Legal Foundation to Eradicate Policy Finance Brokers Will Be Established

Kickoff Meeting of the Ministry of SMEs and Startups Policy Finance Institutions Council
Laying the Legal Groundwork to Eradicate Third-Party Unfair Intervention
Strengthening Cooperation with Police and Portal Companies to Crack Down on Brokers
Enhancing Self-Response Systems and Customer Convenience for Policy Finance Users

Legal groundwork is being established to eradicate third-party unfair intervention (brokers) in policy finance. Brokers are individuals or companies that engage in unfair practices such as supporting or inducing the preparation of false application documents related to policy finance applications, or impersonating policy finance institutions. Despite ongoing policy efforts, the need for active countermeasures has been continuously raised. The Ministry of SMEs and Startups has comprehensively reviewed external feedback and other factors to develop a more systematic and effective response plan.

On the 6th, the Ministry of SMEs and Startups held a kickoff meeting of the "Ministry of SMEs and Startups Policy Finance Institutions Council" at the Ministry’s Junggi Maru conference room in Sejong, chaired by Vice Minister Kim Seong-seop. The council is chaired by the Vice Minister of the Ministry of SMEs and Startups, with the Global Growth Policy Officer serving as secretary, and includes deputy heads of four policy finance institutions under the Ministry as well as department heads responsible for policy finance within the Ministry as members.

At this council meeting, the plan to eradicate brokers was the main focus of discussion. The Ministry plans to establish a legal basis for responding to brokers through amendments to laws under its jurisdiction, enabling policy finance institutions to pursue broker eradication more systematically. The legal amendments will be reviewed according to three main directions. First, a legal definition of third-party unfair intervention will be newly established, and the prohibition obligation regarding third-party unfair intervention will be explicitly codified as a priority. It will also be considered to allow policy finance institutions to request submission of necessary documents to verify third-party unfair intervention, and to provide a legal basis for policy finance institutions to request related agencies to impose sanctions on brokers.

To actively crack down on brokers, a new cooperation system with the National Police Agency will be established. Starting in March, a working-level consultative body between the Ministry and the Police Agency will be activated to share information related to brokers and discuss system improvements. When policy finance institutions conduct internal inspections of suspected broker companies and collectively request investigations from the Police Agency, the Police Agency will review the investigation requests and establish dedicated investigation teams to ensure prompt investigations.

A collaboration system with portal companies will also be fully launched to block illegal broker portal advertisements. Specifically, when dedicated teams of policy finance institutions report internet advertisements suspected of impersonating government agencies or other illegal activities to Naver, Naver will promptly review and take corrective actions if necessary. Additionally, promotion of the official policy fund websites of the Small Enterprise and Market Service (SEMAS) and the Korea Technology Finance Corporation (KOTEC) through portals will be strengthened.

The self-response system of policy finance institutions against third-party unfair intervention will also be supplemented and reinforced. Beyond detecting brokers through the current report center, a big data-based internal broker detection process will be established, information sharing among policy finance institutions will be enhanced, and joint inspections of suspected broker cases will be conducted to strengthen a collaborative response system against brokers.

To make it easier for policy customers such as small business owners to apply for and use policy funds, efforts will also be made to improve convenience and accessibility. Vice Minister Kim Seong-seop, who chaired the meeting, stated, “It is time for policy finance institutions to unite their efforts to resolve financial difficulties and strengthen the competitiveness of small and medium enterprises and small business owners,” adding, “Through the newly launched council, we will work together with policy finance institutions to address major issues such as eradicating third-party unfair intervention and continuously improve.”