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ENFORCEMENT DECREE OF THE MEDICAL DEVICE ACT

Enforcement Decree of the Medical Device Act

[Effective as of March 19, 2010] [Presidential Decree No. 22075, March 15, 2010]

Article 1 (Purpose) The purpose of this Decree is to stipulate the matters delegated by the Medical Device Act and the matters necessary for the implementation of the Medical Device Act.

Article 2 (Constitution of the Medical Device Committee) The Medical Device Committee (hereinafter referred to as the “Committee”) under Paragraph 1 of Article 5 of the Medical Device Act (hereinafter referred to as the “Act”) shall consist of fifty (50) or more but up to one hundred (100) members including one (1) chairperson and two (2) deputy chairpersons.

The Deputy Minister of Health and Welfare shall become the chairperson of the Committee, and the Deputy Commissioner of the Korea Food and Drug Administration shall become one (1) of the two deputy chairpersons of the Committee. The remaining deputy chairperson shall be appointed among the members of the Committee. < Amended on February 29, 2008 and March
15, 2010, respectively>

The Minister of Health and Welfare shall appoint or invite the members of the Committee among the persons who fall under any of the following Items: <Amended on June 12, 2006, February 29, 2008, and March 15, 2010, respectively>
1. Government officials of Grade 4 or higher or government officials of general position belonging to senior civil service who are involved in the duties related to medical devices;
2. Persons recommended by organizations related to medical devices, civic groups (non-profit
private organizations falling under Article 2 of the Non-profit Private Organization Support
Act), or the heads of relevant academic societies or colleges; or
3. Persons who have extensive knowledge and experience in medical devices.

Article 3 (Term of the Committee members) The Committee member’s term shall be two years. The term of a Committee member for government official, however, shall be limited to the period of time during which the member is the incumbent of the relevant position.

Article 4 (Responsibilities of the Chairperson) The Chairperson shall represent the Committee and oversee the operation of the Committee.

If the Chairperson becomes unable to perform duties for unavoidable reasons, a
vice-chairperson designated by the Chairperson shall take his or her place as the Chairperson.

Article 5 (Meetings) The Chairperson shall convene a Committee meeting and becomes the chairperson of the meeting.

The Chairperson shall convene a meeting of Committee members without delay upon receipt of a meeting request from the Minister of Health and Welfare, the Commissioner of the Korea Food and Drug Administration (hereinafter referred to as the “ KFDA Commissioner”), or more than one-half (1/2) of the incumbent Committee members. <Amended on February 29, 2008 and March 15, 2010, respectively>

In a Committee meeting, the Committee shall make a decision by the affirmative vote of
more than one-half (1/2) of the Committee members present at such meeting where more than one-half (1/2) of the incumbent Committee members are present.

Article 6 (Hearings) The Chairperson shall request relevant parties or experts to attend a Committee meeting and hear opinions when it is deemed necessary for the agenda items under review.

Article 7 (Subcommittee) The Committee may establish a subcommittee for each area to facilitate the smooth operation of the Committee.

A subcommittee shall consist of less than 20 members and the subcommittee chairperson shall be elected by the subcommittee members from within.<Amended on June 30, 2010>

The Chairperson shall appoint subcommittee members from among the Committee members who possess in-depth professional knowledge and experience in the relevant area.

A subcommittee meeting shall proceed when more than one-half (1/2) of the incumbent subcommittee members are present and shall make a decision by the affirmative vote of more than two-thirds of the subcommittee members present thereat.

The reviews or decisions made by a subcommittee shall be regarded as final except when the
Chairperson determines that it is necessary for it to be reviewed again by another subcommittee.

For efficient review by a subcommittee, a subdivision may be established in the subcommittee.<Newly enacted on June 30, 2010>

The Minister of Health and Welfare shall determine the matters regarding the types and operation of subcommittees and subdivisions thereof approved by the Committee. <Amended on February 29, 2008 and March 15, 2010 and June 30, 2010 respectively>

Article 8 (Research Members) The Committee may have up to ten (10) research members in order to conduct preparatory research and/or preview of the Committee review agenda.

Research members shall conduct preparatory investigation or research into the matters under review by the Committee, the order of the Chairperson.



Research members may attend the Committee meetings and make comments thereat. The Committee may have up to ten (10) researchers in support of research members.
The Minister of Health and Welfare shall appoint research members and researchers from among persons who possess in-depth professional knowledge and experience in medical devices.
< Amended on February 29, 2008 and March 15, 2010, respectively>

Article 9 (Secretary and Clerk) The Committee shall have a secretary and some clerks.

The Minister of Health and Welfare shall appoint a secretary and clerks from government officials who belong to the Ministry of Health and Welfare or the Korea Food and Drug Administration. < Amended on February 29, 2008 and March 15, 2010, respectively>

Article 10 (Compensation and Expenses) The Minister of Health and Welfare may pay compensation and expenses for the Committee members, expenses for experts attending the Committee meetings pursuant to Article 6, and research fund and expenses relating to investigation and research for research members and researchers. < Amended on February 29,

2008 and March 15, 2010, respectively>
Article 11 (Guidelines for Administrative Sanction Fine Calculation) The amount of the administrative sanction fine under Paragraph of Article 33 of the Act shall be calculated by applying the criteria in the attached table the Ministerial Decree of the Ministry of Health and Welfare, taking the type and degree of a violation into. < Amended on February 29, 2008 and March 15, 2010, respectively>

The KFDA Commissioner, the city mayor, Goon-governor or Gu-governor (meaning the or

Gu-governor of an autonomous district unit; same hereinafter) may increase or reduce the amount of administrative sanction fine by up to one half of the amount under Paragraph 1, considering the size of the business of the medical device handler, the degree and frequency of the violation, etc; inthecaseofsuchincrease,thetotalamountoftheadministrative sanction fine shall not exceed 50 million Won.

Article 12 (Imposition and Payment of Administrative Sanction Fine) In the case that the KFDA Commissioner or the city mayor, Goon-governor or Gu-governor is to impose an administrative sanction fine pursuant to Article 33 of the Act, they shall give written notice requesting payment, which shall specify the type of the violation, the amount of the administrative sanction fine, the manner and period of filing an objection, etc.

A person who has been given notice under Paragraph 1 shall pa y the administrative sanction fine to the collection agency designated by the KFDA Commissioner or the city mayor,

Goon-governor or Gu-governor within 20 days from the date he/she receives the notice; provided, however, that if he/she is unable to pay the administrative sanction fine within the said period

due to a natural disaster or calamity, or due to any other unavoidable cause, he/she shall pay the administrative sanction fine within 7 days after cessation of such unavoidable cause.

The collection agency, which receives the administrative sanction fine pursuant to Paragraph
2, shall issue a receipt to the payer, and shall, without delay, notify the KFDA Commissioner or the city mayor, Goon-governor or Gu-governor of the fact of payment.

The administrative sanction fine shall not be paid in installments.

Article 12-2 (Disposition against Non-payers of Administrative Sanction Fine) In case that a person responsible for paying an administrative sanction fine does not pay the administrative sanction fine by the payment deadline, the KFDA Commissioner or the city mayor,

Goon-governor or Gu-governor shall, pursuant to the main body of Paragraph 4 of Article 33 of the Act, issue a reminder letter within 15 days after the expiration of the payment deadline. In this case, the new payment deadline shall be within 10 days from the date the reminder letter is issued.

If the person who has not paid the administrative sanction fine pursuant to Paragraph 1 fails to pay it by the new payment deadline even after he/she receives the reminder letter, one of the following actions shall be taken:
limit of administrative sanction fine under Paragraph 1 of Article 33 of the Act, the imposition of the administrative sanction fine shall be cancelled and suspension of the business operation shall be ordered; or
2. If the amount of the administrative sanction fine imposed is less than half of the upper limit
of fine under Paragraph 1 of Article 33 of the Act, it shall be collected in accordance with the procedures for collection of unpaid national or local taxes.

In the case that imposition of the administrative sanction fine is to be cancelled and suspension of the business operation is to be ordered pursuant to Item 1 of Paragraph 2, it shall be notified in writing to the pertinent person subject to administrative sanction fine, and such written notification shall state the specifics necessary for suspension of business operation, such
as the reasons for the change from the imposition of the administrative sanction fine to the suspension of the business operation and the period of such suspension of business operation. [Newly added on July 3, 2007]

Article 13 (Delegation of Authority) The Commissioner of KFDA shall delegate the following authorities to the head of the Regional KFDA as referred to in Paragraph 1 of Article 37 of the Act; provided that in case of Items 4 through 6 and Item 8, authority of the Medical Device Refurbisher is excluded. <Amended on July 3, 2007 and June 30, 2010>

1. Acceptance of a manufacture notification for each product under Paragraph 2 of Article 6 of the Act, and a conditional manufacture notification under Paragraph 1 of Article 7 of the Act, except where a manufacture notification for each product is filed at the same time as a in accordance with Paragraph 3 of Article 6 of the Act.
2. Acceptance of an amended notification under Paragraph 1 of Article 11 (including applicable cases under Paragraph 5 of Article 14 of the Act)
3. Acceptance of an import notification for each product under Paragraph 2 of Article 14 of the Act, and a conditional import notification under Paragraph 1 of Article 7 of the Act which is applicable pursuant to Paragraph 5 of Article 14, except where an import notification for each product is filed at the same time as an import business for, in accordance with Paragraph 3
of Article 14 of the Act.
3-2. Deleted <June 30, 2010>
4. Giving an order for reports, or conducting visits, inspections, questioning or collection under
Article 28 of the Act
5. Giving an order for testing in accordance with Article 29 of the Act
6. Giving an order for recalls or destruction, and boxing or sealing under Article 30 of the Act
7. Giving an order to prohibit the manufacture of the product under Article 32 of the Act (limited to the products for which manufacture notifications under Paragraph 2 of Article 6 of the Act were filed), an order to prohibit the import of the product (limited to the products tor which product import notifications under Article 14 of the Act were filed), an order for the partial suspension of business operation, or an order to a refurbisher for the full suspension of its business operation, and, in lieu thereof, imposition and collection of administrative sanction fine, and closure of business operation against of the refurbisher under Article 33 of the Act.
8. Renewal of a notification under Article 41 of the Act
9. Imposition and collection of an administrative default fine under Article 47 of the Act (limited to the cases where, in violation of Article 41 of the Act, renewal has not been completed in respect of a manufacture notification under Paragraph 2 of Article 6 of the Act, a product import notification under Paragraph 2 of Article 14, or a notification of refurbishing business under Paragraph 1 of Article 15).

The Commissioner of KFDA shall delegate the following authorities to the mayor of the
special metropolitan government, the mayor of the metropolitan city, the provincial governor, and the governor of the special self-governing province Paragraph 1 of Article 37 of the Act; provided that in case of Items 4 through 9, the authority to be delegated shall be limited to the authority over the Medical Device Refurbisher. <Newly enacted on June 30, 2010>
1. Acceptance of notification of refurbishing business as provided in Paragraph 1 of Article 15
of the Act
2. Acceptance of amended notification as provided in Paragraph 1 of Article 11 of the Act, which is correspondingly applied under Paragraph 4 of Article 15 of the Act
3. Acceptance of notification of closure, suspension and resumption of business, or amended
notification, as set forth in Article 13 of the Act, which is applied mutatis mutandis under
Paragraph 4 of Article 15 of the Act
4. Order for report, entry, inspection, questions, and collection as provided in Article 28 of the
Act
5. Order for testing as provided in Article 29 of the Act
6. Order for collection, destruction, etc., and boxing, sealing, etc. as provided in Article 30 of the Act
7. Order for shutdown of business place or suspension of part or all of the business as set forth in Paragraph 1 of Article 32 of the Act as provided in Article 33 of the Act, and imposition and collection of an administrative sanction fine in lieu of suspension of business operation as provided in Article 33 of the Act
8. Renewal of an accepted notification as provided in Article 41 of the Act
9. Imposition and collection of an administrative default fine as provided in Article 47 of the
Act

ADDENDUM <No.18401, May 25, 2004>

Article 1 (Effective Date) This Decree shall take effect as of May 30, 2004.
Article 2 (Amendment to Other Relevant Regulations) An amendment shall be made in the Standard Ordinance of Facilities for Manufacturers, Importers, and Sellers of Veterinary Drugs as follows:
The “Veterinary Medical Instruments” shall be amended to “Veterinary Medical Device(s)” in the title and the main body of Item 1 of Article 2 and Article 6 respectively.

An amendment shall be made to the organization of the Ministry for Health and Welfare, and the agencies and organizations under its supervision, as follows:
The “Medical Instrument(s)” shall be amended to “Medical Device(s)” in Item 18 and Item 19 of Paragraph 2 of Article 12.

An amendment shall be made in the Enforcement Decree of the Health and Medical Service
Technology Promotion Act as follows:
“Medical Instrument(s)” shall be amended to “Medical Device(s)” in Sub-item of Item 3 of
Article 2.

An amendment shall be made in the Enforcement Decree of the Income Tax Act as follows: “Medical Instrument(s)” shall be amended to “Medical Device(s)” in Item 3 of Paragraph 1 of Article 110.

An amendment shall be made to the organization of the Korea Food & Drug Administration and its affiliates as follows:
“Medical Instrument(s)” shall be amended to “Medical Device(s)” in Items 41 through 49 of
Paragraph 2 of Article 9, and Items 1, 4 and 11 of Paragraph 8 of Article 10.

An amendment shall be made in the Standard Ordinance of Facilities for Pharmacies and
Manufacturers, Importers and Sellers of Drugs, etc., as follows:
“Manufacturing site for Drugs, Quasi-drugs, or Medical Instruments (hereafter referred to as “Drugs, et al.”)” shall be amended to “Manufacturing site for Drugs or Quasi-drugs (hereafter referred to as “Drugs, et al.”)” in the provisions of Paragraph 1 of Article 3 other than each item thereof.
“Paragraph 8 of Article 43 of the National Health Insurance Act” shall be amended to
“Paragraph 6 of Article 43 of the National Health Insurance Act” in Paragraph 2 of Article 9.

An amendment shall be made in the Enforcement Decree of the Pharmaceutical Affairs Law as follows:
“Drugs, Quasi-drugs and Medical Instruments (hereafter referred to as “Drugs, et al.”)” shall be
amended to “Drugs and Quasi-drugs (hereafter referred to as “Drugs, et al.”)” in Item 2 of
Article 11.

An amendment shall be made in the Enforcement Decree of the Specialized Credit Financial
Business Act as follows:
“Medical Instrument(s)” shall be amended to “Medical Device(s)” in the title and main body of
Article 11 respectively.

An amendment shall be made in the Enforcement Decree of the Foreign Nongovernmental
Aid Organizations Act as follows:
“Drugs, Quasi-drugs, Medical Instruments, Hygiene articles, and Ambulances” shall be amended to “Drugs, Quasi-drugs, Medical Devices and Ambulances” in Item 1 of Article 4.

An amendment shall be made in the Regulation on Delegation and Entrustment of
Administrative Authorities, as follows:
“Drugs (except for the Pharmaceutical Raw Materials designated by the KFDA Commissioner), Quasi-drugs or Medical Instruments” shall be amended to “Drugs (except for the Pharmaceutical Substances designated by the KFDA Commissioner) or Quasi-drugs” in sub-item of Item 2 of Paragraph 1 of Article 35.

ADDENDUM (Staff Regulations of Senior Civil Service)

<No.19513, June 12, 2006>

Article 1 (Effective Date) This Decree shall take effect as of July 1, 2006. Articles 2 and 3 Omitted
Article 4 (Amendment to Other Relevant Regulations) Paragraph 1 through <161> Omitted.
An amendment shall be made in the <162> Enforcement Decree of the Medical Device Act in part as follows:
“Public officials of 4th grade or higher” of Item 1 of Paragraph 3 of Article 2 shall be amended to “Public officials of 4th grade or higher, or those of general position belonging to Senior Civil Service”.
<163 > through <241> Omitted.

ADDENDUM <No.20157, July 3, 2007>

This Decree shall take effect from July 4, 2007 provided that the amended provision of Article
13 shall take effect 30 days from the date of promulgation.

ADDENDUM (Organization of the Ministry for Health, Welfare and Family Affairs and its Affiliates) <No. 20679, February 29, 2008 >

Article 1 (Effective Date) This Decree shall take effect as of the date of promulgation. Articles 2 through 8 Omitted.
Article 9 (Amendment to Other Relevant Regulations) Paragraph 1 through <47> Omitted.
An amendment shall be made in the <48> Enforcement Decree of the Medical Device Act in part as follows:
The “Vice-Minister of Health and Welfare” of Paragraph 2 of Article 2 shall be amended to the “Vice-Minister for Health, Welfare and Family Affairs”.
The “Minister of Health and Welfare” shall be each amended to the “Minister of Health, Welfare and Family Affairs” in Paragraph 3 of Article 2 other than each item thereof, Paragraph
2 of Article 5, Paragraph 6 of Article 7, Paragraph 5 of Article 8, and Article 10 respectively. The “Ministry of Health and Welfare” shall be amended to the “Minister for Health, Welfare and Family Affairs” and the “Minister of Health and Welfare” to the “Minister of Health, Welfare and Family Affairs” in Paragraph 2 of Article 9.
The “Ministerial Decree of the Ministry of Health and Welfare” of Paragraph 1 of Article 11
shall be amended to the “Ministerial Decree of the Ministry for Health, Welfare and Family
Affairs”.
<49> through <80> Omitted.

ADDENDUM <No. 22075, March 15, 2010>

Article 1 (Effective Date) This Decree shall take effect as of March 19, 2010.
Article 2 (Amendment to Other Relevant Regulations) Paragraphs 1 through <119> shall be omitted.
<120> The Medical Device Ordinance shall be amended partially as follows:
“Vice-Minister of Health, Welfare and Family Affairs” shall be amended to the “Vice-Minister for Health and Welfare” in Paragraph 2 of Article 2.
“Minister of Health and Welfare” shall be amended to “Minister for Health, Welfare and
Family Affairs” in Paragraph 3 of Article 2 other than each item thereof, Paragraph 2 of Article
5, Paragraph 6 of Article 7, Paragraph 5 of Article 8 Paragraph 2 of Article 9 and Article 10. “Ministry of Health, Welfare and Family Affairs” of Paragraph 2 of Article 9 shall be amended to “Minister for Health and Welfare”.
“Ministerial Decree of the Ministry of Health, Welfare and Family Affairs” of Paragraph 1 of
Article 11 shall be amended to “Ministerial Decree of the Ministry of Health and Welfare”.
<121> through <187> Omitted.

ADDENDUM <No.22247, June 30, 2010>

Article 1 (Effective Date) This Decree shall take effect as of January 1, 2011. However, the provisions of Article 7 as amended shall take effect from the date of promulgation.
Article 2 (Interim Measures concerning Disposition, Etc.) Acceptance, disposition or other acts by
an administrative body in respect of a refurbishing business notification for medical devices under the previous provisions in effect as of the effective date of this Decree shall be deemed to be
the acceptance, disposition or other acts by an administrative body in respect of a refurbishing
business notification for medical devices under this Decree, and notifications and other acts to an administrative body under such previous provisions shall be deemed to be notifications and other acts to an administrative body under this Decree.

[Attached Table]

Guidelines for Administrative Sanction Fine Calculation(Related to Paragraph 1 of

Article 11)

(Unit: Million Won)

Remarks
1. One (1) month of suspension of business operation shall be deemed as 30 days.
2. The guidelines for administrative sanction fine calculation subject to Medical Devices
Manufacturers or Importers are as follows:
A. In the case of imposing an administrative sanction fine in lieu of suspension of a manufacturing (importing) business, the basis for the penalty shall be the total amount of manufacture or import of all products for one (1) year previous to the year in which the pertinent violation occurred.
B. In the case of imposing an administrative sanction fine in lieu of suspension of product manufacturing (importing), the basis for the penalty shall be the total amount of manufacture or import of the pertinent product for one (1) year previous to the year in which the pertinent violation occurred.
C. In the case of the above sub-items A and B, when the Manufacturer or the Importer newly manufactures or imports the product, or when it is deemed unreasonable to calculate the penalty based on the total amount of production or import for one year due to temporary closing, etc., it shall be calculated on the basis of the quarterly or monthly amount of manufacture (import).
3. When applying the guidelines for an administrative sanction fine to Manufacturers or Importers, in the case where the period for suspension of general business operation is stated in the written order except for the suspension of manufacturing (import) business or product manufacturing (import) business, it shall be calculated by multiplying the period by one-half.
4. Calculation of administrative sanction fine to Refurbisher, Distributors, or Renters shall be based on the total sales for one (1) year of the previous year of the business. However, when it is impossible to calculate the total sales for one (1) year due to new business or temporary business closing, etc., or when it is deemed unreasonable that it is based on the total sales for one (1) year, it shall be calculated based on quarterly or monthly sales.