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홈 - What is the delivery price indexation system?
- Related laws
Related laws
「ACT ON THE PROMOTION OF MUTUALLY BENEFICIAL COOPERATION BETWEEN LARGE ENTERPRISES AND SMALL AND MEDIUM ENTERPRISES」
Article 2 (Definitions)
12. The term "major raw materials" means raw materials used to manufacture goods, etc. in transactions effected on consignment and commission, which account for at least 10/100 of the price of delivered goods;
13. The term "linkage of the price of delivered goods" means adjusting the price of delivered goods in proportion to the fluctuation, where the price of major raw materials changes
between a commissioning enterprise and a commissioned enterprise by at least the agreed ratio not exceeding 10/100.
Article 21 (Issuance of Written Agreements)
① When an enterprise commissions the manufacture of goods, etc. to any other enterprise, the commissioning enterprise shall without delay issue a written agreement specifying the following matters to the commissioned party:
1. Details of the commission;
2. Price of delivered goods (including the method and date of payment);
3. Methods of inspecting delivered goods, etc.;
4. Matters regarding the linkage of the price of delivered goods, such as names, major raw materials, adjustment requirements, standards index, and mathematical formula of goods, etc. subject to the linkage of the price of delivered goods, as prescribed by Presidential Decree;
5. Other matters to be entered in a written agreement, as prescribed by Presidential Decree.
② A commissioning enterprise shall faithfully consult with a commissioned enterprise in order to enter the matters prescribed in paragraph (1) 4 in the written agreement.
③ In any of the following cases, a commissioning enterprise need not enter the matters prescribed in paragraph (1) 4 in the written agreement: Provided, That in cases falling under subparagraph 4,
a commissioning enterprise and a commissioned enterprise shall clearly enter the purport and reasons therefor in the written agreement:
1. Where a commissioning enterprise is a small enterprise under Article 2 (2) of the Framework Act on Small and Medium Enterprises;
2. Where the duration of the transaction effected on consignment and commission is within a period prescribed by Presidential Decree within the scope of not exceeding 90 days;
3. Where the price of delivered goods does not exceed the amount prescribed by Presidential Decrees within the scope of 100 million won;
4. Where a commissioning enterprise and a commissioned enterprise agree not to link the price of delivered goods.
④ No commissioning enterprise shall abuse its position in a transaction regarding transactions effected on consignment and commission in connection with
the linkage of the price of delivered goods, or conduct any act to evade the application of this Article by fraud or other improper means.
⑤ To promote win-win cooperation between commissioning enterprises and commissioned enterprises and fairness in transactions effected on consignment and commission,
the Minister of SMEs and Startups shall formulate or amend standard agreements on paragraph (1) 4 and the proviso, with the exception of the subparagraphs, of paragraph (3) and shall make recommends to use them.
⑥ When the commissioning enterprise receives goods, etc. from the commissioned enterprise, it shall promptly issue the receipt of the delivered goods, regardless of whether it has inspected the goods, etc.
Article 22-2 (Adjustment of Price of Delivered Goods due to Fluctuation in Supply Costs)
① Where it is inevitable to adjust the price of delivered goods because the supply costs of goods, etc. have fluctuated after being commissioned manufacturing the goods, etc.,
a commissioned enterprise may file an application for adjusting the price of the delivered goods with the relevant commissioning enterprise.
② Where it is unavoidable for a small and medium enterprise cooperative defined in Article 3 (1) 1, 2, or 4 of the Small and Medium Enterprise Cooperatives Act to adjust the price of delivered goods
to be paid to any of its members (in cases of the Korea Federation of Small and Medium Business under Article 3 (1) 4 of the Small and Medium Enterprise Cooperatives Act, members of a small and medium enterprise cooperative
under subparagraph 1 or 2 of the same paragraph) as a commissioned enterprise because the supply costs of goods, etc. have fluctuated beyond the standards prescribed by Presidential Decree, the cooperative may consult with
the relevant commissioning enterprise on the adjustment of the price of the delivered goods upon receipt of an application from the commissioned enterprise (in cases of the Korea Federation of Small and Medium Business under
Article 3 (1) 4 of the Small and Medium Enterprise Cooperatives Act, a small and medium enterprise cooperative under subparagraph 1 or 2 of the same paragraph):
Provided, That this shall not apply where both the commissioning enterprise and the commissioned enterprise are members of the same cooperative.
③ Upon receipt of an application under the main clause of paragraph (2), a small and medium enterprise cooperative shall file an application for adjusting the price of delivered goods with the relevant commissioning enterprise
within 20 days from receipt of such application: Provided, That where the Korea Federation of Small and Medium Business under Article 3 (1) 4 of the Small and Medium Enterprise Cooperatives Act consults with the commissioning enterprise,
the small and medium enterprise cooperative shall file an application with the Korea Federation of Small and Medium Business within 20 days of receipt of application from a commissioned enterprise, and the Korea Federation of Small and Medium Business
shall apply for an adjustment with the relevant commissioning enterprise of the price of delivered goods within 15 days of receipt of such request.
④ Where a commissioned enterprise that has applied for the adjustment of the price of delivered goods pursuant to paragraph (1) requests consultations under paragraph (2), the application filed under paragraph (1) shall be deemed suspended;
and where the consultations on adjustment under paragraph (1) or (3) are completed, neither the relevant commissioned enterprise nor the relevant small and medium enterprise cooperative may apply for the adjustment under paragraphs (1) through (3)
based on the same grounds, in the absence of a change in circumstances; and where a commissioned enterprise applies for the adjustment of the subcontract consideration pursuant to Article 16-2 of the Fair Transactions in Subcontracting Act,
it shall not file an application under paragraph (1) or (2) based on the same grounds.
⑤ Upon receipt of an application under paragraph (2), no small and medium enterprise cooperative shall place any unreasonable restriction on competitions or unfairly restrict the scope of business or business activities of the relevant enterprise,
such as resolving to discontinue the supply of goods, etc.
Article 22-4 (Designation of Headquarters for Supporting Expansion of Linkage of Price for Delivery)
① The Minister of SMEs and Startups may designate institutions or organizations related to support
for small and medium enterprises, as a support center for the expansion of the linkage of the price of delivered goods (hereinafter referred to as "linkage support center")
to support the expansion of the linkage of the price of delivered goods.
② The linkage support center shall conduct the following projects:
1. Provision of information on prices of raw materials and major price index;
2. Confirmation of the performance results of introduction and adjustment of the linkage of the price of delivered goods;
3. Education and consulting related to the linkage of the price of delivered goods;
4. Other matters prescribed by Ordinance of the Ministry of SMEs and Startups, which are necessary for the expansion of the linkage of the price of delivered goods.
③ The Minister of Trade, Industry and Energy may provide the linkage support center with support necessary to conduct the projects under each subparagraph of paragraph (2).
④ The Minister of SMEs and Startups may cancel the designation or order the suspension of all or part of the business for a specified period not exceeding six months,
if the linkage support center falls under any of the following cases: Provided, That where it falls under subparagraph 1, the Minister shall revoke the designation thereof:
1. Where it obtains designation by fraud or other improper means;
2. Where it fails to meet the standards for designation under paragraph (5);
3. Where it fails to perform the business described in the subparagraphs of paragraph (2) for at least one month without good cause.
⑤ Detailed matters regarding the standards, procedures, etc. for the designation and revocation of designation of the linkage support center shall be prescribed by Presidential Decree.
Article 25 (Matters to Be Observed)
① A commissioning enterprise shall not perform the following acts when it entrusts the manufacture of goods, etc. to any commissioned enterprise:
1. Refusing to accept goods, etc. or reducing the price of delivered goods, etc. without any reason attributable to the commissioned enterprise;
1-2. Arbitrarily canceling or changing the entrustment of manufacturing goods, etc. in order to not perform the matters prescribed in Article 21 (1) 4 after entrusting the manufacture of goods, etc., even though the commissioned enterprise is not responsible therefor;
14. Reducing the quantity of the transaction effected on consignment and commission, discontinuing the transaction effected on consignment and commission, or giving other disadvantages on the grounds that the relevant commissioned enterprise performs any of the following acts:
(a) Notifying any relevant agency of the fact that the commissioning enterprise performs any of the following acts:
(b) Applying for adjusting the price of delivered goods in regard of the commissioning enterprise pursuant to Article 22-2 (1) or (2); or applying for mediating a dispute with the Minister of SMEs and Startups pursuant
Article 27 (Improvements in Unfair Trade Practices between Commissioned and Commissioning Enterprises)
① The Minister of SMEs and Startups shall periodically survey whether commissioning enterprises implement Articles 21, 21-2 (1), 22, 22-2, 23, and 25 (1) through (3) in the course of transactions effected on consignment and commission
between large enterprises and small and medium enterprises, as prescribed Presidential Decree; and may request relevant enterprises to improve the matters requiring improvement.
② Where any commissioning enterprise under paragraph (1) violates Article 21, 22, 22-2, 23, or 25 (1) through (3), the Minister of SMEs and Startups may order such enterprise to pay the price of delivered goods,
suspend its violation of the Act, or to take other necessary measures for correction: Provided, That this shall not apply where the violations fall under Articles 3, 4 through 12, 12-2, 12-3, 13, 13-2, 15, 16, 16-2, and 17 through 20
of the Fair Transactions in Subcontracting Act or prohibited acts under Article 23 (1) of the Monopoly Regulation and Fair Trade Act.
③Where any commissioning enterprise in receipt of a request for improvement under paragraph (1) or an order under paragraph (2) fails to comply with such request or order,
the Minister of SMEs and Startups shall publish the name of such enterprise and the summary of the request or order.
④ Where deemed necessary, the Minister of SMEs and Startups shall apply paragraphs (1) through (3) mutatis mutandis where small and medium enterprises of a size exceeding
that prescribed by Presidential Decree commission the manufacture of goods to other small and medium enterprises.
⑤ Where an enterprise is found to have good settlement conditions, including the increase of cash settlements, mutually-beneficial settlements, etc.,
and to have endeavored to establish fair relation of transaction effected on consignment and commission as a result of the survey referred to in paragraphs (1) and (4),
the Minister of SMEs and Startups may grant reward to such enterprise and provide it with other necessary support.
⑥ The Government may provide taxation support and other necessary support in order to improve settlement conditions for the price of goods delivered by small and medium enterprises
to large enterprises and to increase the cash settlement (including the settlement in cash and mutually-beneficial settlement)
Article 28 (Mediation of Disputes)
①Where a dispute on any of the following matters arises between commissioning enterprises and commissioned enterprises or between small-medium enterprise cooperatives,
the commissioning enterprises and the commissioned enterprises as well as the small-medium enterprise cooperatives involved in such dispute may request the Minister of SMEs
and Startups to mediate their dispute, as prescribed by Presidential Decree:
1. Matters concerning a written agreement, linkage of the price of delivered goods, and the receipt of goods provided for in Article 21;
5. Matters concerning whether matters to be observed pursuant to Article 25 are complied with.
② The commissioned enterprise involved in the dispute as described in paragraph (1) may delegate its authority regarding the mediation of the dispute to an organization of small-medium enterprisers. <Newly Inserted on Jan. 27, 2016>
③ Upon receipt of a request for mediation referred to in paragraph (1), the Minister of SMEs and Startups shall without delay examine the contents thereof and where it is deemed necessary
to correct the matters referred to in each subparagraph of paragraph (1), recommend the relevant commissioning enterprise, commissioned enterprise, or small-medium enterprise cooperatives to correct such matters or issue a corrective order.
④ When the relevant commissioning enterprise, commissioned enterprise, or small-medium enterprise cooperatives refuses to comply with a corrective order under paragraph (3), the Minister of SMEs and Startups shall publish its names and
the gist of the corrective order: Provided, That where the acts of the relevant commissioning enterprise fall under Article 26, the Minister of SMEs and Startups shall request the Fair Trade Commission to take necessary measures.
Article 28-2 (Training Orders)
① With regards to the commissioning enterprise which has received penalty points pursuant to Article 27 (7),
the Minister of SMEs and Startups may take measures, such as a training order, etc. to the executive officers and employees of the relevant enterprise, as well as a request for improvement or corrective orders
under Article 27 (1), (2), and (4) and recommendation for correction or corrective orders under Article 28 (3) according to the standards of penalty points prescribed by Ordinance of the Ministry of SMEs and Startups.
In such cases, he or she may have the commissioning enterprise bear the expenses incurred in training.
② Necessary matters concerning the detailed procedures, methods, etc. of taking measures, such as a training order, etc. shall be publicly notified by the Minister of SMEs and Startups.
Article 41 (Penalty Provisions)
③ Any of the following persons shall be punished by imprisonment with labor for not more than one year or by a fine not exceeding 50 million won:
1-2. A person who fails to comply with an order under Article 27 (2) (including cases where the same paragraph is applied
mutatis mutandis in Article 27 (4)) until one month after the publication under Article 27 (3) (including cases where the same paragraph is applied mutatis mutandis in Article 27 (4));
2. A person who fails to comply with a corrective order under Article 28 (3) until one month after the publication provided for in the main clause of Article 28 (4) is made;
Article 43 (Administrative Fines)