Kim Dong-yeon "Gyeonggi-do to Implement Nationwide First Payment Linkage System from April"

Gyeonggi Province Governor Kim Dong-yeon is visiting Yulchon Co., Ltd. located in Siheung, where a meeting on delivery prices with small and medium-sized enterprises was held last July, touring the factory with company officials.

Gyeonggi Province Governor Kim Dong-yeon announced that starting in April, Gyeonggi Province will be the first local government in the country to implement the 'Gyeonggi Province-type Payment Price Linkage System' targeting public institutions such as the Gyeonggi Housing and Urban Corporation (GH).

On the 28th, Governor Kim explained the background of the system's introduction through his social media (SNS), saying, "Last fall, I visited small and medium-sized enterprises (SMEs) in the province to hear their voices on the ground," adding, "Due to the Ukraine war and other factors, raw material and energy costs have skyrocketed, but payment prices remain fixed, making it impossible for SMEs to endure."

He continued, "'The Payment Price Linkage System' is one of the five major measures in the 'Comprehensive Plan for Emergency Economic Response and Livelihood Stabilization,' which was the first approval I made after taking office as governor," and introduced, "As a result of speeding up for quick implementation, the 'Gyeonggi Province-type Payment Price Linkage System' will start from April."

In particular, he evaluated its significance by saying, "This is before the enforcement of the Win-Win Cooperation Act and the first among local governments nationwide," and added, "The scope of application, determined by the proportion of raw material costs, payment price scale, and transaction period, has been expanded beyond what the law stipulates."

Governor Kim emphasized, "The public sector, including the Gyeonggi Housing and Urban Corporation, will promote this from April, and in the private sector, excellent companies participating in the payment price linkage system will be discovered and provided with incentives prepared by the province," stressing, "We must overcome the crisis together through win-win cooperation between large and small businesses."

Earlier, the province announced that ahead of the government's implementation of the payment price linkage system under the Win-Win Cooperation Act scheduled for October this year, Gyeonggi Province will introduce the 'Gyeonggi Province-type Payment Price Linkage System' starting in April.

The payment price linkage system introduced by the province is characterized by relaxing the application criteria more than the legal standards to encourage participation from more companies.

First, under the Win-Win Cooperation Act, the linkage system applies if major raw materials account for 10% or more of the payment price, but the province lowered this to 5% or more. Also, the regulation excluding application for payment prices under 100 million KRW and transaction periods within 90 days will be applied to all transactions over 50 million KRW in Gyeonggi Province. Furthermore, the transaction period restriction has been removed.