Public Procurement Service Conducts Annual Comprehensive Investigation of Resale Activities in Public Stockpiling Projects

The Public Procurement Service (PPS) has decided to conduct an annual full-scale investigation into resale activities in the public stockpiling project.

On the 29th, PPS announced that starting next month, it will carry out a full investigation into the resale (transfer) of stockpiled materials by companies using public stockpiled goods.

Companies found to have engaged in resale during the investigation will have their registration as stockpile users canceled according to relevant regulations, and strict measures will be taken, including registration restrictions for up to two years, recovery of resale profits, and imposition of penalties.

Currently, PPS stocks six types of non-ferrous metals?aluminum, copper, nickel, tin, zinc, and lead?to prepare for supply chain crises. It also releases some quantities throughout the year to stabilize domestic prices and support stable operations of small and medium-sized manufacturers.

However, Article 29, Paragraph 3 of the Procurement Service Act explicitly prohibits companies using PPS stockpiled materials from reselling the raw materials without manufacturing or processing them. Raw materials released under the Procurement Service Act are therefore banned from resale.

This measure is intended to uphold the purpose of releasing raw materials to support manufacturing activities by PPS and to prevent unfair profits from price differences in the market.

In particular, PPS revised the “PPS Stockpiled Materials Usage Terms and Conditions” in March last year to impose an obligation on stockpile users to submit tax data. Companies that purchased stockpiled materials last year are required to submit related documents such as purchase and sales ledgers by the end of next month. Refusal to submit will result in the inability to use stockpiled materials in the future.

PPS has prepared an amendment to the Procurement Service Act that allows it to directly receive electronic tax invoices from the National Tax Service for the purpose of investigating resale by stockpile users.

The amendment is scheduled to take effect in September this year, and PPS expects that the enforcement of the law will enable more effective resale investigations.

Lim Gi-geun, Administrator of PPS, stated, “Illegal resale activities undermine the reliability and effectiveness of the stockpiling project and harm sincere companies. PPS will conduct repeated annual full-scale investigations into resale activities to prevent unfair practices from taking root in public stockpiling.”