Assemblyman Bae Jin-kyo: "Repeated Unfair Trade... Fine System Must Be Changed to Reduce Illegal Incentives"
[Asia Economy Reporter Moon Chaeseok] It has been revealed that 93% of the cases reported to the Fair Trade Commission (FTC) for violations of the Subcontracting Act over the past five years were related to non-payment of subcontracting fees.
According to data submitted by the FTC to Bae Jinkyo, a member of the National Assembly's Political Affairs Committee from the Justice Party, a total of 3,329 cases of Subcontracting Act violations were reported to the FTC between 2016 and August 2020. Among these, 3,105 cases, or 93.3%, were violations related to non-payment of fees.
Other cases included 151 instances of failure to provide written documents and 73 cases of unfair determination of subcontracting fees.
In industries such as shipbuilding and construction, it is interpreted that the primary contractors, who hold significantly superior positions compared to subcontractors, continue to abuse this power by withholding payments.
Recently, Hyundai Heavy Industries was fined 970 million won for forcibly taking technical data from a subcontractor they had worked with for over 20 years and then terminating the business relationship. Shinhan Heavy Industries, a subsidiary of Daewoo Shipbuilding & Marine Engineering, was also reported to the prosecution for reducing subcontracting fees by about 500 million won.
Additionally, from 2016 to August of this year, there were 462 cases reported to the FTC for violations of the Franchise Business Act, and 5 cases related to the Agency Act.
Assemblyman Bae stated, "Large corporations repeatedly engage in unfair trade practices against small and medium-sized enterprises. The Subcontracting Act prohibits imposing fines exceeding twice the amount of the subcontracting fees, but for repeated and intentional violations, measures such as imposing fines proportional to operating profits should be introduced to reduce incentives for such behavior."
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