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ENFORCEMENT DECREE OF THE ACT ON FACILITATION OF PURCHASE OF SMALL AND MEDIUM ENTERPRISE-MANUFACTURED PRODUCTS AND SUPPORT FOR DEVELOPMENT OF THEIR MARKETS — 법갈피

영문법령 / ENFORCEMENT DECREE OF THE ACT ON FACILITATION OF PURCHASE OF SMALL AND MEDIUM ENTERPRISE-MANUFACTURED PRODUCTS AND SUPPORT FOR DEVELOPMENT OF THEIR MARKETS

ENFORCEMENT DECREE OF THE ACT ON FACILITATION OF PURCHASE OF SMALL AND MEDIUM ENTERPRISE-MANUFACTURED PRODUCTS AND SUPPORT FOR DEVELOPMENT OF THEIR MARKETS

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CHAPTER I GENERAL PROVISIONS

Article 1(Purpose) #

The purpose of this Decree is to prescribe matters delegated by the Act on Facilitation of Purchase of Small and Medium Enterprise-Manufactured Products and Support for Development of Their Markets and matters necessary for the enforcement of said Act.

Article 2(Definitions) #

(1) "Corporations prescribed by Presidential Decree" defined in subparagraph 2c of Article 2 of the Act on Facilitation of Purchase of Small and Medium Enterprise-Manufactured Products and Support for Development of Their Markets (hereinafter referred to as the "Act") means the following:

1. The Korea Federation of Small and Medium Businesses under the Small and Medium Enterprise Cooperatives Act (hereinafter referred to as the "Korea Federation of Small and Medium Businesses");

2. The National Agricultural Cooperative Federation under the Agricultural Cooperatives Act;

3. The National Federation of Fisheries Cooperatives under the Fisheries Cooperatives Act;

4. The National Forestry Cooperatives Federation under the Forestry Cooperatives Act;

5. The Bank of Korea under the Bank of Korea Act;

6. Deleted; <Aug. 7, 2018>

7. The Korea Chamber of Commerce and Industry under the Chambers of Commerce and Industry Act.

(2) "Public institutions prescribed by Presidential Decree" defined in subparagraph 2d of Article 2 of the Act means public corporations, quasi-governmental institutions or any other public institution referred to in Article 5 of the Act on the Management of Public Institutions.

CHAPTER II FACILITATING PURCHASE OF SMALL AND MEDIUM ENTERPR

Article 2-2(Preferential procurement contracts with small and medium enterprises) #

(1) A procurement contract that the heads of public institutions must conclude preferentially with small and medium enterprises pursuant to Article 4(2) of the Act (hereinafter referred to as "preferential procurement contract") shall be concluded according to any of the following methods. In such cases, the heads of public institutions shall verify whether business entities are small and medium enterprise through the comprehensive information network for public procurement of small and medium enterprise-manufactured products prescribed in Article 25(2) of the Act (hereinafter referred to as "purchase information network"). <Amended on May 26, 2015; Jul. 26, 2017; Aug. 7, 2018; Feb. 18, 2020; Feb. 2, 2021; Dec. 30, 2025>

Article 2-3(Exceptions to preferential procurement contracts with small and medium enterprises) #

(1) In any of the following cases, the head of a public institution need not conclude a preferential procurement contract referred to in Article 2-2: <Amended on Jan. 12, 2016; Jul. 26, 2017; Feb. 18, 2020; Oct. 8, 2020>

1. Where less than two small and medium enterprises participate in a tendering process referred to in the proviso of Article 2-2(1)1 or subparagraph 2 of that paragraph, or where tendering fails due to the absence of qualified entities or any other reason even though at least two small and medium enterprises participate therein;

2. Where it is deemed necessary for non-profit corporations to participate in a competitive tendering process with regard to any of the following service contracts:

a. Services provided for advice on policies, measures, etc. through academic activities, studies, research, inspections, evaluations, development, or any other intellectual activities;

b. Services entrusted for educational activities in schools, other than the curricular prescribed in Article 23(1) of the Elementary and Secondary Education Act;

c. Services entrusted for in specimen tests related to medical care benefits provided under Article 41 of the National Health Insurance Act;

d. Services entrusted by a subsidy program operator defined in the Subsidy Management Act to perform a subsidy program;

e. Other services publicly notified by the Minister of SMEs and Startups as he or she deems it necessary for non-profit corporations to participate in a tendering process to achieve the purpose of a service contract;

3. Where it is intended to procure goods or services specified by other statutes or regulations as the subject matter of preferential purchase or for which a negotiated contract or contract following selective competitive tendering process is permitted thereunder;

4. Where a specific performance, technology, qualify, etc. are necessary and where it is impossible to achieve the purpose of the relevant procurement contact using the methods of concluding a preferential procurement contract provided in Article 2-2;

5. Any other case equivalent to that prescribed in subparagraph 4, which is determined and publicly notified by the Minister of SMEs and Startups.

(2) Where the head of a public institution intends to conclude a procurement contract other than a preferential procurement contract in any case specified in any subparagraph of paragraph (1), he or she shall either state the ground for doing so in the relevant public notice of a tender or enter such ground into the Korea ON-line E-Procurement System under the Electronic Procurement Utilization and Promotion Act or the designated information processing system under Article 6-2(2) of the Enforcement Decree of the Act on Contracts to Which a Local Government Is a Party. <Added on Jan. 12, 2016>

[This Article Added on May 6, 2013]

Article 3(Heads of public institutions required to notify purchase plans) #

The heads of public institutions required to notify the Minister of SMEs and Startups of purchase plans and purchase records pursuant to Article 5(1) of the Act shall be as follows: <Amended on Mar. 15, 2010; Jul. 12, 2010; Dec. 31, 2010; Jun. 27, 2011; Mar. 23, 2013; Sep. 9, 2013; Nov. 19, 2014; Jan. 12, 2016; Jul. 26, 2017; Aug. 7, 2018; Aug. 4, 2020; Apr. 11, 2023; May 14, 2024; Oct. 22, 2024; Oct. 1, 2025; Dec. 30, 2025>

1. In cases of State agencies, any of the following persons:

a. The Minister of Economy and Finance; Minister of Science and ICT; Minister of Education; Minister of Foreign Affairs; Minister of Unification; Minister of Justice; Minister of National Defense; Minister of the Interior and Safety; Minister of Patriots and Veterans Affairs; Minister of Culture, Sports and Tourism; Minister of Agriculture, Food and Rural Affairs; Minister of Trade, Industry and Resources; Minister of Health and Welfare; Minister of Climate, Energy and Environment; Minister of Employment and Labor; Minister of Gender Equality and Family; Minister of Land, Infrastructure and Transport; Minister of Oceans and Fisheries; and Minister of SMEs and Startups;

b. The Minister of Planning and Budget; Minister of the Office for Government Policy Coordination; Minister of Personnel Management; Minister of Government Legislation; Minister of Food and Drug Safety; Minister of Data and Statistics; and Minister of Intellectual Property;

c. The Commissioner of the National Tax Service; Commissioner of the Korea Customs Service; Administrator of the Public Procurement Service; Administrator of the Korea AeroSpace Administration; Commissioner of the Overseas Koreans Agency; Prosecutor General of Public Prosecutor's Office; Commissioner of the Military Manpower Administration; Commissioner of the Defense Acquisition Program Administration; Commissioner General of the Korea National Police Agency; Commissioner of the National Fire Agency; Administrator of the Korea Heritage Service; Administrator of the Rural Development Administration; Minister of the Korea Forest Service; Commissioner of the Korea Disease Control and Prevention Agency; Administrator of the Korea Meteorological Administration; Administrator of the National Agency for Administrative City Construction; Administrator of the Saemangeum Development and Investment Agency; Commissioner of the Korea Coast Guard;

d. The Chairperson of the Board of Audit and Inspection of Korea; Chairperson of the Korea Media and Communications Commission; Chairperson of the Fair Trade Commission; Chairperson of the Financial Services Commission; Chairperson of the Anti-Corruption and Civil Rights Commission; Chairperson of the Personal Information Protection Commission; and the Chairperson of the Nuclear Safety and Security Commission;

2. In cases of local governments, any of the following persons:

a. The Special Metropolitan City Mayor; a Metropolitan City Mayor; a Special Self-Governing City Mayor; a Do Governor; and a Special Self-Governing Province Governor;

b. The Superintendent of Education of the Special Metropolitan City, of a Metropolitan City, of a Special Self-Governing City, of a Do, and of a Special Self-Governing Province;

c. The head of a Si/Gun/Gu (referring to the head of an autonomous Gu);

3. In cases of corporations incorporated pursuant to any Special Act, any of the following persons:

a. The Chairperson of the National Agricultural Cooperative Federation under the Agricultural Cooperatives Act;

b. The Chairperson of the National Federation of Fisheries Cooperatives under the Fisheries Cooperatives Act;

c. The Chairperson of the National Forestry Cooperatives Federation under the Forestry Cooperatives Act;

d. The Governor of the Bank of Korea under the Bank of Korea Act;

e. Deleted; <Aug. 7, 2018>

f. The Chairperson of the Korea Federation of Small and Medium Business under the Small and Medium Enterprise Cooperatives Act;

g. The Chairperson of the Korea Chamber of Commerce and Industry under the Chambers of Commerce and Industry Act;

4. The head of a public institution referred to in Article 5 of the Act on the Management of Public Institutions;

5. The head of a local public corporation or agency under the Local Public Enterprises Act;

6. The head of a local medical center under the Act on the Establishment and Management of Local Medical Centers.

Article 4(Notification of purchase plans and purchase records) #

(1) The head of a public institution referred to in any subparagraph of Article 3 shall notify, each fiscal year, the Minister of SMEs and Startups of a purchase plan including its target ratio for purchase of small and medium enterprise-manufactured products and purchase records of such products for the preceding year, by January 31 of the relevant year, pursuant to Article 5(1) of the Act. <Amended on Jan. 12, 2016; Jul. 26, 2017>

(2) When preparing purchase plans and purchase records under paragraph (1), the Administrator of the Public Procurement Service shall do so separately for domestic, Government-required commodities prescribed by the Government Procurement Act and the Enforcement Decree of the same Act and for contracts for facility construction delegated to him or her by the heads of relevant end-user institutions, respectively; and the heads of the other public institutions shall prepare purchase plans and purchase records, separately for contracts for purchase they have entrusted to the Administrator of the Public Procurement Service and for goods, services or construction works (hereinafter referred to as "products") purchased directly, respectively.

(3) The target ratio for purchase of small and medium enterprise-manufactured products under paragraph (1) shall be at least 50 percent of the total amount of products to be purchased by the relevant institution in the relevant year; provided, where the head of a public institution finds it impracticable to achieve the target ratio of at least 50 percent in light of the nature of the public institution, he or she may separately determine a target ratio for purchase after consultation with the Minister of SMEs and Startups. <Amended on Jul. 26, 2017>

(4) The Minister of SMEs and Startups shall publicly announce each public institution's annual target ratio for purchase of small and medium enterprise-manufactured products by April 30 each year. <Amended on Jul. 26, 2017>

Article 5(Matters to be included in purchase plans and purchase records) #

(1) A purchase plan referred to in Article 5(1) of the Act, shall include the following: <Amended on Jul. 26, 2017; Aug. 7, 2018>

1. The target ratio for purchase of small and medium enterprise-manufactured products to the total purchase, and the target amount of such products to purchase;

2. The target amount of each good, each construction work and each service to purchase;

3. The target ratio for purchase of products manufactured with technology developed by small and medium enterprises, subject to preferential purchase under Article 14(1) of the Act (hereinafter referred to as "products manufactured with technology developed by small and medium enterprises, subject to preferential purchase"), and the target amount of such products to purchase;

4. The target ratio for purchase of products manufactured by female-owned businesses defined in Article 9(3) of the Act on Support for Female-Owned Businesses, and the target amount of such products to purchase;

5. The target ratio for purchase of products of enterprises owned or operated by persons with disabilities under Article 9-2(3) of the Act on the Facilitation of Entrepreneurial Activities of Persons with Disabilities, and the target amount of such products to purchase;

6. Any other matters deemed by the Minister of SMEs and Startups as necessary to increase the purchase of small and medium enterprise-manufactured products.

(2) The purchase records of small and medium enterprise-manufactured products referred to in Article 5(1) of the Act shall include the following: <Amended on Jun. 27, 2011; Jul. 26, 2017; Feb. 18, 2020>

1. Purchase records of products referred to in any subparagraph of paragraph (1) (where the purchase records of products are below the initial target, including the reason for the failure to meet the target);

2. Records of direct purchase of each individual product selected and publicly notified by the Minister of SMEs and Startups pursuant to Article 12(2) of the Act, if the relevant public institution's purchase records of construction works in the preceding year, exceed 100 billion won.

Article 6(Designation of competing products among small and medium enterprises) #

(1) Where the Minister of SMEs and Startups intends to designate a competing product among small and medium enterprises (hereinafter referred to as "competing product") pursuant to Article 6(1) of the Act, he or she shall designate and publicly notify a competing product upon the recommendation of the Chairperson of the Korea Federation of Small and Medium Businesses (hereinafter referred to as the "Chairperson of the Federation") and in consultation with the head of a relevant central administrative agency, before the commencement of the fiscal year immediately following the year in which the term of validity of the designation of a competing product prescribed in paragraph (6) expires. <Amended on Jul. 8, 2022; Feb. 18, 2020; Mar. 8, 2022>

(2) Where the Chairperson of the Federation intends to recommend competing products pursuant to paragraph (1), he or she shall submit a written recommendation which includes the following: <Added on Mar. 8, 2022>

1. Reasons for recommending the products and the need to designate them;

2. Current status and prospect of the manufacture, production, and sale of the products to be recommended;

3. Whether, with regard to the products to be recommended, it is possible to commence a limited competitive tendering process open only to small and medium enterprises or a selective competitive tendering process open only to invited small and medium enterprises under Article 7(1) of the Act (hereinafter referred to as "competitive tendering process open only to small and medium enterprises");

4. Impacts of the products to be recommended on relevant industries and enterprises, where they are designated as competing products;

5. Other matters determined and publicly notified by the Minister of SMEs and Startups as necessary to recommend competing products.

(3) Where the details of a written recommendation submitted pursuant to paragraph (2) or documents regarding recommended products are insufficient or incomplete, the Minister of SMEs and Startups may request the supplementation of such details or documents. <Added on Mar. 8, 2022>

(4) Where the Minister of SMEs and Startups deems it particularly necessary to additionally designate or to exclude competing products, he or she may separately designate and publicly notify the competing products to be added or excluded in consultation with the head of a relevant central administrative agency, notwithstanding the deadline referred to in paragraph (1). <Amended on Jul. 26, 2017; Feb. 18, 2020; Mar. 8, 2022>

(5) Where the head of a relevant central administrative agency intends to request exclusion of a product from designation as a competing product under the latter part of Article 6(2) of the Act, he or she shall do so in writing, stating the ground, necessity, etc. for such exclusion, taking into account the following: <Amended on Mar. 8, 2022>

1. Whether it is possible to commence a competitive tendering process open only to small and medium enterprises with regard to the product for which the request for exclusion is to be made;

2. Whether it is necessary to nurture small and medium enterprises in relation to the product for which the request for exclusion is to be made.

(6) The term of validity of the designation of a competing product shall be the following relevant period: <Amended on Mar. 8, 2022>

1. A competing product designated and publicly notified under paragraph (1): Three years from the date the designation takes effect;

2. A competing product designated and publicly notified under paragraph (4): The period from the date the designation takes effect to the date the term of validity prescribed in subparagraph 1 expires.

(7) Except as provided in paragraphs (1) through (6), details necessary for designating competing products, such as procedures for designating competing products, shall be determined and publicly notified by the Minister of SMEs and Startups. <Amended on Jul. 26, 2017; Mar. 8, 2022>

Article 7(Exceptions to competitive tendering process open only to small and medium enterprises) #

(1) "Extenuating circumstances prescribed by Presidential Decree" in Article 7(1) of the Act means any of the following: <Amended on May 6, 2013; Jan. 12, 2016>

1. Where the head of a public institution purchases small and medium enterprise-manufactured products specified as subject to preferential purchase or permitted to be purchased under negotiated contract, by this Act and other statutes;

2. Where the head of a public institution concludes a negotiated contract with a small or micro enterprise recommended by a cooperative, pursuant to Article 8;

3. Where it is intended to newly call for tenders through competitive tendering process other than competitive tendering process open only to small and medium enterprises, after tendering has failed because no qualified small and medium enterprises participated in competitive tendering process open only to small and medium enterprises or due to any other reason;

4. Where it is intended to make a purchase by other than competitive tendering process open only to small and medium enterprises due to the relevant public institution's special circumstances, including where particular technology or services are required.

(2) Where the head of a public institution intends to enter into a procurement contract by other than competitive tendering process open only to small and medium enterprises in any case specified in any subparagraph of paragraph (1), he or she shall either state the ground for doing so in the relevant public notice of a tender or enter such ground into the Korea ON-line E-Procurement System under the Electronic Procurement Utilization and Promotion Act or the designated information processing system under Article 6-2(2) of the Enforcement Decree of the Act on Contracts to Which a Local Government Is a Party. <Added on Jan. 12, 2016>

(3) "Method prescribed by Presidential Decree" in the proviso of Article 7(2) of the Act means any of the following methods to determine a successful tenderer: <Amended on Jan. 12, 2016; Sep. 29, 2020>

1. Contracts with multiple suppliers under Article 13 of the Government Procurement Act;

2. Competitive tendering process in a desired quantity referred to in Article 17 of the Enforcement Decree of the Act on Contracts to Which the State Is a Party, or Article 17 of the Enforcement Decree of the Act on Contracts to Which a Local Government Is a Party;

3. Tendering in two-step competitions, etc. referred to in Article 18 of the Enforcement Decree of the Act on Contracts to Which the State Is a Party or Article 18 of the Enforcement Decree of the Act on Contracts to Which a Local Government Is a Party;

4. Any other method of determining a successful tenderer, other than examining the capabilities to fulfill contracts prescribed in the Act on Contracts to Which the State Is a Party or any other contract-related statutes or regulations.

(4) Where procurement prices of competing products considerably decrease or where small and medium enterprises suffer any other highly significant impact by a method of determining a successful tenderer, other than examining the capabilities to fulfill contracts under paragraph (3), the Minister of SMEs and Startups may request the head of the relevant public institution to hold consultations on the method, etc. of determining a successful tenderer, and the head of the public institution so requested shall reflect the outcomes of the consultations, except in extenuating circumstances. <Amended on Jan. 12, 2016; Jul. 26, 2017>

(5) "Contracting consortium which meets the requirements prescribed by Presidential Decree" in Article 7(3) of the Act, means a contracting consortium satisfying all the following requirements: <Amended on Jan. 12, 2016>

1. At least three small or micro enterprises shall be included therein;

2. All the small and medium enterprises that constitute a contracting consortium shall obtain the confirmation of direct production pursuant to Article 9(1) of the Act.

(6) With regard to competitive tendering process open only to small and medium enterprises, the head of a public institution shall determine the final successful tenderer by examining the capabilities of relevant small and medium enterprises to fulfill the relevant contract, starting from a tenderer whose tender price is the lowest and not exceeding the budget price, in accordance with the detailed standards for evaluating capabilities to fulfill contracts determined and publicly notified by the Minister of SMEs and Startups under Article 7(4) of the Act. In such cases, he or she shall reflect, in the detailed standards for evaluating the capabilities to fulfill contracts, matters to increase the opportunities for small or micro enterprises to be jointly awarded a contract under Article 7(3) of the Act. <Amended on Jan. 12, 2016; Jul. 26, 2017>

(7) "Those prescribed by Presidential Decree, such as small and medium enterprise cooperatives" in the latter part of Article 7(4) of the Act means cooperatives that satisfy all the requirements specified in any subparagraph of Article 9(2). <Amended on Jan. 12, 2016>

(8) Except as provided in paragraphs (1) through (7), matters necessary for operating a system for competitive tendering open only to small and medium enterprises for competing products, such as verifying small and medium enterprises, shall be determined and publicly notified by the Minister of SMEs and Startups. <Amended on Jan. 12, 2016; Jul. 26, 2017>

Article 8(Negotiatedcontracts concluded upon recommendation of cooperatives) #

(1) The head of a public institution may conclude a negotiated contract with any small or micro enterprise recommended by a cooperative pursuant to paragraph (2).

(2) Where the head of a public institution intends to conclude a negotiated contract for competing products according to any of the following grounds, he or she may request the relevant cooperative to recommend small or micro enterprises which have the capabilities to fulfill the contract and also satisfy the purchasing conditions. In such cases, the public institution shall conclude a contract with any of the small or micro enterprises recommended by the cooperative, by determining the price pursuant to Article 30(2) of the Enforcement Decree of the Act on Contracts to Which the State Is a Party or Article 30(2) of the Enforcement Decree of the Act on Contracts to Which a Local Government Is a Party: <Amended on Jul. 21, 2010; Aug. 25, 2020; Jul. 6, 2021; Oct. 22, 2024>

1. Article 26(1)5a of the Enforcement Decree of the Act on Contracts to Which the State Is a Party;

2. Article 25(1)5 of the Enforcement Decree of the Act on Contracts to Which a Local Government Is a Party.

(3) Upon receipt of a request for recommendation from the head of a public institution under paragraph (2), the relevant cooperative shall recommend at least five small or micro enterprises upon receipt of applications therefrom; provided, the cooperative may recommend the same number of small or micro enterprises as applicants if three or four small or micro enterprises submit an application for recommendation, and at least two small or micro enterprises if the estimated price is less than 20 million won. <Amended on May 6, 2013>

(4) Public institutions requesting recommendations, cooperatives making recommendations, and small or micro enterprises submitting an application for recommendation pursuant to paragraph (2) or (3) shall use the purchase information network. <Amended on Feb. 18, 2020>

(5) Details about the annual limits on negotiated contracts that each small or micro enterprise is permitted to conclude upon the recommendation of a cooperative, the annual limits on recommendation it can be accorded from a cooperative, the method of recommendation, the method, etc. of using the purchase information network referred to in paragraph (4) shall be prescribed and publicly notified by the Minister of SMEs and Startups. <Amended on Jul. 26, 2017>

Article 9(Eligibility for participation in competitive tendering process open only to small and medium enterprises) #

(1) Any small or medium enterprise (excluding cooperatives) participating in competitive tendering process open only to small and medium enterprises pursuant to Article 8(1) of the Act shall meet all the following requirements:

1. Facilities capable of directly producing and supplying competing products;

2. The requirements specified in any subparagraph of Article 12(1) of the Enforcement Decree of the Act on Contracts to Which the State Is a Party.

(2) Where a cooperative intends to participate in competitive tendering process open only to small and medium enterprises pursuant to Article 8(1) of the Act, it shall meet all the following requirements and may participate in such competitive tendering process only for the products it produces or supplies; provided, if it is deemed necessary for at least two cooperatives to participate in competitive tendering process open only to small and medium enterprises, in order to ensure fair competition, the Minister of SMEs and Startups may publicly notify relevant products separately: <Amended on Jun. 28, 2010; Mar. 23, 2013; Jul. 26, 2017>

1. At least 1/2 of the members of the relevant cooperative shall be small and medium enterprises (limited to small and medium enterprises defined in Article 2 of the Framework Act on Small and Medium Enterprises) that meet all the requirements specified in any subparagraph of paragraph (1); provided, if the relevant cooperative is a cooperative prescribed and publicly notified by the Minister of SMEs and Startups, such as a cooperative incorporated based on any manufacturing method or raw materials; and less than 1/2 of its entire members produce any competing product, at least 1/2 of its members producing such competing product shall be small and medium enterprises that meet all the requirements referred to in any subparagraph of paragraph (1);

2. The relevant cooperative shall prepare and implement standards for quality control and follow-up management of competing products;

3. The articles of incorporation shall specify that the relevant cooperative is permitted to participate in competitive tendering process open only to small and medium enterprises;

4. The relevant cooperative shall have at least two full-time employees who have completed at least 10 hours each year, of education recognized by the Minister of SMEs and Startups as relevant to public procurement;

5. The relevant cooperative shall satisfy other matters determined by Decree of the Ministry of SMEs and Startups after consultation with the Fair Trade Commission in order to enhance the effectiveness of competitive tendering process, such as the standards for the market share to be held by cooperatives participating in tenders in a market for competitive tendering process open only to small and medium enterprises.

(3) Deleted. <Sep. 19, 2017>

Article 9-3(Dominant or subordinate relationship) #

"Dominant or subordinate relationship prescribed by Presidential Decree" in Article 8-2(1)2 of the Act means any of the following relationships:

1. The parent-subsidiary relationship referred to in Article 3-2 of the Enforcement Decree of the Framework Act on Small and Medium Enterprises;

2. Any of the following relationships between a large enterprise and a small or medium enterprise:

a. Where the representative, largest shareholder or biggest equity holder of a large enterprise defined in subparagraph 2 of Article 2 of the Act on the Promotion of Collaborative Cooperation between Large Enterprises and Small-Medium Enterprises (hereafter in this subparagraph, referred to as "large enterprise") or any executive officer (referring to an executive defined in subparagraph 5 of Article 2 of the Monopoly Regulation and Fair Trade Act; hereafter in this subparagraph, the same shall apply) of such large enterprise concurrently serves as an executive officer of a small or medium enterprise or is assigned as an executive officer to a small or medium enterprise;

b. Where a large enterprise is delegated by a small or medium enterprise to engage, and thus engages, in the main business or operating activities or the main part of transactions of such small or medium enterprise;

c. Where a large enterprise leases its assets to, or guarantees the payment of debts for, a small or medium enterprise, of a value or amount equivalent to an amount exceeding the total number of stocks issued or the total amount of investment (referring to the total amount of assets in cases of a sole proprietor) made by such small or medium enterprise;

d. Where a large enterprise or a person in a relationship specified in Article 3-2(1)1a of the Enforcement Decree of the Framework Act on Small and Medium Enterprises with a large enterprise, appoints or dismisses the chief executive officer of a small or medium enterprise; or appoints, or is able to appoint, at least 50/100 of its executives according to a contract or agreement with another major shareholder (referring to a shareholder who owns at least 10/100 of the total number of issued voting stocks on his or her own account in whosever name or exercises de facto control over important matters relating to the management of the relevant small or medium enterprise by appointing or dismissing its executive officers or by any other means) of the small or medium enterprise;

e. Where a large enterprise invests, lends, or guarantees at least 51/100 of the total cost incurred in starting a business which produces competing products, such as the cost of establishing a factory (referring to rental charges, if the factory is leased out) and the cost of installing production facilities, for a small or medium enterprise.

[This Article Added on Apr. 3, 2013]

Article 11(Increase in direct purchase of construction materials) #

(1) "The construction project in an amount at least equivalent to that prescribed by Presidential Decree" in the main clause of Article 12(3) of the Act, means a construction project, the estimated budget price of which is at least four billion won, in cases of general construction projects specified in Appendix 1 of the Enforcement Decree of the Framework Act on the Construction Industry; and a construction project, the estimated budget price of which is at least 300 million won, in cases of specialized construction projects specified in Appendix 1 of the Enforcement Decree of the same Act; electrical construction projects under the Electrical Construction Business Act; information and communications construction projects under the Information and Communications Construction Business Act; or fire-fighting system installation projects under the Fire-Fighting System Installation Business Act. <Amended on Sep. 19, 2017; Feb. 18, 2020>

(2) Where the head of a public institution places an order for a construction project referred to in paragraph (1), the purchase of any product selected and publicly notified by the Minister of SMEs and Startups pursuant to Article 12(2) of the Act (hereinafter referred to as "product subject to direct purchase") shall be done by any of the following methods: <Amended on Sep. 19, 2017; Feb. 18, 2020>

1. In cases of falling under any of the following: he or she shall directly purchase a product subject to direct purchase by reflecting it in the design as government- supplied materials for the relevant construction project; provided, in cases of falling under item a, where the estimated price of a detailed item constituting a product subject to direct purchase is less than five million won, he or she need not directly purchase such detailed item:

a. Where the estimated price of a product (excluding an item falling under item b) is not less than 40 million won;

b. Where the estimated price of a product subject to direct purchase falling under any of the following item b is not less than 10 million won:

1) A product to be preferentially purchased in accordance with statutes or regulations related to property and physical safety of the people; rationalization of energy use; promotion of technology development; environmental conservation, etc.;

2) A product designated by the Minister of SMEs and Startups after consultation with the heads of the relevant central administrative agencies, for which special performance, specifications, marks, etc. are deemed necessary;

2. In cases of not falling under any item of subparagraph 1: he or she may directly purchase a product subject to direct purchase.

(3) Where the head of a public institution fails to make direct purchase under the proviso of Article 12(3) of the Act for any reason, he or she shall publicize such reason when giving public notice of a tender.

(4) Detailed matters for direct purchase of materials for construction projects, other than those prescribed in paragraph (1) through (3) shall be determined and publicly notified by the Minister of SMEs and Startups. <Added on Sep. 19, 2017>

Article 12(Preferential purchase of products manufactured with technology developed by small and medium enterprises) #

(1) "Persons prescribed by Presidential Decree" in Article 13(2) of the Act means any of the following:

1. A person that obtains financial assistance, such as contributions or subsidies, from the Government or a local government directly or indirectly;

2. An educational institution referred to in Article 3 of the Pension for Private School Teachers and Staff Act.

(2) Pursuant to Article 13(2) of the Act, each fiscal year, the Minister of SMEs and Startups may request the head of a public institution referred to in any subparagraph of Article 3 to submit a report on its purchase plan, which includes the target ratio for purchase of products manufactured with technology developed by small and medium enterprises, subject to preferential purchase, and purchase records of such products for the preceding year, by January 31 of the relevant year. <Added on Jan. 12, 2016; Jul. 26, 2017>

(3) The target ratio for purchase of products manufactured with technology developed by small and medium enterprises, subject to preferential purchase under paragraph (2), shall be at least 15 percent of the amount of small and medium enterprise-manufactured goods purchased; provided, where the head of a public institution finds it impracticable to achieve the target ratio of 15 percent in light of business purposes of the public institution and the nature of purchase of goods, he or she may separately determine a target ratio for purchase in consultation with the Minister of SMEs and Startups. <Amended on Jan. 12, 2016; Jul. 26, 2017; Feb. 18, 2020>

(4) The Minister of SMEs and Startups shall publicly announce the annual target ratio for purchase of products manufactured with technology developed by small and medium enterprises, subject to preferential purchase for each public institution by April 30 each year after consultation with the head of each public institution. <Amended on Jan. 12, 2016; Jul. 26, 2017>

(5) A public institution shall notify the Minister of SMEs and Startups or the head of relevant central administrative agency of the details of measures for preferential purchase taken, such as relevant products (including the specifications thereof), the contracting method and the contracting price, if it has taken such measures pursuant to Article 13(3) of the Act;, and the reason for a failure to take measures for preferential purchase, if it has not taken such measures, within 60 days from the date it first received the request prescribed in Article 13(2) of the Act. <Amended on Jun. 27, 2011; Jan. 12, 2016; Jul. 26, 2017>

(6) Except as otherwise expressly provided for in paragraphs (1) through (5), matters relating to operation, etc. of the preferential purchase system shall be prescribed and publicly notified by the Minister of SMEs and Startups. <Amended on Jan. 12, 2016; Jul. 26, 2017>

(7) "Large-scale national project that conforms to the standards, etc. for the amount prescribed by Presidential Decree" in Article 13(4) of the Act, means a national project, the total project cost of which is at least 50 billion won and which receives financial assistance of at least 30 billion won from the State. <Added on Jul. 6, 2016>

Article 13-2(Pilot purchase program for products manufactured with technology developed by small and medium enterprises) #

(1) An enterprise allowed to participate in the pilot purchase program for products manufactured with technology developed by small and medium enterprises operated under Article 14-2(1) of the Act (hereinafter referred to as "pilot purchase program for products manufactured with technology developed by small and medium enterprises") shall be an enterprise meeting all of the following requirements:

1. A small and medium enterprise (excluding a cooperative);

2. A person who has developed a product referred to in the subparagraphs of Article 13, or a product manufactured with technology developed by small and medium enterprises that is eligible for the pilot purchase program for products manufactured with technology developed by small and medium enterprises as publicly notified by the Minister of SMEs and Startups.

(2) An enterprise that intends to participate in the pilot purchase program for products manufactured with technology developed by small and medium enterprises shall submit to the Minister of SMEs and Startups an application prescribed by Decree of the Ministry of SMEs and Startups through the purchase information network, along with the following documents:

1. Data regarding the current status of the enterprise submitting the application;

2. A description and specifications regarding the product intended for the application;

3. Data substantiating that the requirements under the subparagraphs of paragraph (1) are satisfied.

(3) A public institution that intends to participate in the pilot purchase program for products manufactured with technology developed by small and medium enterprises shall submit to the Minister of SMEs and Startups an application prescribed by Decree of the Ministry of SMEs and Startups through the purchase information network, along with data regarding the current status of the public institution.

(4) Upon receipt of an application under paragraph (3), the Minister of SMEs and Startups shall decide to purchase products on behalf of public institutions by evaluating the following matters to select products to be purchased:

1. Innovativeness and potential growth of a product;

2. Capabilities of an enterprise participating the pilot purchase program, such as a production capacity and quality control of products;

3. Necessity to support pilot purchase, such as the possibility of preferential purchase in the public procurement market.

(5) When evaluating a product under paragraph (4), the Minister of SMEs and Startups shall hear the opinions of enterprises participating the pilot purchase program, public institutions, and related experts.

(6) Except as provided in paragraphs (1) through (5), matters necessary for the procedures, detailed standards, etc. for evaluating products manufactured with technology developed by small and medium enterprises shall be determined and publicly notified by the Minister of SMEs and Startups.

[This Article Added on Oct. 8, 2020]

Article 13-6(Designation of dedicated institutions) #

(1) An institution designated under Article 14-5(1) of the Act dedicated to supporting the pilot purchase of products manufactured with technology developed by small and medium enterprises and the purchase of on-site inspection-type products manufactured with technology developed by small and medium enterprises (hereinafter referred to as "dedicated institution") shall perform the following affairs:

1. Operating the pilot purchase program for products manufactured with technology developed by small and medium enterprises;

2. Supporting the facilitation of the pilot purchase program for products manufactured with technology developed by small and medium enterprises;

3. Supporting on-site inspections of on-site inspection-type products manufactured with technology developed by small and medium enterprises;

4. Other affairs deemed necessary by the Minister of SMEs and Startups to promote the purchase of products manufactured with technology developed by small and medium enterprises.

(2) Requirements for the designation as a dedicated institution shall be as follows:

1. An institution or an organization shall mainly engage in a project falling under any of the subparagraphs of Article 26(1) of the Act;

2. A dedicated organization that performs the affairs provided in the subparagraphs of paragraph (1) and office space shall be prepared.

(3) An entity which intends to be designated as a dedicated institution shall submit an application prescribed by Decree of the Ministry of SMEs and Startups to the Minister of SMEs and Startups, along with documents substantiating that the requirements under the subparagraphs of paragraph (2) are satisfied.

(4) Upon designation of a dedicated institution, the Minister of SMEs and Startups shall make a public announcement of such designation in the Official Gazette or on the website of the Ministry of SMEs and Startups.

(5) A dedicated institution shall submit a business plan for the relevant year and a performance report for the preceding year to the Minister of SMEs and Startups by the end of February each year.

[This Article Added on Oct. 8, 2020]

Article 16(Payment of subsidies) #

(1) Where a small or medium enterprise certified under Article 15(3) of the Act requests the expenses specified in Article 14(1)1 through 3 after undergoing inspections on its products required for performance certification or inspections on its factories conducted by a testing institute, the Minister of SMEs and Startups may partially subsidize such expenses. In such cases, the relevant small or medium enterprise shall submit a test report, etc. expressly stating the results of performance tests, to the Minister of SMEs and Startups. <Amended on Jul. 26, 2017>

(2) Where the Minister of SMEs and Startups intends to subsidize funds required for performance certification and performance liability insurance services (hereafter in this Article, referred to as "subsidies") pursuant to Article 19(1) of the Act, he or she shall enter into an agreement with the relevant testing institute or performance liability insurer. <Amended on Jul. 26, 2017>

(3) An agreement referred to in paragraph (2) shall include the following:

1. Tasks and details of the business;

2. A person responsible for conducting the business;

3. Matters concerning the payment, etc. of subsidies;

4. Matters concerning amending the agreement.

(4) A testing institute or performance liability insurer that has entered into an agreement pursuant to paragraph (2) shall submit, to the Minister of SMEs and Startups, the business results of the pertinent year and a business plan for the following year, by December 31 each year. <Amended on Jul. 26, 2017>

(5) The Minister of SMEs and Startups may pay subsidies in installments, taking into account the progress of performance certification and performance liability insurance business. <Amended on Jul. 26, 2017>

(6) Upon receipt of subsidies, the relevant testing institute or performance insurer shall manage the subsidies in a separate account therefor and use the subsidies only for performance certification and performance liability insurance business.

(7) The Minister of SMEs and Startups may inspect the actual operational conditions, etc. of a testing institute or performance liability insurer, and may suspend payment of subsidies to, or fully or partially recover the subsidies already paid from, a testing institute or performance liability insurer if it uses subsidies for any purpose other than originally intended purposes specified in paragraph (6) without just cause. <Amended on Jul. 26, 2017>

(8) A small or medium enterprise intending to obtain subsidies for expenses incurred in obtaining performance certification pursuant to paragraph (1) may apply for such subsidies using the purchase information network, and any other matters concerning assistance to performance certification and performance liability insurance business shall be prescribed and publicly notified by the Minister of SMEs and Startups. <Amended on Jul. 26, 2017>

Article 17-2(Criteria for selecting those eligible for support under support program for mutually beneficial cooperation) #

(1) Criteria for selecting those eligible for support under the support program for mutually beneficial cooperation prescribed in Article 20-2(1) of the Act (hereinafter referred to as the "support program for mutually beneficial cooperation") shall be as follows:

1. Potential growth shall be sufficient in view of the innovativeness of the relevant product, market prospects, etc.;

2. A business plan shall be clear and feasible;

3. Anticipated outcomes of mutually beneficial cooperation with participating enterprises, such large enterprises, shall be achievable;

4. Other criteria publicly notified by the Minister of SMEs and Startups as deemed necessary to strengthen the innovative capabilities of small and medium enterprises shall be satisfied.

(2) A large enterprise or small and medium enterprise who intends to be eligible for support under the support program for mutually beneficial cooperation shall submit an application prescribed by Decree of the Ministry of SMEs and Startups to the Minister of SMEs and Startups, along with the following documents:

1. A business plan;

2. An agreement on sharing roles among participating enterprises in mutually beneficial cooperation, rights, obligations, etc.;

3. Data substantiating that the criteria for selection provided in the subparagraphs of paragraph (1) are met.

(3) Where the Minister of SMEs and Startups intends to select those eligible for support under the support program for mutually beneficial cooperation, he or she shall hear the opinions of participating enterprises and related experts.

(4) "Mutually beneficial cooperation deemed by Presidential Decree" in Article 20-2(2)4 of the Act means any of the following:

1. Mutually beneficial cooperation with enterprises which have relevant technologies to manufacture products using disparate technologies or parts;

2. Mutually beneficial cooperation with enterprises which can innovate the existing technologies or have technologies that can create new social and economic values;

3. Mutually beneficial cooperation with other enterprises deemed to require support so as to facilitate the supply of small and medium enterprise-manufactured products to public institutions, as determined and publicly notified by the Minister of SMEs and Startups.

(5) Details regarding the criteria, procedures, etc. for selecting those eligible for support under the support program for mutually beneficial cooperation under paragraphs (1) through (3) shall be prescribed by Decree of the Ministry of SMEs and Startups.

[This Article Added on Oct. 8, 2020]

Article 18(Duties of public procurement assistance managers) #

(1) A public procurement assistance manager designated pursuant to Article 21(1) of the Act shall perform the following duties: <Amended on Feb. 18, 2020>

1. Examining the appropriateness of public institutions' plans to increase public procurement prepared pursuant to Article 5(1) of the Act;

2. Reviewing the appropriateness of contracts and orders placed under Articles 4(2) and 7(1) of the Act;

3. Investigating whether construction materials have been directly purchased pursuant to Article 12(3) of the Act;

4. Investigating whether measures for preferential purchase have been taken under Article 13(2) of the Act;

5. Examining whether the conclusion of contracts with small and medium enterprises by methods other than a preferential procurement contract under Article 2-3(1)2 and 4 is appropriate;

6. Examining whether purchase of competing products by methods other than competitive tendering process open only to small and medium enterprises pursuant to Article 7(1)4 is appropriate;

7. Performing other duties necessary to efficiently support the public procurement system, such as fact-finding surveys, education, and consultations.

(2) Any of the following persons shall be eligible to become a public procurement assistance manager under Article 21(1) of the Act: <Amended on Jul. 26, 2017; Feb. 18, 2020>

1. A public official of the Ministry of SMEs and Startups;

2. A person involved in contracts or affairs regarding small and medium enterprises, who is recommended by the head of the relevant public institution upon request by the Minister of SMEs and Startups;

3. Any other person designated by the Minister of SMEs and Startups.

(3) The Minister of SMEs and Startups may order a public procurement assistance manager to request necessary data from a public institution or to conduct an investigation by visiting the public institution in order to perform the duties referred to in paragraph (1), and the head of the public institution shall fully cooperate in such request or investigation. <Amended on Jul. 26, 2017>

(4) The Minister of SMEs and Startups may hear opinions of experts related to contracts or tenders in order to enhance effectiveness of public procurement assistance managers' business. <Amended on Jul. 26, 2017>

(5) Details about the designation procedures for, operation, etc., of public procurement assistance managers, shall be prescribed and publicly notified by the Minister of SMEs and Startups. <Amended on Jul. 26, 2017>

Article 20(Provision of information on public institutions and small and medium enterprises) #

(1) "Information prescribed by Presidential Decree, such as whether a person is classified as a small or medium enterprise" in Article 25(1) of the Act, means any of the following: <Amended on Jul. 26, 2017>

1. Information to verify eligibility to participate in competitive tendering process open only to small and medium enterprises;

2. Information to examine capabilities to fulfill contracts;

3. Information to verify the credit status of the relevant small and medium enterprise when concluding a contract;

4. Information to verify the reliability of product quality;

5. Information to determine whether the relevant product amounts to the products manufactured with technology developed by small and medium enterprises, subject to preferential purchase;

6. Public institutions' annual purchase plans for, and purchase records, of small and medium enterprise-manufactured products;

7. Information on negotiated contracts executed upon the recommendation of cooperatives;

8. Information on assistance for performance certification or cost accounting;

9. Any other information prescribed by the Minister of SMEs and Startups to facilitate public institutions' purchase of small and medium enterprise-manufactured products.

(2) The Minister of SMEs and Startups shall take necessary measures to enable public institutions and small and medium enterprises to freely use the purchase information network. <Amended on Jul. 26, 2017>

(3) The Minister of SMEs and Startups shall inspect the information and data on small and medium enterprises registered in the purchase information network, on a regular or frequent basis; and if a small or medium enterprise is found to have provided false information or data (hereinafter referred to as "false information"), he or she may publish such fact in the purchase information network or the information processing system publicly notified by the Minister of Economy and Finance, and delete the information on such small and medium enterprise, therefrom. <Amended on Jul. 26, 2017; Dec. 30, 2025>

(4) If it is necessary to publish the fact that false information has been provided and to delete such information from the purchase information network pursuant to paragraph (3), the Minister of SMEs and Startups shall provide the relevant small or medium enterprise with an opportunity to provide explanations or to submit explanatory materials. <Amended on Jul. 26, 2017>

Article 21(Support agencies for development of markets) #

"Agencies or organizations prescribed by Presidential Decree" in Article 26 (2) of the Act means any of the following agencies or organizations: <Amended on Jun. 28, 2010; Mar. 23, 2013; Jul. 26, 2017; Apr. 2, 2019; Oct. 8, 2020; Oct. 8, 2024; Oct. 1, 2025>

1. Korea SMEs and Startups Agency referred to in Article 68 of the Small and Medium Enterprises Promotion Act;

2. Korea Trade-Investment Promotion Agency under the Korea Trade-Investment Promotion Agency Act;

3. Korea Trade Insurance Corporation referred to in Article 37 of the Trade Insurance Act;

4. Korea Institute of Design Promotion referred to in Article 11 of the Industrial Design Promotion Act;

5. Korea Institute for Industrial Economics and Trade established pursuant to Article 8 of the Act on the Establishment, Operation and Fostering of Government-Funded Research Institutes;

6. Korea Institute of Science and Technology Information and Korea Institute of Industrial Technology established pursuant to Article 8 of the Act on the Establishment, Operation and Fostering of Government-Funded Science and Technology Research Institutes;

7. Korea Institute for Advancement of Technology and Korea Testing Laboratory established pursuant to Article 38 or 41 of the Industrial Technology Innovation Promotion Act;

8. Korea Federation of Small and Medium Business referred to in Article 3 of the Small and Medium Enterprise Cooperatives Act;

9. The Korea SMEs & Startups Distribution & Marketing Agency established under Article 69 of the Small and Medium Enterprises Promotion Act;

10. National IT Industry Promotion Agency established under Article 26 of the Information and Communications Technology Industry Promotion Act;

11. Korea International Trade Association established with permission from the Minister of Trade, Industry and Resources under Article 32 of the Civil Act;

12. Large and Small Business, Agriculture, and Fisheries Cooperation Foundation established under Article 20 of the Act on the Promotion of Mutually Beneficial Cooperation between Large Enterprises and Small and Medium Enterprises;

13. Any other agency or organization deemed necessary by the Minister of SMEs and Startups.

Article 23(Standards and procedures for assistance for collective trademark) #

(1) In order to obtain assistance for expenses for the development of a collective trademark, etc. pursuant to Article 28(2) of the Act, at least five small and medium enterprises shall participate in developing a single collective trademark.

(2) The Minister of SMEs and Startups shall exclude any of the following types of business from those eligible for assistance under paragraph (1): <Amended on Jul. 26, 2017; Oct. 1, 2025>

1. A type of business classified as a business operating ballrooms, golf courses, skiing facilities, drinking places or saunas or as a gambling and betting business, according to the Korean Standard Industrial Classification publicly notified by the Minister of Data and Statistics under the Statistics Act;

2. A type of business publicly notified by the Minister of SMEs and Startups, as deemed unfit for assistance which is provided for sound development of small and medium enterprises.

(3) Small and medium enterprises intending to obtain assistance under Article 28(2) of the Act shall select any of the following persons as the representative of the relevant project for a collective trademark (hereafter in this Article, referred to as "trademark representative"), and have the trademark representative submit to the Minister of SMEs and Startups an application for assistance for a collective trademark determined by the Minister of SMEs and Startups, along with a plan to promote the project and the rules on introducing and using collective trademarks: <Amended on Jul. 26, 2017>

1. A cooperative;

2. A small or medium enterprise representing the project for a collective trademark;

3. A corporation established by small and medium enterprises in order to perform the project for a collective trademark.

(4) Where a collective trademark selected as eligible for assistance falls under any of the following cases, the Minister of SMEs and Startups may suspend assistance therefor: <Amended on Jul. 26, 2017>

1. Where a small or medium enterprise that has introduced and used the relevant collective trademark (hereinafter referred to as "participating enterprise") operates any business specified in any subparagraph of paragraph (2);

2. Where the number of participating enterprises falls below five;

3. Where the number of participating enterprises falls below five, excluding participating enterprises which do not engage in business due to suspension, discontinuation, etc. of business;

4. Where products under a collective trademark are not produced or sold for at least one year without special reasons not to do so;

5. Where any participating enterprise harms consumers by selling inferior products under a collective trademark or by cheating them;

6. Where it is deemed impracticable to normally promote a project for a collective trademark due to disputes, etc. between the trademark representative and participating enterprises or between participating enterprises themselves.

(5) Detailed standards and procedures necessary to provide assistance for the development, publicity, etc. of a collective trademark, shall be prescribed and publicly notified by the Minister of SMEs and Startups. <Amended on Jul. 26, 2017>

Article 24(Designation of and assistance for small and medium exporting enterprises and promising items) #

(1) "Small and medium enterprises meeting the standards prescribed by Presidential Decree" in Article 30(1)1 of the Act, means enterprises meeting all the following requirements: <Amended on Jan. 12, 2016; Jul. 26, 2017>

1. Small and medium enterprises that operate manufacturing business, service business related to the manufacturing industry, or knowledge-based service business;

2. Small and medium enterprises that meet the standards prescribed and publicly announced by the Minister of SMEs and Startups for the number of full-time workers or sales growth rates.

(2) "Small and medium enterprises meeting the standards prescribed by Presidential Decree" in Article 30(1)2 of the Act, means enterprises meeting all the following requirements: <Amended on Jan. 12, 2016; Jul. 26, 2017>

1. Small and medium enterprises that operate manufacturing business, service business related to the manufacturing industry, or knowledge-based service business;

2. Small and medium enterprises that meet the standards prescribed and publicly announced by the Minister of SMEs and Startups for exports, the number of full-time workers, or sales growth rates.

(3) "Items meeting the standards prescribed by Presidential Decree" in Article 30(1)3 of the Act, means items determined in consideration of the following selection standards: <Amended on Dec. 6, 2011>

1. Export growth rates in the last three years;

2. The scale of the export market;

3. The market share in the last three years and the possibility of expansion thereof;

4. Comparative advantage in terms of technology and prices, compared with competing countries;

5. The share of exports by small and medium business enterprises.

(4) Deleted. <Dec. 6, 2011>

(5) Deleted. <Dec. 6, 2011>

(6) Applications, procedures, etc. for the designation of small and medium enterprises referred to in paragraph (1) or (2) shall be prescribed and publicly notified by the Minister of SMEs and Startups. <Amended on Dec. 6, 2011; Jul. 26, 2017>

Article 27(Entrustment of duties) #

(1) Pursuant to Article 34(2) of the Act, the Minister of SMEs and Startups shall entrust the following duties to the Korea Federation of Small and Medium Business or companies distributing products manufactured by small and medium enterprises and venture businesses (referring to the companies established to assist small and medium enterprises and venture businesses in finding new markets for their products under Article 69 of the Small and Medium Enterprises Promotion Act; hereafter in this Article, the same shall apply): <Amended on Jun. 27, 2011; Jul. 26, 2017; Mar. 8, 2022>

1. Verifying cooperatives' eligibility to participate in competitive tendering process open only to small and medium enterprises under Article 8(2) of the Act;

2. Receiving requests for the verification of direct production, verifying direct production, and issuing direct production confirmation certificates under Article 9(4) of the Act;

3. Receiving objection filings, and making and notifying determinations on objections filed under Article 10 of the Act;

4. Revoking the confirmation of direct production, and holding a hearing under Article 11 of the Act;

5. Deleted. <Feb. 18, 2020>

(2) Where the Minister of SMEs and Startups entrusts his or her duties pursuant to paragraph (1), he or she shall publicly notify the institutions entrusted with such duties and the duties entrusted. <Added on Mar. 8, 2022>

(3) The Minister of SMEs and Startups shall entrust the following duties to companies distributing products manufactured by small and medium enterprises and venture businesses under Article 34(2) of the Act: <Added on Feb. 18, 2020; Oct. 8, 2020; Mar. 8, 2022; Oct. 22, 2024>

1. Receiving applications for performance certification under the main clause of Article 15(2) of the Act;

2. Assessment of conformity, inspection of factories, and performance tests on products under Article 15(3) of the Act;

3. Collection of fees associated with inspection of factories, performance tests on products, and maintenance and management of performance certification by the Minister of SMEs and Startups under Article 15(7) of the Act;

4. Inspection of factories and performance tests on products under the latter part of Article 17(4);

5. Receiving applications for selection of those eligible for support under the support program for mutually beneficial cooperation and hearing opinions under Article 20-2(2) of the Act and Article 17-2(2) and (3) of this Decree;

6. Evaluating the implementation of the support program for mutually beneficial cooperation under Article 20-2(3)2 of the Act;

7. Surveying the current status of products manufactured through mutually beneficial cooperation, the share of such products in the public procurement market, etc., as publicly notified by the Minister of SMEs and Startups under Article 20-3(1) of the Act;

8. Surveying the current status of the public purchase of the relevant products, domestic manufacturing companies, etc. under Article 20-3(3) of the Act;

9. Collecting and managing information on places of origin of materials and parts of products supplied to the public procurement market and manufacturers, etc. of such products under Article 20-3(4) of the Act;

10. Providing a list of those eligible for support under the support program for mutually beneficial cooperation and of the relevant products under Article 20-3(5) of the Act and Article 17-5(2) of this Decree;

11. Collecting, registering, revising, reproducing, and providing information on small and medium enterprises and public institutions to establish and operate the purchase information network under Article 25 of the Act;

12. Disclosing the fact that small and medium enterprises provides false information to the purchase information network under Article 20(3) and deleting information on such small and medium enterprises.

(4) Where a company distributing products manufactured by small and medium enterprises and venture businesses intends to delete information on a small or medium enterprise that has provided false information pursuant to paragraph (3)12, he or she shall report such fact to the Minister of SMEs and Startups in advance, and shall submit an annual report on the operation of the purchase information network to the Minister of SMEs and Startups by January 31 of the following year. <Amended on Jun. 27, 2011; Jul. 26, 2017; Feb. 18, 2020; Oct. 8, 2020; Mar. 8, 2022; Oct. 22, 2024>

[Title Amended on Mar. 8, 2022]

ENFORCEMENT DECREE OF THE ACT ON FACILITATION OF PURCHASE OF SMALL AND MEDIUM ENTERPRISE-MANUFACTURED PRODUCTS AND SUPPORT FOR DEVELOPMENT OF THEIR MARKETS

Article 1(Purpose) #

Article 2(Definitions) #

Article 2-2(Preferential procurement contracts with small and medium enterprises) #

Article 2-3(Exceptions to preferential procurement contracts with small and medium enterprises) #

Article 3(Heads of public institutions required to notify purchase plans) #

Article 4(Notification of purchase plans and purchase records) #

Article 5(Matters to be included in purchase plans and purchase records) #

Article 5-2(Request for submission of purchase records) #

Article 6(Designation of competing products among small and medium enterprises) #

Article 7(Exceptions to competitive tendering process open only to small and medium enterprises) #

Article 8(Negotiatedcontracts concluded upon recommendation of cooperatives) #

Article 9(Eligibility for participation in competitive tendering process open only to small and medium enterprises) #

Article 9-2(Requirements for revocation, or suspension, of eligibility for participating in competitive tendering process) #

Article 9-3(Dominant or subordinate relationship) #

Article 9-4(Standards for scope of same kind of business) #

Article 9-5(Matters to be considered in determining whether participation in competitive tendering process is restricted) #

Article 9-6(Standards for restrictions on middle-standing enterprises' participation in competitive tendering process open only to small and medium enterprises) #

Article 10(Confirmation of direct production) #

Article 10-2(Imposition of penalty surcharges) #

Article 11(Increase in direct purchase of construction materials) #

Article 12(Preferential purchase of products manufactured with technology developed by small and medium enterprises) #

Article 12-2(Establishment and operation of support centers for preferential purchase of products manufactured with technology developed by small and medium enterprises) #

Article 13(Designation of products manufactured with technology developed by small and medium enterprises subject to preferential purchase) #

Article 13-2(Pilot purchase program for products manufactured with technology developed by small and medium enterprises) #

Article 13-3(Methods for concluding contracts for products purchased under pilot program) #

Article 13-4(Institutions certifying products manufactured with technology developed by small and medium enterprises) #

Article 13-5(Support for inspections of products manufactured with technology developed by small and medium enterprises which require on-site inspections) #

Article 13-6(Designation of dedicated institutions) #

Article 14(Collecting certification expenses) #

Article 15(Scope of coverage of performance liability insurance) #

Article 16(Payment of subsidies) #

Article 17(Assistance in cost accounting for products manufactured with technology developed by small and medium enterprises subject to preferential purchase) #

Article 17-2(Criteria for selecting those eligible for support under support program for mutually beneficial cooperation) #

Article 17-3(Evaluations of implementation of support program for mutually beneficial cooperation) #

Article 17-4(Reasons for prohibiting participation in support program for mutually beneficial cooperation) #

Article 17-5(Promotion of support program for mutually beneficial cooperation) #

Article 18(Duties of public procurement assistance managers) #

Article 18-2 #

Article 19(Protection of small and medium subcontractors) #

Article 20(Provision of information on public institutions and small and medium enterprises) #

Article 21(Support agencies for development of markets) #

Article 22(Connected production support projects) #

Article 23(Standards and procedures for assistance for collective trademark) #

Article 24(Designation of and assistance for small and medium exporting enterprises and promising items) #

Article 25(Agencies providing export statistics of small and medium enterprises) #

Article 26(Special corporations deemed as small and medium enterprises) #

Article 27(Entrustment of duties) #

Article 28(Re-examination of regulation) #

Article 29(Criteria for imposing administrative fines) #