What Is the Fair Trade Commission's Legislated Compliance Program?

Amendment to the Fair Trade Act Passed in the National Assembly Plenary Session on the 25th

The amendment to the Fair Trade Act, passed by the National Assembly on the 25th, includes provisions allowing the Korea Fair Trade Commission to grant fines reduction benefits to companies with outstanding performance in operating the Compliance Program.

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The Compliance Program is an internal compliance system established and operated by companies themselves to adhere to fair trade-related laws and regulations. It involves setting and implementing standards and procedures to ensure that employees clearly understand and practice compliance requirements related to fair trade in their work, as well as establishing an internal monitoring system.

The Korea Fair Trade Mediation Agency has been assisting companies in adopting the Compliance Program and annually evaluating whether the program is effectively operated based on applications from companies.

However, according to the Korea Fair Trade Mediation Agency, many companies operating the CP system have expressed that the 'incentives' were insufficient. They stated that the practical benefits of voluntarily adopting the CP system and striving to comply with the Fair Trade Act were not significant. The Fair Trade Commission excluded the 'fines reduction' benefit, which was included when the CP was introduced in 2001, in 2014. Among companies that adopted the CP and have operated it for more than a year, only benefits such as exemption or reduction of public disclosure of corrective orders and exemption from ex officio investigations were granted to outstanding companies. As a result, the adoption of the CP system has stagnated.

In response, the Fair Trade Commission established a legal basis for the CP system through the amendment of the Fair Trade Act and enabled the Commission to evaluate the operation status of the Compliance Program for operators. Previously, since the CP system was operated based on administrative guidelines, the incentives that could be given to outstanding companies were limited. Depending on the evaluation results, corrective actions, fines reduction, rewards, or support can also be provided. Additionally, a legal basis was established for the Fair Trade Commission to designate or revoke the designation of Compliance Program evaluation agencies.