPTER V PENAL PROVISIONS
law view
| Article 39 (Penal Provisions) |
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| (1) |
Any person who falls under any of the following subparagraphs shall be punished by imprisonment for not more than two years or a fine not exceeding 150 million won: |
| 1. |
A person whocausesa supplier, etc. to engage in exclusive transactions or interferes with a supplier, etc. in his/her transactions with other business operators, in violation of Article 13; |
| 2. |
A person who requests a supplier, etc. to provide information, in violation of Article 14 (1); |
| 3. |
A person who changes the terms of a contract to the disadvantage of a supplier, etc., restricts a supplier, etc. from the opportunity of supplying goods or renting a sales floor or gives disadvantages in the course of implementing the contract, in violation of Article 18; |
| 4. |
A person who fails to comply with a corrective order pursuant to Article 32. |
| (3) |
A person who divulges confidential information or uses confidential information for a purpose other than for the implementation of this Act in violation of Article 62 of the Monopoly Regulation and Fair Trade Act which applies mutatis mutandis as prescribed in Article 38 (5) shall be punished by imprisonment for not more than two years or a fine not exceeding two million won. |
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| Article 40 (Joint Penal Provisions) |
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If the representative of a corporation, or an agent, employee or other worker of a corporation or individual violatesArticle 39 (1) or (2) in connection with the business of such corporation or individual, not only shall such violator be punished but also such corporation or individual shall be punished by a fine prescribed in the relevant Article: Provided
, That the same shall not apply where the corporation or individual has not neglected to exercise due diligence and supervision over the relevant business in order to prevent such violation.
law view
| Article 41 (Fines for Negligence) |
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| (1) |
Where a large franchise and retailbusiness operator falls under any of subparagraphs 1 through 3, a fine for negligence not exceeding 100 million won shall be imposed on him/her, and where he/she falls under subparagraph 4, a fine for negligence not exceeding 200 million won shall be imposed on him/her: |
| 1. |
A person who fails to submit data prescribed in Article 30 (2) or submits false data; |
| (2) |
Where an executive or employee of a large franchise and retail business operator or other interested person falls under the provisions of paragraph (1) 1 through 3, a fine for negligence not exceeding ten million won shall be imposed on him/her, and where he/she falls under subparagraph 4, a fine for negligence not exceeding 50 million won shall be imposed on him/her. |
| (3) |
A fine for negligence not exceeding ten million won shall be imposed on a person who fails to preserve important documents, such as contracts, etc., in violation of Article 6 (8). |
| (5) |
Fines for negligence prescribed in the provisions of paragraphs (1) through (4) shall be imposed and collected by the Fair Trade Commission, as prescribed by Presidential Decree. |
law view
| Article 42 (Complaints) |
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| (1) |
Violations prescribed in Article 39 (1) may be prosecuted only where the Fair Trade Commission files a complaint. |
| (2) |
Where the Fair Trade Commission recognizes that the severity of a violation among the violations prescribed in Article 39 (1) is obvious and serious in an objective view and thus such violation substantially hinders orderly transactions in the large franchise and retail business, it shall file a complaint to the Prosecutor General. |
| (3) |
The Prosecutor General may notify the Fair Trade Commission that a fact that constitutes the grounds for complaint prescribed in paragraph (2) exists, and request it to file a complaint. |
| (4) |
Even when the Fair Trade Commission decides that the case does not constitutes the grounds for complaint under paragraph (2), the chairman of the Board of Audit and Inspection and the Administrator of the Small and Medium Business Administration may request the Fair Trade Commission to file a complaint on other grounds, such as social impacts and the degree of damage to suppliers, etc. <Newly Inserted by Act No. 11936, Jul. 16, 2013> |
| (5) |
Upon receipt of a request to file a complaint made under paragraph (3) or (4), the Chairperson of the Fair Trade Commission shall file a complaint to the Prosecutor General. <Newly Inserted by Act No. 11936, Jul. 16, 2013> |
| (6) |
The Fair Trade Commission cannot revoke a complaint once a prosecution is instituted. |
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2012.
Article 2 (Applicability)
This Act shall apply beginning from the contract concluded between a large franchise and retail business operator and a supplier, etc. for the first time after this Act enters into force.
ADDENDUM <Act No. 11936, Jul. 16, 2013>
This Act shall enter into force six months after the date of its promulgation.
