ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT

영문법령 불러오는 중…

ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT — 법갈피

Article 4(Scope of business groups) #

(1) "Companies whose business is under the de facto control ... according to the criteria prescribed by Presidential Decree" in the provision, with the exception of the items, of subparagraph 11 of Article 2 of the Act means the following companies: <Amended on Dec. 27, 2022>

1. A company in which the same person, severally or jointly with any of the following persons or entities (hereinafter referred to as "person related to the same person"), owns at least 30/100 of the total number of shares issued by that company (excluding non-voting shares under Article 344-3(1) of the Commercial Act; hereafter in this Article, Article 5,33(2), and 34(2), the same shall apply), as the largest investor in that company:

a. A person who has the following relationship with the same person (hereinafter referred to as "relatives"):

1) A spouse;

2) Blood relatives within the fourth degree of relationship;

3) Affinity relatives within the third degree of relationship;

4) A blood relative of the fifth or sixth degree or a relative of the fourth degree who owns at least 1/100 of the total number of issued and outstanding shares of a domestic company controlled by the same person;

5) A natural father or mother of a person born out of wedlock, whom the same person has recognized under the Civil Act;

b. A non-profit corporation or organization (limited to an unincorporated association or foundation; hereinafter the same shall apply) in which the same person, severally or jointly with persons related to the same person, has at least 30/100 shareholding out of the total amount of shareholding as the largest contributor, or which either the same person or one of persons related to the same person has established;

c. A non-profit corporation or organization under a dominant influence of the same person, directly or through a person related to the same person, with regard to the composition of executive officers, business operations, etc.;

d. A company whose business is under de facto control of the same person as provided in this subparagraph or subparagraph 2;

e. An employee of the same person or any person having any of the relationships provided in items b through d with the same person (or an executive officer in cases of a corporation, or a commercial employee or an employee hired under an employment contract in cases of an individual);

2. Any of the following companies for which the same person is deemed to exercise a dominant influence upon the management of the relevant company:

a. A company, the representative director of which has been appointed or dismissed, or at least 50/100 of executive officers of which has been or may be appointed, by the same person under a contract or agreement with other major shareholders;

b. A company subject to a dominant influence of the same person, directly or through a person related to the same person, with respect to major decision-makings or business execution, such as reorganization of the relevant company and investments in new business;

c. A company that conducts the following personnel exchanges with another company controlled by the same person (including the same person, where the same person is a company; hereafter in this item, the same shall apply):

1) Where an executive officer holds concurrent offices in the relevant company and a company controlled by the same person;

2) Where an executive officer or employee of a company controlled by the same person is reinstated to the company after having been appointed as an executive officer of the relevant company (including where such executive officer or employee is reinstated to another company, not the company he or she formerly worked for, among companies controlled by the same person);

3) Where an executive officer of the relevant company is reinstated to the company or its affiliate after having been appointed as an executive officer or employee of a company controlled by the same person;

d. A company that performs transactions involving funds, assets, goods, services, etc. or provides debt guarantees with the same person or a person related to the same person, beyond the ordinary scope;

e. Other company recognized as a single economic entity by the social norms on such grounds that it declares its business intent in such a way that it can be recognized as an affiliate of a business group of the same person.

(2) Notwithstanding paragraph (1)1d, a company that is managed by an outside director prescribed in Article 382(3) of the Commercial Act, among persons in a relationship referred to in item e of the same subparagraph with the same person, and meets all the requirements prescribed in items of Article 5(1)3 shall be excluded from the scope of business group controlled by the same person. <Added on Dec. 27, 2022>

Article 5(Exclusion from business groups) #

(1) Notwithstanding Article 4(1), the Fair Trade Commission may exclude the following companies from the scope of the business group controlled by the same person at the request of an interested party so long as such companies are recognized as being not under the control of the same person with regard to their business: <Amended on Dec. 27, 2022>

1. A company deemed to be de facto managed by a person, other than the following persons, under an agreement or contract, etc. between investors:

a. A person appointed by the same person;

b. A person who has any of the relationships provided in subparagraph 1a or e of Article 4(1) with the same person;

2. A company that satisfies all of the following requirements and is recognized as being managed independently by a relative of the same person:

a. The aggregate number of shares owned by the same person and persons related to the same person, excluding the following persons, in each company that has requested to be excluded from the business group (hereinafter referred to as "affiliate of a relative") from among companies whose business is under de facto control of a relative of the same person shall be less than 3/100 (or 10/100 in cases of a stock-listed corporation under Article 9(15)3 of the Financial Investment Services and Capital Markets Act (hereinafter referred to as "listed corporation")) of the total number of shares issued by each company:

1) A person who independently manages an affiliate of a relative (hereinafter referred to as "independently managing relative");

2) A person whom the Fair Trade Commission recognizes as being excluded from the scope of persons related to the same person (hereinafter referred as "person related to an independently managing relative") at the request of an independently managing relative, among those who have any relationship prescribed in the items of Article 4(1)1 with the independently managing relative;

b. The aggregate number of shares owned by independently managing relatives and persons related to independently managing relatives in each company other than affiliates of relatives from the business group (hereinafter referred to as "affiliate of a non-relative"), shall be less than 3/100 (or 15/100 for a company that is not a listed corporation) of the total number of shares issued by each company;

c. No executive officer shall hold concurrent positions in any affiliate of a non-relative and any affiliate of a relative;

d. There shall be no debt guarantee or loan between any affiliate of a non-relative and any affiliate of a relative; provided, the following debt guarantees or loans shall be excluded herefrom:

1) Debt guarantees referred to in subparagraph 1 of Article 24 of the Act;

2) Debt guarantees or loans which are recognized to have been provided in the ordinary course of transactions;

e. Neither a corrective measure (including a recommendation for correction or warning) nor a penalty surcharge shall have been taken against, or imposed on, any affiliate of a non-relative, any affiliate of a relative, or the same person or his or her relative, by the Fair Trade Commission for a violation of Article 45(1)9 or (2) or 47 of the Act, in relation to any of the following transactions (limited to transactions conducted for the three years immediately before and after the date the relevant company was excluded from the scope of a business group):

1) A transaction between an affiliate of a non-relative and an affiliate of a relative;

2) A transaction between an affiliate of a non-relative and an independently managing relative (including persons related to independently managing relatives);

3) A transaction between an affiliate of a relative and the same person (including relatives of the same person other than persons related to independently managing relatives);

3. A company that meets all of the following requirements and is recognized as being managed independently by a person who has a relationship prescribed in Article 4(1)1e with the same person:

a. The company shall be one (including any company whose business is under control of such company) whose business has been under de facto control of a person (hereinafter referred to as "independently managing executive officer") who independently manages each company requesting an exclusion from a business group (hereinafter referred to as "affiliate of an executive officer") among companies whose business is under de facto control of a person who has a relationship prescribed in Article 4(1)1e with the same person, before the independently managing executive officer gets into the relationship prescribed in that item with the same person;

b. No person, other than the following persons, among the same person and persons related to the same person, shall have invested in any affiliate of an executive officer:

1) An independently managing executive officer;

2) A person whom the Fair Trade Commission recognizes as being excluded from the scope of persons related to the same person (hereinafter referred to as "person related to an independent executive officer") at the request of an independently managing executive officer, among those who have any relationship prescribed in Article 4(1)1 with the independently managing executive officer;

c. No independently managing executive officer or person related to an independently managing executive officer shall have investment in any company of a business group, excluding affiliates of executive officers (including the same person, where the same person is a corporation; hereinafter referred to as "affiliate of a non-executive officer"); provided, cases where an independently managing executive officer or a person related to an independently managing executive officer has investment therein while meeting all of the following requirements shall be excluded herefrom:

1) The independently managing executive officer shall be an outside director prescribed in Article 382(3) of the Commercial Act or a director who does not engage in regular business;

2) The aggregate number of shares that have been owned by the independently managing executive officer and persons related to the independently managing executive officer in affiliates of non-executive officers before the independently managing executive officer gets into a relationship prescribed in Article 4(1)1e with the same person shall be less than 3/100 (or 15/100 for a company that is not a listed corporation) of the total number of shares issued by each company;

d. No executive officer, other than independently managing executive officers, shall hold concurrent positions in any affiliate of a non-executive officer and any affiliate of an executive officer;

e. There shall be no debt guarantee or loan between any affiliate of a non-executive officer and any affiliate of an executive officer;

f. For the business year immediately preceding the business year in which the date the request for exclusion from the business group falls, the ratio of all of the following is less than 50/100:

1) The ratio of the sales and purchase transaction amount with all affiliates of executive officers to the total sales and the total purchase transaction amount of each affiliate of a non-executive officer;

2) The ratio of the sales and purchase transaction amount with all affiliates of non-executive officers to the total sales and total purchase transaction amount of each affiliate of an executive officer;

4. A company under bankruptcy proceedings after having been declared bankrupt under the Debtor Rehabilitation and Bankruptcy Act;

5. A company that constitutes a company contracted for corporate restructuring under the Corporate Restructuring Investment Companies Act, which satisfies all of the following requirements:

a. The company shall delegate its authority to dispose of, and exercise voting rights in, shares owned by the same person and persons related to the same person in excess of 3/100 (or 10/100 for a company that is not a listed corporation) of the total number of shares issued by the relevant company, to a creditor financial institution under the Corporate Restructuring Investment Companies Act;

b. The same person and persons related to the same person shall enter into a special agreement waiving the right to terminate the delegation contract under item a;

6. A company under the rehabilitation procedures according to a decision on commencing such procedures under the Debtor Rehabilitation and Bankruptcy Act, which satisfies all of the following requirements:

a. The company shall delegate its authority to dispose of, and exercise voting rights in, shares owned by the same person and persons related to the same person in excess of 3/100 (or 10/100 for a company that is not a listed corporation) of the total number of shares issued by the relevant company, to a custodian appointed under Article 74 of the Debtor Rehabilitation and Bankruptcy Act, but shall succeed to such right after completion of the rehabilitation proceedings;

b. The same person and persons related to the same person shall enter into a special agreement waiving the right to terminate the delegation contract under item a;

(2) Notwithstanding Article 4(1), the Fair Trade Commission may exclude any of the following companies from the scope of a business group controlled by the same person upon request of interested parties; provided, where Article 47 of the Act applies to a company specified in subparagraph 3 or 5; and where Article 3(3) applies to a small and medium enterprise defined in Article 2 of the Framework Act on Small and Medium Enterprises in which a venture holding company out of companies specified in subparagraph 5 owns shares, or applies to a venture business defined in the Special Act on the Promotion of Venture Businesses; such company shall be deemed to belong to the business group: <Amended on Dec. 27, 2022; Dec. 12, 2023; Dec. 19, 2023; Jul. 2, 2024>

1. A public-private partnership project corporation established under the Act on Public-Private Partnerships in Infrastructure (hereafter in this paragraph referred to as "public-private partnership project corporation"), where any of the following entities owns at least 20/100 of the total number of shares issued by the public-private partnership project corporation, in which case the public-private partnership project corporation shall be free of both cross shareholding with any other company and debt guarantee by any person, other than its investors:

a. The State or a local government;

b. A public enterprise under Article 5 of the Act on the Management of Public Institutions;

c. A public corporation, a public organization, or other corporation established under a special Act;

2. A company that has at least two largest investors deemed to be not exercising any dominant influence over the composition of its executive officers, business operations, etc. among the following companies; in such cases, the shares of that company owned by the same person or persons related to the same person shall be included for the purpose of calculating the shares owned by the largest investors:

a. A company established by at least two companies running the same type of business for the purpose of restructuring their business by investing their assets in kind, through a merger, or by any other equivalent means;

b. A company that implements a public-private partnership project by the methods prescribed in subparagraphs 1 through 4 of Article 4 of the Act on Public-Private Partnerships in Infrastructure, among public-private partnership project corporations;

3. A company provided in subparagraph 2b that satisfies all of the following requirements; provided, the company may be excluded from the scope of a business group controlled by the same person only for the period beginning on the date the company is designated as a concessionaire under Article 13 of the Act on Public-Private Partnerships in Infrastructure and ending before it obtains confirmation of construction completion under Article 22(1) of that Act, by completing a project in accordance with the implementation plan publicly notified under Article 15(2) of that Act (excluding incidental projects publicly notified under Article 21(7) of that Act) with approval from the competent administrative agency under Article 15(1) of that Act:

a. The largest investor in the relevant company shall be deemed to be not exercising any dominant influence over the composition of executive officers, business operations, etc.; in such cases, the shares of the relevant company owned by the same person or persons related to the same person shall be included for the purpose of calculating the shares owned by the largest investor;

b. The relevant company (including any company whose business is under control of such company) shall not have invested in a company controlled by the same person (including the same person, where the same person is a company; hereafter in this subparagraph the same shall apply);

c. There shall be no debt guarantee between the relevant company (including any company whose business is under control of such company) and a company controlled by the same person; provided, the foregoing shall not apply where a company controlled by the same person who has invested in the relevant company (excluding any company whose business is under control of such company) provides a debt guarantee for the relevant company;

d. Neither a corrective measure (including a recommendation for correction or warning) nor a penalty surcharge shall have been taken against, or imposed on, the relevant company, the same person (including his or her relatives), or a company controlled by the same person, by the Fair Trade Commission for a violation of Article 45(1)9 or (2) or 47 of the Act, which is committed between the relevant company (including any company whose business is under control of such company; hereafter in this item, the same shall apply) and the same person (including his or her relatives) or between the relevant company and the company controlled by the same person, after the date the same person or a person related to the same person comes to satisfy the requirements prescribed in Article 4(1) by acquiring or owning shares of the relevant company;

4. Any of the following companies, which have neither invested in, nor provided any debt guarantee for, a company controlled by the same person (including the same person, where the same person is a company):

a. An industry-academia-research cooperation-based technology holding company and its subsidiaries under the Industrial Education Enhancement and Industry-Academia-Research Cooperation Promotion Act;

b. A company specializing in the start-up of new technology-based businesses under the Special Act on the Promotion of Venture Businesses (including subsidiaries under Article 11-2(4)2 of that Act), for which 10 years have not passed since the registration date of its incorporation;

5. A company that satisfies all of the following requirements (including a company whose business activities are controlled by the relevant company):

a. The relevant company shall be a company falling under any of the following as of the date immediately before the date it becomes falling under the requirement prescribed in Article 4(1):

1) A small or medium enterprise that spends at least 3/100 of its annual sales as annual research and development expenses, calculated as prescribed and publicly notified by the Fair Trade Commission, among small or medium enterprises under Article 2 of the Framework Act on Small and Medium Enterprises;

2) A venture business under the Special Act on the Promotion of Venture Businesses;

b. Within 7 years from the date the same person or a person related to the same person acquires or owns shares of the company in agreement with a person who controls the business of the company and becomes falling under the requirement specified in Article 4(1) [10 years if the company is a subsidiary of a venture holding company, a subsidiary of a general holding company, a venture investment company under the Venture Investment Promotion Act, or a company invested in by a new technology business finance company under the Specialized Credit Finance Business Act (including investment through the execution of the business of an investment association)];

c. The relevant company (including a company over which the company has control of its business; hereafter in items d and e the same shall apply) shall not have invested in a company controlled by the same person (including the same person, where the same person is a company);

d. There shall be no debt guarantee between the relevant company and a company controlled by the same person (including the same person, where the same person is a company);

e. Neither a corrective measure (including a recommendation for correction or warning) nor a penalty surcharge shall have been taken against, or imposed on, the relevant company, the same person (including his or her relatives), or a company controlled by the same person, by the Fair Trade Commission for a violation of Article 45(1)9 or (2), or Article 47 of the Act, which is committed between the relevant company and the same person (including his or her relatives) or between the small and medium venture business and the company controlled by the same person, after the date it becomes falling under the requirement specified in item b.

(3) Where a company excluded from the scope of a business group controlled by the same person under paragraph (1) or (2) ceases to satisfy requirements for such exclusion, the Fair Trade Commission may revoke such decision of exclusion, ex officio or upon request of an interested party; provided, in cases of a company excluded from the scope of a business group controlled by the same person under paragraph (1)2, the decision of exclusion may be revoked only when it ceases to meet the criteria for exclusion within three years (or five years in the case of paragraph (1)2e) from the date of such exclusion.

(4) A person who intends to request exclusion from a business group controlled by the same person under paragraph (1)2 or 3 shall submit the following documents to the Fair Trade Commission; in such cases, the Fair Trade Commission shall verify certificates of corporation registration of affiliates of non-relatives, affiliates of relatives, affiliates of non-executive officers, or affiliates of executive officers, through administrative data matching under Article 36(1) of the Electronic Government Act:

1. In the case of paragraph (1)2a and b and 3a through c: A register of shareholders, to which a certificate issued by a stock transfer agent shall be attached in cases of a corporation whose shares have been listed on a securities market under Article 176-9(1) of the Enforcement Decree of the Financial Investment Services and Capital Markets Act;

2. In the case of paragraph (1)2d and 3e: Documents regarding the current status of debt guarantees and loans certified by a certified public accountant;

3. In the case of paragraph (1)2e: Documents regarding the details of transactions of funds, securities, assets, goods, and services between affiliates of non-relatives and affiliates of relatives for the three immediately preceding years from the date the company requests an exclusion from a business group controlled by the same person;

4. In the case of paragraph (1)3f: Documents regarding the transactions between affiliates of non-executive officers and affiliates of executive officers, certified by certified public accountants.

(5) Any interested person who intends to request that a small or medium enterprise under subparagraph 5a1) of the same paragraph is excluded from a business group controlled by the same person pursuant to the main clause of paragraph (2) shall submit documents confirmed by a certified public accountant as to the status of annual research and development expenses based on the annual sales under item 1) of the same item. <Amended on Dec. 27, 2022>

(6) Each company excluded from a business group controlled by the same person pursuant to paragraph (1)2 (including a company which is the largest investor, where an independently managing relative becomes excluded from persons related to the same person pursuant to Article 6(1) and then severally or jointly with persons related to the independently managing relative comes to own at least 30/100 of the total number of shares issued by the company) shall submit the details of transactions of funds, securities, assets, goods, and services with affiliates of non-relatives to the Fair Trade Commission every year for three years from the date it becomes excluded from a business group controlled by the same person.

(7) Where a company required to submit materials under paragraph (6) fails to submit materials or submits false materials, the Fair Trade Commission may revoke its decision of exclusion.

Article 9(Types of, and criteria for, abusive practices) #

(1) Unfairly determining, maintaining, or changing the price of goods or service fees as prescribed in Article 5(1)1 of the Act (hereinafter referred to as "price") means significantly increasing or moderately lowering the price compared to fluctuations in the supply and demand or the cost required for the supply (limited to ordinary levels of the same or similar types of business), without good cause.

(2) Unfairly controlling the sale of goods or the provision of services as prescribed in Article 5(1)2 of the Act means the following acts:

1. Sharply reducing the supply of goods or services in light of recent market trends, without good cause;

2. Reducing the supply of goods or services despite a short supply in distribution channels, without good cause.

(3) Unfairly interfering with business activities of any other business entity as prescribed in Article 5(1)3 of the Act means an act of hindering business activities of other business entities by directly or indirectly conducting the following acts:

1. Interfering with any other business entity’s purchase of raw materials necessary for such entity to engage in production activities, without good cause;

2. Hiring an employee essential for the business activities of any other business entity by providing, or promising to provide, the employee with excessive economic benefits in light of ordinary practices;

3. Denying, interrupting, or limiting the use of or access to elements indispensable for any other business entity to produce, supply, or sell its goods or services, without good cause;

4. Any other acts determined and publicly notified by the Fair Trade Commission, among acts of making it difficult for any other business entity to engage in business activities by other improper means other than those prescribed in subparagraphs 1 through 3.

(4) Unfairly interfering with the market entry of a new competitor as prescribed in Article 5(1)4 of the Act means making it difficult for a new competitor to enter the market by directly or indirectly conducting any of the following acts:

1. Concluding an exclusive transaction contract with a distributor, without good cause;

2. Purchasing rights, etc. necessary for an existing business entity to continue its business activities, without good cause;

3. Denying or limiting the use of or access to elements indispensable for a new competitor to produce, supply, or sell its goods or services, without good cause;

4. Any other acts determined and publicly notified by the Fair Trade Commission, among acts of making it difficult for a new competitor to enter the market by other improper means other than those prescribed in subparagraphs 1 through 3.

(5) Making an unfair transaction to exclude a competitor as prescribed in Article 5(1)5 of the Act means the following acts:

1. Unfairly supplying goods or services at prices lower than the arm’s length prices or purchasing them at prices higher than the arm’s length prices, thereby likely to cause exclusion of competitors;

2. Unfairly making a transaction with the other party to the transaction on the condition that the other party does not make any transaction with a competitor.

(6) Matters necessary for detailed types of, and criteria for, acts prescribed in paragraphs (1) through (5) shall be determined and publicly notified by the Fair Trade Commission.

Article 17(Standards for business combination date) #

The business combination date referred to in the main clause, with the exception of the subparagraphs, of Article 9(5) of the Act shall be the following dates: <Amended on Aug. 6, 2024>

1. In cases of owning shares or increasing shareholding ratio in another company: The following dates:

a. In cases of acquiring shares of a stock company, the date a share certificate is issued; provided, it shall be the date the price of shares is paid, if no share certificate is issued; and it shall be the date the relevant rights are transferred, if voting rights or other rights in shares are substantially transferred before the issuance of share certificates or the full payment of the price of shares under an agreement or a contract, etc.;

b. In cases of acquiring new shares of a stock company for value, the date following the due date for payment of subscription prices for new shares;

c. In cases of acquiring equity of a company, other than a stock company, the date the acquisition of equity takes effect;

d. In cases other than those prescribed in items a through c, if the shareholding ratio increases due to a reduction of capital, the retirement of shares, or other causes, the date the increase in the shareholding ratio is determined in a final and conclusive manner;

2. In cases of concurrently holding an executive position in another company under Article 9(1)2 of the Act: The date the appointment of an executive officer is resolved at a general meeting of shareholders, or a general meeting of employees, of the company in which the executive officer concurrently hold an executive position;

3. In cases of merging with another company: The date the merger is registered;

4. In cases of acquiring business under Article 9(1)4 of the Act (hereinafter referred to as "business acquisition"): The date the business acquisition price is paid up; provided, where the business acquisition price is paid up after the lapse of 90 days after the date of conclusion of a contract, it shall be the date 90 days elapse from the date of conclusion of the contract;

5. In cases of participating in the establishment of a new company: The date following the due date for payment of prices for allocated shares.

Article 18(Standards and procedures for reporting business combinations) #

(1) "Company that satisfies the criteria prescribed by Presidential Decree in terms of the total assets or sales" in the provision, with the exception of the subparagraphs, of Article 11(1) of the Act means a company whose total assets amount under Article 15(1) or sales amount under Article 15(2) is at least 300 billion won.

(2) "Another company that satisfies the criteria prescribed by Presidential Decree in terms of the total assets or sales" in the provision, with the exception of the subparagraphs, of Article 11(1) of the Act means a company whose total assets amount under Article 15(1) or sales amount under Article 15(2) is at least 30 billion won.

(3) Notwithstanding paragraphs (1) and (2), if both of the company required to report its business combination under Article 11(1) of the Act (hereinafter referred to as "company required to report its business combination") and its partner company referred to in that paragraph (hereinafter referred to as "partner company") are foreign companies (referring to companies that have their main offices in foreign countries or which are established under a foreign statute) or if the company required to report its business combination is a domestic company and its partner company is a foreign company, they shall be required to report their business combination pursuant to Article 11(1) of the Act only when the domestic sales amount of respective foreign companies is at least 30 billion won according to calculation as determined and publicly notified by the Fair Trade Commission.

(4) Cases where a company becomes to own at least 20/100 (or 15/100 for a listed corporation; hereafter in this paragraph, the same shall apply) of the total number of shares issued by another company (excluding the number of non-voting shares under Article 344-3(1) and 369(2) and (3) of the Commercial Act) as prescribed in Article 11(1)1 of the Act means cases where its shareholding increases from less than 20/100 to at least 20/100.

(5) Cases where a person becomes the largest investor by additionally acquiring shares of another company as prescribed in Article 11(1)2 of the Act means cases where a person who was not the largest investor becomes the largest investor.

(6) A person who intends to file a report on business combination under Article 11(1) or (2) of the Act shall submit to the Fair Trade Commission a report stating the following matters, as determined and publicly notified by the Fair Trade Commission, along with documents substantiating the details of the report:

1. The name of the person required to report and the name of the partner company;

2. The sales and the total assets of the person required to report and those of the partner company;

3. Business activities of the person required to report and those of the partner company, and details of the business combination;

4. The current status of related markets;

5. Other matters equivalent to those prescribed in subparagraphs 1 through 4, which are determined and publicly notified by the Fair Trade Commission as necessary for reporting a business combination.

(7) Where a report or accompanying documents submitted pursuant to paragraph (6) are incomplete, the Fair Trade Commission may order such documents to be supplemented within a fixed period. In such cases, the period required for supplementation (including the date the written order requiring supplementation is sent and the date the supplemented documents reach the Fair Trade Commission) shall not be included in the period referred to in Article 11(7) and (10) of the Act.

Article 20(Deadline for reporting business combinations) #

(1) The business combination date referred to in the main clause and the proviso, with the exception of the subparagraphs, of Article 11(6) of the Act means the business combination date prescribed in Article 17.

(2) "Cases prescribed by Presidential Decree" in Article 11(6)1 of the Act means any of the following business combinations falling under paragraph (1)1 and 2 of that Article:

1. Where shares are acquired through competitive trading in a securities market defined in Article 9(13) of the Financial Investment Services and Capital Markets Act; provided, excluded herefrom shall be cases where shares are acquired by settling the payment through a securities market after determining the quantity, price, etc. of the relevant shares under a contract or an agreement between the parties to the transaction;

2. Where the shareholding ratio increases as a result of the forfeiture of shares after a rights issue;

3. Where the shareholding ratio increases as a result of share retirement or capital reduction based on a decision by the board of directors or the general meeting of shareholders of another company, irrespective of the will of companies participating in the business combination;

4. Other cases equivalent to those prescribed in subparagraphs 1 through 3, which are determined and publicly notified by the Fair Trade Commission as required to be reported after the business combination date.

(3) "Date prescribed by Presidential Decree, such as the date a merger contract is concluded" in the proviso, with the exception of the subparagraphs, of Article 11(6) of the Act means the following dates:

1. Business combinations that fall under the type specified in Article 11(1)1 or 2 of the Act: The date the acquisition or owning of shares is determined under a contract or an agreement, etc. or by the board of directors, etc.;

2. Business combinations that fall under the type specified in Article 11(1)4 of the Act: The date a contract for merger or business acquisition is concluded;

3. Business combinations that fall under the type specified in Article 11(1)5 of the Act: The date a resolution on participating in the establishment of a company is made at a general meeting of shareholders, a general meeting of employees, or the board of directors in lieu of such general meeting.

(4) If there is any material change in the reported matters, a company required to report business combination that has filed a report pursuant to the proviso, with the exception of the subparagraphs, of Article 11(6) of the Act, shall report the material change to the Fair Trade Commission by the date of ownership of its shares, the date of registration of the merger, the date of business acquisition, or the date of establishment of the company.

Article 23(Imposition of enforcement fines) #

(1) An enforcement fine under Article 16(1) of the Act shall be imposed for the period beginning on the date following the expiration date of the period prescribed by corrective measures under Article 14(1) of the Act ending on the date the corrective measures are implemented as follows:

1. In cases of share disposal: The date of share certificate delivery;

2. In cases of an executive officer's resignation: The date of registration of the relevant fact;

3. In cases of transfer of business: The date of registration of ownership transfer or registration of transfer, of the related real estate, etc.

(2) Notwithstanding paragraph (1), an enforcement fine imposed on a person who fails to take corrective measures under Article 14(1)6 or 7 of the Act (limited to orders requiring implementation of certain obligations at intervals such as every quarter or business year) shall be imposed for the relevant period of non-compliance.

(3) Enforcement fines under paragraph (1) shall be imposed, in the absence of special circumstances, within 30 days after the expiration date of the period prescribed by the corrective measures; and enforcement fines under paragraph (2), within 30 days after the date it can be checked whether the corrective measures have been taken.

(4) The criteria for imposing enforcement fines under Article 16(1) of the Act shall be as specified in Appendix 1.

(5) In imposing enforcement fines under Article 16(1) of the Act, the Fair Trade Commission shall notify in writing the amount of the fines per day (referring to the finalized amount for the relevant period of non-compliance in cases of enforcement fines under paragraph (2)), grounds for imposition, deadline for payment, receiving agencies of such fines, methods of filing an objection, agencies with which such objection may be filed, and other similar information.

(6) A person notified under paragraph (5) shall pay enforcement fines within the following periods; provided, where he or she is unable to pay the fines within the period due to a force majeure event or any other unavoidable reason, he or she shall pay such fines within 30 days after the date such reason ceases to exist:

1. In cases of enforcement fines under paragraph (1): Within 30 days after the date the Fair Trade Commission determines the amount of the fines in a final and conclusive manner and gives a payment notice, after checking the date of completion of compliance;

2. In cases of enforcement fines under paragraph (2): Within 30 days after the date the Fair Trade Commission issues a payment notice.

(7) Where the Fair Trade Commission imposes enforcement fines under Article 16(1) of the Act, if no corrective measure is taken even after the lapse of 90 days from the end of the period specified by the corrective measure under Article 14(1) of the Act, the Fair Trade Commission may collect the fines upon the lapse of every 90-day period calculated from such end date.

(8) Except as provided in paragraphs (1) through (7), details necessary for imposing enforcement fines shall be determined and publicly notified by the Fair Trade Commission.

Article 26(Reporting on establishment of, or conversion into, holding companies) #

(1) A person who intends to file a report on the establishment of, or conversion into, a holding company under Article 17 of the Act shall submit a report stating the following, along with documents evidencing the details of the report and documents on the results of the resolution of the debt guarantees specified in the subparagraphs of Article 19 of the Act (limited to where such report is filed by the same person who controls member companies of such business group subject to limitations on cross shareholding as designated under the former part of Article 31(1) of the Act, or his or her related parties) to the Fair Trade Commission:

1. The name of the company and the name of the representative thereof;

2. The following matters concerning a holding company, and its subsidiaries, second-tier subsidiaries, and third-tier subsidiaries under Article 18(5) of the Act (hereinafter referred to as "holding company, etc."):

a. The name of the relevant company and the name of the representative thereof;

b. The total assets and liabilities;

c. The current status of shareholders and shareholdings;

d. Business details;

3. Other matters equivalent to those prescribed in subparagraphs 1 and 2, which are determined and publicly notified by the Fair Trade Commission as necessary for filing a report on the establishment of, or conversion into, a holding company.

(2) The report on the establishment of, or conversion into, a holding company under Article 17 of the Act shall be filed within the following periods:

1. Where a holding company is established: Within 30 days after the date the establishment of the holding company is registered;

2. Where a company is converted into a holding company through a merger with another company or a division of such company: Within 30 days after the date of registration of the merger or division;

3. In cases of a company excluded from the application of Article 17 of the Act under any other statute, such as Article 249-19 of the Financial Investment Services and Capital Markets Act: Within 30 days after the expiration of the period for exclusion prescribed by such other statute;

4. In cases of a company converted into a holding company through acquisition of shares in another company, an increase or a decrease in assets, or due to other causes: Within four months from the base date for the calculation of the total assets referred to in Article 3(1)2.

(3) Where at least two persons intend to establish a holding company and file a report thereon under Article 17 of the Act, they shall jointly file such report; provided, if the persons required to file a report designate a representative among them and the representative files a report, the representative may solely file the report.

(4) Where a person who has filed a report on establishment or conversion under Article 17 of the Act notifies the Fair Trade Commission that the relevant holding company ceases to meet the standards for holding companies referred to in Article 3(1) or (2) due to a decrease in shareholdings, an increase or a decrease in assets, etc. during a business year, the company shall not be deemed a holding company from the date the relevant grounds arise.

(5) Where a person who has filed a report on establishment or conversion under Article 17 of the Act notifies the Fair Trade Commission that the relevant holding company ceases to meet the standards for holding companies pursuant to paragraph (4), the person shall submit to the Fair Trade Commission the balance sheet audited by a certified public accountant and documents on the current status of stock ownership as of the date the grounds on which it ceases to be a holding company arise.

(6) Upon receipt of the documents under paragraph (5), the Fair Trade Commission shall notify in writing the relevant holding company of the processing result within 30 days after the date of receipt.

(7) Except as provided in paragraphs (1) through (6), details necessary for the procedures, methods, etc. for reporting, etc. on establishment of, and conversion into, holding companies shall be determined and publicly notified by the Fair Trade Commission.

Article 29(Submission of reports on business of holding companies) #

(1) A holding company shall submit to the Fair Trade Commission a report on the business of the holding company, etc., including the following, within four months after the end of the relevant business year pursuant to Article 18(7) of the Act:

1. The general status of the following:

a. The name of the company and the name of its representative;

b. The location;

c. The date of establishment;

d. Business details;

2. The current status of the following financial affairs:

a. The paid-in capital;

b. The total capital;

c. The total liabilities;

d. The total assets;

3. The current status of affiliates;

4. The current status of shareholders and shareholdings;

5. The current status of such trading with or for related parties (excluding overseas affiliates; hereafter in this subparagraph, the same shall apply) as prescribed in the subparagraphs of Article 26(1) of the Act (limited to cases where a venture holding company submits such documents);

6. Other matters equivalent to those specified in subparagraphs 1 through 5, which are determined and publicly notified by the Fair Trade Commission as necessary to verify the business details of a holding company, etc.

(2) The following documents shall be attached to the report specified in paragraph (1):

1. Financial statements of the holding company, etc., such as its balance sheet and income statement for the immediately preceding business year (including consolidated financial statements in cases of an enterprise which prepares consolidated financial statements under the Act on External Audit of Stock Companies);

2. An auditor's report on financial statements under subparagraph 1 (limited to member companies of a business group subject to disclosure designated under the former part of Article 31(1) of the Act and companies subject to external audit under the Act on External Audit of Stock Companies);

3. Rosters of shareholders of subsidiaries, second-tier subsidiaries, and third-tier subsidiaries.

(3) Where a report or accompanying documents submitted pursuant to paragraphs (1) and (2) are incomplete, the Fair Trade Commission may order such documents to be supplemented within a fixed period.

(4) Except as provided in paragraphs (1) through (3), details necessary for the methods and procedures, etc. for submitting reports on business details of holding companies, etc. shall be determined and publicly notified by the Fair Trade Commission.

Article 31(Exception to prohibition of debt guarantees for affiliates) #

(1) Debt guarantees provided in subparagraph 1 of Article 24 of the Act shall be guarantees for the following debts:

1. Debts of the transferor acquired by means of transfer of shares, a merger, etc., which are outstanding at the time of transfer or to be taken over by the transferee: Guarantees provided by the transferee or its affiliates;

2. Debts taken over by the transferee, where the transferor’s debts are divided and taken over by the transferee: Guarantees provided by an affiliate of the transferee.

(2) Debt guarantees provided in subparagraph 2 of Article 24 of the Act shall be as follows:

1. A guarantee for a loan extended by the Export-Import Bank of Korea to provide funds necessary in the process of producing capital goods and other products and providing technologies pursuant to Article 18(1)1 and 2 of the Export-Import Bank of Korea Act, or a loan extended by another domestic financial institution in connection therewith;

2. A guarantee for a bid bond, contract performance guarantee, advance payment refund guarantee, reserve repayment guarantee, defect liability guarantee, or tax payment guarantee provided by a domestic financial institution in connection with any of the following projects:

a. Construction projects and projects to install industrial facilities, which are performed overseas;

b. Projects to build ships for export;

c. Projects to export services;

d. Other projects for the export of goods, recognized by the Fair Trade Commission for the purpose of strengthening the international competitiveness of enterprises;

3. A guarantee for funding by domestic financial institutions for technological development projects, such as commercializing locally developed new technology or introduced technology and purchasing equipment and machinery to develop technology;

4. A guarantee to domestic financial institutions in purchasing export bills under documents against acceptance or payment terms and opening a local letter of credit;

5. A guarantee for credits provided by overseas branch offices of domestic financial institutions in relation to the following projects:

a. Foreign direct investment under the Foreign Exchange Transactions Act;

b. An overseas construction or service project performed by international contractors and service providers;

c. Other projects similar to those prescribed in items a or b, which are recognized by the Fair Trade Commission to strengthen international competitiveness of enterprises;

6. A guarantee directly related to the acquisition by a third party of a company which has filed an application with the court to commence rehabilitation procedures under the Debtor Rehabilitation and Bankruptcy Act;

7. A guarantee for credits extended by a domestic financial institution to an affiliate, if an investment is made in the affiliate that performs a public-private partnership project in any of the manners prescribed in subparagraphs 1 through 4 of Article 4 of the Act on Public-Private Partnerships in Infrastructure;

8. A re-guarantee provided by a company for a newly established company through a division in direct relation to the guarantee which was provided by the company for a company other than its affiliates, and underwritten by the newly established company, if the company, as provided in Article 2 of the Act on the Improvement of Managerial Structure and Privatization of Public Enterprises, is divided for its structural reorganization.

Article 33(Resolutions by board of directors on large-scale internal trading and disclosure thereof) #

(1) The scale of a trade under the subparagraphs of Article 26(1) of the Act (hereinafter referred to as "large-scale internal trading") shall be an amount (in cases falling under subparagraph 4 of that paragraph, referring to the aggregated amount of trades to be performed in a quarter) equal to or greater than the lower of the following: <Amended on May 30, 2023>

1. 10 billion won;

2. An amount equivalent to 5/100 of the greater of the total capital or capital of a domestic member company of a business group subject to disclosure designated under the former part of Article 31(1) of the Act, which intends to engage in a large-scale internal trade (if the amount is less than 500 million won).

(2) "Affiliate prescribed by Presidential Decree" in Article 26(1)4 of the Act means an affiliate, at least 20/100 of the total number of issued shares of which are owned by the same person who is a natural person, severally or jointly with relatives of the same person (excluding those excluded from persons related to the same person pursuant to Article 6(1)), or its subsidiary as defined in Article 342-2 of the Commercial Act.

(3) "Material facts prescribed by Presidential Decree, such as the purpose, scale, and terms and conditions of the trading and the trading counterparty" in Article 26(2) of the Act means the following:

1. The objectives of the trading and an object to be traded;

2. The trading counterparty (in cases of a trading for a related party, including such related party);

3. The amount and terms and conditions of the trading;

4. The total trading balance of the same type of trading with the trading counterparty under subparagraph 2;

5. Other matters equivalent to those prescribed in subparagraphs 1 through 4, which are determined and publicly notified by the Fair Trade Commission as necessary for resolution of the board of directors on large-scale internal trading and disclosure thereof.

(4) "Trading that meets the criteria prescribed by Presidential Decree" in the former part of Article 26(4) of the Act means a trading that meets all of the following requirements:

1. The trading shall be conducted under terms and conditions in accordance with the Act on the Regulation of Terms and Conditions;

2. The trading shall be an ordinary trading arising in the course of conducting financial business or insurance business.

(5) Except as provided in paragraphs (1) through (4), details necessary for the methods, procedures, and timing for resolution of the board of directors on large-scale internal trading and disclosure thereof shall be determined and publicly notified by the Fair Trade Commission.

Article 34(Disclosure of material facts by unlisted companies) #

(1) "Company that meets the criteria prescribed by Presidential Decree in terms of its total assets, etc." in the main clause, with the exception of the subparagraphs, of Article 27(1) of the Act means the following companies:

1. A company with the total assets of at least 10 billion won as at the end of the immediately preceding business year;

2. A company with the total assets of less than 10 billion won as at the end of the immediately preceding business year, in which a related party (referring only to the same person who is a natural person and his or her relatives; hereafter in this subparagraph, the same shall apply), severally or jointly with other related parties, owns at least 20/100 of the total number of its issued shares, or which solely owns more than 50/100 of the total number of its issued shares; provided, a company that is in the process of liquidation or has been suspending its business for at least one year shall be excluded herefrom.

(2) "Largest shareholder and major shareholders prescribed by Presidential Decree" in Article 27(1)1 of the Act means the following shareholders:

1. The largest shareholder: A shareholder of the relevant company who owns the largest number of shares (including the same person and persons related to the same person, where the same person, severally or jointly with persons related to the same person, is the largest shareholder) in terms of the total number of issued voting shares;

2. A major shareholder: A shareholder who owns at least 10/100 of the voting shares issued by a company on his or her account, regardless of in whose name the shares are owned; or who exercises de facto control over important management issues, such as appointment or dismissal of executive officers.

(3) "Matters prescribed by Presidential Decree" in Article 27(1)1 of the Act means the following:

1. The shareholding status of the largest shareholder prescribed in paragraph (2)1 and major shareholders prescribed in paragraph (2)2 and any change in such status (limited to where the largest shareholder's or major shareholders' shareholding ratio changes by at least 1/100 of the total number of issued shares);

2. Deleted. <Aug. 6, 2024>

(4) "Matters prescribed by Presidential Decree" in Article 27(1)2 of the Act means the following; in such cases, the total assets and the equity capital as at the end of the latest business year shall be based on the period from three months after the end of each business year until three months after the end of the following business year, and in cases of a newly incorporated company without any balance sheet of the latest business year, it shall be based on the paid-in capital as at the time of its establishment in lieu of the total assets and the equity capital as at the end of the latest business year:

1. A decision, if the decision is made to acquire, or dispose of, fixed assets in an amount that is at least 10/100 of the total assets as of the end of the latest business year (including the acquisition or disposal of fixed assets through a trust contract under the Financial Investment Services and Capital Markets Act (limited to where the relevant corporation has the authority to give instructions as to the management of assets) or a privately placed fund under that Act (limited to where the relevant corporation exercises de facto influence on the management of assets));

2. A decision, if the decision is made to acquire, or dispose of, the shares and investment certificates of another corporation (excluding affiliates) in an amount that is at least 5/100 of the equity capital;

3. A decision, if the decision is made to give or take a gift in an amount that is at least 1/100 of the equity capital;

4. A decision, if the decision is made to provide collateral or a debt guarantee (excluding any debt guarantee provided to guarantee the performance of a contract, etc. and the payment of tax) for a third person in an amount that is at least 5/100 of the equity capital;

5. A decision, if the decision is made to exempt, underwrite, or be exempted from, a debt in an amount that is at least 5/100 of the equity capital;

6. A decision, if the decision is made to increase or decrease the capital;

7. A decision, if the decision is made to issue convertible bonds or bonds with warrant.

(5) "Matters prescribed by Presidential Decree" in Article 27(1)3 of the Act means the following matters:

1. A decision, if the decision is made as prescribed in Article 360-2, 360-15, 374, 522, 527-2, 527-3, or 530-2 of the Commercial Act;

2. Grounds for dissolution, if such grounds arise as prescribed in Article 517 of the Commercial Act or any other statute;

3. A decision, if the decision is made to commence, complete, or rescind rehabilitation procedures under the Debtor Rehabilitation and Bankruptcy Act;

4. A decision, if the decision is made to commence, suspend, or cancel administrative proceedings under the Corporate Restructuring Promotion Act.

(6) Except as provided in paragraphs (1) through (5), details necessary for the methods, procedures, and timing for disclosure of companies, other than listed corporations, shall be determined and publicly notified by the Fair Trade Commission.

Article 35(Disclosure of current status of business groups) #

(1) "Company that meets the criteria prescribed by Presidential Decree" in the provision, with the exception of the subparagraphs, of Article 28(1) of the Act means any company except a company whose total assets as of the end of the immediately preceding business year are less than 10 billion won and which is in the process of liquidation or has been suspending its business for at least one year.

(2) "Matters prescribed by Presidential Decree" in the provision, with the exception of the subparagraphs, of Article 28(1) of the Act means the following matters for a business group subject to disclosure which is designated pursuant to the former part of Article 31(1) of the Act:

1. The following general status of its member companies:

a. The name of the company;

b. The name of the representative;

c. Business details;

d. Financial status;

e. Changes in affiliates for the immediately preceding one-year period;

f. The current status of executive officers;

g. The current status of operation of the board of directors;

h. Other matters equivalent to those referred to in items a through g, which are determined and publicly notified by the Fair Trade Commission;

2. The current status of shareholders of its member companies;

3. The current status of investments among its member companies;

4. The current status of affiliates that are not holding companies, etc., among its member companies (limited to where the combined total assets of the holding companies, etc. are at least 50/100 of the aggregate of the total assets of the member companies of the business group (or the total capital or capital stock, whichever is greater, in cases of a company engaging in financial business or insurance business));

5. The current status of cross shareholding among its member companies;

6. The current status of circular shareholding among its member companies;

7. The current status of debt guarantees provided among its member companies;

8. Whether a member company which is engaging in financial business or insurance business has exercised voting rights as prescribed in Article 25(1) of the Act; provided, the exercise of voting rights in the shares of the company engaging in financial business or insurance business shall be excluded herefrom;

9. The current status of funds, assets, goods, or services provided or traded between its member companies and their related parties;

10. Where the amount of goods or services traded with its affiliate during a business period (referring to a business quarter in cases of a listed company, and a business year in cases of an unlisted company) is at least 5/100 of the sales for the same business period or at least five billion won, the details of the goods or services traded with the affiliate.

(3) "Matters prescribed by Presidential Decree, such as the composition of shareholders" in Article 28(2)1 of the Act means the following; provided, where the same person refuses to provide information on the following matters regarding an overseas affiliate, on the condition that his or her relative has made investment, severally or jointly with other relatives, in the overseas affiliate; that the overseas affiliate does not own the shares of a domestic affiliate directly or by means specified in paragraph (4); and that the overseas affiliate has no direct or indirect transaction with domestic affiliates for the immediately preceding one-year period; the relevant matters shall be excluded herefrom:

1. The name of the company;

2. The name of the representative;

3. The country where the overseas affiliate is located;

4. Business details;

5. The current status of shareholders; provided, where the provision or disclosure of information regarding shareholders is prohibited by statutes or regulations of the country where the overseas affiliate is located, such information shall be excluded herefrom;

6. Other matters equivalent to those referred to in subparagraphs 1 through 5, which are determined and publicly notified by the Fair Trade Commission as necessary for disclosure.

(4) "Methods prescribed by Presidential Decree" in Article 28(2)2 of the Act means methods of owning shares of an overseas affiliate that directly owns shares of a domestic member company of a business group subject to disclosure designated pursuant to the former part of Article 31(1) of the Act, by linking them through investments between at least one overseas affiliate.

(5) "Matters prescribed by Presidential Decree" in Article 28(2)2 of the Act means the following:

1. Matters specified in paragraph (3)1 through 5;

2. The current status of investments in domestic affiliates or in other overseas affiliates;

3. Other matters equivalent to those prescribed in subparagraphs 1 and 2, which are determined and publicly notified by the Fair Trade Commission as necessary for disclosure.

(6) "Reasons prescribed by Presidential Decree, such as unconsciousness" in the proviso, with the exception of the subparagraphs, of Article 28(2) of the Act means the following:

1. Unconsciousness;

2. Judicial declaration of disappearance;

3. Decision on the commencement of adult guardianship;

4. Other reasons equivalent to those prescribed in subparagraphs 1 through 3, which are recognized by the Fair Trade Commission as reasons which make it practically impossible for the same person to make a disclosure.

(7) A disclosure under Article 28(1) and (2) of the Act shall be made on a quarterly, semiannual, or annual basis, as determined and publicly notified by the Fair Trade Commission.

(8) Except as provided in paragraphs (1) through (7), details necessary for the methods and procedures, etc. for disclosing the current status of business groups, etc. shall be determined and publicly notified by the Fair Trade Commission.

Article 37(Reporting on stock ownership status) #

(1) A company that intends to file a report under Article 30(1) of the Act shall submit a report to the Fair Trade Commission by May 31 every year, stating the following; provided, a member company of a business group newly designated as a business group subject to disclosure pursuant to the former part of Article 31(1) of the Act, shall submit a report (limited to the year in which such business group is newly designated as a business group subject to disclosure) within 30 days after the date it receives notice under Article 38(7): <Amended on Aug. 6, 2024>

1. The outline of the relevant company, such as its name, capital stock, and total assets;

2. The number of shares of the relevant company that its affiliates and related parties own;

3. The shareholding status of the relevant company in domestic companies.

(2) A report provided in paragraph (1) shall be accompanied by the following documents:

1. A statement of shares owned by the relevant company;

2. A table describing the status of cross shareholding with affiliates;

3. An audit report of the relevant company for the immediately preceding business year.

(3) Where any reason for changes arises in a domestic member company of a business group subject to disclosure designated pursuant to the former part of Article 31(1) of the Act due to acquisition of shares, etc., the company that has filed a report under Article 30(1) of the Act shall submit a report including the details of such change to the Fair Trade Commission within 30 days after the following date:

1. Where the company becomes to own shares or increases its shareholding ratio: The date specified in the items of subparagraph 1 of Article 17;

2. Where the company appoints an executive officer: The date the appointment of an executive officer is resolved at a general meeting of its shareholders or a general meeting of its employees;

3. Where the company participates in the establishment of a new company: The date the establishment of the new company is registered;

4. In cases other than those specified in subparagraphs 1 through 3 where the entitlement to exercise a dominant influence arises: The date the entitlement to exercise a dominant influence over the management of the relevant member company arises under a contract or an agreement, etc. with major shareholders.

(4) A company that intends to file a report under Article 30(2) of the Act shall submit to the Fair Trade Commission a report that includes the amount of a debt guarantee provided by the relevant company, not later than May 31 each year, accompanied by the following documents; provided, a member company of a business group newly designated as a business group subject to limitations on cross shareholding pursuant to the former part of Article 31(1) of the Act, shall submit a report thereon (limited to the year in which such business group is newly designated as a business group subject to disclosure) within 30 days after the date it receives notice under Article 38(7): <Amended on Aug. 6, 2024>

1. A detailed statement of debt guarantees provided by the relevant company for its affiliates and details of changes in debt guarantees for the immediately preceding one-year period;

2. A detailed statement of debt guarantees that the relevant company received from its affiliates and details of changes in debt guarantees for the immediately preceding one-year period;

3. Written certificates prepared by the domestic financial institutions specified in the items of subparagraph 18 of Article 2 of the Act in the form set forth by the Fair Trade Commission, to verify the amount of debt guarantees provided by the relevant company and details specified in subparagraphs 1 and 2.

Article 38(Designation of business groups subject to disclosure and business groups subject to limitations on cross shareholding) #

(1) A business group subject to disclosure under the former part of Article 31(1) of the Act (hereinafter referred to as "business group subject to disclosure") shall be a business group, the combined total assets (in cases of a company engaging in financial business or insurance business, referring to the total capital or capital stock, whichever is greater; and in cases of a newly established company that has no balance sheet for the immediately preceding business year, referring to the paid-in capital as of the date of designation; hereafter in this Article, the same shall apply) of domestic member companies of which, as presented on the balance sheet for the business year immediately preceding the designation as a business group subject to disclosure, are at least five trillion won; provided, the following business groups shall be excluded from the designation of a business group subject to disclosure:

1. A business group engaging only in financial business or insurance business;

2. A business group in which a company engaging in financial business or insurance business is the same person;

3. A business group, among whose member companies the combined total assets of the following companies are at least 50/100 of the total assets of the entire business group; provided, a business group whose member companies’ combined total assets, except the following companies, are at least five trillion won shall be excluded herefrom:

a. A company that is under the rehabilitation procedures according to a decision on commencing such procedures under the Debtor Rehabilitation and Bankruptcy Act;

b. A company that undergoes the administrative proceedings according to a decision on commencing such proceedings under the Corporate Restructuring Promotion Act;

4. A business group in which a public institution under Article 4 of the Act on the Management of Public Institutions, or a local government-directly operated enterprise, local government-invested public corporation, or local government public corporation under Article 2(1) of the Local Public Enterprises Act is the same person;

5. A business group, all of whose member companies fall under any of the following:

a. A private equity fund exclusive to institutional investors, as defined in Article 9(19)1 of the Financial Investment Services and Capital Markets Act;

b. A special-purpose company specified in Article 249-13(1) of the Financial Investment Services and Capital Markets Act (hereafter in this subparagraph referred to as "special-purpose company"), in which a person specified in item a has invested;

c. A special-purpose company in which a person specified in item b has invested;

d. An investable enterprise referred to in Article 249-18(2)4 of the Financial Investment Services and Capital Markets Act, in which a person specified in items a through c has invested;

e. A company controlled by a person specified in item d;

f. A managing general partner of a private equity fund exclusive to institutional investors, which is registered with the Financial Services Commission under Article 249-15(1) of the Financial Investment Services and Capital Markets Act;

6. A business group, all of whose member companies fall under any of the following; in such cases, at least one company specified in items a and b shall be included:

a. A company engaging in financial business or insurance business;

b. A company falling under any of the items of subparagraph 5.

(2) Paragraph (1) shall apply mutatis mutandis to the criteria for designation of business groups subject to limitations on cross shareholding under the former part of Article 31(1) of the Act (hereinafter referred to as "business groups subject to limitations on cross shareholding") and the criteria for exclusion from designation of such business groups. In such cases, "five trillion won" in the main clause, with the exception of the subparagraphs, of paragraph (1) and in subparagraph 3 of that paragraph shall be construed as "amount equivalent to 5/1,000 of the gross domestic production", respectively.

(3) The Fair Trade Commission shall designate business groups that newly meet the criteria prescribed in paragraph (1) or (2) as business groups subject to disclosure or business groups subject to limitations on cross shareholding by May 1 (or May 15 in unavoidable circumstances) each year, pursuant to the former part of Article 31(1) of the Act; and shall exclude such designated business groups from being subject to disclosure or limitations on cross shareholding where the groups cease to meet the criteria prescribed in paragraph (1) or (2).

(4) In designating a business group subject to disclosure or a business group subject to limitations on cross shareholding pursuant to the former part of Article 31(1) of the Act, the Fair Trade Commission may, at the request of interested parties, designate a business group subject to disclosure or a business group subject to limitations on cross shareholding if the relevant business group satisfies all of the following requirements: <Added on May 10, 2024>

1. The scope of business groups shall be the same in cases of designating a business group subject to disclosure or business group subject to limitations on cross shareholding with a natural person as the same person and in cases of designating a business group subject to disclosure or business group subject to limitations on cross shareholding with a domestic company, non-profit corporation, or organization as the same person;

2. It shall meet all of the following requirements, thereby making it unlikely to give undue benefits, etc. to related parties:

a. A natural person who controls the relevant business group shall not hold stocks issued by a domestic affiliate (referring to a domestic affiliate, excluding the domestic company, if a business group subject to disclosure or a business group subject to limitations on cross shareholding is designated with a domestic company as the same person);

b. A relative of a natural person who controls the relevant business group shall not hold stocks issued by a domestic affiliate;

c. No relative of a natural person who controls the relevant business group shall not participate in the management of a domestic affiliate by means of serving as an executive officer, etc.;

d. There shall be no debt guarantee or loan between a natural person who controls the relevant business group, his or her relatives, and a domestic affiliate.

(5) If a business group subject to disclosure or a business group subject to limitations on cross shareholding designated with a domestic company, non-profit corporation, or organization as the same person pursuant to paragraph (4) ceases to meet the requirements prescribed in the subparagraphs of paragraph (4), the Fair Trade Commission may change its designation to a business group subject to disclosure or a business group subject to limitations on cross shareholding with a natural person who controls the relevant business group as the same person. <Added on May 10, 2024>

(6) Where a business group designated as a business group subject to disclosure or business group subject to limitations on cross shareholding under paragraphs (3) through (5) falls under any of the following cases, the Fair Trade Commission may exclude such business group from being subject to disclosure or limitations on cross shareholding when relevant grounds arise: <Amended on May. 10, 2024>

1. Where it falls under the main clause, with the exception of the items, of paragraph (1)3 after the date of designation; provided, if the combined total assets of companies, other than those specified in paragraph (1)3a or b, are at least 3.5 trillion won, such business group shall not be excluded from being subject to disclosure, and if the combined amount is at least the amount equivalent to 35/10,000 of the gross domestic production, such business group shall not be excluded from being subject to limitations on cross shareholding;

2. Where the combined total assets of domestic member companies of the relevant business group are decreased to less than 3.5 trillion won (limited to business groups subject to disclosure) due to a change of its member companies;

3. Where the combined total assets of domestic member companies of the relevant business group are decreased to less than the amount equivalent to 35/10,000 of the gross domestic production (limited to business groups subject to limitations on cross shareholding) due to a change of its member companies.

(7) If the Fair Trade Commission designates, changes the designation, or excludes from designation, any business group subject to disclosure or business group subject to limitations on cross shareholding under paragraphs (3) through (6), it shall immediately give written notice of such fact to the member companies of the relevant business group and the public interest corporations that are related parties to the same person who controls the companies. <Amended on May 10, 2024>

(8) If any change occurs in a member company of the relevant business group after the designation under paragraphs (3) through (6), the Fair Trade Commission shall notify the relevant company of such fact in writing. <Amended on May 10, 2024>

(9) "Materials prescribed by Presidential Decree, such as the general status of a company, the composition of shareholders and executive officers of a company, the current status of related parties, and the current status of shareholdings" in Article 31(4) of the Act means the following materials: <Amended on May 10, 2024>

1. The general status of a company;

2. The composition of shareholders and executive officers of a company;

3. The current status of related parties;

4. The shareholding status;

5. The current status of each member company under the rehabilitation procedures according to a decision on commencing such procedures under the Debtor Rehabilitation and Bankruptcy Act and each member company undergoing the administrative proceedings according to a decision on commencing such proceedings under the Corporate Restructuring Promotion Act;

6. An audit report; provided, in cases of a company not subject to an external audit under the Act on External Audit of Stock Companies, it refers to the statement of tax adjustment, and if there is no statement of tax adjustment, it refers to a settlement of accounts;

7. Other materials determined and publicly notified by the Fair Trade Commission as necessary to verify the materials specified in subparagraphs 1 through 6.

(10) Except as provided in paragraphs (1) through (9), details necessary for designating, and excluding from designation, business groups subject to disclosure or business groups subject to limitations on cross shareholding, shall be determined and publicly notified by the Fair Trade Commission. <Amended on May 10, 2024>

Article 42(Types of, and standards for, Acts of circumventing law) #

Acts of circumventing law prohibited pursuant to Article 36(1) of the Act shall be the following acts committed by a member company of a business group subject to limitations on cross shareholding:

1. Bearing debts under the same terms and conditions without releasing its affiliate from existing debts to any of the domestic financial institutions specified in the items of subparagraph 18 of Article 2 of the Act;

2. Providing a debt guarantee for any other company or an affiliate of such other company in return for requiring such other company to provide a debt guarantee for an affiliate of the member company;

3. Causing a trust business entity to acquire or own shares of its affiliate that has acquired or owned its shares through a specific money trust referred to in subparagraph 1 of Article 103 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act; and practically exercising voting rights in such shares under a contract, etc. with the trust business entity;

4. Acquiring or owning shares of its affiliate that has acquired or owned its shares, under a third person's name and on its own account;

5. Causing a trust business entity to acquire or own shares, which would constitute shares provided in the following if acquired or owned by it, through a specific money trust referred to in subparagraph 1 of Article 103 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act; and practically exercising voting rights in such shares under a contract, etc. with the trust business entity:

a. Shares that constitute a shareholding in an affiliate forming circular shareholding which is prohibited under Article 22(1) of the Act;

b. Shares that constitute an additional shareholding that a member affiliate of a group of circular shareholding companies has in an issuing company, which is prohibited under Article 22(1) of the Act;

6. Acquiring or owning shares, which would constitute shares specified in subparagraph 5a or b if acquired or owned by it, under a third person's name and on its own account;

7. Other acts equivalent to those provided in subparagraphs 1 through 6, which are determined and publicly notified by the Fair Trade Commission as necessary to prevent an act of circumventing law.

Article 45(Exclusion from application of cartel conduct) #

(1) "Requirements prescribed by Presidential Decree" in the provision, with the exception of the subparagraphs, of Article 40(2) of the Act means the following requirements:

1. In the case of Article 40(2)1 of the Act: All of the following requirements shall be satisfied:

a. A substantial number of enterprises in the relevant industry is likely to suffer difficulties in business activities due to economic recession;

b. The supply capacity of the relevant industry shall be remarkably in an excessive state or the production efficiency or international competitiveness shall be on a sharp decline due to obsolescence of the manufacturing facilities or methods;

c. It is impossible to overcome the situations specified in item a or b by the rationalization of enterprises;

d. The cartel conduct shall be more effective in industrial restructuring than in competition restrictions;

2. In the case of Article 40(2)2 of the Act: All of the following requirements shall be satisfied:

a. The relevant research and technological development shall be essential to reinforce industrial competitiveness and shall have far-reaching effects on the economy;

b. The scale of investment required for such research and technological development shall be too big to be made by a single business entity;

c. The cartel conduct shall be necessary for diversifying risks due to the uncertainty of the results of research and technological development;

d. The cartel conduct shall be more effective in research and technological development than in competition restrictions;

3. In the case of Article 40(2)3 of the Act: All of the following requirements shall be satisfied:

a. The cartel conduct shall help rationalize trade terms and conditions, thereby contributing manifestly to improving productivity, facilitating transactions, and enhancing consumers' convenience or interests;

b. Details of the rationalization of trade terms and conditions shall be technically and economically feasible for most business entities in the relevant business field;

c. The cartel conduct shall be more effective in rationalization of trade terms and conditions than in competition restrictions;

4. In the case of Article 40(2)4 of the Act: All of the following requirements shall be satisfied:

a. The cartel conduct shall clearly help small and medium enterprises to improve their productivity such as having better quality and technological ability, or to strengthen their bargaining power on the trade terms and conditions;

b. All the business entities that participate in the cartel conduct (hereinafter referred to as "participating business entity") shall be small and medium enterprises;

c. It would be difficult to efficiently compete with, or fight against, large enterprises by means other than the cartel conduct.

(2) Notwithstanding paragraph (1), the Fair Trade Commission shall not grant authorization under Article 40(2) of the Act with regard to any of the following cartel conduct:

1. Where cartel conduct exceeds the extent necessary for achieving its objective;

2. Where cartel conduct is likely to unfairly undermine the interests of consumers and related business entities;

3. Where there is unfair discrimination among participating business entities in connection with the details of the cartel conduct;

4. Where participation in, or withdrawal from, the cartel conduct is restricted unfairly.

Article 46(Procedures and methods for authorization of cartel conduct) #

(1) A person who intends to obtain authorization to engage in cartel conduct under Article 40(2) of the Act shall select a representative business entity (hereinafter referred to as "representative business entity of the cartel conduct") and shall file an application containing the following with the Fair Trade Commission:

1. The name and location of the applicant (including the name and address of its representative);

2. The details of the cartel conduct;

3. The reasons for the cartel conduct;

4. The duration of the cartel conduct;

5. The following matters regarding participating business entities:

a. The number of participating business entities;

b. Business details of participating business entities;

c. The names and locations of participating business entities (including the names and addresses of their representatives).

(2) An application under paragraph (1) shall be accompanied by the following documents:

1. Documents evidencing that the cartel conduct meets the requirements specified in Article 45(1);

2. Documents evidencing that the cartel conduct does not fall under any subparagraph of Article 45(2);

3. Business reports, balance sheets, and income statements of participating business entities for the most recent two years;

4. A copy of the agreement or written resolution on the cartel conduct;

5. Other documents determined and publicly notified by the Fair Trade Commission as necessary for the authorization of cartel conduct.

(3) Upon receipt of an application for authorization under Article 40(2) of the Act, the Fair Trade Commission shall determine whether to grant authorization within 30 days (excluding the period of disclosure specified in paragraph (4)) from the date of application; provided, the Fair Trade Commission may extend the processing period by up to 30 days, if such extension is deemed necessary in light of the details of an application for authorization, the effect of the authorization, etc.

(4) Where the Fair Trade Commission deems it necessary to grant authorization under Article 40(2) of the Act, it may disclose the details of the application for authorization for up to 30 days to seek opinions from interested persons.

(5) The Fair Trade Commission shall issue a certificate of authorization to an applicant when it grants authorization for cartel conduct under Article 40(2) of the Act.

(6) Where a business entity that has obtained authorization for cartel conduct under Article 40(2) of the Act intends to change any of the matters authorized, such entity shall file an application stating the details of change and the reason therefor with the Fair Trade Commission, accompanied by the following documents; in such cases, paragraph (4) shall apply mutatis mutandis to seeking opinions from interested persons, for the authorization of change:

1. Documents evidencing that the changes comply with the requirements prescribed in Article 45(1);

2. Documents evidencing that the changes do not fall under any subparagraph of Article 45(2);

3. The certificate of authorization under paragraph (5).

(7) Except as provided in paragraphs (1) through (6), details necessary for the procedures and methods, etc. for authorizing cartel conduct shall be determined and publicly notified by the Fair Trade Commission.

Article 48(Measures to prevent illegal cartel conduct in relation to bidding in public sector) #

(1) "Public Institutions prescribed by Presidential Decree" in Article 41(2) of the Act means the following institutions: <Amended on Dec. 12, 2023>

1. A central administrative agency established under the Government Organization Act or other statutes;

2. A local government under the Local Autonomy Act;

3. A public institution under the Act on the Management of Public Institutions;

4. A local public enterprise under the Local Public Enterprises Act.

(2) Information related to bidding referred to in Article 41(2) of the Act (limited to a bid whose estimated price is at least five billion won in cases of a bid for construction works defined in subparagraph 4 of Article 2 of the Framework Act on the Construction Industry, where the number of business entities participating in the bid is no greater than 20; and at least 500 million won in other cases) shall be as follows:

1. The procurement institution and the end-user institution;

2. The kind and methods of bidding;

3. The date and time and details of the bidding announcement;

4. The estimated prices, expected prices, and low-end prices;

5. The number of bidding participants;

6. Bidding details by bidding participants;

7. The profile of the successful bidder;

8. The successful bid price;

9. The number of failed bids and the number of increase in the expected prices;

10. Other information that the Fair Trade Commission deems necessary to discover and prevent illegal cartel conduct related to bidding.

(3) If the head of a public institution referred to in any subparagraph of paragraph (1) submits bidding-related information to the Fair Trade Commission in accordance with Article 41(2) of the Act, the head of the public institution referred to in the subparagraphs of paragraph (1) shall submit the matters referred to in the subparagraphs of paragraph (2) through the integrated national electronic procurement system under subparagraph 4 of Article 2 of the Electronic Procurement Utilization and Promotion Act or through an information processing system designated and publicly notified by the Minister of Economy and Finance in accordance with the former part of Article 31(2) of the State Property Act (hereafter in this Article referred to as "integrated national electronic procurement system, etc.") within 30 days after a successful bidder is determined; provided, if it is difficult to submit bidding-related information through the integrated national electronic procurement system, etc. due to reasons such as the case where the head of a public institution referred to in the subparagraphs of paragraph (1) does not request the Commissioner of the Public Procurement Service to conclude a contract, such information may be submitted by directly entering such information into the information processing device operated by the Fair Trade Commission. <Amended on Dec. 12, 2023; Dec. 30, 2025>

Article 51(Leniency criteria) #

(1) The scope of persons eligible for full or partial exemption from corrective measures or penalty surcharges under Article 44(1) of the Act and the criteria therefor shall be as follows:

1. A person who files a leniency application with the Fair Trade Commission under Article 44(1)1 of the Act before the Commission commences an investigation shall be granted full exemption from both penalty surcharges and corrective measures, if all of the following requirements are satisfied:

a. The person shall be the first person who alone provides evidence of the illegal cartel conduct (even in cases where evidence is jointly provided by two or more business entities involved in the illegal cartel conduct, it shall be deemed to be provided by a single business entity, so long as the business entities are affiliates in a substantial control relationship or are involved in a division or business transfer, while meeting requirements determined and publicly notified by the Fair Trade Commission; hereafter in this Article the same shall apply);

b. The person shall have filed a leniency application concerning the illegal cartel conduct under circumstances that the Fair Trade Commission fails to obtain information on the illegal cartel conduct or fails to obtain sufficient evidence substantiating the illegal cartel conduct;

c. The person shall have conscientiously cooperated until the completion of an investigation, deliberation, and resolution (hereinafter referred to as "investigation, etc."; hereafter in this Article the same shall apply) including testifying all the facts related to the illegal cartel conduct and submitting related materials;

d. The person shall have ceased to engage in the illegal cartel conduct;

2. A person who cooperates in an investigation, etc. under Article 44(1)2 of the Act after the Fair Trade Commission commences an investigation, shall be granted full exemption from penalty surcharges or full or partial exemption from corrective measures, if all of the following requirements are satisfied:

a. The person shall have cooperated in the investigation, etc. under circumstances that the Fair Trade Commission fails to obtain information on the illegal cartel conduct or fails to obtain sufficient evidence substantiating the illegal cartel conduct;

b. The person shall meet all the requirements specified in subparagraph 1a,c, and d;

3. Where a person who has filed a leniency application under Article 44(1)1 of the Act before the Fair Trade Commission commences an investigation or a person who cooperates in an investigation, etc. under subparagraph 2 of that paragraph (hereafter in this Article referred to as "leniency applicant, etc.") meets all of the following requirements, the penalty surcharge may be reduced by 50/100 or the corrective measures may be partially exempted:

a. The person shall be the second person who alone provides evidence of the illegal cartel conduct (excluding where there are two business entities involved in the illegal cartel conduct and the person is one of them);

b. The person shall meet both of the requirements specified in subparagraph 1c and d;

c. A leniency applicant, etc. falling under subparagraph 1 or 2 shall have filed a leniency application or have cooperated in an investigation, etc. within two years from the date he or she filed a leniency application or cooperated in an investigation, etc.;

4. Where a person who is already subject to a penalty surcharge or corrective measure due to his or her illegal cartel conduct meets all the requirements provided in the items of subparagraph 1 or 2 with respect to another illegal cartel conduct in which he or she is involved, the penalty surcharge may be fully or partially exempted and the corrective measure may be partially exempted, against such other illegal cartel conduct.

(2) A person who falls under any of paragraph (1)1 through 4 shall not be granted full or partial exemption from corrective measures and penalty surcharges in any of the following cases:

1. Where he or she has coerced any other business entity into participating in the relevant illegal cartel conduct or into continuing such cartel conduct contrary to the will of the business entity;

2. Where he or she has involved in the illegal cartel conduct repeatedly during a certain period in violation of Article 40(1) of the Act.

(3) In any of the following cases, the Fair Trade Commission may revoke full or partial exemption from corrective measures or penalty surcharges under Article 44(1) of the Act, as prescribed in Article 44(3) of the Act:

1. Where a leniency applicant, etc. denies in a trial whole or part of important content of the statements or materials he or she provided in the course of an investigation, etc. conducted by the Fair Trade Commission;

2. Where any statements made, or any materials submitted, by a leniency applicant, etc. in the course of an investigation, etc. conducted by the Fair Trade Commission is found to be false in a trial;

3. Where a leniency applicant, etc. fails to testify about the fact of the cartel conduct in a trial, without good cause;

4. Where a leniency applicant, etc. fails to appear in court, without good cause;

5. Where a leniency applicant, etc. files a lawsuit seeking to deny the fact of the illegal cartel conduct concerning which he or she has filed a leniency application.

(4) "Cases prescribed by Presidential Decree, such as where it is necessary for handling cases" in Article 44(4) of the Act means the following cases:

1. Where it is necessary for handling cases;

2. Where a leniency applicant, etc. consents to the provision of information and materials under Article 44(4) of the Act;

3. Where the information is necessary to institute a lawsuit related to the relevant case or to proceed with such lawsuit.

(5) The Fair Trade Commission may, at the request of a leniency applicant, etc., separately deliberate or decide upon the relevant case to ensure that no information about the leniency applicant, etc. is disclosed under Article 44(4) of the Act.

(6) Except as provided in paragraphs (1) through (5), details necessary for the criteria, degree, methods, procedures, etc. for full or partial exemption from penalty surcharges or corrective measures shall be determined and publicly notified by the Fair Trade Commission.

Article 65(Request for mediation) #

(1) A person who intends to file a request for dispute mediation under Article 76(1) of the Act shall submit to the Council a document stating the following (hereinafter referred to as "request for dispute mediation"): <Amended on Dec. 12, 2023>

1. Names and addresses of the parties to the dispute (where a party to the dispute is a corporation, the corporation's name, location of its principal office, and its representative's name and address; hereafter in Article 68 the same shall apply);

2. The purport of, and the grounds for, the request for dispute mediation;

3. The name and address of his or her representative (limited to where he or she has a representative).

4. The litigation case number (limited to cases where a lawsuit is filed for a case subject to the application for dispute mediation).

(2) A request for dispute mediation shall be accompanied by the following documents:

1. A document evidencing the grounds for the request for dispute mediation as well as the facts;

2. A letter of attorney of the claimant of the request for dispute mediation (limited to where he or she has a representative);

3. Other evidencing documents or materials necessary for mediating the dispute.

(3) Upon receipt of a request for dispute mediation under Article 76(1) of the Act, the Council shall issue a receipt to the disputing party who is the claimant and shall send copies of documents related to the request for dispute mediation to the Fair Trade Commission and the other disputing parties.

(4) Where the Council is entrusted with dispute mediation from the Fair Trade Commission under Article 76(2) of the Act, it shall inform the disputing parties of such fact.

(5) Where the Council deems a request for dispute mediation filed under Article 76(1) of the Act or entrustment of dispute mediation made under paragraph (2) of that Article incomplete, the chairperson may require supplementation thereof within a fixed reasonable time. In such cases, the period needed for supplementation shall not be included in the period prescribed in Article 77(4)2 of the Act.

Article 68(Notification of institution of lawsuit) #

(1) If any of the disputing parties initiates a lawsuit over the relevant case after filing a request for dispute mediation, the party shall without delay inform the Council of such fact. <Amended on Dec. 12, 2023>

(2) If the Council is notified of the facts pursuant to paragraph (1) or confirms that a lawsuit has been filed in a case for which dispute mediation has been requested through a dispute mediation application submitted pursuant to Article 65(1) of the Act, it may obtain the consent of the parties to the dispute and shall notify the court before which the litigation is pending of the following matters: <Added on Dec. 12, 2023>

1. Names and addresses of the parties to the dispute;

2. Date the request for mediation is filed;

3. The purport of and reasons for the request for mediation;

4. The litigation case number.

(3) Where the court before which the litigation is pending suspends litigation procedures pursuant to Article 77-2(1) of the Act, the parties to the dispute shall notify the Council of such fact without delay. <Added on Dec. 12, 2023>

(4) The Council shall dismiss an application for mediation without prejudice under Article 77(3) of the Act with respect to a dispute mediation case in which the court before which the litigation pending has suspended litigation procedures pursuant to Article 77-2(1) of the Act, or if the Committee terminates mediation proceedings under paragraph (4) of that Article, it shall notify the court of the following matters with the consent of the parties to the dispute: <Added on Dec. 12, 2023>

1. Names and addresses of the parties to the dispute;

2. Grounds for dismissing the request for mediation without prejudice or for terminating the mediation procedure;

3. Results of mediation (limited to cases where mediation is successful);

4. The litigation case number.

(5) If the Council suspends mediation procedures under Article 77-2(2) and (3) of the Act, it shall notify the parties to the dispute thereof without delay. <Added on Dec. 12, 2023>

[Title Amended on Dec. 12, 2023]

Article 90-2(Standards and procedures for fair trade compliance) #

(1) In conducting an evaluation of fair trade compliance under Article 120-2(2) of the Act (hereinafter referred to as "evaluation of fair trade compliance"), the Fair Trade Commission may grant an evaluation grade in consideration of the following standards:

1. The degree of the management's will and support for voluntary compliance with statutes and regulations under the jurisdiction of the Fair Trade Commission (hereinafter referred to as "fair trade compliance");

2. Whether the following matters are implemented and the appropriateness of such matters to ensure fair trade voluntary compliance:

a. Establishing and operating the standards and procedures for business affairs related to fair trade compliance;

b. Establishing and operating an internal surveillance system for the prevention and early detection of violations;

c. Educating fair trade compliance;

d. Preparing and using a fair trade compliance manual;

e. Operating personnel systems, such as disciplinary action against executive officers and employees who violate statutes or regulations under the jurisdiction of the Fair Trade Commission and the appointment of managers related to fair trade compliance;

3. Compliance with obligations, orders, etc. provided in statutes or regulations under the jurisdiction of the Fair Trade Commission;

4. Other matters deemed necessary and publicly notified by the Fair Trade Commission to evaluate the operational status of the fair trade compliance system under Article 120-2(2) of the Act (hereinafter referred to as "fair trade compliance system").

(2) A business entity that intends to apply for an evaluation of fair trade compliance pursuant to Article 120-2(3) of the Act shall submit documents concerning the matters referred to in the subparagraphs of paragraph (1) to the Fair Trade Commission.

(3) Upon receipt of an application under paragraph (2), the Fair Trade Commission shall conduct an evaluation of fair trade compliance in accordance with the standards prescribed in the subparagraphs of paragraph (1) and notify the relevant business entity of the evaluation grade and the grounds for such evaluation; provided, if the fair trade compliance system was introduced less than one year ago, the Fair Trade Commission need not conduct the evaluation of fair trade compliance.

(4) With respect to the publication of the receipt of a corrective order under Article 7(1), 14(1)5, 37(1)6, 42(1), 49(1), and 52(1) of the Act, the Fair Trade Commission may reduce the number of media for publication, the period of publication, and the size of the publication space in consideration of the details and degree of the violation, the evaluation results of the fair trade compliance, etc. pursuant to Article 120-2(4) of the Act.

(5) The Fair Trade Commission may give an award to a person who achieves excellent evaluation results for fair trade compliance pursuant to Article 120-2(4) of the Act.

(6) A business entity that has filed an application for an evaluation of fair trade compliance shall pay expenses for such evaluation as determined and publicly notified by the Fair Trade Commission in consideration of the size of the business entity, the results of the previous evaluation of fair trade compliance, etc. pursuant to Article 120-2(5) of the Act.

(7) Notwithstanding paragraph (6), the Fair Trade Commission may exempt small and medium enterprises defined in Article 2 of the Framework Act on Small and Medium Enterprises and other business entities determined and publicly notified by the Fair Trade Commission from bearing expenses incurred in evaluating fair trade compliance.

(8) Except as provided in paragraphs (1) through (3), matters necessary for detailed standards and procedures for the evaluation of fair trade compliance, detailed standards for reduction, such as the number of media for publication under paragraph (4), and detailed standards for awards under paragraph (5), shall be determined and publicly notified by the Fair Trade Commission.

[This Article Added on Jun. 11, 2024]

Article 91(Payment of monetary awards) #

(1) The Fair Trade Commission may pay a monetary award, within the budget, to the first person who files a report or provides information on the following violations, and submits materials evidencing them; provided, the foregoing shall not apply where the person who has filed a report or the informant is a business entity that has committed such violations:

1. Submitting materials by any related party in receipt of a request for submission of materials under Article 31(4) of the Act while omitting any member company of the business group, without good cause;

2. Illegal cartel conduct prescribed in the subparagraphs of Article 40(1) of the Act;

3. Unfair trade practices in newspaper business (referring to the business of publishing or selling newspapers, as defined in subparagraph 1a through d of Article 2 of the Act on the Promotion of Newspapers), among those prescribed in Article 45(1)1 through 8 of the Act;

4. Unfair trade practices provided in Article 45(1)4 of the Act;

5. Unfairly coercing executive officers and employees of his or her company or affiliates into purchasing or selling goods or services of his or her company or affiliates, among the unfair trade practices provided in Article 45(1)5 of the Act;

6. Unfair trade practices in the business of operating a large-scale retail store (referring to the business of selling various daily necessaries at the same store with the total area of sales floors of at least the size determined and publicly notified by the Fair Trade Commission), among unfair trade practices provided in Article 45(1)6 of the Act;

7. Unfair trade practices provided in Article 45(1)9 of the Act;

8. Provision of undue benefits to a related party provided in Article 47(1) of the Act;

9. Prohibited acts for trade associations under Article 51(1)1 through 3 of the Act.

(2) In the absence of special circumstances, the Fair Trade Commission shall pay a monetary award within three months from the date it determines that the act reported or informed of constitutes a violation of the Act (or the date an adjudication is made, if an objection has been filed).

(3) The Fair Trade Commission may establish a deliberative committee on monetary awards for reporting in order to deliberate on matters regarding the payment of monetary awards.

(4) Where any of the following facts is found after the Fair Trade Commission has paid a monetary award under paragraph (1), it may recapture the award:

1. In cases of receiving monetary awards by improper means such as evidence collection by unlawful or improper means, false reporting, false statement, and evidence forgery;

2. In cases of receiving monetary awards or valuables equivalent thereto under other statutes or regulations by the same cause;

3. Any other cases where the monetary award is given in error due to a mistake, etc.

(5) Except as provided in paragraphs (1) through (4), matters necessary for the standards of, and procedures and methods for, payment and return of monetary awards, and the establishment and operation of the deliberative committee on monetary awards for reporting shall be determined and publicly notified by the Fair Trade Commission.

Article 92(Re-examination of regulation) #

(1) The Fair Trade Commission shall examine the appropriateness of the following matters every three years, counting from each base date specified in the following (referring to the period that ends on the day before January 1 of every third year) and shall take measures, such as making improvements: <Amended on Dec. 27, 2022; May 10, 2024; Mar. 12, 2025>

1. The total assets used as standards for holding companies under the subparagraphs of Article 3(1): January 1, 2022;

1-2. The scope of a person related to the same person under Article 4(1)1: January 1, 2023;

2. The scope of companies that may be excluded from the scope of a business group under Article 5: January 1, 2022;

3. Deleted; <Mar. 12, 2025>

4. Resolutions by the board of directors on large-scale internal trading and disclosure thereof under Article 33: January 1, 2022;

5. Disclosure of material facts by unlisted companies, etc. under Article 34: January 1, 2022;

6. Resolutions by the board of directors of public interest corporations and disclosure thereof under Article 36(1): January 1, 2022;

7. Procedures for authorizing cartel conduct under Article 46: January 1, 2022;

8. Criteria for full or partial exemption under Article 51: January 1, 2022;

9. Substantially advantageous terms and conditions under the proviso, with the exception of the items, of subparagraphs 1 of Appendix 3 and the proviso of subparagraph 3 of that Appendix: January 1, 2022;

10. A considerable scale under the proviso of subparagraph 4 of Appendix 3: January 1, 2022.

(2) The Fair Trade Commission shall examine the appropriateness of the procedures for designating a business group subject to disclosure and a business group subject to limitations on cross shareholding under Article 38(4) and (5) every two years, counting from January 1, 2024 (referring to the period that ends on the day before January 1st of every second year) and shall take measures, such as making improvements. <Added on May 10, 2024; Mar. 12, 2025>

ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT

Article 1(Purpose) #

Article 2(Criteria for market-dominant business entities) #

Article 3(Criteria for holding companies) #

Article 4(Scope of business groups) #

Article 5(Exclusion from business groups) #

Article 6(Exclusion from persons related to same person) #

Article 7(Scope of domestic financial institutions) #

Article 8(Entrustment of market structure surveys or publication) #

Article 9(Types of, and criteria for, abusive practices) #

Article 10(Requests for price surveys) #

Article 11(Presumption of market-dominant business entities) #

Article 12(Methods of publishing facts of receiving corrective orders) #

Article 13(Penalty surcharges) #

Article 14(Scope of related parties) #

Article 15(Standards for total assets or sales) #

Article 16(Standards for exemption from application of business combinations) #

Article 17(Standards for business combination date) #

Article 18(Standards and procedures for reporting business combinations) #

Article 19(Criteria for reporting business combinations with small acquirees) #

Article 20(Deadline for reporting business combinations) #

Article 21(Designation of agents to file reports on business combinations) #

Article 22(Corrective measures) #

Article 23(Imposition of enforcement fines) #

Article 24(Demands for payment of enforcement fines) #

Article 25(Entrustment of disposition on delinquency) #

Article 26(Reporting on establishment of, or conversion into, holding companies) #

Article 27(Criteria for venture holding companies) #

Article 28(Restrictions on acts by holding companies) #

Article 29(Submission of reports on business of holding companies) #

Article 30(Special cases concerning restrictions on owning shares of financial companies by general holding companies) #

Article 31(Exception to prohibition of debt guarantees for affiliates) #

Article 32(Exception to restrictions on voting rights held by financial companies, insurance companies, and public interest corporations) #

Article 33(Resolutions by board of directors on large-scale internal trading and disclosure thereof) #

Article 34(Disclosure of material facts by unlisted companies) #

Article 35(Disclosure of current status of business groups) #

Article 36(Resolutions by board of directors of public interest corporations that are related parties and disclosure thereof) #

Article 37(Reporting on stock ownership status) #

Article 38(Designation of business groups subject to disclosure and business groups subject to limitations on cross shareholding) #

Article 39(Presumptive date of inclusion and notice of affiliates) #

Article 40(Requiring relevant institutions to verify materials) #

Article 41(Scope of information disclosed in relation to current status of business groups subject to disclosure) #

Article 42(Types of, and standards for, Acts of circumventing law) #

Article 43(Publishing facts of receiving corrective orders) #

Article 44(Criteria for cartel conduct) #

Article 45(Exclusion from application of cartel conduct) #

Article 46(Procedures and methods for authorization of cartel conduct) #

Article 47(Discontinuation of approved cartel conduct) #

Article 48(Measures to prevent illegal cartel conduct in relation to bidding in public sector) #

Article 49(Publishing facts of receiving corrective orders) #

Article 50(Penalty surcharges) #

Article 51(Leniency criteria) #

Article 52(Types of, or criteria for, unfair trade practices) #

Article 53(Fair competition covenant) #

Article 54(Prohibition of provision of undue benefits to related parties) #

Article 55(Publishing facts of receiving corrective orders) #

Article 56(Penalty surcharges) #

Article 57(Publishing facts of receiving corrective orders) #

Article 58(Penalty surcharges) #

Article 59(Composition of subcommittees) #

Article 60(Functional division of subcommittees) #

Article 61(Challenge to, or refrainment by, members) #

Article 62(Allowances for commissioners) #

Article 63(Qualifications for members of Fair Trade Dispute Mediation Council) #

Article 64(Meetings of Fair Trade Dispute Mediation Council) #

Article 65(Request for mediation) #

Article 66(Selection of representatives) #

Article 67(Verifying facts from disputing parties) #

Article 68(Notification of institution of lawsuit) #

Article 69(Dismissal of request for dispute mediation without prejudice) #

Article 70(Operating rules of Council) #

Article 71(Methods of reporting violations) #

Article 72(Date of commencement of investigation of illegal cartel conduct) #

Article 73(Investigations by the fair trade Commission) #

Article 74(Payment of expenses) #

Article 75(Investigations by affiliated public officials) #

Article 76(Requests for postponement of investigations) #

Article 77(Imposition and collection of enforcement fines) #

Article 78(Procedures for recommendation for correction) #

Article 79(Procedures for consent decrees) #