Ministry of SMEs and Startups to Conduct 2024 Regular Survey on Consignment and Entrustment Transactions

The Ministry of SMEs and Startups announced on the 22nd that it will conduct the '2024 Regular Survey on Consignment Transactions' to rectify unfair trade practices occurring during consignment transactions between companies.

Consignment transactions refer to transactions where, according to the "Act on the Promotion of Mutual Growth between Large and Small-Medium Enterprises" (hereinafter referred to as the ‘Mutual Growth Act’), a business engaged in manufacturing, construction, processing, repair, sales, or services entrusts the manufacturing, construction, processing, repair, services, or technology development of goods, parts, semi-finished products, and raw materials to another small or medium-sized enterprise, and the entrusted SME professionally manufactures the goods, etc.

This year’s survey by the Ministry targets 15,000 companies involved in consignment transactions and will investigate overall unfair trade practices between companies, such as non-payment of delivery fees and failure to issue agreements for consignment transactions conducted in the first half of this year.

The main survey items include compliance with the obligations of consigning companies stipulated in Articles 21 to 25 of the Mutual Growth Act, such as △ issuance of agreements △ payment of delivery fees △ adherence to delivery fee payment deadlines △ prohibition of unfair reduction of delivery fees △ prohibition of unfair price determination △ prohibition of unfair demands for technical data.

The survey will be conducted in three stages: Stage 1, investigation of consigning companies’ transaction status; Stage 2, survey of entrusted companies; and Stage 3, on-site investigation of companies suspected of violating the law. Companies found to be in violation of the Mutual Growth Act based on the survey results will be subject to administrative measures such as improvement requests.

Since this survey is conducted after the guidance period for the delivery fee linkage system (until 2023), it plans to focus on investigating and sanctioning failure to issue linked agreements and illegal acts to contribute to the establishment of the linkage system in the field.

Additionally, from the 26th until January 7, 2025, ‘Consignment Transaction Survey Corporate Briefings’ will be held in six regions nationwide (Gyeonggi, Seoul, Daegu, Daejeon, Busan, Gwangju) targeting consigning companies subject to the survey.