Hankyung Association Expresses Concern Over Confusion Among Companies Regarding Fair Trade Compliance Program, Recommends Measures to Fair Trade Commission

KFTC Announces Plan to Raise Evaluation Grade Standards
Korea Economic Association: "Timing of Standard Changes is Inappropriate"
"Abstract Criteria for Lowering Grades Raise Concerns Over Discretionary Intervention"

The Korea Economic Association urged a cautious approach regarding the Fair Trade Commission's (FTC) proposed amendments to the 'Fair Trade Compliance Program (CP) Operation and Evaluation Regulations,' stating that it could cause confusion among companies.

In a statement sent to the FTC on the 8th, the Korea Economic Association said, "Companies establish annual plans based on grade-specific benchmark scores at the beginning of each year and apply for evaluations the following year. However, the FTC announced the score adjustment plan only in February, ten days before the evaluation application deadline, undermining predictability."

The CP is an internal system operated by companies to voluntarily comply with fair trade laws. The FTC evaluates the operation status of CPs and provides benefits such as reductions in fines.

Recently, the FTC disclosed a draft amendment through an administrative notice to raise the evaluation benchmark scores. According to the amendment, the AA grade criteria have been raised from the previous '80 points or higher but less than 90 points' to '85 points or higher but less than 90 points,' and the A grade from '70 points or higher but less than 80 points' to '80 points or higher but less than 85 points.'

The Korea Economic Association also pointed out that the criteria for lowering evaluation grades are unclear. The amendment allows for lowering grades in cases where social controversies arise that could undermine the credibility of the system.

Regarding this, the Korea Economic Association stated, "The criteria are abstract and ambiguous, which could lead to excessive discretion by evaluators," and recommended establishing clear standards and a clarification procedure.

Another issue highlighted was that a single violation could be counted twice as a deduction due to overlapping evaluation periods.

Lee Sang-ho, Head of the Economic and Industrial Division at the Korea Economic Association, said, "If changes to the standards are pushed less than a year after the CP operation and evaluation notice was implemented, companies' willingness to participate may be dampened," adding, "To maintain the effectiveness of the system, improvements should be made gradually."