Fair Trade Commission Corrects Acts Restricting Competitors' Association Membership
[Sejong=Asia Economy Reporter Joo Sang-don] The Fair Trade Commission announced on the 19th that the Imported Two-Wheel Vehicle Environment Association corrected its practice of restricting the membership of competing businesses and, together with the Ministry of Environment, improved the association’s articles of incorporation and other regulations that could potentially limit competition.
According to the Fair Trade Commission, the Imported Two-Wheel Vehicle Environment Association established and operated regulations that made it difficult for certain businesses to join the association by imposing unreasonable or discretionary conditions. While membership in the association provides benefits such as simplified certification procedures for emissions, companies that had conflicts with existing members were required to obtain consent from current members upon joining, making membership difficult.
Currently, individual importers must undergo testing by the Korea Environment Corporation and receive certification from the National Institute of Environmental Research to verify that imported two-wheel vehicles meet domestic emission and noise standards. However, association members can skip certification tests for vehicles of the same specifications for one year after initial certification and can import up to 500 units by obtaining a certification exemption confirmation from the Environment Corporation. In contrast, non-members must undergo re-certification (costing about 800,000 KRW per vehicle and taking 1-2 months) at each customs clearance, even if the vehicle has already been certified. If the association unjustly refuses membership to a business, the business activities of individual importers are inevitably restricted.
The Fair Trade Commission judged that such actions by the association constitute prohibited business group practices under the Fair Trade Act and issued a corrective order.
Additionally, through consultations with the Ministry of Environment and the association, the association’s articles of incorporation and membership registration regulations were revised or abolished to prevent unjust refusal or restriction of membership for importers in the future. The clause regarding "damage to the association’s honor," which could be applied at the association’s discretion as grounds for withdrawal or expulsion, was removed. Furthermore, the membership registration regulation that restricted membership if complaints were filed against the association or its members, or if business obstruction or legal disputes (such as lawsuits) occurred, was also abolished.
A Fair Trade Commission official stated, "With this measure and institutional improvement, the membership barrier for two-wheel vehicle importers will be lowered, expanding the benefits of the emission certification exemption system, thereby reducing certification costs and time. We will continue to identify and improve unfair practices and structural causes that induce unfair conduct in cases where violations occur."
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