Three-Pronged Set Introduced to Prevent Improper Intervention in Policy Funds... Legislation Underway

Ministry of SMEs and Startups Holds Second Task Force Meeting on Improper Third-Party Intervention with Financial Services Commission, National Police Agency, and Financial Supervisory Service
Introduction of Fact-Finding Survey, Whistleblower Immunity

A three-pronged response system will be introduced to address unfair third-party intervention in policy funds. This system consists of a fact-finding survey, an immunity program for voluntary reporters, and a reward program for reporting, offering up to 2 million won per case.

The Ministry of SMEs and Startups announced on January 15 that it held the 2nd meeting of the Task Force on Resolving Third-Party Unfair Intervention Issues, presided over by First Vice Minister Noh Yongseok, to discuss these measures. In addition to the Ministry of SMEs and Startups, the task force included policy finance institutions such as the Korea SMEs and Startups Agency, the Small Enterprise and Market Service, the Korea Technology Finance Corporation, and the Korea Federation of Credit Guarantee Foundations. Other relevant ministries and agencies, including the Financial Services Commission, the National Police Agency, and the Financial Supervisory Service, also participated. The Korea Technology and Information Promotion Agency for SMEs, which specializes in SME research and development, the Korea Institute of Startup & Entrepreneurship Development, and the Korea Credit Guarantee Fund, a policy finance institution under the Financial Services Commission, were also involved.

Noh Yongseok, First Vice Minister of the Ministry of SMEs and Startups, is delivering opening remarks at the "2nd Meeting of the Task Force on Resolving Third-Party Unfair Intervention Issues" held in Seoul on the 15th. Ministry of SMEs and Startups

During the second task force meeting, participants shared the direction for legislating a registration system for policy fund consulting, reviewed plans for a fact-finding survey on the current status of unfair third-party intervention, and discussed the establishment and operation of a reward program for reporting, as well as the introduction of an immunity program for reporters. Detailed implementation plans for the three-pronged response system were prepared and final opinions were collected.

To prevent unfair third-party intervention in policy funds, the Ministry of SMEs and Startups is considering introducing a registration system for policy fund consulting, which supports small businesses and SMEs with applications for policy loans and guarantees. The ministry is preparing the legal basis for this system and is reviewing regulations on consultant management and prohibited acts by referencing other statutory registration systems. It plans to prepare amendments to the "Act on the Promotion of Small and Medium Enterprises" and related laws within the first half of this year.

Additionally, to accurately assess the status of unfair third-party intervention, the four policy finance institutions will conduct an anonymous online survey starting January 21, targeting both new and existing companies that have received policy loans or guarantees. Until now, the authorities have relied on voluntary reports from companies regarding illegal third-party intervention, but will now undertake a thorough assessment of the current situation related to policy finance. The survey will investigate whether companies have experienced third-party intervention, the types of unfair acts, reasons for using such services, and whether any damage was incurred.

Furthermore, each policy finance institution will introduce a reward program to encourage reporting to the illegal broker reporting center, which has been operating since early January. Rewards of up to 2 million won per case will be provided. The ministry will review the importance and specificity of each report before payment, and some rewards may be paid in advance depending on the progress of investigations by law enforcement agencies, ensuring prompt payment to reporters of unfair third-party intervention.

To further encourage reporting of illegal third-party intervention, an immunity program for active reporters will also be introduced within January. Under this program, if a person involved in unfair intervention did not engage in illegal or malicious collusion, they will be exempt from disadvantages such as loan recall, guarantee cancellation, or restrictions on new loans or guarantees from policy finance institutions. Based on active reporting of suspected cases, the Ministry of SMEs and Startups plans to take strong legal action, including filing complaints and requesting investigations.

The Financial Services Commission, the National Police Agency, and the Financial Supervisory Service, which participated in the meeting, agreed to discuss ways to share information among related agencies for a whole-of-government response and to strengthen cooperation so that investigations and probes into illegal acts can be conducted swiftly.

Noh Yongseok, First Vice Minister of the Ministry of SMEs and Startups, stated, "The Ministry will establish an institutional management system by considering the introduction of a registration system for policy fund consulting," and added, "Within January, we will implement the reward and immunity programs to encourage reporting of unfair third-party intervention, and we will respond strictly to illegal acts by referring reported cases for investigation and other legal actions."