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Laws of the Republic of Korea |
[Amended by Presidential Decree No. 12979, April 14, 1990]
Enacted by Presidential Decree No. 10267, April 1, 1981 Amended by Presidential Decree No. 11475, July 21, 1984 Amended by Presidential Decree No. 12120, April 1, 1987 Amended by Presidential Decree No. 12979, April 14, 1990 Amended by Presidential Decree No. 13842, February 20, 1993 Amended by Presidential Decree No. 14566, April 1, 1995 Amended by Presidential Decree No. 15328, March 31, 1997 *Enforcement Decree of the Specialized Credit Financial Business Act No. 15569, December 31, 1997 Amended by Presidential Decree No. 15765, April 1, 1998 Amended by Presidential Decree No. 16221, March 31, 1999 *Enforcement Decree of the Fair Labeling and Advertising Act No. 16430, June 30, 1999 Amended by Presidential Decree No. 16777, April 1, 2000 Amended by Presidential Decree No. 17176, March 27, 2001 Amended by Presidential Decree No. 17317, July 24, 2001 Amended by Presidential Decree No. 17564, March 30, 2002 Amended by Presidential Decree No. 18536, April 1, 2004 Amended by Presidential Decree No. 18736, March 8, 2005 (Enforcement Decree of the Act on Private Participation in Infrastructure)
Amended by Presidential Decree No. 18768, March 31, 2005 Presidential Decree No. 18903, June 30, 2005 (Enforcement Decree of the Design Act) Presidential Decree No. 19023, August 31, 2005 (Enforcement Decree of the New and Renewable Energy Development, Use, and Supply Promotion Act) Presidential Decree No. 16422, March 29, 2006 (Enforcement Decree of the Integrated Insolvency Act)
Amended by Presidential Decree No. 19447, April 14, 2006 Presidential Decree No. 19574, June 29, 2006 (Enforcement Decree of the Environmental Technology Development and Support Act)
Amended by Presidential Decree, July 13, 2007
Chapter 1 General Provisions
Article 1 (Purpose)
This Decree seeks to define the details of matters delegated by the Monopoly Regulation and Fair
Trade Act (hereinafter referred
to as "Act") and matters required for the implementation of the Act.
Article 2 (Classification of a Holding Company)
"Any company... whose total asset exceeds the amount set forth in the Presidential Decree" as
stipulated in Item 1-2, Article 2
(Definitions) of the Act pertains to a corporation whose net assets as
indicated in the balance sheet exceed KRW100 billion as of
the end of the previous business year [for
corporations that were newly established or those that underwent a merger or a division/merger
through division/real division (hereinafter referred to as "Division") during the year in question, the
establishment date, merger
date, or division date, respectively; the same shall apply hereinafter].
"...criteria established in the Presidential Decree" as stipulated in Clause 1-3, Article 2 (Definitions)
of the Act mean that the
following conditions are satisfied:
1. Affiliated corporations (excluding affiliated corporations whose shares are acquired by a small and
medium enterprise establishment
investment company established in accordance with the Support for
Small and Medium Enterprise Establishment Act or by a financing
business for new technology
projects as established by the Specialized Credit Financial Business Act for purposes of investing in
enterprise establishment or supporting new technology business) of a holding company
2. Shares owned by a holding company or total shares owned by a holding company, its subsidiaries,
and business-related sub-subsidiaries
to be equal to or more than the shares owned by the largest
investor among the persons defined in Clause 1 or 2, Article 11 (Scope
of Specially Related Persons)
[Amended on March 31, 1999]
Article 2-2 (Criteria for Business-related Sub-subsidiaries)
"A domestic company that is closely related to the subsidiaries concerned
as determined by the
Presidential Decree" as stipulated in Item 1-4, Article 2 of the Act pertains to a company engaging in
any
of the following businesses:
1. Transport, storage, and sale of goods produced by subsidiaries or sale of the services of
subsidiaries
2. Management and maintenance of goods and services produced by subsidiaries or provision of
services such as the repair of goods
3. Production or sale of goods and services whose major production factors are the goods and
services of subsidiaries
4. Provision of production factors such as raw materials and services required by subsidiaries
5. Research on and development of products or services produced by subsidiaries
6. Production or sale of products and services sharing similarities with or most production technologies
of the goods and services
produced by subsidiaries
7. Other businesses that are closely related to the businesses of subsidiaries
[Newly established on March 31, 2005]
Article 3 (Scope of Business Groups)
"An entity that in fact controls businesses as defined in the Presidential Decree" in Clause 2, Article 2
(Definitions) of the Act
refers to any of the following companies: 1. Corporation wherein a single person owns either solely or together with any of the following
enterprisers (hereinafter referred
to as "Related Persons") thirty percent (30%) or more of the total
outstanding shares [excluding non-voting shares as set forth
in Article 370 of the Commercial Act; the
same shall apply to Article 3, Article 3-2 (Exemption from Business Groups), Article 17-5
(Conditions
for Exemption from the Limitations on Debt Guarantees), and Article 18 (Reporting, Etc., of
Combination of Enterprises)]
and considered the largest shareholder
A. Spouse, blood relative within eight degrees of kinship, or in-law within four degrees
of kinship
(hereinafter referred to as "Relatives")
B. Non-profit corporation or organization (referring to non-incorporated associations or foundations;
the same shall apply hereinafter)
founded either by a person or a related person and whose thirty plus
percent (30%+) of donations come either solely from such person
or together with a related person as
the highest contributor(s)
C. Non-profit corporation or organization wherein a person either directly or indirectly (through a
related person) wields a controlling
influence on matters such as the composition of officers or
operation of business, etc.
D. Corporation whose businesses are in fact controlled by a person pursuant to Clauses (1) and (2)
E. Person and employees whose
relationships fall under Items B~D (officers in the case of
corporations, commercial employees and those under employment contracts
in the case of individuals)
2. Any of the following corporations considered to wield considerable influence on the company
concerned:
A. Corporation wherein a person through a contract or an agreement with another major shareholder
has appointed/dismissed the chief
executive or has appointed fifty percent (50%) or more of the
officers, or there is a likelihood of such
B. Corporation wherein a person either directly or indirectly (through a related person) wields a
controlling influence on major
business decisions or executions such as organizational readjustment
and investments in new companies
C. Company that engages in personnel exchange under any of the following cases, with the
corporation controlled by a person (includes
the person if he/she is an enterpriser; the same shall
apply hereinafter):
(1) Cases of interlocking directorate between said company and the corporation controlled by the
person
(2) Cases wherein the officers or employees of the corporation controlled by the person were
appointed as officers of said company
and subsequently re-appointed as officers or employees of the
corporation controlled by the person (including cases of re-appointment
to different corporations
owned by the person)
(3) Cases wherein the officers of said company were appointed as officers or employees of the
corporation controlled by the person
and subsequently re-appointed either to said company or
affiliates
D. Companies engaged in acts deemed to be acts of a single economic entity according to the social
norm, e.g., acts of trading funds,
assets, products, services with the person or related person, acts of
granting or receiving guarantees in excess of the normal range
to and from the person or related
person, and acts of representation in sales that render the company as an affiliate of the person's
business group
[Amended on March 31, 1997]
Article 3-2 (Exclusion from the Business Group)
Any of the following corporations whose business is not deemed to be controlled by the person may
be excluded by the Fair Trade
Commission from the business group controlled by the person at the
request of interested parties, notwithstanding the provisions
of Article 3: 1. Companies that are in fact managed by persons other than the following in accordance with
agreements, contracts, etc., among investors:
A. Appointees of the person
B. Enterpriser related to the person by the relationships specified in Item A or E, Clause 1, Article 3
(Scope of Business Groups)
2. Companies deemed to be compliant with the following requirements (hereinafter referred to as
"Criteria for Recognition of Independent
Management") and independently managed by a relative of
the person:
A. Each company's total shares owned by the person and related persons [excluding independent
managers of affiliates of relatives
(hereinafter referred to as "Independent Manager") and those
excluded by the Fair Trade Commission from the scope of related persons
at the request of
independent managers] shall be less than three percent (3%) (less than ten percent (10%) for entities
other than
listed corporations or association-registered corporations) of the total outstanding shares of
each company requesting for exemption
from the business group controlled by the person (hereinafter
referred to as "Affiliates of Relatives").
B. Each of the person-controlled companies' total shares (referring to the business group controlled
by the person excluding the
affiliates of relatives; hereinafter referred to as "Affiliates of the Person")
owned by the independent manager and those related
to the independent manager by any of the
relationships outlined in Item 1 (excluding persons related to the person (related persons)
as per the
provisions of Item a), Article 3 (Scope of Business Groups) shall be less than three percent (3%) of
each company's
total outstanding shares (less than fifteen percent (15%) for entities other than listed
corporations or association-registered
corporations).
C. Affiliates of the person and those of his/her relatives shall not have an interlocking directorate.
D. Between
the affiliates of relatives and those of the person, there shall be neither debt guarantees
nor financial loans; note, however,
that debt guarantees and financial loans occurring during the
ordinary process of debt guarantees and transaction pursuant to Item
1, Clause (1), Article 10-2 of the
Act shall be excluded.
E. Deleted
3. Companies undergoing the bankruptcy procedure after they were declared bankrupt as per the
Integrated Insolvency Act
4. Companies falling under those contracting an agreement as defined in Item 2, Article 2 of the
Corporate Restructuring Vehicle
Act and meeting the following conditions:
A. Among the shares owned by the person or related person, disposal and voting rights
related to
shares exceeding 3% of the total shares issued by the company concerned (in case of companies that
are neither listed
on the stock market nor registered in the Korea Securities Dealers Association, 10%),
shall be transferred to the creditor financial
institution (financial institutions as per the Banking Act and
other related Acts) granting credit to the company concerned.
B.
The person and related person shall make a special arrangement to give up the right to terminate
the authorization contract under
the provisions of Item A.
5. Companies undergoing the reorganization procedure as per the Integrated Insolvency Act and
meeting the following conditions:
A. Among the shares owned by the person or related person, disposal and voting rights related to
shares exceeding 3% of the total
shares issued by the company concerned (in case of companies that
are neither listed on the stock market nor registered in the Korea
Securities Dealers Association, 10%)
shall be transferred to the supervisor as per the provisions of Article 94 of the Corporate
Reorganization Act. Upon the completion of the corporate reorganization process, the rights shall be
succeeded to the reorganized
company.
B. The person and related person shall make a special arrangement to give up the right to terminate
the authorization contract under
the provisions of Item A.
Notwithstanding Article 3 (Scope of Business Group), the Fair Trade Commission may exempt from
the scope
of business groups controlled by the single person the following corporations at the request
of interested parties:
1. Any of the following private investment corporations established as per the Private Investment in
Indirect Public Facilities Act
wherein twenty percent (20%) or more of the total outstanding shares are
owned by the person (note, however, that such private investment
corporations shall neither engage in
cross-shareholding with other corporations nor receive debt guarantees from persons other than
investors):
A. National/Local autonomous bodies
B. Government-invested institution pursuant to Article 2 (Application Scope) of the Governmental
Institution Management Act
C. Public companies, organizations, and other corporations established under special statutes
2. Any of the following corporations with more than two largest investors (including cases wherein a
single person and his/her related
persons made investments) deemed not to wield a controlling
influence on the composition of executive managers, business operation,
etc.:
A. Corporation established by two or more corporations engaged in the same business through
investment in kind of assets
or merger for purposes of corporate restructuring
B. Any of the corporations in the list of private investment business entities
as per the Act on Private
Participation in Infrastructure and pursuing private investment projects in accordance with the methods
set forth in Items 1~4, Article 4 of said Act
If a corporation exempted from the business group controlled by the person as stipulated in Clauses
(1) and (2) no longer meets
the exemption criteria, the Fair Trade Commission may invalidate such
exemption at the request of interested parties or through
its own initiative; for companies exempted
from the business group controlled by the person as per Item 2, Clause 1, however, the
foregoing shall
apply only to cases wherein the company no longer meets the exemption conditions within three years
of the date
of exemption.
Any enterpriser wishing to request for exemption from the business group controlled by the person
under Item 2, Clause (1) shall
submit the following documents to the Fair Trade Commission (when
the information on the submitted document can be confirmed through
the joint use of administrative
information pursuant to Clause 1, Article 21 of the Act on Promoting Paperless Work in Public
Administration
to Realize an e-Government, however, such confirmation may replace the submitted
documents: 1. In the case of Items 2A and 2B, Clause (1), the register of shareholders; in such case, registered
corporations shall include
a written confirmation from the stock transfer agency
2. In the case of Item 2C, Clause (1), the registrations of the affiliates of the person and affiliates of
relatives
3. In the case of Item 2D, Clause (1), a status report of the debt guarantees and capital loans by a
certified public accountant
[Newly established on March 31, 1997]
Article 4 (Computation of Sales or Purchase)
"Annual turnover or purchase" as per the provisions of Item 7, Article 2 (Definitions) of the Act
pertains to the price of goods
or services supplied or purchased by the company (referring to the price
excluding indirect taxes on goods or services; the same
shall apply hereinafter) during the year
immediately before the year covering the date the activity suspected of violating Article
3-2 (Prohibition
on the Abuse of Market Dominance) of the Act by the company ended (in case the activity continues
until either
the recognition or reporting date, the recognition or reporting date).
"Market share" as per Item 7, Article 2 (Definitions) and
Article 4 (Ex-Post Facto Judgment of
Market-Dominant Enterprisers) of the Act refers to the ratio of price of goods or services
supplied or
purchased domestically by the company concerned to the total price of goods or services supplied or
purchased domestically
during the year immediately before the year covering the date the activity
suspected of violating Article 3-2 (Prohibition on the
Abuse of Market Dominance) of the Act by the
company ended; if computing the market share based on the price is difficult, however,
the market
share may be computed based on the quantity or production capacity.
In applying the provisions of Item 7, Article 2
(Definitions) and Article 4 (Ex-post Facto Judgment of
Market-dominant Enterprisers) of the Act, an enterpriser and its affiliated
corporations shall be
regarded as a single entity.
The Fair Trade Commission may determine and announce the specific criteria required for judging
market-dominant enterprisers as
per Item 7, Article 2 (Definitions) of the Act.
[Amended on March 31, 1999]
Article 4-2 (Commissioning of Investigations of the Market Structure and Public Announcement)
The Fair Trade Commission may commission
the tasks of investigating monopolistic and
oligopolistic market structures, making public announcements, or requesting the submission
of
pertinent documents as per Clause (5), Article 3 (Improvement of Monopolistic and Oligopolistic
Market Structures) to the heads
of the relevant administrative agencies or state-funded research
centers.
The head of the agency entrusted with the investigation of market structure or making of public
announcements pursuant to Clause
(1) shall report his/her performance of the task to the Fair Trade
Commission.
[Newly established on March 31, 1999]
Chapter 2 Prohibition on the Abuse of Market Dominance
Article 5 (Types of and Criteria for Abusive Acts)
"Unreasonable fixing,
maintenance, or alteration of price" as per Item 1, Clause (1), Article 3-2
(Prohibition on the Abuse of Market Dominance) of the
Act pertains to a sharp increase or insignificant
decrease in the price/cost of goods or services relative to the changes in the
supply and demand or in
the supply cost without justifiable reason (limited to general or similar businesses).
"Unreasonable control
of the sale of goods or provision of services" as per Item 2, Clause (1), Article
3-2 (Prohibition on the Abuse of Market Dominance)
of the Act refers to the following:
1. Significantly decreasing the supply of goods or services without justifiable reason and considering
the recent trends
2. Decreasing the supply of goods or services despite a supply shortage in distribution without
justifiable reason
"Unreasonably hampering another enterpriser's business activities" as per Item 3, Clause 1, Article
3-2 (Prohibition on the Abuse
of Market Dominance) of the Act involves hindering another enterpriser's
business activities by directly or indirectly engaging
in any of the following acts:
1. Hindering the purchase of raw materials required for the production of the other enterpriser without
justifiable reason
2. Employing human capital indispensable to the business activities of another firm by granting or
promising excessive economic compensation
compared to normal practices
3. Refusing, discontinuing, or limiting the use of or access to essential facilities for the manufacture,
provision, or sale of products
or services of other enterprisers without justifiable reason
4. Engaging in unreasonable acts other than those in Items 1, 2, and 3 and deemed by the Fair Trade
Commission to hinder the business
activities of other enterprisers
"Unreasonably hindering the entry of a new competitor" as per Item 4, Clause (1), Article 3-2
(Prohibition on the Abuse of Market Dominance) of the Act involves obstructing the entry of new
competitors by directly or indirectly
engaging in any of the following acts:
1. Entering into an exclusive contract with a transaction partner without justifiable reason
2. Purchasing the rights, etc., required for the continued business activities of an established
enterpriser without justifiable
reason
3. Refusing or limiting the use of or access to essential facilities for the manufacture, provision, or sale
of products or services
of new competitors without justifiable reason
4. Engaging in unreasonable acts other than those in Items 1, 2, and 3 and deemed by the Fair Trade
Commission to hinder the entry
of new competitors
"Unreasonable transaction to exclude competitors" as per Item 5, Clause (1), Article 3-2 (Prohibition
on the
Abuse of Market Dominance) of the Act pertains to any of the following:
1. Where there is a possibility of excluding a competitor by supplying goods or services at
unreasonably low prices or purchasing
goods or services at unreasonably high prices compared to the
normal transaction price
2. Unreasonably transacting with a partner under the condition that the partner does not transact with
a competing enterpriser
The Fair Trade Commission may determine and announce the specific types of and criteria for
Abusive Acts as referred to in Clauses
(1)~(5).
[Amended on March 31, 1999]
Article 6 (Request for Price Investigation)
When there is substantial ground to suspect that a market-dominant enterpriser has unreasonably
fixed, maintained, or altered the
price of goods or services, the Fair Trade Commission may request
for an investigation of the price of goods or services from the
head of the relevant administrative
agencies or from public institutions responsible for investigating consumer prices.
Article
7 Deleted
Article 8 (Method for the Public Announcement of Receipt of Corrective Order
The Fair Trade Commission may order the enterpriser concerned pursuant to Article 5 (Corrective
Measures), Article 16 (Corrective
Measures), Clause 1, Article 21 (Corrective Measures), Article 24
(Corrective Measures), Article 27 (Corrective Measures), or Article
31 (Corrective Measures) of the Act
[in the case of Article 27 (Corrective Measures) of the Act, a business group (including member
enterprisers when necessary)] to publicize its receipt of corrective order by setting the standards for
the content, type and number
of media, and size of space for such publication considering the
following:
1. Content and degree of violations
2. Duration and frequency of violations
Article 9 (Computation of Surcharges)
"Turnover set forth in the Presidential Decree" as per Article 6 (Surcharges), Article 22 (Surcharges),
Article 24-2 (Surcharges),
Article 28 (Surcharges), Clause (2), Article 31-2 (Surcharges), and Article
34-2 (Surcharges) of the Act refers to an enterpriser's
average turnover for the past three years
(hereinafter referred to as "average turnover"). If the firm is less than three years
old at the start of the
relevant business year, however, the turnover shall be the annual average turnover adjusted from the
total
amount of turnover from the first day until the last day of business for the year immediately prior
to the relevant business year;
in case the firm commenced business during the relevant business year,
the turnover shall be the annual average turnover calculated
from the total turnover from the first day
of operation until the date of violation.
[Amended on March 31, 1997]
Article 9-2 (Scope of Enterprisers Using Operating Revenue)
"An enterpriser as provided for by the Presidential Decree" as per Article
6 (Surcharges) of the Act
pertains to an enterpriser entering in its financial statements the total price of goods or services as
operating revenue.
[Amended on March 31, 1997]
Article 10 (Absence of Turnover, etc.)
"In the absence of turnover, or in case of difficulty in calculating the turnover as provided for by the
Presidential Decree" as
per Article 6 (Surcharges) of the Act refers to any of the following cases:
1. There is no operating result because either business was not commenced or was suspended.
2. Deleted 3. The computation of an objective turnover is difficult due to a disaster, etc., thereby causing data
damage or loss in the course
of calculating the turnover.
[Amended on March 31, 1997]
Chapter 3 Restrictions on the Combination of Enterprises and Concentration of Economic
Power
Article 11 (Scope of Specially Related Party)
"Specially related person as defined by the Presidential Decree" as per Clause (1), Article 7
(Restrictions on the Combination of
Enterprises) of the Act pertains to a person other than a
corporation falling under the following cases:
1. Controls the concerned company
2. A related person; note, however, that persons distinguished from related persons as per Clause
(1), Article 3-2 (Exemption from
Business Groups) are excluded
3. Engages in the Combination of Enterprises for the joint purpose of controlling management
[Amended on March 31, 1997]
Article 12 (Criteria for Total Assets or Sales Revenues)
"Total assets" as per Clause (1), Article 7 (Restrictions on the Combination
of Enterprises) and
Clause 1, Article 12 (Notification on the Combination of Enterprises) of the Act refer to the total assets
in the balance sheet as of the closing date of the fiscal year immediately prior to the year of the
combination of enterprises.
For financial or insurance companies, however, the total shareholders'
equity or capital in the balance sheet as of the closing
of the previous fiscal year, whichever is larger,
shall be used.
"Sales revenues" as per Clause (1), Article 7 (Restrictions on the Combination of Enterprises) and
Clause (1), Article 12 (Notification
on the Combination of Enterprises) of the Act refer to the sales
revenues in the income statement of the year immediately prior
to the year of the combination of
enterprises. For financial or insurance companies, however, "sales revenues" pertain to operating
revenues in the income statement of the previous fiscal year.
Article 12-2 (Criteria for Large-Scale Company)
"Enterpriser whose total assets or sales revenues meet the criteria provided for by the Presidential
Decree" as per Clause 1, Article
7 (Restrictions on the Combination of Enterprises) of the Act pertains
to a company whose total assets or sales revenues exceed
KRW2 trillion.
[Newly established on March 31, 1997]
Article 12-3 (Exceptions from the Scope of Specially Related Persons)
"Those set forth under the Presidential Decree" as per Item
5a, Clause (1), Article 7 of the Act, Item 1,
Clause (1), Article 8-2 of the Act, and Item 3, Article 11 of the Act refer to the
persons defined by Item
3, Article 11 of this Decree.
Article 12-4 (Combination of Enterprises Involving a Company that Cannot be Revitalized)
"Conditions set forth under the Presidential
Decree" as per Item 2, Clause (2), Article 7 (Restrictions
on the Combination of Enterprises) refer to any of the following cases:
1. The continued use of the company's production facilities, etc., in the relevant market is difficult
without a combination of enterprises.
2. Carrying out a combination of enterprises that is less anti-competitive than the combination of
enterprises in question is difficult.
[Newly established on March 31, 1999]
Article 13 Deleted
Article 14 Deleted
Article 15 (Reporting the Establishment of or Conversion into a Holding Company)
A person establishing a holding company or converting
into such shall submit an application
including the name of the reporting person, name of the holding company, subsidiaries and
business-
related sub-subsidiaries, total assets and liabilities, shareholder status, share ownership status,
business content,
etc., to the Fair Trade Commission within any of the following time frames as per
Article 8 of the Act based on the procedures established
and announced by the Fair Trade
Commission along with certifying documents: 1. When establishing a holding company, within thirty days of registration of the establishment
2. When converting into a holding company through merger or division, within thirty days of the merger
or division
3. When a company is not covered by Article 8 of the Act pursuant to other Acts, within thirty days of
the expiration of the exemption
period
4. When converting into a holding company through the acquisition of shares, change in assets, or
other methods, within four months
of the end of the relevant business year
If the person making the report as per Clause (1) is also the entity controlling a corporation
belonging to a large business group subject to the limitations on debt guarantees as per Clause (1),
Article 10-2 (Prohibition
on Debt Guarantees for Affiliated Corporations) of the Act or a specially
related person of the entity, an Elimination Record of
Debt Guarantees shall be additionally submitted
pursuant to the Items of Article 8-3 (Restrictions on the Establishment of Holding
Companies by Large
Business Groups Subject to the Limitations on Debt Guarantees) of the Act.
If there are more than two persons involved in the reporting of the establishment of a holding
company as per Clause (1), the report
shall be filed jointly. If one of the persons subject to reporting is
appointed as the representative, and such representative files
the report, however, the foregoing does
not apply.
If a company is no longer subject to Clause (1) or (2), Article 2 (Criteria for a Holding Company)
during a business year as a holding
company due to an event such as a decrease in shares owned or
change in assets, etc., and it notifies the Fair Trade Commission
accordingly, such company shall no
longer be considered a holding company as of the date of occurrence of the relevant event.
A
corporation filing a report as per Clause (4) shall submit to the Fair Trade Commission a balance
sheet and the share ownership
status audited by a certified public accountant as of the date of
occurrence of the event in question following the procedures set
forth by the Fair Trade Commission.
In such case, the Fair Trade Commission shall notify the filer of the report of the review results
within
thirty days.
[Amended on March 31, 1999]
Article 15-2 (Criteria for a Holding Company for Venture Business)
"The criteria provided by the Presidential Decree" as per Item
2, Clause (1), Article 8-2 of the Act
pertains to the case wherein the total share value of the venture company pursuant to Clause
(1),
Article 2 of the Act on Special Measures for the Promotion of Venture Business under the ownership of
a holding company is
equal to fifty percent (50%) or more of the sum of the share values of all
subsidiaries under said holding company.
Article 15-4 (Restrictions on the Ownership of Subsidiary Shares by a Financial Holding
Company)
"Corporations closely related to the financial or insurance business, etc., and meeting the criteria set
forth in the Presidential
Decree" as per Item 4, Clause (2), Article 8-2 of the Act refer to corporations
whose primary purpose is as follows: 1. Providing services such as computation or information processing to financial or insurance
companies
2. Managing real estate and other assets owned by financial or insurance companies
3. Conducting survey or research related to financial or insurance businesses
4. Engaging in other activities directly related to the characteristic businesses of financial or
insurance companies
[Newly established on March 31, 1999][Moved from Article 15-3; former Article 15-4 moved to Article
15-5
Article 15-5 Deleted
Article 15-6 (Reporting of Share Ownership Status of a Holding Company, Etc.
As stipulated in Clause (5), Article 8-2 of the Act, a holding company as defined and announced by
the Fair Trade Commission shall
submit to the Fair Trade Commission within four months of the last
day of the relevant business year a report containing the following
information:
1. General information of the holding company and their subsidiaries and business-related sub-
subsidiaries (hereinafter referred
to as "Holding Company, Etc."), such as name, place, date of
establishment, business content, names of representative executives,
etc.
2. Information on the shareholders of the holding company, etc.
3. Share ownership status of the holding company, etc.
4. Financial information of the holding company, etc., such as paid-in capital, total capital, total
liabilities, total assets, etc.
5. Deleted
1. Financial statements of the holding company, etc., for the previous year, e.g., balance sheets and
income statements, etc. (including
consolidated financial statements prepared by the corporation, if
applicable, pursuant to the Act on the External Auditing of Joint
Stock Companies) and audit report for
such financial statements by an auditor [the submission of the audit report is limited to
companies
falling under large business groups subject to the limitations on cross- shareholding, large business
groups subject
to the limitations on the total shareholding of other companies, and large business
groups subject to the limitations on debt guarantees
(hereinafter referred to as "Large Business
Groups Subject to the Limitations on Cross-Shareholding, Etc.") and target companies
for external
auditing as per the provisions of the Act on the External Auditing of Joint Stock Companies]
2. Shareholders' registers of subsidiaries and business-related sub-subsidiaries
3. Business report of subsidiaries and business-related sub-subsidiaries
In case the submitted report and attached documents as per
Clauses (1) and (2) are insufficient, the
Fair Trade Commission may order the supplementation of such within a set period.
[Newly
established on March 31, 1999][Moved from Article 15-5
Article 17 (Scope of Business Groups Subject to the Limitations on CrossShareholding
"Business group subject to the limitations on cross-shareholding" as per Clause (1), Article 9
(Prohibition on Cross-Shareholding)
of the Act refers to those business groups whose domestic
member corporations' combined total assets (in case of financial or insurance
companies, the total
shareholders' equity or capital stock, whichever is larger; in the case of a newly incorporated
corporation
having no balance sheet for the previous year, the paid-in capital as of the designation
date; the same shall apply herein and in
Articles 17-8 and 21) as indicated in the balance sheet of the
year immediately prior to the year of designation as a large business
group subject to the limitations
on cross-shareholding are at least KRW2 trillion, except the following business groups: 1. Business groups solely engaged in financial or insurance businesses
2. Business groups whose member financial or insurance corporation is an entity as defined in Item 2,
Article 2 (Definitions) of
the Act
3. Deleted 4. Deleted 5. Business groups wherein the total assets of the following member companies are fifty percent (50%)
or more of the combined total
assets of the business group, except the business groups whose
member companies other than those falling under the following categories
have combined total assets
of KRW2 trillion:
B. Companies undergoing the management process as per Items 1~3, Clause 1, Article 12 of No.
6504 Corporate Restructuring Promotion
Act
"Business groups prescribed by the Presidential Decree" as per Clause 8, Article 10 of the Act refer
to any of the following groups:
1. Business groups falling under Item 1 or 2, Clause (1)
2. Business groups wherein the total assets of member companies falling under Item 5A or 5B, Clause
(1) are fifty percent (50%) or
more of the combined total assets of the business group, excluding
business groups whose member companies other than those falling
under Item 5a or 5b, Clause (1)
have combined total assets of KRW10 trillion or more
3. Deleted 4. Among business groups wherein a person is natural person, business groups wherein the
proportion obtained by subtracting the ownership
right ratio of stocks of the person and his/her relative
from the voting right ratio of stocks of the person and related persons
in accordance with Articles 3
and 4 as of April 1 every year does not exceed 25/100 and wherein the voting right ratio of the person
and related persons does not exceed thrice the ownership right ratio of stocks of the person and
his/her relative
5. Business groups wherein there are no more than five affiliated companies falling under Clause (1),
Article 10 of the Act engaging
in two-tiered equity investment only (i.e., case wherein the affiliated
companies acquire or own shares of other affiliates, and
other affiliated companies acquire or own
shares of yet another affiliate)
The ownership right ratio of stocks of the person and his/her relatives pursuant to Item 4, Clause (2)
is calculated by adding the
figures derived by multiplying the ownership percentage of the person and
his/her relatives in each affiliated company [i.e., ratio
of shares owned by the person and his/her
relatives to the total stocks issued of each affiliated company (excluding non-voting
shares pursuant to
Articles 369 and 370 of the Commercial Act; the same shall apply herein)] by the total capital or capital
stock
of each affiliated company, whichever is larger, and dividing the result by the sum of the total
capital or capital stock of each
affiliated company, whichever is larger.
The voting right ratio of the person and related persons pursuant to Item 4, Clause (2) is calculated
by adding the figures derived
by multiplying the ownership percentage of the person and related
persons in each affiliated company (i.e., ratio of shares owned
by the person and related persons to
the total issued stocks of each affiliated company) by the total capital or capital stock of
each affiliated
company, whichever is larger, and dividing the result by the sum of the total stockholders' equity or
capital stock
of each affiliated company, whichever is larger.
"Other industries prescribed by the Presidential Decree" as per Item 4, Clause (1), Article 10 of the
Act refer to industries falling
under any of the following items:
1. Industries related to information and communication as per Clause (3), Article 2 of the Framework
Act on Informatization Promotion
2. Industries using bioengineering as per Article 2 of the Act on Bioengineering Promotion
3. Industries related to alternative energy as per Article 2 of the Act on the Development, Use, and
Spread of Alternative Energy
4. Industries related to environment as per Clause (3), Article 2 of the Act on Development and
Support to Environment Technology
"Conditions set forth in the Presidential Decree" as per Item 4, Clause 1, Article 10 of the Act
pertain to any of the following:
1. Acquisition or ownership of stocks of another company engaged in the same kind of business
(based on the medium category of the
Korean Standard Industry Classification as announced by the
Commissioner of the National Statistical Office pursuant to Clause 1,
Article 17 of the Statistical Act)
via transfer or investment-in-kind business run on an ongoing basis for 3 or more years or of
primary
properties used in such business for such company; in case of acquiring or owning stocks of a newly
established company
via transfer of business or investment in kind in the new company, however, this
provision shall be applied to the transfer of business
or investment in kind in the new company by
another company engaged in the same kind of business
2. Deleted 3. Deleted 4. Acquisition or ownership of stocks of a corporation newly incorporated through the splitoff or spin-off
of operation that has
been going on for three years or more covering the primary assets used in such
operation; in the case of a spin-off, however, the
same shall be applied to the acquisition or ownership
of stocks of a newly established company within the ratio of treasury stocks
5. Acquisition or ownership of less than 30 % of the outstanding shares of a newly incorporated
corporation meeting the following
criteria through investments in kind in the corporation of operation or
primary assets used in such operation
A. The combined equity investments of officers and employees engaged in the relevant business
shall be the largest among the equity
investments of the corporation concerned.
B. The corporation concerned shall not be another affiliated firm.
6. Acquisition or ownership of stocks of a corporation meeting the following conditions:
A. Company wherein a government-invested
institution owns more than 30% of the total stocks for
corporate restructuring
B. Country owning more than 30% of the total stocks of the government-invested institution in Item
A
7. Deleted
7-3. Deleted
8. Deleted 9. Acquisition or ownership of less than 50% of the total outstanding shares of any of the following
small and medium enterprises
pursuant to the Framework Act on Small and Medium Enterprises:
A. A small/medium enterprise that mainly produces/supplies raw materials,
parts, or materials
B. A venture company pursuant to the Act on Special Measures for the Promotion of Venture
Businesses; in case
of acquisition or ownership of shares issued by a non-venture company, however,
the same shall be applied for six months after the
issuance
10. Acquisition or ownership of shares of corporations commercializing new technologies as follows to
enhance the international competitiveness
of industries falling under any of the items in Clause (1); in
this case, "commercialize" pertains to the case wherein the sales
proportion of the product using such
new technologies accounts for not less than 30% of the total sales of a company for the past
one year
(in case of acquisition or ownership of shares of a newly established company attempting to
commercialize new technologies,
the company shall be deemed to have been commercializing new
technologies for two years following its establishment regardless of
the sales proportion of the product
using new technologies as in each sub-item of Item 10 among the total sales of the company for
the
past one year):
A. Distinguished new technology in information and communications as designated in accordance
with Article 22 of the Framework Act
on Informatization Promotion
B. New technology acknowledged by the Technology Development Promotion Act
C. Imported technology
reported pursuant to Clause (1), Article 25 (Report on Contracts for the
Introduction of Technology) of the Foreign Investment Promotion
Act
D. New environment technology designated as per Item 1, Clause (1), Article 18 of the Enforcement
Decree of the Act on Development
and Support to Environment Technology
E. Technology certified as per Item 3, Clause (2), Article 28 of the Enforcement Decree of
the
Industrial Development Act
F. Technology included in a comprehensive plan for next-generation growth engine industries
pursuant to Item 1, Clause (4), Article
13 of the Enforcement Decree of the Framework Act on Science
and Technology as acknowledged by the head of the related administrative
agency in accordance with
related laws
Companies falling under business groups subject to the limitations on the total cross-shareholding
pursuant to Item 4, Clause (1),
Article 10 of the Act and intending to gain recognition for their
acquisition or ownership of shares as per the Items of Clause
(2) shall submit the following documents
to the Fair Trade Commission in accordance with the conditions set forth by the Fair Trade
Commission:
1. Application form and other documents showing the particulars of equity investment
2. Documentary evidence such as proportions of sales and transaction as confirmed by a certified
accountant or a licensed tax accountant
in the case of Item 10, Clause (2) and Items 1 and 2, Clause
(5)
3. Other documents proving that they satisfy the related requirements
As per Item 5, Clause 1, Article 10 of the Act, "conditions
set forth by the Presidential Decree" refers
to any decision made during a shareholders' meeting (if the company concerned is not
a stock
company, decision means that for changing the articles of incorporation) regarding the conversion into
a holding company
and transformation into companies other than a stock company.
"Government-invested institution as set forth in the Presidential Decree" as per Item 2C, Clause (6),
Article 10 (Limitations on
the Total Cross-Shareholding) refers to any of the following companies:
1. Korea Electric Power Corporation established as per the Korea Electric Power Corporation Act
2. Korea District Heating Corporation established as per the Collective Energy Business Act
"Companies meeting the conditions set
by the Presidential Decree" as per Item 3, Clause (6),
Article 10 of the Act pertain to any of the following companies (if they
no longer fall under the following
conditions, however, the regulations in Clause (6), Article 10 of the Act shall be applied for
not more
than 6 months from the date they no longer fall under such conditions):
1. Corporations running the same business as those subject to the limitations on the total cross-
shareholding (referred to as "investing
company" herein); in this case, businesses run by the investing
company and company issuing shares acquired or owned by the investing
company (referred to as
"investee" herein) shall comply with the following criteria categorized as medium category in the
Korean
Standard Industry Classification as announced by the Commissioner of the National Statistical
Office pursuant to Clause 1, Article
17 of the Statistical Act:
A. For the investing company, the business generating at least 25% of total turnover at the time of
investment in the last three business years shall be used as basis. If there is only one such business,
a business taking up the
second largest portion (limited to that occupying at least 15% of the total
turnover) shall be included. In the absence of a business
with more than 25% of total turnover for the
past three business years, the basis shall be the business accounting for the largest
portion.
B. For the investee, the business accounting for the largest portion and whose total turnover is at
least 25% at the time
of investment in the last three business years shall be used as basis.
2. Companies conforming to any of the following conditions based on the volume of commerce for the
last three business years:
A. When an investee sells 50% or more of the goods produced by the investing company, or sales of
goods produced by the investing
company account for not less than 50% of the total sales of the
investee
B. When an investing company sells 50% or more of the goods produced by the investee, or sales of
goods produced by the investee
account for not less than 50% of the total sales of the investing
company
C. When an investee performs 50% or more of the maintenance, management, and repair of goods or
production facilities produced by
the investing company, or not less than 50% of an investee's total sales come
from the maintenance, management, and repair of goods
and production facilities produced by the
investing company
D. When an investing company performs 50% or more of the maintenance, management, and repair
of goods or production facilities produced
by the investee, or not less than 50% of an investing company's
total sales come from the maintenance, management, and repair of
goods and production facilities produced by
the investee
E. When 50% or more of the goods produced by an investing company are supplied to the investee
for raw material and parts, or not
less than 50% of the raw material and parts consumed by the
investee are supplied by an investing company
F. When 50% or more of the goods produced by an investee are supplied to the investing company
for raw material and parts, or not
less than 50% of the raw material and parts used by the investing
company are supplied by an investee
3. Companies mainly focusing on research and development for the production of an investing
company
4. Companies falling under any of the following items directly related to the business of an investing
company:
A. Companies confirmed to run the same businesses as those in Item 1a of an investing company as
their main businesses based on
the corresponding authorization/approval or statute
B. Companies providing indispensable facilities or services to enable an investing
company to run a
business in the relevant market
"Company falling under the standard prescribed by the Presidential Decree" in Item 5, Clause 6,
Article 10 refers to the affiliate
approved as per Article 17 of the Act on North-South Cooperation and
with total sales of more than 50% for the previous year. Note,
however, that a company that has not
been established for more than 2 years is considered a company that mainly operates the North-South
exchange cooperation business based on the approval for the North-South exchange cooperation
business and company statute.
Article 17-3 Deleted
Article 17-4 Deleted
Article 17-5 (Conditions for Exemption from the Limitations on Debt Guarantees
"Guarantees given in relation to the debts of companies undertaken" as per Item 1, Clause (1),
Article 10-2 of the Act pertain to
the following:
1. Guarantees given by the underwriting corporation or its affiliates to existing debt or debt or to be
assumed at the time of takeover
of the firm through share transfer, merger, etc.
2. Guarantees given by affiliates for the debt of the undertaken corporation and transferred in
installments
"Guarantees given in relation to debts as necessary to enhance a corporation's international
competitiveness, etc., as defined by
the Presidential Decree" as per Item 3, Clause (1), Article 10-2 of
the Act refer to the following:
1. Guarantees for loans given by the Export-Import Bank of Korea for purposes of financing the
production or capital and other goods
or for providing technology as per the provisions of Items 1 and
2, Clause (1), Article 18 (Duties) of the Export-Import Bank of
Korea Act or guarantees for loans given
by other domestic financial institutions in connection with such
2. Guarantees for the execution of bid warranty contracts, advance payment refund, reserve refund,
warranties, tax payments, etc.,
made by domestic financial institutions in connection with overseas
building and plant construction, export shipbuilding, service
exports, and other export of goods as
acknowledged by the Fair Trade Commission
3. Guarantees of funds provided by domestic financial institutions in connection with technology
development projects, e.g., commercialization
of new domestically developed or imported technology,
procurement of facilities and materials necessary for technology development,
etc.
4. Guarantees with respect to the purchase of bills by domestic financial institutions as issued for
exports on the condition of
documents against payment or documents against acceptance or with
respect to the opening of local letters of credit
5. Guarantees of loans given by an overseas branch of a domestic financial institution in connection
with the following:
A. Foreign direct investment as per the Foreign Exchange Control Act
B. Overseas construction and service projects performed by
overseas construction and service
businesses
C. Other overseas businesses approved by the Fair Trade Commission
6. Guarantee directly related to the acquisition of a corporation filing with the court an application for
corporate reorganization
as per the Corporation Reorganization Act by a third party
7. Guarantee of loans given by a domestic financial institution to an affiliated firm in case of investment
in the affiliated firm
concerned and engaged in private investment projects pursuant to Clauses 1~4,
Article 4 of the Act on Private Participation in Infrastructure
8. Counter-guarantee for a newly established entity in direct relation to the new company's succession
of guarantee done by the original
company for the non-affiliate company in case a company falling
under Item 2a or 2c, Clause (6), Article 10 of the Act is divided
for structural reform
[Newly established on March 20, 1993]
Article 17-6 (Scope of Domestic Financial Institutions)
"Other financial institutions set forth under the Presidential Decree" as
per Item 6, Clause (2), Article
10-2 (Prohibition on Debt Guarantees for Affiliated Companies) of the Act refer to specialized lending
institutions defined by the Specialized Financial Business Act.
[Amended on April 1, 1998]
Article 17-7
Article 17-8 (Resolution of the Board of Directors on Large-scale Intra-group Transactions and
Public Disclosure)
Large business groups subject to the resolution of the board of directors on large-scale intra-group
transactions and public disclosure
of such transactions pursuant to Clause (1), Article 11-2 of the Act
shall pertain to large business groups subject to the limitations
on cross equity investment pursuant to
Clause (1), Article 17 (Scope of Large Business Groups Subject to the Limitations on Cross-
Shareholding).
"Affiliate as prescribed by the Presidential Decree" as per Item 4, Clause 1, Article 11-2 refers to the
affiliate or its affiliate
as per Article 342-2 of the Commercial Law with more than 30% of the total
stocks added to the same person himself/herself or his/her
relative (excluding those separated from
the person related to the same person as per Clause 1, Article 3-2; the same shall apply
hereinafter),
excluding the following companies:
1. Company in business group wherein the same person is not a natural person
2. Subsidiary company or business-related sub-subsidiary as per Item 3, Clause 1, Article 2 of the
Act of the holding company
3. Stock-listed company or KOSDAQ-listed company with less than 50% of the total stocks added to
the same person himself/herself
or his/her relative
4. Affiliate (company with less than 30% of total stocks added to the same person himself/herself or
his/her relative) as per Article
342-2 of the Commercial Law of a stock-listed company or a KOSDAQ-
listed company as per Item 3
Pursuant to Clause (2), Article 11-2 of the Act, the following shall be disclosed:
1. Purpose and subject of transaction
2. Transaction counterpart (if the transaction is carried out for a specially related person, including
the specially related person
even if he/she is not a direct party to the transaction)
3. Contract amount and terms and conditions
4. Total number of transactions of the same kind with the transaction counterpart
5. Matters that are similar in nature with Items 1~4 as determined and announced by the Fair Trade
Commission
Transactions that can be carried out without the need for approval by the board of directors pursuant
to Clause 4, Article 11-2
of the Act shall meet the following criteria: 1. They shall be carried out in accordance with an adhesion contract pursuant to Article 2 of the
Adhesion Contract Regulation Act.
2. They shall constitute transactions in the ordinary area of business of the companies concerned.
[Newly established on April 1,
2000]
The Fair Trade Commission may determine and announce the details of the method, proceedings,
and time for resolution and notification
on the board of directors' meeting for large-scale internal
transactions apart from matters other than those provided for in this
Decree.
Article 17-9 (Company Not Subjected to the Limitations on the Total Investment Amount)
"Company equipped with monitoring
and controlling mechanism as set by the Presidential Decree"
as per Item 4, Clause (7), Article 10 of the Act refers to a company
acknowledged by the Fair Trade
Commission to meet three or more of the following criteria: 1. Company that is able to exercise voting rights in writing pursuant to Article 368-3 of the
Commercial Act
2. Company that is able to exercise voting rights through cumulative voting pursuant to Article 382-
2 of the Commercial Act
3. Company establishing a committee in accordance with Article 393-2 of the Commercial Act
(hereinafter referred to as "intra-group
transaction committee") with the right to review and approve a
transaction with specially-related persons (excluding Item 3, Article
11; the same shall apply herein) or
for specially-related persons (hereinafter referred to as "internal trading") and receiving
the majority
vote of the intra-group transaction committee for an internal transaction whose one-time or annual
amount is KRW10
billion or more (in case of goods and service, the amount of a single transaction is
10/100 or more of the capital stock or KRW5
billion or more); in this case, the intra-group transaction
committee shall consist of external directors pursuant to Clause 19,
Article 2 of the Securities and
Exchange Act, and there shall be at least 4 external directors
4. Company establishing/operating the external director candidate nominating committee pursuant
to Clauses (2) and (3), Article 54-2
of the Securities and Exchange Act and establishing/operating the
external director candidate nominating advisory group under the
committee to recommend candidates
for external directors; in this case, the external director candidate nominating committee shall
consist
of external directors in accordance with Clause (19), Article 2 of the Securities and Exchange Act and
have at least 4
external directors (the external director candidate nominating advisory group shall
consist of those not belonging to business groups
and have at least 5 members)
The Fair Trade Commission may establish/operate an advisory organization to deliberate on matters
specified in Clause (1)
[Newly established on March 31, 2005]
"That set by the Presidential Decree" in Item 5, Clause 7, Article 10 is KRW2 trillion.
Article 17-10 (Disclosure of Important
Matters Related to Non-listed Companies, Etc.)
"Companies falling under business conglomerates meeting the standards set by the
Presidential
Decree" as per Clause (1), Article 11-3 of the Act pertain to companies belonging to a large business
group subject
to the limitations on cross-shareholding as per Clause (1), Article 17. Note, however,
that those in the process of liquidation
or under business suspension for a year or more and whose
total assets as of the end of the fiscal year immediately prior to the
year are less than KRW7 billion
shall be excluded.
"Important issues set by the Presidential Decree" as per Item 1, Clause (1), Article 11-3 of the Act
refer to any of the following:
1. Changes in the status of share ownership and proportion of shares owned by the largest
shareholder (including the person and related
person if the person solely or in combination with a
related person becomes the largest investor) exceeding 1% of the total shares
issued by the
corporation
2. Status of officer composition and changes
3. Status of share ownership of affiliates or changes in the proportion of shares exceeding 1% of the
total shares issued by the
corporation
"Activities set by the Presidential Decree" as per Item 2, Clause (1), Article 11-3 of the Act pertain
to the following:
1. Decisions regarding the acquisition or disposal [including acquisition or disposal through trust
contract (limited to cases wherein
the corporation has the authority for operational instructions)
pursuant to the Trust Business Act or private offering indirect
investment fund (limited to cases
wherein the corporation has influence on asset management) pursuant to the Act on Operating
Indirect
Investment and Asset Businesses] of fixed assets valued at more than 10/100 of the total
assets as of the end of the recent business
year
2. Decisions regarding the acquisition or disposal (i.e., aggregate amount for such business year
excluding that already reported)
of shares or investment certificates of other corporations (excluding
affiliates) equal to not less than 5% of the equity capital
3. Decisions to give or receive donation (i.e., aggregate amount for such business year excluding that
already reported) of not less
than 1% of the equity capital
4. Decisions regarding the provision of securities (i.e., the amount of aggregate balance for such
business year excluding that already
reported) for others or debt guarantees (i.e., the amount of
aggregate balance for such business year excluding debt guarantees
for guaranteeing compliance
with the contract, etc., or tax payment) of not less than 5% of the equity capital
5. Decisions to forgive or take over debts of not less than 5% of the equity capital or to receive debt
forgiveness
6. Decisions regarding capital increase or capital decrease
7. Decisions regarding the issuance of convertible bond or bond with warrant
"Activities set by the Presidential Decree" as per Item
3, Clause (1), Article 11-3 of the Act pertain to
those falling under any of the following categories: 1. Decisions in accordance with Articles 374, 522, 527-2, 527-3, or 530-2 of the Commercial Act
2. Decisions regarding an all-inclusive share exchange in accordance with Article 360-2 of the
Commercial Act or a share transfer
in accordance with Article 360-15 of the Commercial Act
3. Reasons for dissolution occurring in accordance with Article 517 of the Commercial Act or other
Act
4. Decisions to commence, conclude, or repeal the company reorganization proceedings in
accordance with the Company Reorganization
Act
5. Deleted 6. Decisions to commence, suspend, or cancel management procedures pursuant to Items 1~3,
Clause (1), Article 12 of No. 6504 (Corporate
Restructuring Promotion Act)
7. Decisions to conclude or terminate a single sales contract or a supply contract valued at not less
than 10/100 of turnover for
the recent business year
Clause 1~4 are applied to the total asset and equity capital at the end of the recent business year
from
three months after the end of every business year to the third month after the end of the following
business year. In the absence
of a balance sheet for the recent business year as in the case of a
newly established company, the paid-in capital at the time of
establishment of the company shall be
the basis instead of the total asset and equity capital as of the end of the recent business
year.
[Newly established on March 31, 2005]
The Fair Trade Commission may determine and announce the details of the method, proceedings,
and time of notification based on Article
11-3 of the Act of a company other than a stock-listed
company or a KOSDAQ-listed company or other than that specified in this Decree.
Article 18 (Notification, Etc., on the Combination of Enterprises)
"Enterprisers whose total asset amount or turnover is set by
the Presidential Decree" as per Clause
(1), Article 12 of the Act refer to enterprisers whose total amount of assets or turnover
is at least
KRW100 billion.
"Counterpart enterpriser whose total asset amount or turnover is set by the Presidential Decree" as
per Clause (1), Article 12 of
the Act shall pertain to an enterpriser whose total asset amount or
turnover is at least KRW3 billion.
If the notification or certification documents submitted as per Clause (3) is insufficient, the Fair Trade
Commission may order
the supplementation of such within a set period. In such case, the time spent
supplementing the documents (including the date the
supplementation order is sent and the date the
supplemented documents arrive at the Fair Trade Commission) shall not be included
in the period set
forth in Clauses (7) and (9), Article 12 of the Act.
"In case of becoming the largest shareholder" as per Item 2, Clause (1), Article 12 of the Act
pertains to cases wherein a shareholder
has not been the largest shareholder prior to being the
largest shareholder. 1. When acquiring or increasing the ownership right ratio of another firm's stocks, any of the following
dates:
A. When transferring the stocks of a joint stock corporation, the date the share certificate is
delivered; if the share certificate
has not been issued, however, the date the purchased shares are
paid for or the date voting and other rights associated with shares
are actually transferred prior to
receiving the share certificate or making a full payment for the shares through an agreement,
a
contract, etc.
B. When paying for the purchase of a joint stock company's newly issued shares, the day
immediately following the date the payment
is made
C. When transferring the shares of a non-joint stock company, the date the equity transfer takes
effect
D. When increasing the ownership right ratio of stocks due to capital decrease, retirement of shares,
etc., other than those falling
under Items a~c, the date the ownership right ratio increase is confirmed
2. In case of an interlocking directorate, the date officers are elected during a general shareholders' or
a members' meeting
3. In the case of asset acquisition, the date the payment for business transfer is completed; if the
payment is completed ninety
days after the contracting date, however, then the 90th day after the
contract date
4. In the case of a merger with another corporation, the date of merger registration
5. When participating in the establishment of a new company, the day immediately following the date
the payment for the allocated
shares is made
"Date set by the Presidential Decree" as per Clause (6), Article 12 of the Act pertains to any of the
following dates: 1. When acquiring another firm's stocks or becoming the largest shareholder, any of the following
dates:
A. When acquiring shares by a contract or an agreement with the owners of the shares outside the
securities market and KOSDAQ market,
the date the contract or agreement is made
B. When owning shares other than those falling under a tender offer pursuant to the Securities
and
Exchange Act and Item a, the date falling under any of the sub-items in Item 1, Clause (7)
2. In the case of merger or takeover of business, the date a merger contract or a contract for business
takeover is concluded
3. When participating in the establishment of a new company, the day on which resolution is made at
shareholders' meeting or board
of directors instead thereof as to the participation in the establishment
of a company
A large-scale company that has filed a notification under the proviso of Clause (6), Article 12 of the
Act shall report any and
all significant changes in the content of the notification by the date of stock
acquisition, date of merger registration/date of
business transfer, or date of establishment of
corporation.
Article 19 (Appointment of Representative for the Filing of the Combination of Enterprises)
Any person wishing to be appointed as
a Representative under the proviso of Clause (10), Article 12
of the Act shall submit to the Fair Trade Commission an application
form stating the name, total assets,
sales, etc., of the corporation.
Any person wishing to file a report as per Clauses (1) and (2), Article 13 (Reporting of Share
Ownership Status) of the Act shall
submit a report containing the information below every April to the
Fair Trade Commission. In the case of a corporation belonging
to a newly designated large business
group subject to the limitations on cross-equity investment, the report shall be filed within
thirty days of
the date of notification in the relevant year as outlined in Clause (2), Article 21 (Designation of Large
Business
Groups Subject to the Limitations on Cross-Equity Investment). 1. Profile of said corporation including its name, capital stock, total assets, etc.
2. Shares of said corporation as owned by affiliated corporations and specially related persons
3. Net assets, investment ceiling amount, and total investment amount of said corporation pursuant
to Clause 1, Article 10 of the
Act
4. Amount of debt guarantees of said corporation
The following documents shall be submitted together with the report described in
Clause (1):
1. Detailed statement of stocks owned by the corporation concerned
2. Status report on cross-equity investments with affiliated corporations
3. Audit report of the corporation concerned for the previous business year
4. Detailed statement of debt guarantees given by the corporation concerned to affiliated
corporations and statement of changes in
such debt guarantees for the past one (1) year
5. Detailed statement of debt guarantees given by affiliated corporations to the corporation
concerned and statement of changes in
such debt guarantees for the past one (1) year
6. Document verifying the content of Item 4.5 and Item 4, Clause (1) as written in the form set by the
Fair Trade Commission by a
domestic financial institution as per Article 10-2 (Prohibitions on Debt
Guarantees for Affiliated Corporations)
If the acquisition of shares, etc., results in the change in the member corporations of a large
business group subject to the limitations
on cross-shareholding as per Clause (1), Article 13 of the Act,
a corporation belonging to such large business group shall report
the nature of such change to the
Fair Trade Commission within thirty days.
Article 21 (Designation of Large Business Groups Subject to the Limitations on Cross-
Shareholding
In accordance with the provisions of Clause (1), Article 14 (Designation of Large Business Groups
Subject to the Limitations on
Cross-Shareholding) of the Act, the Fair Trade Commission shall
designate business groups meeting the conditions set forth in Article
17 (Scope of Large Business
Groups and Large Business Groups Subject to the Limitations on Debt Guarantees) of the Decree as
large
business groups and exclude those that no longer meet the criteria for large business groups by
April 1 every year (by April 15
if necessary).
When newly designating or excluding business groups from large business groups subject to the
limitations on cross-shareholding
as per Clause (1), the Fair Trade Commission shall promptly notify
the member corporations of the large business group subject to
the limitations on cross-shareholding
and the person actually controlling the business contents of member corporations as defined
in Item 2,
Article 2 (Definitions) of the Act accordingly in writing.
If there is a change in the corporations belonging to a large business group subject to the limitations
on cross-shareholding after
the designation and notification as per Clauses (1) and (2), the Fair Trade
Commission shall notify the corporation concerned and
the person in writing of the nature of change
once a month.
"The date set forth under the Presidential Decree" as per Article 14-3 of the Act pertains to any of
the following dates: 1. For corporations that should have been incorporated as members of the large business group
subject to the limitations on cross-shareholding
at the time of designation, the date of receipt of
designation as a large business group and corresponding notification
2. For corporations that should have been incorporated as members of the large business group
subject to the limitations on cross-shareholding
after the designation, the first day of the month
immediately following the month when the cause for incorporation into the large
business group
subject to the limitations on cross-shareholding occurred
The provisions of Clauses (1)~(5) shall apply mutatis
mutandis to the designation and notification on
Large Business Groups Subject to the Limitations on Debt Guarantees and those subject
to the
limitations on the total shareholding of other companies as prescribed in Clause (1), Article 14 of the
Act. In such case,
the large business group subject to the limitations on cross-shareholding shall be
regarded as a large business group subject to
the limitations on debt guarantees or that subject to the
limitations on total equity investment.
1. The total assets of companies falling under Item 5a or 5b, Clause (1), Article 17 (Scope of Large
Business Groups Subject to the
Limitations on Cross-Shareholding) among the affiliated companies
reach 50% or more of the total assets of a business group as a
whole after the date of designation,
excluding business groups whose member companies other than those falling under Item 5a or
5b,
Clause (1), Article 17 (Scope of Large Business Groups Subject to the Limitations on Cross Equity
Investment) have total assets
of not less than KRW1.4 trillion.
2. The total assets of domestic affiliated companies in the business group concerned decrease to
less than KRW1.4 trillion due to
changes in affiliated companies.
Large business groups appointed as those subject to the limitations on the total shareholding
of
other companies as per the provisions of Clauses (1) and (6) and deemed to fall under the following
items may be excluded from
large business groups subject to the limitations on the total shareholding:
1. Total assets of companies falling under Items 5a or 5b, Clause (1), Article 17 among affiliated firms
after the date of designation
accounting for 50% or more of the total assets of the overall business
group, excluding business groups whose member companies other
than those falling under Items 5a
or 5b, Clause (1), Article 17 have total assets of not less than KRW7 trillion
2. Total assets of domestic affiliated companies in the business group concerned decreasing to less
than KRW7 trillion due to the
changes in affiliated companies
3. Deleted 4. After the date of designation in case the large business group falls under Item 4 or Item 5, Clause
(2), Article 17 (Scope of
Large Business Groups Subject to the Limitations on Cross-Shareholding)
Article 21-2 (Scope of the Relevant Institutions)
"Institutions
designated in the Presidential Decree" as per Item 4, Article 14-4 (Request for the
Certification of Documents from the Relevant
Institutions) of the Act refer to those institutions effecting
a change of ownership as per the Securities and Exchange Act as well
as institutions handling
comprehensive credit information as defined by Item 5, Article 2 (Definitions) of the Use and Protection
of Credit Information Act.
Article 21-3 (Scope of Disclosed Information on the Status of the Business Group Subject to
the Limitations on Cross-Shareholding)
"Information set by the Presidential Decree" as per Item 1, Clause 1, Article 14-5 refers to the
following information:
1. Name, business, major stockholders, officers, financial situation, and other general particulars of
a company belonging to the
business group subject to the limitations on cross-shareholding
2. Board of directors, organization, and management of committee established in the board of
directors based on Article 393-2 of
the Commercial Act, method of exercising voting rights, and other
governance structure status of the business group subject to the
limitations on cross-shareholding
"Information set by the Presidential Decree" in Item 2, Clause 1, Article 14-5 refers to the following
information:
1. Ownership percentage based on Clause 3, Article 7 and voting percentage based on Clause 4,
Article 7, stock ownership and other
status of investment between companies in a business group
subject to the limitations on cross-shareholding or between a company
in a business group subject to
the limitations on cross-shareholding and a person with special interest
2. Status of debt guarantee based on Clause 2, Article 10-2 of companies in a business group
subject to the limitations on cross-shareholding
3. Status of funds, securities, assets, goods, services, and other transactions between companies in
a business group subject to
the limitations on cross-shareholding or between a company in a business
group subject to the limitations on cross-shareholding
and person with special interest
Article 21-4 (Type of and Criteria for Law Evasions)
Evasive acts prohibited as per Clause (1),
Article 15 of the Act pertain to any of the following acts:
1. Deleted 2. Any of the following acts committed by a company belonging to a large business group subject to
the limitations on debt guarantee
pursuant to Clause 1, Article 10-2 of the Act:
A. Assuming liability without the write-off of liability of an affiliated company
to a domestic financial
institution pursuant to Clause 2, Article 10-2 of the Act
B. Giving debt guarantee to the corporation or
affiliated corporation in return for having another
corporation give a debt guarantee to an affiliated company
3. Act similar to the acts defined in Item 2 as determined and announced by the Fair Trade
Commission
Deleted
[Newly established on March 31, 1997]
Article 22 Deleted
Article 23 Deleted
Article 23-2 (Scope of Standard Balance Sheet)
"The balance sheet set by the Presidential Decree" as per Item 1, Clause (4), Article 17 of the Act
refers to the balance sheet
showing for the first time the fact of violating the provisions of Clauses
(2)~(4), Article 8-1 of the Act; when the fact of violation
does not appear in the balance sheet since the
violation (excluding violations as per Item 1, Clause (2), Article 8-1 of the Act)
is corrected before the
balance sheet is prepared, however, the balance sheet made as of the date the violation was
committed shall
have precedence.
[Newly established on March 31, 2005][Former Article 23-2 moved to Article 23-3
When deciding shares without voting rights pursuant to Clause 3, Article 17-2 (Special Case of
Corrective Measures, Etc.) of the
Act, the Fair Trade Commission shall consider recently acquired or
owned shares first excluding shares exceeding the limit of the
total shareholding of other companies
as per Item 2, Clause 3, Article 14 of the Act as acquired or owned after the date of designation
or
entry and shares acquired or owned after one year from the date of designation or entry.
The company receiving an order prohibiting
the exercise of voting rights as per Clause 1, Article 17-
2 (Special Cases of Corrective Measures, Etc.) of the Act (hereinafter
referred to as "Target Company")
shall make an announcement regarding the following items within 5 days of the date of notifying
the
Fair Trade Commission of the target shares the voting rights for which shall not be exercised as per
Clause 3, Article 17-2
of the Act or the date the Fair Trade Commission notifies the target company of
the shares for which voting rights cannot be exercised
as per Clause 2, Article 17-2 of the Act:
1. Corporation issuing shares for which voting rights are restricted
2. Total shares acquired or owned by the target company and shares for which voting rights are
restricted among the shares issued
by the corporation in Clause 1
When making an announcement as per Clause 3, the target company shall notify the Fair Trade
Commission
accordingly within 3 days.
A target company disposing of its shares following the announcement as per Clause 3 or increasing
its net assets such that a change
in shares for which voting rights are restricted occurs shall report the
reason and particulars of the change to the Fair Trade
Commission within 10 days and make an
announcement within 5 days of such notification. In this case, shares affected by the change
shall be
determined within the scope of shares disclosed shortly before the disclosure of shares pursuant to
Clause 3 or the provisions
herein.
The Fair Trade Commission may entrust the organization concerned as per Article 186 (Duty of
Reporting and Disclosure of Listed
Corporations) of the Securities and Exchange Act with tasks
related to public disclosure as per Clause 3. In this case, the Fair
Trade Commission sets the method,
procedure, and other details of disclosure in consultation with the organization concerned.
[Newly established on March 30, 2002][Moved from Article 23-2; former Article 23-3 moved to Article
23-4
Article 23-4 (Assessment, Collection, Etc., of Compulsory Enforcement Charges)
When imposing compulsory enforcement charges as
per Article 17-3 (Compulsory Enforcement
Charges) of the Act, the Fair Trade Commission shall assess the charges starting from the
day after
the expiration date of the period set by the corrective measure to the date of implementation of the
corrective measure.
In this case, compulsory enforcement charges shall be assessed within thirty days
of the expiration of the period set by the corrective
measure except under special circumstances.
In designating the date of performing the corrective measure as outlined in Clause (1), the following
dates shall apply: the delivery
date of stock certificate if the corrective measure involves the disposal
of stock; the date of registration of the resignation
of an officer if the corrective measure involves such,
and; the date of transfer registration of ownership of the relevant real
estate, etc., if the corrective
measure involves the transfer of business.
Notwithstanding Clause 1, the Fair Trade Commission shall impose compulsory enforcement
charges against a corporation that fails
to carry out the corrective measure as per Items 7 and 8,
Clause (1), Article 16 (Corrective Measures) of the Act, which sets forth
the specific duties for a
specific period, e.g., every quarter or every business year for the noncompliance period. In this case,
compulsory enforcement charges shall be assessed within thirty days of the date as to whether the
corrective measure has been performed
or not can be confirmed except under special circumstances.
In deciding the compulsory enforcement charges, the Fair Trade Commission
shall consider the
reason for noncompliance with the corrective measure and extent of benefits gained as a result of
such noncompliance.
When imposing compulsory enforcement charges, the Fair Trade Commission shall serve a written
notice of the details of daily charges
(for compulsory enforcement charges described in Clause (3), the
amount confirmed for the relevant noncompliance period), reason
for assessment, payment due date
and receiving institution, procedures and institutions for appeal, etc.
A person notified as per
Clause (5) shall remit the compulsory enforcement charges within the
period described below; if timely remittance is rendered impossible
by natural disaster or other
unavoidable circumstances, however, the charges shall be paid not later than thirty days after such
unavoidable circumstances no longer exist.
1. For compulsory enforcement charges imposed as per Clause (1), within thirty days of issuance of
notice after the Fair Trade Commission
confirms the date of completion of the performance of
corrective measure and determines the total compulsory enforcement charges
2. For compulsory enforcement charges pursuant to Clause (3), within thirty days of issuance of
notice by the Fair Trade Commission
In collecting compulsory enforcement charges as described in Clause (1), the Fair Trade
Commission may collect the charges every
ninety days starting from the termination date if the
corrective measure is not performed within ninety days.
The provisions of
Article 64 (Demanding Payment) and Article 64-2 (Delegation of Handling
Payment Arrears) shall apply mutatis mutandis to demanding
payment and delegating the handling of
payment arrears in relation to compulsory enforcement charges.
[Newly established on March
31, 1999][Moved from Article 23-3; former Article 23-4 moved to Article
23-5
Article 23-5 (Criteria for the Designation of Non-voting Shares)
In designating shares for which voting rights cannot be exercised
pursuant to Clause 4, Article 18 of
the Act, the Fair Trade Commission shall follow the order below:
1. Shares that are newly acquired or owned in excess of the ceiling on equity investment pursuant to
Clause 1, Article 10 of the
Act
2. Recently acquired or owned shares
[Newly established on April 1, 2000][Moved from Article 23-4
Article 24 (Criteria for the Authorization of Cartels)
"Criteria set forth in the Presidential Decree" in Clause (2), Article 19
(Restrictions on Improper Cartels)
of the Act refer to the conditions stipulated in Article 24-2 (Criteria for Cartels for Purposes
of Industry
Rationalization) to Article 28 (Criteria for Cartels for Purposes of Enhancing the Competitiveness of
Small and Medium
Enterprises) of the Decree.
[Newly established on March 31, 1997]
Article 24-2 (Criteria for Cartels for Purposes of Industry Rationalization)
Authorization for cartels for the purpose of industrial
rationalization as per Item 1, Clause (2), Article 19
(Prohibition on Improper Cartels) of the Act shall be limited to cartels meeting
the following conditions:
1. Effects arising from the cartel such as technological enhancement, quality improvement, cost
reduction, and efficiency increases
are clearly manifested.
2. The rationalization of the industry using means other than the cartel is difficult.
3. The beneficial effects of industrial rationalization outweigh the effects of prohibiting the restriction
of competition.
Article 24-3 (Criteria for Cartels for Purposes of Research and Technological Development)
Authorization for cartels for the purpose
of research and technological development as per Item 2,
Clause (2), Article 19 (Prohibition on Improper Cartels) of the Act is
limited to cartels meeting the
following conditions:
1. The research and technological development are indispensable to the reinforcement of industrial
competitiveness, and their economic
impact is substantial.
2. The scale of investment required for research and technological development is too large for a
single enterpriser.
3. Collaboration is necessary for the distribution of risks associated with the uncertainties of research
and technological development
results.
4. The beneficial effects of research and technological development outweigh the effects of prohibiting
the restriction of competition.
[Newly established on February 20, 1993]
Article 25 (Criteria for Cartels for Purposes of Overcoming Economic Depression)
Authorization for cartels for the purpose of overcoming
economic depression as per Item 3, Clause (2),
Article 19 (Prohibition on Improper Cartels) of the Act is limited to cartels meeting
the following
conditions:
1. There has been a continued decline in the demand for a particular product or service for a
substantial period of time due to a
continued large oversupply, and the situation will most likely persist
in the future.
2. The transaction price of a particular product or service has persistently fallen short of the average
production cost.
3. A considerable number of companies in a given area of trade will likely be unable to continue their
business.
4. The circumstances in Items 1~3 cannot be overcome through the rationalization of enterprisers.
Article 26 (Criteria for Cartels
for Purposes of Industrial Restructuring)
Authorization for cartels for the purpose of industrial restructuring as per Item 4, Clause
(2), Article 19
(Prohibition on Improper Cartels) of the Act is limited to cartels meeting the following conditions:
1. There is a marked excess in capacity on the supply side in a particular industry due to a change in
the economic environment at
home or abroad, or production efficiency or international competitiveness
has substantially decreased due to the deterioration of
production facilities and methods.
2. The situation described in Clause (1) cannot be overcome through the rationalization of
enterprisers.
3. The benefits of industrial restructuring outweigh the effects of restriction on competition.
Article 27 (Criteria for Cartels
for Purposes of Rationalizing the Terms of Trade)
Authorization for cartels for the purpose of rationalizing the terms of trade
as per Item 5, Clause (2),
Article 19 (Prohibition on Improper Cartels) of the Act is limited to cartels meeting the following
conditions:
1. The cartel significantly contributes to an increase in production efficiency, facilitation of transaction,
and enhancement of
convenience of consumers by rationalizing the terms of trade.
2. The nature of rationalization of the terms of trade is technologically and economically viable for
most enterprisers in the given
area of trade.
3. The benefits of rationalization of the terms of trade outweigh the effects of restriction on
competition.
[Newly established on March 31, 1997]
Article 28 (Criteria for Cartels for Purposes of Enhancing the Competitiveness of Small and
Medium Enterprises)
Authorization for cartels for the purpose of enhancing the competitiveness of small and medium
enterprises as per Item 6, Clause
(2), Article 19 (Prohibition on Improper Cartels) of the Act is limited
to cartels meeting the following conditions:
1. The cartel has a significantly positive effect on the productivity of small and medium enterprises,
e.g., quality and technological
improvement, or on the reinforcement of their bargaining power with
respect to the terms of trade.
2. All participating enterprisers are small and medium enterprises.
3. There is no means of competing effectively with or countering large-scale companies other than
the cartel.
Article 29 (Limitations on the Authorization of Cartels)
Notwithstanding Article 24-2 (Criteria for Cartels for Purposes of Industry
Rationalization) up to Article
28 (Criteria for Cartels for Purposes of Enhancing the Competitiveness of Small and Medium
Enterprises)
of the Decree, the Fair Trade Commission shall not grant authorization for the following
cartels:
1. The cartel exceeds the necessary extent for the achievement of its purpose.
2. The interests of consumers and other related enterprisers will likely be compromised unreasonably.
3. The nature of the cartel unreasonably discriminates against participating enterprisers.
4. The participation in or withdrawal from the Cartel is unreasonably restricted.
Article 30 (Procedures for the Authorization of
Cartels)
Any person wishing to obtain authorization from the Fair Trade Commission as per Clause (2),
Article 19 (Prohibition on
Improper Cartels) of the Act shall submit to the Fair Trade Commission an
application specifying the following: 1. Number of participating enterprisers
2. Names of the participating enterprisers and their office locations
3. Addresses and names of representative directors and officers
4. Reasons for and nature of the cartel
5. Proposed duration of the cartel
6. Business content of the participating enterprisers
The following documents shall be attached to the application described in Clause
(1):
1. Business reports, balance sheets, and statements of income of the participating enterprisers for
the past two years
2. Copy of the agreement or statement of resolution of the cartel
3. Documents verifying the satisfaction of criteria for authorization
4. Documents verifying the satisfaction of provisions of Article 29 (Limitations on the Authorization of
Cartels) of the Decree
When granting authorization upon receiving an application for such as per Clause (1), the Fair Trade
Commission shall deliver a
certificate of authorization to the applicant.
A person who has been granted authorization but wishes to modify the details he/she
submitted
shall submit to the Fair Trade Commission an application for change containing the documents
specified in Clauses (1)
and (2) as necessary for the modified particulars together with a certification of
authorization.
Upon receiving an authorization application as per Clause (2), Article 19 (Prohibition on Improper
Cartels) of the Act, the Fair
Trade Commission shall reach a decision within thirty days of receipt of
such application [when making a public notification as
outlined in Clause (3), Article 31 (Public Notification on
the Contents of Application for the Authorization of Cartels) of the
Decree, thirty days in addition to the public
notification period]; when deemed necessary, however, the Fair Trade Commission may
extend the period
for up to thirty days.
1. Name and address of the applicant enterpriser
2. Nature of the cartel
3. Reasons for the cartel
4, Proposed period of the cartel
5, In the case of application for modification, the reason and nature of change
The duration of announcement as per Clause (1) shall
not exceed thirty days.
An interested party with an opinion regarding the contents of the announcement described in Clause
(2) may submit to the Fair Trade
Commission a statement of opinion containing the following
information within the period of announcement:
1. Name and address of the person stating an opinion
2. Opinion and reasons for its submission
3. Other materials required for stating an opinion
Article 32 (Discontinuance of Authorized Cartels)
Any person who has received
authorization for a cartel as per Clause (2), Article 19 (Prohibition on
Improper Cartels) of the Act but discontinues the authorized
cartel shall immediately notify the Fair
Trade Commission accordingly.
[Amended on March 31, 1999]
Article 33 Deleted
Article 34 Deleted
Article 35 (Criteria for the Mitigation of or Reduction or Waiving of Punishment for Informants,
Etc.)
The criteria for the mitigation of or reduction or waiving of corrective measures or surcharges as per
Clause (2), Article 22-2
of the Act are as follows:
1. Any company reporting to the Fair Trade Commission before it begins an investigation and falling
under any of the following cases
shall be eligible for the waiving of surcharges and corrective
measures:
A. The company is the first company to provide independently the evidence necessary for proving the
improper cartel.
B. Reporting is made when the Fair Trade Commission either has no knowledge of the improper cartel
or lacks the evidence necessary
for proving the improper cartel.
C. Cooperation has been provided until the completion of investigation, e.g., stating all facts
regarding
the improper cartel and submitting related data.
D. The improper cartel is discontinued.
2. Any company reporting to the Fair Trade Commission before it begins an investigation and falling
under the following cases may
be eligible for the reduction of surcharge by 30/100 and reduction of
corrective measures:
A. The company is the second company to provide independently the evidence necessary for proving
the improper cartel.
B. Cooperation has been provided until the completion of investigation, e.g., stating all facts regarding
the improper cartel and
submitting related data.
C. The improper cartel is discontinued.
3. Any company cooperating in an investigation after the commencement of such by the Fair Trade
Commission and falling under the
following cases shall be exempted from paying surcharges and shall
be eligible for the reduction or waiving of corrective measures:
A. The company is the first company to provide independently the evidence necessary for proving the
improper cartel.
B. Cooperation is provided when the Fair Trade Commission either has no knowledge of the improper
cartel or lacks the evidence necessary
for proving the improper cartel.
C. Cooperation has been provided until the completion of investigation, e.g., stating all facts
regarding
the improper cartel and submitting related data.
D. The improper cartel is discontinued.
4. Any company cooperating in an investigation shortly after the commencement of such by the Fair
Trade Commission and falling under
the following cases may be eligible for a reduction of surcharge
by 30/100 and reduction of corrective measures:
A. The company is the second company to provide independently the evidence necessary for proving
the improper cartel.
B. Cooperation has been provided until the completion of investigation, e.g., stating all facts regarding
the improper cartel and
submitting related data.
C. The improper cartel has been discontinued.
5. A company subject to surcharges or corrective measures for an improper cartel but satisfies the
conditions under the items of
Clauses 1 or 3 for another improper cartel wherein the person is involved
besides the improper cartel may be eligible for the reduction
or waiving of surcharges and reduction of
corrective measures for the original improper cartel.
No public official involved in
the investigation shall disclose or provide to other persons matters
regarding the report or information provision such as details
of reports or identity of informants or
persons cooperating in the investigation without prior consent from such informant or cooperating
person.
Matters regarding the degree of leniency for informants, etc., and operating procedure for the
Leniency Program as well as how to
submit evidence shall be determined and announced by the Fair
Trade Commission.
[Amended on March 31, 2005]
Chapter 5 Prohibition on Unfair Business Practices
Article 36 (Designation of Unfair Business Practices)
The types of and criteria
for Unfair Business Practices as per Clause (2), Article 23 (Prohibition on
Unfair Business Practices) of the Act are listed in
Appendix 1.
When deemed necessary, the Fair Trade Commission may establish and announce the detailed
standards for the types of
and criteria for Unfair Business Practices as per Clause (1) for purposes of
applying them to a particular area or act. In this
case, the Fair Trade Commission shall hear the
opinions of the heads of the relevant administrative agencies in advance.
[Amended
on March 31, 1997]
Article 37 (Fair Competition Code)
Upon receiving a request for the examination of the Fair Competition Code as per Clause (5), Article
23 (Prohibition on Unfair Business
Practices) of the Act, the Fair Trade Commission shall notify the
requester of the examination results within sixty days of receiving
the request.
Deleted
Article 38 Deleted
Article 38-2 Deleted
Chapter 6 Enterprisers' Organization
Article 39 Deleted
Article 40 (Authorization of Acts Restricting Competition)
Any enterprisers' organization wishing to obtain approval for an act
restricting competition as per
Item 1, Clause (1), Article 26 (Prohibited Acts of Enterprisers' Organization) of the Act shall submit
to
the Fair Trade Commission an application specifying the following information together with
documents proving the need for the
act restricting competition as per Clause (2), Article 26 (Prohibited
Acts of Enterprisers' Organization) of the Act: 1. Reasons for and nature of the act restricting competition
2. Standard for and scope of participating enterprisers
The provisions of Article 24-2 (Criteria for Cartels for Purposes of Industry
Rationalization) up to
Article 29 (Limitations on the Authorization of Cartels), Clauses (3), (4), and (5), Article 30 (Procedures
for the Authorization of Cartels), Article 31 (Public Notification on the Contents of Application for the
Authorization of Cartels),
and Article 32 (Discontinuance of an Authorized Cartel) of the Act shall apply
to the authorization of acts restricting competition.
Article 42 Deleted
Chapter 7 Restrictions on Resale Price Maintenance
Article 43 (Publications Eligible for Resale Price Maintenance)
"Publications
specified in the Presidential Decree" as per Clause (2), Article 29 (Restrictions on Resale
Price Maintenance) of the Act refer
to those publications defined in Article 2 (Definitions) of the
Copyright Act and designated by the Fair Trade Commission following
consultations with the head of
the relevant central administrative agency (including electronic publications).
Article 44 (Procedures for Designating Products Eligible for Resale Price Maintenance)
An enterpriser wishing to receive designation
of eligibility for resale price maintenance as per
Clause (3), Article 29 (Restrictions on Resale Price Maintenance) of the Act
shall submit to the Fair
Trade Commission an application specifying the following: