Unfair Reduction of Subcontract Payments: Euratech Sanctioned by the Fair Trade Commission

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Yuratech, which engaged in unfair practices by unjustly reducing subcontract payments while outsourcing processing to subcontractors, will face sanctions from the Fair Trade Commission.

On the 16th, the Fair Trade Commission announced that it ordered Yuratech to pay the reduced subcontract payments and delayed interest for its unfair subcontract transaction practices, and imposed a corrective order along with a fine of 67 million KRW.

According to the Fair Trade Commission, since 2012, Yuratech had outsourced the processing of automotive wiring system parts, wiring harnesses, to subcontractors and agreed with them to lower the unit prices of 17 items, which were previously traded at fixed prices, to temporary reduced prices.

Yuratech unjustly reduced the total subcontract payments by 75,190,609 KRW by retroactively applying these temporary prices to the quantities entrusted before the agreement was finalized, with a retroactive period ranging from a minimum of 25 days to a maximum of 60 days.

This act constitutes a violation of Article 11 of the Subcontracting Act. The Fair Trade Commission stated, "This measure is significant in clarifying that even if it is a temporary price, retroactively applying a lower price to subcontract payments for quantities entrusted before the agreement is established and reducing payments constitutes an unfair subcontract transaction and a serious legal violation."