'Three-Pronged Measures Introduced to Prevent Unfair Intervention in Policy Funding... 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

Three measures will be introduced to address unfair third-party intervention in policy funding. These include a fact-finding survey, an immunity system for voluntary whistleblowers, and a reporting reward system offering up to 2 million won per case.

The Ministry of SMEs and Startups announced on January 15 that it held the second meeting of the "Task Force on Resolving Third-Party Unfair Intervention Issues," presided over by First Vice Minister Noh Yongseok, to discuss these measures. The task force included the Ministry of SMEs and Startups, 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, as well as related government agencies including the Financial Services Commission, the National Police Agency, and the Financial Supervisory Service. Other participants included 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.

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, the Ministry of SMEs and Startups and other participants shared the direction for legislating a registration system for policy fund consulting. They also finalized detailed implementation plans for a fact-finding survey on the current status of third-party unfair intervention, the establishment and operation of a reporting reward system, and the introduction of an immunity system for whistleblowers.

To prevent unfair third-party intervention in policy funding, the Ministry of SMEs and Startups is considering introducing a registration system for policy fund consulting, which would support SMEs and small business owners in applying for policy loans and guarantees. The ministry is preparing to establish a legal basis for this system. It is reviewing regulations on consultant management and prohibited activities by referencing other legal registration systems, with plans to propose amendments to the "Act on the Promotion of Small and Medium Enterprises" and related laws during the first half of this year.

Additionally, to better understand the current status of third-party unfair intervention, an anonymous online survey will be conducted starting January 21 among both new and existing client companies of four major policy finance institutions. Previously, authorities relied on voluntary reports from companies regarding illegal third-party intervention, but now they plan to conduct a thorough assessment of the situation related to policy finance. The survey will investigate whether companies have experienced third-party unfair intervention, the types of such acts, the reasons for using these services, and whether any damages were incurred.

Furthermore, each policy finance institution will introduce a reporting reward system to encourage reports through the illegal broker reporting centers, which have been operating since early January. Rewards of up to 2 million won per report will be offered. The ministry will assess the importance and specificity of each report before payment, and may provide partial rewards in advance depending on the progress of investigations by law enforcement agencies, ensuring prompt compensation for whistleblowers reporting third-party unfair intervention.

To further encourage reporting of illegal third-party intervention, an immunity system for proactive whistleblowers will also be introduced within January. Under this system, those involved in unfair intervention, but not in illegal or malicious collusion, will be exempt from penalties such as loan recalls, guarantee cancellations, or restrictions on new loans or guarantees from policy finance institutions. The Ministry of SMEs and Startups plans to take strong legal action, including criminal complaints and investigation requests, based on active reporting of suspected third-party unfair intervention cases.

The Financial Services Commission, National Police Agency, and Financial Supervisory Service, which participated in the meeting, agreed to discuss ways to share information among relevant agencies as part of a whole-of-government response, and to strengthen cooperation to ensure prompt investigation and review of illegal activities.

Noh Yongseok, First Vice Minister of the Ministry of SMEs and Startups, stated, "The Ministry of SMEs and Startups will establish an institutional management system, including consideration of a registration system for policy fund consulting," adding, "By implementing the reporting reward and immunity systems within January, we will encourage reports of third-party unfair intervention, and will respond strictly to illegal activities through investigation requests and other legal measures for all reported cases."