[Asia Economy Reporter Jang Sehee] The Fair Trade Commission's decision on the level of sanctions for shipping companies' collusion is imminent.
According to the Fair Trade Commission and the industry on the 15th, the Fair Trade Commission is expected to hold a plenary meeting as early as next month to decide on the level of sanctions for the freight collusion case involving 23 domestic and international shipping companies.
A Fair Trade Commission examiner began an investigation after receiving a report in 2018 from the timber import industry suspecting that domestic shipping companies had colluded by simultaneously raising freight rates on Southeast Asia routes.
In May, the Fair Trade Commission sent examination reports containing opinions that 23 domestic and international shipping companies, including HMM (formerly Hyundai Merchant Marine), violated the Fair Trade Act and that fines of up to 800 billion KRW (applying 10% of total sales) should be imposed to each company.
In response, the shipping industry strongly opposed, arguing that the fines are excessive and that a "second Hanjin Shipping bankruptcy incident" could occur.
The National Assembly has also sided with the shipping industry and is pushing for legislative amendments to halt the Fair Trade Commission's sanction moves.
Democratic Party lawmaker Wi Seong-gon has proposed an amendment to the Shipping Act. The amendment mainly stipulates that the Fair Trade Act does not apply to joint actions under the Shipping Act.
The National Assembly's Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee is expected to submit this bill to the National Assembly in September and begin full deliberations.
The committee previously adopted a "Resolution urging the application of the Shipping Act to joint actions of regular container shipping companies," proposed by the committee chairman. This showed that both ruling and opposition parties have no major disagreements on the bill's content.
On the other hand, the Fair Trade Commission has clearly opposed the bill, stating that it goes against global standards.
The Fair Trade Commission explained that in major countries such as the United States and Japan, joint actions in the shipping industry are exceptionally allowed but competition authorities can take action if certain conditions are not met, and that in places like the European Union (EU) and Hong Kong, freight collusion itself is not permitted.
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