Ministry of SMEs and Startups and Fair Trade Commission Fully Disclose Special Agreement on 'Delivery Price Linkage System'

[Image source=Yonhap News]

[Asia Economy Reporter Choi Dong-hyun] The Ministry of SMEs and Startups announced on the 12th that it disclosed the full text of the special agreement on linkage of delivery payments and the subcontract payment linkage contract in cooperation with the Fair Trade Commission, and held a joint briefing session on the same day.

This special agreement allows the contracting parties to negotiate and determine the method of linking delivery unit prices. It was established based on actual linkage cases to be operable in the field.

Until now, even if raw material prices rose, entrusted companies (including subcontractors) found it difficult to reflect changes in raw material prices. With the preparation of this special agreement, it is expected to open the way to easily reflect raw material price fluctuations through pre-agreed linkage conditions, serving as an opportunity to share risks between consignors and consignees (including original and subcontractors).

The Ministry of SMEs and Startups is recruiting participating companies for the 'Delivery Unit Price Linkage Pilot Operation' to conclude linkage agreements using the special agreement from today until the 26th.

Among participating companies, those with confirmed linkage performance will be granted incentives such as government awards, preferential selection for smart factories, and exemption from regular surveys on entrusted-subcontracted transactions.

An official from the Ministry of SMEs and Startups stated, "The disclosure of this special agreement will serve as an opportunity for the expansion of delivery payment linkage in the market," adding, "It is expected to help consignors and consignees share the risk burden caused by raw material prices and especially contribute to alleviating the management difficulties of small and medium-sized enterprises."