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MONOPOLY REGULATION AND FAIR TRADE ACT
MONOPOLY REGULATION AND FAIR TRADE ACT
INTRODUCTION
Details of Enactment and Amendment
- Enactment: This Act was enacted on December 31, 1980 as Act No. 3320, in order to encourage creative enterprising activities, to
protect the consumers, and to strive for a balanced development of the national economy by preventing any abuse of market-dominating
positions by enterprises and any excessive concentration of economic power, by regulating undue collaborative acts and unfair trade
practices, and by promoting fair and free competition.
- Amendment: This Act was wholly amended on January 13, 1990, and has arrived at its present form as a result of being amended 25
times thereafter. The latest amendment was on March 31, 2005.
Main Contents
- In order to maintain effectively the order of competition in the domestic market from the activities of foreign enterprisers, this
Act shall apply even if the activities performed in a foreign country have an effect on the domestic market.
- In case that stocks of a company which is approved as a cooperation enterpriser in accordance with the Inter-Korea Exchange and
Cooperation Act and which meets the standards prescribed by the Presidential Decree such as proportion of total sales are acquired
or owned, the application of the provisions concerning the restriction on the total investment amount shall be excluded to facilitate
inter-Korea economic exchange.
- A market-dominating enterpriser shall be prohibited against committing any act of abusing his market dominating position, such as
the act of unreasonably determining/maintaining/changing the price, the act of unreasonably controlling the sale of commodities or
provision of services, the act of unreasonably interfering with the business activities of other enterprisers, the act of unreasonably
impeding the participation of new competitors, the act of effecting unreasonable transactions in order to exclude competitive entrepreneurs,
or an act that might considerably harm the interests of the consumers, and a punitive surcharge shall be imposed in case of any violation.
- In order to prevent any act of practically suppressing competition, such act of combining enterprises either directly or by using
a special interest as acquiring or owning stocks of other companies, merging with other companies, or effecting the concurrent holding
of an officer s position in another company by own officer or employee shall be prohibited. And enterprises that are prohibited from
the act of combining enterprises are classified into enterprise group subject to the limitations on mutual contribution, enterprise
group subject to the limitations on gross amount of investment, and enterprise group subject to the limitations on debt guarantees
by the form of the enterprises.
- A company that belongs to an enterprise group subject to the limitations on mutual contribution or an enterprise group subject to
the limitations on gross amount of investment may not acquire or own stocks of another domestic company in excess of the amount that
is the product of the net asset of the company concerned multiplied by the ratio of twenty-five hundredths and give debt guarantees
to an affiliated domestic company. However, exceptions shall be made for the cases that meet certain standards and have the purpose
of facilitating company reorganization and strengthening cooperation in technology with a small or medium enterprise or industrial
competitive position in world markets.
- When a company that belongs to an enterprise group subject to the limitations on mutual contribution or an enterprise group subject
to the limitations on gross amount of investment intends to conduct a transactions of funds at or exceeding a certain level or transactions
in assets, such as stocks and bonds or immovable assets, with a person with a special interest in the company in question, the company
shall in advance put it to a resolution by the board of directors and announce it publicly.
- Performance compulsory money may be imposed on a person who fails to carry out a corrective order which is given by the Fair Trade
Commission to a person who commits a restricted act of combining enterprises.
- Any act of an entrepreneur that unfairly restricts competition through joint engagement with other entrepreneurs by contract, agreement,
resolution, or any other means shall be prohibited, and unfair trade practices, such as unfair refusal of transactions and unfair
exclusion of competitors, shall be prohibited.
- A person who reports or communicates an act of violating this Act and submits corroborative evidences of such violation may be paid
rewards.
MONOPOLY REGULATION AND FAIR TRADE ACT
Amended by Act No. 7492, Mar. 31, 2005
CHAPTER I GENERAL PROVISIONS
Article 1 (Purpose)
The purpose of this Act is to promote fair and free competition, to encourage thereby creative enterprising activities, to protect
consumers and to strive for balanced development of the national economy, by preventing any abuse of market-dominating positions
by enterprisers and any excessive concentration of economic power, and by regulating undue collaborative acts and unfair trade practices.
Article 2 (Definitions)
For the purpose of this Act, the definitions of terms shall be as follows: <Amended by Act No. 4513, Dec. 8, 1992; Act No. 5335,
Dec. 30, 1996; Act No. 5813, Feb. 5, 1999; Act No. 6371, Jan. 16, 2001; Act No. 7315, Dec. 31, 2004>
1.The term enterpriser means a person who conducts a manufacturing business, service business, or other businesses. Any officer,
employee, agent or other person who acts in the interest of the enterpriser shall be deemed as an enterpriser in application of the
provisions pertaining to the enterprisers organization;
1-2.The term holding company means a company which makes controlling any domestic company s business through the ownership of stocks
(including equities; hereinafter the same shall apply) as its main business and whose total assets are above an amount as determined
by the Presidential Decree. In this case, the standards for main business shall be determined by the Presidential Decree;
1-3.The term subsidiary means a domestic company the business of which is controlled by the holding company under the criteria as
prescribed by the Presidential Decree;
1-4.The term business related sub-subsidiary means the domestic company that runs its business under the control of its subsidiary
and its business maintains a close relationship with its subsidiary, which is prescribed by the Presidential Decree;
2.The term enterprise group means a group of companies the businesses of which is substantially controlled by the same person according
to the following distinction pursuant to the standards as prescribed the Presidential Decree:
(a) Where the same person is a company, a group composed of such person and one or more companies controlled by him; and
(b) Where the same person is not a company, a group composed of two or more companies controlled by him;
3.The term affiliated company means that where two or more companies belong to the same enterprise group, each company is called
as an affiliated company of the others;
4.The term enterprisers organization means a juristic person which is organized by two or more enterprisers for the purpose of increasing
their common interests, regardless of its form or federation thereof;
5.The term officer means a director, representative director, managing partner with unlimited liability, auditor or person in a
similar position, or a commercial employer, such as manager, etc., who is capable of executing general businesses of the main or
branch office;
6.The term resale price maintenance means an act by which an enterpriser compels, in trading the goods or services, a counterpart
enterpriser or an enterpriser by next stage of transaction to sell them only at the price fixed in advance, or transacts under any
agreement or binding conditions thereon for such purpose;
7.The term market-dominating enterpriser means any enterpriser who can determine, maintain, or change the prices, quantity or quality
of commodities or services or other terms and conditions of business as a supplier or customer in a particular business area individually
or jointly with other enterprisers. In deciding whether an enterpriser is a market-dominating enterpriser, his market share, whether
and to what extent any barriers to enter into the market exist, and the relative size of competitive enterprisers shall be comprehensively
taken into account: Provided, That an enterpriser whose annual total sales or purchases are less than one billion won shall be excluded;
8.The term particular business area means an area in which any competitive relation exists or may exist, by the subject, stage or
geographical area of such a trade;
8-2.The term practices practically suppressing competition means practices which cause or threaten to cause impacts on the determination
of price, quantity, quality, or other terms or conditions of trading by intent of a certain enterpriser or an enterprisers organization,
because of reduced competition in a particular business area;
9.The term credit means any loan and guarantee or acceptance of company obligation by domestic financial institutions; and
10.The term the financial business or the insurance business means the financial business and the insurance business that are categorized
according to the Korean Standard Industrial Classification that is published by the Commissioner of the National Statistical Office
pursuant to Article 17 (1) of the Statistics Act.
Article 2-2 (Application of Overseas Act)
In case where any act that performs even abroad affects the domestic market, this Act shall apply to such act.
[This Article Newly Inserted by Act No. 7315, Dec. 31, 2004]
CHAPTER II PROHIBITIONOFABUSE OF MARKET-DOMINATING POSITIONS
Article 3 (Remedy, etc. of Monopoly or Oligopoly in Market Structures)
(1)The Fair Trade Commission shall establish and implement action plans to promote competition in markets in which monopoly or oligopoly
situations have continued for a long time in relation to supply or demand of goods or services.
(2)The Fair Trade Commission may give opinions to the chief-officers of the competent administrative authorities as to the introduction
of competition or other measures necessary to improve market structures, where it appears to be necessary for the Commission to carry
out action plans under paragraph (1).
(3)The Fair Trade Commission shall research the market structures and announce the results in order to establish and promote the action
plans referred to in paragraph (1). <Newly Inserted by Act No. 5813, Feb. 5, 1999>
(4)The Fair Trade Commission may request an enterpriser to submit data necessary for the research and announcement of the market structure
referred to in paragraph (3). <Newly Inserted by Act No. 5813, Feb. 5, 1999>
(5) The Fair Trade Commission may entrust the affairs referred to in paragraphs (3) and (4) to other agencies under the conditions
as prescribed by the Presidential Decree. <Newly Inserted by Act No. 5813, Feb. 5, 1999>
[This Article Newly Inserted by Act No. 5335, Dec. 30, 1996]
Article 3-2 (Prohibition of Abuse of Market-Dominating Position)
(1)No market-dominating enterpriser shall commit acts falling under any of the following subparagraphs (hereinafter referred to as
the abusive acts ): <Amended by Act No. 5813, Feb. 5, 1999>
1.An act of determining, maintaining or changing unreasonably the price of commodities or services (hereinafter referred to as the
price );
2.An act of unreasonably controlling the sale of commodities or provision of services;
3.An act of unreasonably interfering with the business activities of other enterprisers;
4.An act of unreasonably impeding the participation of new competitors; and
5.An act of unfairly excluding competitive enterprisers, or of doing considerable harm to the interests of consumers.
(2)Categories or standards for abusive acts shall be determined by the Presidential Decree. <Newly Inserted by Act No. 5335, Dec.
30, 1996; Act No. 5813, Feb. 5, 1999>
Article 4 (Presumption of Market-Dominating Enterpriser)
An enterpriser whose market share in a particular business area falls under any of the following subparagraphs shall be presumed a
market-dominating enterpriser referred to in subparagraph 7 of Article 2:
1.Market share of one enterpriser is 50/100 or more; or
2.The total market share of not less than three enterprisers is 75/100 or more: Provided, That those whose market share is less than
10/100 shall be excluded.
[This Article Wholly Amended by Act No. 5813, Feb. 5, 1999]
Article 5 (Corrective Measures)
In case where there exists any act of violating the provisions of Article 3-2, the Fair Trade Commission may order the market-dominating
enterpriser concerned to reduce the price, discontinue the act of violation, publish the fact that the latter is ordered to make
the correction thereof, and to take other measures necessary for correction. <Amended by Act No. 5335, Dec. 30, 1996; Act No.
7315, Dec. 31, 2004>
Article 6 (Surcharge)
In the case of abusive acts by a market-dominating enterpriser, the Fair Trade Commission may impose upon such an enterpriser surcharges
not exceeding the amount equivalent to 3 percent of the turnover determined by the Presidential Decree (referring to profits of business
particularly for a person designated by the Presidential Decree; hereinafter the same shall apply): Provided, That under the Presidential
Decree, where there is no turnover, or where it is difficult to compute the turnover (hereinafter referred to as the in the absence
of turnover, etc. ), surcharges may be imposed up to but not exceeding one billion won.
[This Article Wholly Amended by Act No. 5335, Dec. 30, 1996]
CHAPTER III RESTRICTION ON COMBINATION OF ENTERPRISES AND REPRESSION OF ECONOMIC POWER CONCENTRATION
Article 7 (Restriction on Combination of Enterprises)
(1)No one shall, directly or through a person determined by the Presidential Decree as having special interest (hereinafter referred
to as the person with special interest ), practically suppress competition in a particular business area by conducting practices
falling under each of the following subparagraphs (hereinafter referred to as combination of enterprises ): Provided, That this
shall not apply to the case where a person other than a company whose size of total assets or turnover (referring to the sum of total
assets or turnover of affiliated companies) meets the size as determined by the Presidential Decree (hereinafter referred to as
large company ), performs an act falling under subparagraph 2: <Amended by Act No. 5335, Dec. 30, 1996; Act No. 5813, Feb. 5,
1999>
1.The acquisition or ownership of stocks of other companies;
2.The concurrent holding of an officer s position in another company (hereinafter referred to as the concurrent holding of an officer
s position ) by an officer or employee (referring to a person who continues to be engaged in the affairs of the company, but is not
an officer; hereinafter the same shall apply);
3.A merger with other companies;
4.An acquisition by transfer, lease or acceptance by mandate of the whole or main part of a business of another company, or the acquisition
by transfer of the whole or main part of fixed assets used for the business of another company (hereinafter referred to as the acquisition
by transfer of business ); and
5.Participation in the establishment of a new company: Provided, That this shall not apply to the following cases:
(a) Where a person other than persons with special interests (excluding those as determined by the Presidential Decree) does not participate
in the establishment of a new company; or
(b) Where a person participates in the establishment of a company by division under Article 530-2 (1) of the Commercial Act.
(2)The provisions of paragraph (1) shall not apply to the case where the Fair Trade Commission deems that a combination of enterprises
falls under any of the following subparagraphs. In this case, the parties concerned shall prove if it meets the requirements: <Amended
by Act No. 5813, Feb. 5, 1999>
1.Where the effect of efficiency promotion attainable through the combination of enterprises is more than the negative effect produced
by restricted competition; and
2.Where such combination is made with an inviable company, falling under the requirements as determined by the Presidential Decree
such as the company whose total capital in a balance sheet is less than its paid-in capital for a reasonable period of time.
(3)No person shall combine another company by a coercive or any other unfair method. <Amended by Act No. 5335, Dec. 30, 1996>
(4)In the case of a combination of enterprises falling under each of the following subparagraphs, it is presumed that competition
is practically suppressed in a particular business area: <Newly Inserted by Act No. 5335, Dec. 30, 1996; Act No. 5813, Feb. 5,
1999>
1.In cases where the aggregate of the market share of a company taking part in the combination of enterprises (referring to the aggregate
of market shares of the affiliated companies; hereafter the same shall apply in this Article) falls under any of the following categories:
(a) In a case where the aggregate of the market share of the company concerned satisfies the presumptive requirements for a market-dominating
enterprise;
(b) In a case where the aggregate of the market share of the company concerned is the largest in the business area concerned; and
(c) In a case where the aggregate of the market share of the company concerned exceeds the market share of a company with the second
largest market share (referring to a company with the largest market share besides the company concerned) by not less than 25 percent
of the aggregate of the market share; and
2.In cases where a large company, directly or through a person with a special interest, combines enterprises according to the following
requirements:
(a) In the case of the combination of enterprises in a particular business area where small or medium sized companies under the Framework
Act on Small and Medium Enterprises occupy not less than two-thirds of the whole market share; and
(b) In the case of the combination of enterprises in which the combined company has a market share of not less than 5 percent.
(5)The Fair Trade Commission may determine and announce matters as to the standards for the combination of enterprises which practically
suppresses competition in a particular business area under paragraph (1), to which the provisions of paragraph (1) do not apply under
paragraph (2), and which is made coercively or by unfair practices under paragraph (3). <Newly Inserted by Act No. 5335, Dec.
30, 1996; Act No. 5813, Feb. 5, 1999>
Article 7-2 (Standards for Acquisition or Ownership of Stocks)
The acquisition or ownership of stocks by this Act shall be determined by the genuine ownership of stocks, regardless of the names
listed on the register.
[This Article Newly Inserted by Act No. 5335, Dec. 30, 1996]
Article 8 (Report on Establishment of and Conversion into Holding Company)
Where a person has established a holding company or has converted a company into a holding company, he shall make a report to the
Fair Trade Commission under the conditions as prescribed by the Presidential Decree. <Amended by Act No. 6371, Jan. 16, 2001>
[This Article Wholly Amended by Act No. 5813, Feb. 5, 1999]
Article 8-2 (Restrictions, etc. on Act of Holding Companies, etc.)
(1)The definitions of the terms used in this Article shall be as follows: <Newly Inserted by Act No. 7315, Dec. 31, 2004>
1.The term joint stock corporation means the corporation (excluding any corporation in which persons other than the persons who
are prescribed by the Presidential Decree from among the specially related persons of any holding company invest) in which not less
than two investors (persons other than the persons who are prescribed by the Presidential Decree from among investors who are related
to specially related persons shall be deemed one person) who hold so considerable equities that they may influence the corporate
governance and restrict the transfer of equity stocks by means of contracts or other ways corresponding thereto, thereby making it
difficult for any change in equities among investors; and
2.The term venture holding company means the holding company that has venture enterprises provided for in Article 2 (1) of the Act
on Special Measures for the Promotion of Venture Businesses as its subsidiaries and is in conformity with the standards that are
set by the Presidential Decree.
(2)No holding company shall perform the act falling under any of the following: <Amended by Act No. 6371, Jan. 16, 2001; Act No.
6651, Jan. 26, 2002; Act No. 7315, Dec. 31, 2004>
1.The act of holding liabilities exceeding the total capitals (referring to an amount obtained by deducting liabilities from the total
assets on the balance sheet; hereinafter the same shall apply): Provided, That when any holding company holds the amount of liabilities
in excess of the total amount of its capital at the time when the holding company is converted or incorporated, it may hold the amount
of liabilities in excess of the total amount of its capital for 2 years from the date on which it is converted or incorporated;
2.The act of holding not more than 50/100 of the total number of stocks issued by the subsidiary (in case where the subsidiary is
a stock-listed corporation, or an Association-registered corporation provided for in the Securities and Exchange Act or a joint stock
corporation, the percentage shall be 30/100 and in case where the subsidiary is the subsidiary of a venture holding company, the
percentage shall be 20/100; hereafter in this Article referred to as the subsidiary stock holding standard ): Provided, That the
same shall not apply to any subsidiary that falls short of the subsidiary stock holding standard in the case falling under each of
the following:
(a) Where the holding company holds stocks that fall short of the subsidiary stock holding standard at the time when the holding company
is converted or incorporated and is within 2 years from the date on which it is converted or incorporated;
(b) Where the subsidiary that was a stock-listed corporation or an Association-registered corporation provided for in the Securities
and Exchange Act or a joint stock corporation falls short of the subsidiary stock holding standard on the grounds that it does not
fall under either of them and is within one year from the date on which it does not fall under the standard;
(c) Where the company that was a venture holding company falls short of the subsidiary stock holding standard on the grounds that
it does not fall under such venture holding company and is within one year from the date on which it does not fall under such venture
holding company;
(d) Where the subsidiary falls short of the subsidiary stock holding standard and is within one year from the date on which such subsidiary
falls short of the subsidiary stock holding standard on the grounds that the subsidiary preferentially allots stocks to the employee
stock ownership association pursuant to Article 191-7 of the Securities and Exchange Act while offering and selling stocks or a claim
is filed for conversing convertible bonds or warrant bonds that are issued by the subsidiary pursuant to Article 513 or 516-2 of
the Commercial Act or the preemptive right is exercised;
(e) Where the company that is not a subsidiary falls under a subsidiary and falls short of the subsidiary stock holding standard and
is within one year from the date on which the relevant company falls under such subsidiary; and
(f) Where the subsidiary falls short of the subsidiary stock holding standard in the process of making the subsidiary a non-subsidiary
and is within one year from the date on which such subsidiary falls short of the subsidiary stock holding standard (limited to a
case where the subsidiary does not fall under the category of the subsidiary within one year from the date on which it falls short
of the subsidiary stock holding standard);
3.The act of holding stocks of any domestic company that is not a subsidiary in excess of 5/100 of the total number of stocks issued
by the relevant domestic company (the same shall not apply to any holding company that holds not more than 15/100 of the total amount
of the stock value of the domestic company that is not its subsidiary) or the act of holding stocks of any domestic affiliate other
than its subsidiary: Provided, That the same shall apply to the case of any domestic company that is not an affiliate or any domestic
affiliate that each holds stocks on the grounds of the case falling under each of the following subparagraphs:
(a) Where the company that falls under the act provided for in the main sentence of this subparagraph at the time when it is converted
into a holding company or is incorporated as a holding company and is within 2 years from the date on which it is converted or incorporated
as a holding company;
(b) Where the company falls under the act provided for in the main sentence of this subparagraph in the process of getting any company
that is not its affiliate to fall under its subsidiary and is within one year from the date on which it falls under the act (limited
to a case where it falls under the subsidiary within the same period);
(c) Where the company holds the stocks of the domestic affiliate, none of which is owned by the company, in the process of getting
the domestic affiliate to fall under its subsidiary and is within one year from the date on which it holds the stocks of the domestic
affiliate (limited to a case where the domestic affiliate is made to fall under its subsidiary); and
(d) Where the company is within one year from the date on which the relevant subsidiary does not fall under its subsidiary in the
process of getting the subsidiary not to fall under the subsidiary;
4.An act of owning stocks of a domestic company other than those of a company conducting the financial business or insurance business
(including a company meeting the standards as determined by the Presidential Decree such as companies closely connected with the
financial business or insurance business) for a holding company which owns stocks of its subsidiary conducting the financial business
or insurance business (hereinafter referred to as financial holding company ): Provided, That when a holding company holds stocks
of any domestic company other than any company that runs the financial business or insurance business at the time when such holding
company is converted into a financial holding company or is incorporated as a financial holding company, such holding company may
hold the stocks of any domestic company for 2 years from the date on which it is converted into a financial holding company or is
incorporated as a financial holding company; and
5.An act of owning stocks of a domestic company conducting the financial business or insurance business for a holding company which
is not a financial holding company (hereinafter referred to as general holding company ): Provided, That when a holding company
holds stocks of any domestic company that runs the financial business or insurance business at the time when the holding company
is converted into a general holding company or is incorporated as a general holding company, such holding company may hold the stocks
of any domestic company for 2 years from the date on which it is converted into a general holding company or is incorporated as a
general holding company.
(3)The subsidiary of every general holding company shall be prohibited from performing acts falling under any of the following subparagraphs:
<Amended by Act No. 7315, Dec. 31, 2004>
1.The act of holding not more than 50/100 of the total number of stocks issued by the relevant business related sub-subsidiary (30/100
in case where the business related sub-subsidiary is a stock-listed corporation provided for in the Securities and Exchange Act,
an Association-registered corporation or a joint stock corporation, hereafter in this Article referred to as the business related
sub-subsidiary stock holding standard ): Provided, That the same shall not apply to any business related sub-subsidiary that falls
short of the business related sub-subsidiary stock holding standard on the grounds of the case falling under each of the following
items:
(a) Where the subsidiary holds stocks of the business related sub-subsidiary that fall short of the business related sub-subsidiary
stock holding standard at the time when the subsidiary is incorporated and is within 2 years from the date on which the subsidiary
falls under the subsidiary;
(b) Where the business related sub-subsidiary that was a stock-listed corporation or Association-registered corporation provided for
in the Securities and Exchange Act or a joint stock corporation falls short of the business related sub-subsidiary stock holding
standard on the grounds of its failure to fall under a stock-listed corporation or Association-registered corporation provided for
in the Securities and Exchange Act or a joint stock corporation and is within one year from the date on which it fails to fall under
each of them;
(c) Where the business related sub-subsidiary preferentially allots stocks to the employee stock ownership association while offering
and selling its stocks pursuant to Article 191-7 of the Securities and Exchange Act or the relevant business related sub-subsidiary
falls short of the business related sub-subsidiary stock holding standard after a claim is filed for conversing the convertible bonds
or the warrant bonds that are issued pursuant to Article 513 or Article 516-2 of the Commercial Act or the preemptive right is exercised
and is within one year from the date on which the business related sub-subsidiary falls short of the business related sub-subsidiary
stock holding standard;
(d) Where any company that is not the business related sub-subsidiary falls under the business related sub-subsidiary, but falls short
of the business related sub-subsidiary stock holding standard and is within one year from the date on which the relevant company
falls under the business related sub-subsidiary; and
(e) Where the business related sub-subsidiary falls short of the business related sub-subsidiary stock holding standard in the process
of getting the business related sub-subsidiary not to fall under the business related sub-subsidiary and is within one year from
the date on which it does not fall under the business related sub-subsidiary (limited to a case where it does not fall under the
business related sub-subsidiary during the period of one year); and
2.The act of holding stocks of any domestic affiliate that is not a business related sub-subsidiary: Provided, That the same shall
not apply to a case where any domestic affiliate holds the stocks on the grounds of the case falling under each of the following
items:
(a) Where the domestic affiliate holds stocks at the time when it is converted into a subsidiary and is within 2 years from the date
on which it is converted into the subsidiary;
(b) Where it is within one year from the date on which a company that is not an affiliate falls under a business related sub-subsidiary
in the process of getting the company to fall under a business related sub-subsidiary (limited to a case where the company falls
under the business related sub-subsidiary within the same period);
(c) Where it is within one year from the date on which stocks of any domestic affiliate, none of which is owned, are obtained in the
process of getting the relevant domestic affiliate to fall under the business related sub-subsidiary (limited to a case where it
falls under the business related sub-subsidiary within the same period); and
(d) Where it is within one year from the date on which any business related sub-subsidiary does not fall under the business related
sub-subsidiary in the process of getting the former not to fall under the latter (limited to a case where the business related sub-subsidiary
does not fall under any affiliate within the same period).
(4)Every business related sub-subsidiary of the general holding company shall be prohibited from holding stocks of any domestic affiliate:
Provided, That the same shall not apply to a case where the domestic affiliate holds such stocks on the grounds of the case falling
under each of the following items: <Newly Inserted by Act No. 7315, Dec. 31, 2004>
1.Where the domestic affiliate holds stocks at the time when it becomes a business related sub-subsidiary and is within 2 years from
date on which the domestic affiliate falls under the business related sub-subsidiary; and
2.The domestic company that is not an affiliate holding stocks falls under an affiliate and is within one year from the date on which
the domestic company falls under the affiliate.
(5)A holding company shall submit to the Fair Trade Commission a report on the business contents of the holding company, its subsidiaries
and its business related sub-subsidiaries such as status of stockholding and financial standing, under the conditions as prescribed
by the Presidential Decree. <Amended by Act No. 7315, Dec. 31, 2004>
[This Article Newly Inserted by Act No. 5813, Feb. 5, 1999]
Article 8-3 (Restrictions on Establishment of Holding Company by Enterprise Group Subject to Limitations on Debt Guarantees)
Where the same person who controls a company belonging to an enterprise group subject to the limitations on debt guarantees designated
under Article 14 (1) or the person with special interests in the same person intends to establish a holding company or convert the
company into a holding company, he shall have the existing debt guarantees under Article 10-2, which fall hereunder, annulled: <Amended
by Act No. 6651, Jan. 26, 2002>
1.Debt guarantee between a holding company and its subsidiary;
2.Debt guarantee between a holding company and other domestic affiliated companies (excluding a subsidiary controlled by the holding
company);
3.Debt guarantee between subsidiaries; and
4.Debt guarantee between a subsidiary and other domestic affiliated companies (excluding a holding company controlling the subsidiary
and other subsidiary controlled by the holding company).
[This Article Newly Inserted by Act No. 5813, Feb. 5, 1999]
Article 9 (Prohibition, etc. of Mutual Contribution)
(1)Any company belonging to an enterprise group whose total assets, etc. fall under the criteria as prescribed by the Presidential
Decree, and thereby designated under Article 14 (1) (hereinafter referred to as an enterprise group subject to the limitations on
mutual investment ) shall not acquire or own stocks of an affiliated company which acquires or owns its stocks: Provided, That this
shall not apply to the case where it falls under any of the following subparagraphs: <Amended by Act No. 6651, Jan. 26, 2002>
1.A merger of companies, or the acquisition by transfer of a whole business; and
2.An execution of collateral right, or the receipt of an accord and satisfaction.
(2)Any company which makes a contribution under the proviso of paragraph (1) shall dispose of stocks within six months from the day
on which it acquires or holds them: Provided, That this shall not apply to the case where an affiliated company acquiring or holding
its own stocks disposes of them.
(3)Any company which belongs to an enterprise group subject to the limitations on mutual investment and which is also an investment
company for the establishment of small and medium-sized enterprises under the Support for Small and Medium Enterprise Establishment
Act, shall not acquire or hold stocks of a domestic affiliated company. <Amended by Act No. 6651, Jan. 26, 2002>
Article 10 (Restrictions on Gross Amount of Investment)
(1)Any company belonging to an enterprise group whose total amount of assets, financial structure, number of its affiliates and ownership
control structure, etc. fall under the standard prescribed by the Presidential Decree, and thereby designated under Article 14 (1)
(hereinafter referred to as an enterprise group subject to the limitations on total investment amount ) shall be prohibited from
acquiring or owning stocks of another domestic company in excess of an amount obtained by multiplying its net asset amount by 25/100
(hereinafter referred to as the investment limit amount ): Provided, That the same shall not apply to the case falling under any
of the following subparagraphs: <Amended by Act No. 6371, Jan. 16, 2001; Act No. 6651, Jan. 26, 2002; Act No. 7315, Dec. 31, 2004;
Act No. 7428, Mar. 31, 2005>
1.Where such company acquires or owns new stocks of another domestic company within the ratio of acquired or owned stocks against
the gross number of stocks issued by the said company. In this case, the same shall be limited to within two years from the date
of acquisition or owning;
2.Where such company acquires or owns stocks of another domestic company through the execution of collateral right or receipt of accord
and satisfaction: Provided, That the same shall be limited to within 6 months from the date of acquisition or owning;
3.Where acquiring or obtaining stocks in a company with 10 percent of total issued stocks is held by one foreigner (including any
related enterprise that is interested in the capital investment provided for in Article 2 (1) 4 (b) of the Foreign Investment Promotion
Act and the relevant foreigner and the specially related person provided for in Article 6 of the Foreign Investment Promotion Act
of any enterprise that is interested in the capital investment relation provided for in Article 2 (1) 4 (b) of the Foreign Investment
Promotion Act with the relevant foreigner), from among foreign invested enterprises provided for in the Foreign Investment Promotion
Act. In this case, it shall be limited to not more than 5 years from the date on which they are acquired and held: Provided, That
when the stock ratio that is held by any foreigner is not more than 10 percent of the total number of stocks issued by the company,
it shall be limited to 6 months from the date on which the foreigner first holds the stock ratio;
4.Where stocks are acquired and held in a manner that meets the requirements prescribed by the Presidential Decree in order to facilitate
technical cooperation with small and medium enterprises, to sharpen the international competitiveness of new industries provided
for in Article 7 of the Industrial Development Act and other industries that are prescribed by the Presidential Decree and to facilitate
corporate restructuring aimed to strengthen the corporative competitiveness;
5.Where such company acquires or owns the stocks in excess of the investment limit amount with the aim of converting it into a holding
company or of not becoming a holding company which was a holding company by acquiring, owning or disposing of the stocks or by decreasing
or increasing the assets, and where such acts satisfy the requirements prescribed by the Presidential Decree: Provided, That the
period for which such company may acquire or own the stocks shall be from the date of acquisition or owning to the end of relevant
business year, but, if such conversion into the holding company or into the company other than a holding company takes considerable
time and if there exist reasonable reasons therefor, the Fair Trade Commission may extend such period until the next business year;
and
6.Where such company owns stocks of a company falling under any of the following items. In this case, when the procedures of each
of the following items have been completed, the same shall be limited to within 6 months from the date of completion:
(a) Company for which the procedure for company reorganization has been initiated and is in progress under the Company Reorganization
Act;
(a) Company for which the procedure for rehabilitation has been initiated and is in progress under the Debtor Rehabilitation and Bankruptcy
Act; Enforcement Date: Apr. 1, 2006
(b) Company for which the procedure for composition has been initiated and is in progress under the Composition Act;
(b) Deleted; <by Act No. 7428, Mar. 31, 2005> Enforcement Date: Apr. 1, 2006
(c) Company for which the procedure is in progress after being sentenced to a bankruptcy under the Bankruptcy Act; and
(c) Company for which the procedure is in progress after being sentenced to a bankruptcy under the Debtor Rehabilitation and Bankruptcy
Act; and Enforcement Date: Apr. 1, 2006
(d) Company for which the procedure for management has been initiated and is in progress under Article 12 (1) 1 through 3-1 of the
Corporate Restructuring Promotion Act.
(2) The net asset amount under the provisions of the main sentence of paragraph (1) except each subparagraph shall be an amount calculated
according to the following methods: <Amended by Act No. 6651, Jan. 26, 2002>
1.An amount obtained by subtracting the amount of investment made by affiliated companies in the company (meaning an amount that derives
from the multiplication of the number of stocks in possession by the per stock face value; hereafter in this paragraph, the same
shall apply) as of the closing date of the immediately preceding business year from the larger amount between the capital sum, entered
on the balance sheet of immediately preceding business year, and the equity capital;
2.In case that a newly incorporated company has no balance sheet of the immediately preceding business year, an amount obtained by
subtracting the amount of investment made by affiliated companies in the company from the paid-in capital at the time of incorporation;
and
3.In case of subparagraph 1 or 2, if the capital sum has been increased by the issuance of new stocks, a merger or the conversion
of convertible bonds after the closing date of the immediately preceding business year or after the date of company incorporation,
an amount obtained by subtracting the amount of investment made by affiliated companies in the company from the increased capital
sum.
(3) The value of stocks acquired or owned under the provisions of the main sentence of paragraph (1) except each subparagraph shall
be computed according to prices at the time of acquiring such stocks: Provided, That where the price at the time of acquisition contains
the contribution to be paid to the Government, it shall be computed on the basis of the amount obtained by subtracting such contribution
from the prices at the time of acquisition. <Amended by Act No. 6651, Jan. 26, 2002>
(4) In applying the provisions of paragraph (1), where the prescribed investment limit amount is exceeded due to a decrease of the
net asset value of a company (excluding the case where the net asset value of the company is decreased by the acquisition of treasury
stocks; hereinafter the same shall apply) or the already excessive amount increases, the small amount from among the amounts falling
under each of the following subparagraphs shall be deemed the investment limit amount for two years from the date on which the net
asset value decreases. The same shall also apply to the case where the net asset value of the company decreases again after the prescribed
period elapses:
1.The amount of investment made to another domestic company as of the date on which the net asset value decreases; and
2.The investment limit amount calculated in case that the net asset value does not decrease.
(5)Where the investment limit amount increases in excess of the amount that is deemed the investment limit amount in paragraph (4)
following an increase in the net asset value under the provisions of paragraph (2) 3, the provisions of paragraph (4) shall not be
applied.
(6) Where the stocks acquired or owned by a company belonging to an enterprise group subject to the limitations on total investment
amount fall under any of the following subparagraphs, such stocks shall not be deemed to be the stocks of another domestic company
under the text of other portion than each subparagraph of paragraph (1): <Newly Inserted by Act No. 6651, Jan. 26, 2002; Act No.
7315, Dec. 31, 2004; Act No. 7386, Jan. 27, 2005; Act No. 7492, Mar. 31, 2005>
1.Where acquiring or owning the stocks of a company operating a private investment project in the modes under subparagraphs 1 through
3 of Article 4 of the Act on Private Participation in Infrastructure. In this case, the same shall be limited to within 20 years
from the date of acquisition or owning: Provided, That it may be extended within the limit of 10 years, when the Fair Trade Commission
deems it necessary, such as the period summing up the construction period of the said private investment project and the free-use
period exceeds 20 years;
2.Where acquiring or owning the stocks of company falling under any of the following items in order to take over such company:
(a) Government-invested institutions under Article 2 of the Framework Act on the Management of Government-Invested Institutions;
(b) Corporations under Article 2 of the Act on the Improvement of Managerial Structure and Privatization of Public Enterprises;
(c) Government-contributed organizations as prescribed by the Presidential Decree; and
(d) Affiliated companies of the companies under items (a) through (c);
3.Where acquiring or owning the stocks of company falling under the standard as prescribed by the Presidential Decree, such as carrying
on the business identical with the company under the provisions of other portion than each subparagraph, or having a close relation
with the business contents of such company;
4.Where acquiring or owning the stocks of company in which the State or local government acquires or owns not less than 30/100 of
the gross number of issued stocks. In this case, when the stocks ratio of the State or local government in the said company falls
short of 30/100, it shall be limited to within 6 months from the said date; and
5.Where acquiring or owning the stocks company which falls under the standard, such as the gravity of sales amount, prescribed by
the Presidential Decree, and is approved to be a corporate project operator.
(7)The provisions of paragraph (1) shall not apply to the company falling under any of the following subparagraphs: <Newly Inserted
by Act No. 6651, Jan. 26, 2002; Act No. 7315, Dec. 31, 2004; Act No. 7428, Mar. 31, 2005>
1.Company carrying on the financial business or insurance business;
2.Holding company, subsidiary or business related sub-subsidiary;
3.Company for which the procedure for rehabilitation under the Debtor Rehabilitation and Bankruptcy Act has been initiated and is
in progress, or the procedure for management under Article 12 (1) 1 through 3 of the Corporate Restructuring Promotion Act has been
initiated and is in progress. In this case, when each procedure has been completed, it shall be limited to within one year from the
date of completion; and
4.Company that operates the oversight and check mechanism that is prescribed by the Presidential Decree with respect to directors,
the board of directors and the general meeting of stockholders in order to ensure the transparent decision-making and corporate governance
activities.
[This Article Newly Inserted by Act No. 6043, Dec. 28, 1999]
Article 10-2 (Prohibition of Debt Guarantees for Affiliated Company)
(1)Any company (excluding a company conducting the financial business or insurance business; hereinafter the same shall apply) belonging
to an enterprise group which falls under the criteria set forth in the Presidential Decree, such as the total amount of assets in
excess of a specific scale, and thereby designated under Article 14 (1) (hereinafter referred to as an enterprise group subject
to the limitations on debt guarantees ), shall not give debt guarantees to its domestic affiliated companies: Provided, That the
same shall not apply to a debt guarantee which falls under any of the following subparagraphs: <Amended by Act No. 5335, Dec.
30, 1996; Act No. 5528, Feb. 24, 1998; Act No. 5825, Feb. 8, 1999; Act No. 6651, Jan. 26, 2002>
1.A guarantee made in connection with any obligation of a company, which is taken over according to the plan of or criteria for rationalization
under the Restriction of Special Taxation Act;
2.Deleted; and <by Act No. 5335, Dec. 30, 1996>
3.A guarantee on debts which is deemed necessary to enhance the international competitiveness of enterprises, or which is set forth
in the Presidential Decree.
(2)For the purpose of paragraph (1), the term debt guarantee means any guarantee to be made to a domestic affiliated company by
a company belonging to an enterprise group subject to the limitations on debt guarantees in connection with the credit of a domestic
financial institution falling under any of the following subparagraphs: <Amended by Act No. 5403, Aug. 30, 1997; Act No. 5454,
Dec. 13, 1997; Act No. 6651, Jan. 26, 2002>
1.Financial institutions as prescribed by the Banking Act, the Korea Development Bank, the Export-Import Bank of Korea, the Long-Term
Credit Bank, and the Industrial Bank of Korea;
2.Deleted; <by Act No. 5503, Jan. 13, 1998>
3.Insurance companies as prescribed by the Insurance Business Act;
4.Securities companies as prescribed by the Securities and Exchange Act;
5.Merchant banks as prescribed by the Merchant Bank Act; and
6.Other financial institutions as prescribed by the Presidential Decree.
(3)and (4) Deleted. <by Act No. 5528, Feb. 24, 1998>
[This Article Newly Inserted by Act No. 4513, Dec. 8, 1992]
Article 10-3 Deleted.
<by Act No. 6371, Jan. 16, 2001>
Article 11 (Limitation on Voting Rights of Financial and Insurance Companies)
No financial or insurance company belonging to an enterprise group subject to the limitations on mutual investment shall exercise
its voting rights in stocks of domestic affiliated companies, under its acquisition or ownership: Provided, That the same shall not
apply to the cases falling under any of the following subparagraphs: <Amended by Act No. 4513, Dec. 8, 1992; Act No. 5335, Dec.
30, 1996; Act No. 6651, Jan. 26, 2002; Act No. 7315, Dec. 31, 2004>
1.Where acquiring or owning stocks in order to carry on the financial business or insurance business;
2.Where acquiring or owning stocks by obtaining an approval, etc. pursuant to the Insurance Business Act, etc. in order to efficiently
operate and manage the insurance properties; and
3.Where the general meeting of stockholders of a relevant domestic affiliated company (limited to the stock-listed corporation or
Association-registered corporation under the Securities and Exchange Act) passes a resolution for matters falling under any of the
following items. In this case, the number of voting stocks from among those of the said affiliated company shall not exceed 15/100
of the gross number of stocks issued by the said affiliated company, including the number of stocks to be exercised by the persons
other than those as stipulated by the Presidential Decree, from among the specially-related persons with the said affiliated company:
(a) Appointment or dismissal of officers;
(b) Alteration of the articles of incorporation; and
(c) Merger of the said affiliated company with another company, or transfer of the whole or part of business to another company.
Article 11-2 (Resolution of Board of Directors and Publication on Large-Scale Internal Trading)
(1)When any company belonging to an enterprise group which falls under the criteria set forth in the Presidential Decree, such as
the total amount of assets in excess of a specific scale, (hereinafter referred to as a company subject to the publication of internal
trading ), intends to carry out the trading act falling under any of the following subparagraphs (hereinafter referred to as large-scale
internal trading ) with specially-related persons or for such specially-related persons beyond the business scale prescribed by the
Presidential Decree, it shall publish such intention in advance after going through a resolution of the board of directors. The same
shall apply to the case where such company intends to change major contents as prescribed in paragraph (2): <Amended by Act No.
6651, Jan. 26, 2002>
1.The act of offering or trading funds such as suspense payments and loans, etc.;
2.The act of offering or trading securities such as stocks and company bonds, etc.; and
3.The act of offering or trading assets such as real estate or intangible property rights, etc.
(2)Any company subject to the publication of internal trading, in making the publication pursuant to the provisions of paragraph (1),
shall include in such publication the objective of trading, the other party to such trading, and the scale and terms of such trading,
etc. as prescribed by the Presidential Decree.
(3)The Fair Trade Commission may entrust the business related to the publication as prescribed in the provisions of paragraph (1)
to institutions in charge of receiving reports, which are established pursuant to the provisions of Article 186 of the Securities
and Exchange Act. In this case, the Fair Trade Commission shall determine methods, procedures and other necessary matters with respect
to the publication after consultations with such entrusted institutions.
(4)Any company subject to the publication of internal trading that runs the financial business or the insurance business, if it intends
to carry out a trading act that is a fixed trading according to its standard contractual terms and conditions and is consistent with
standards prescribed by the Presidential Decree, may perform such trading act, notwithstanding the provisions of paragraph (1), without
going through a resolution of the board of directors: Provided, That such company shall publish the contents of such trading.
[This Article Newly Inserted by Act No. 6043, Dec. 28, 1999]
Article 11-3 (Publication of Important Matters of Unlisted Companies, etc.)
(1)A company (excluding any company that runs the financial business or the insurance business) that belongs to the business group
that falls under the standards, including the total amount of assets of not less than a certain scale, that are prescribed by the
Presidential Decree, with the exclusion of any stock-listed corporation and any Association-registered corporation provided for in
Article 2 of the Securities and Exchange Act, shall publish matters falling under each of the following subparagraphs: Provided,
That matters that are published pursuant to Article 11-2 shall be excluded:
1.Important matters concerning the ownership control structure, including the current state of stocks held by largest stockholders
and major stockholders (referring to major stockholders provided for in Article 188 (1) of the Securities and Exchange Act), the
changed matters thereof and changes in officers, etc. of the company, which are all prescribed by the Presidential Decree;
2.Matters, including acquisition of assets or stocks, donations, the provision of security, the acceptance and exception of liabilities,
etc. that result in major changes in the financial structure of the company, and are prescribed by the Presidential Decree; and
3. Matters, including the transfer and takeover of business, merger and division, the exchange and transfer of stocks, etc. that result
in major changes in the management of the company, which are prescribed by the Presidential Decree.
(2)The provisons of Article 11-2 (2) and (3) shall apply mutatis mutandis to the publication referred to in paragraph (1).
[This Article Newly Inserted by Act No. 7315, Dec. 31, 2004]
Article 12 (Report on Combination of Enterprises)
(1)In case where any company (in case where the corporate combination that falls under subparagraph 3 is performed, such corporate
combination shall be limited to the large-scale company and hereafter in this Article referred to as the company liable to make
a report on corporate combination ) whose total amount of assets or scale of the sales amount falls under the standards that are
set by the Presidential Decree or any specially related person of the company liable to make a report on corporate combination performs
the corporate combination falling under each of the following subparagraphs with other company (hereafter in this Article referred
to as the counterpart company ) that falls under the standards, such as total amount of assets or scale of the sales amount, that
are set by the Presidential Decree, it or he shall make a report thereon to the Fair Trade Commission under the conditions as prescribed
by the Presidential Decree. The same shall apply to a case where any company that falls under the scale of the counterpart company
other than the company liable to make a report on corporate combination performs the corporate combination falling under each of
the following subparagraphs with the company liable to make a report on corporate combination: <Amended by Act No. 7315, Dec.
31, 2004>
1.Where not less than 20/100 (in the case of the stock-listed corporation or the Association-registered corporation provided for in
the Securities and Exchange Act, 15/100) of the total number of stocks issued (excluding stocks without voting rights provided for
in Article 370 of the Commercial Act; hereafter the same shall apply) by other company is held;
2.Where anyone who falls under subparagraph 1 becomes the largest equity investor by additionally acquiring stocks of the relevant
company after making a report on the corporate combination;
3.Where any officer concurrently holds offices (excluding a case where he concurrently holds the office of any affiliate);
4.Where the act falling under Article 7 (1) 3 or 4 is performed; and
5.Where not less than 20/100 of shares of any newly incorporated company are taken over.
(2)The total amount of assets or the scale of the sales amount of the company liable to make a report on corporate combination or
of the counterpart company referred to in paragraph (1) means the scale of the aggregate of the total amount of assets or the sales
amount of the company that continues to maintain the status of an affiliate from the date on which the corporate combination is performed
after the date on which the corporate combination is performed: Provided, that in the case of the business acquisition by transfer
provided for in Article 7 (1) 4, the total amount of assets or the scale of sales amount of the company that transfers its business
(including the business rent, the management delegation and the transfer of operating assets) means the scale that does not include
the total amount of assets or sales amount of its affiliates. <Newly Inserted by Act No. 7315, Dec. 31, 2004>
(3)Notwithstanding the provisions of the former part of the portion other than each subparagraph of paragraph (1), in the case of
the combination of enterprises falling under any of the following subparagraphs, and which falls under subparagraph 1 or 5 of the
same paragraph, it shall be excluded from one subject to reports: <Newly Inserted by Act No. 6371, Jan. 16, 2001; Act No. 6651,
Jan. 26, 2002; Act No. 6705, Aug. 26. 2002; Act No. 7315, Dec. 31, 2004>
1.Where the small and medium enterprise start-up investment company or the small and medium enterprise start-up investment association
under subparagraphs 4 and 5 of Article 2 of the Support for Small and Medium Enterprise Establishment Act, has combined with the
founder under subparagraph 2 of the same Article or a venture business;
2.Where the venture capitalist or the venture business investment association under Article 41 (1) and (3) of the Specialized Credit
Financial Business Act has combined with the new technology enterprise under subparagraph 1 of Article 2 of the Korea Technology
Credit Guarantee Fund Act; and
3.Where the company liable to make a report on corporate combination performs the corporate combination with any investment company
provided for in the Act on Business of Operating Indirect Investment and Assets (excluding any securities investment company for
business takeover provided for in Article 142 (1) of the same Act).
(4)The provisions of paragraph (1) shall not apply to the case where the head of the central administrative agency concerned has consulted
in advance with the Fair Trade Commission with regarding to the combination of enterprises under the relevant Acts.
(5)In computing the rate of holding or acquisition pursuant to paragraph (1) 1, 2 or 5, those stocks owned by a person with special
interest in the company concerned shall be included. <Amended by Act No. 7315, Dec. 31, 2004>
(6)Reports on the combination of enterprises under paragraph (1) shall be made within thirty days after the date of such combination:
Provided, That in case where not less than one company are large-scale companies from among companies involved in the corporate combination
referred to in paragraph (1) 1, 2, 4 or 5, a report shall be made on such corporate combination within 30 days from the date on which
a merger contract is concluded or from the date that is set by the Presidential Decree. <Amended by Act No. 5813, Feb. 5, 1999;
Act No. 7315, Dec. 31, 2004>
(7)Anyone who is liable to make a report required under the proviso of paragraph (6) shall be prohibited from performing the act of
holding stocks, having a merger registered and fulfilling any business acquisition by transfer contract or taking over stocks by
the time when 30 days elapse after making a report thereon except as otherwise prescribed by the Presidential Decree: Provided, That
when it is deemed necessary by the Fair Trade Commission, the period may be shortened or extended within the scope of 90 days that
are reckoned from the date following the date on which the period expires. <Amended by Act No. 7315, Dec. 31, 2004>
(8)Where a person intends to make a combination of enterprises under Article 7 (1), he may request the Fair Trade Commission to determine
whether such combination may be categorized as one which practically suppresses competition even before the period of report under
paragraph (6). <Amended by Act No. 5813, Feb. 5, 1999; Act No. 6371, Jan. 16, 2001; Act No. 7315, Dec. 31, 2004>
(9)Upon the request of a determination under paragraph (8), the Fair Trade Commission shall give notice of its decision to the requesting
company within thirty days: Provided, That the Fair Trade Commission may, if deemed necessary, extend such period within the limits
of 90 days from the date following the expiry date. <Amended by Act No. 5813, Feb. 5, 1999; Act No. 6371, Jan. 16, 2001; Act No.
7315, Dec. 31, 2004>
(10)When there are two or more companies that are liable to file a report under paragraph (1), these companies shall file the report
jointly: Provided, That this shall not apply to the case where the Fair Trade Commission has designated one of the companies belonging
to an enterprise group comprising of the obligator to file as the representative responsible for filing the report (hereafter referred
to as the representative in this Article) under the conditions as prescribed by the Presidential Decree.
[This Article Wholly Amended by Act No. 5335, Dec. 30, 1996]
Article 13 (Report on Status of Stockholding)
(1) Companies belonging to an enterprise group subject to the limitations on mutual investments, an enterprise group subject to the
limitations on the total investment amount, or an enterprise group subject to the limitations on debt guarantees shall submit to
the Fair Trade Commission a report on the status of ownership of their stockholders, financial standing, and status of their ownership
of other domestic companies stocks under the conditions as prescribed by the Presidential Decree. <Amended by Act No. 5335, Dec.
30, 1996; Act No. 6651, Jan. 26, 2002>
(2)Companies belonging to the enterprise group subject to the limitations on debt guarantees, shall submit to the Fair Trade Commission
a report on the status of debt guarantees issued in favor of domestic affiliated companies after obtaining confirmation from a domestic
financial institution pursuant to the Presidential Decree. <Newly Inserted by Act No. 4513, Dec. 8, 1992; Act No. 5335, Dec. 30,
1996; Act No. 6651, Jan. 26, 2002>
(3)The proviso of Article 12 (10) shall apply mutatis mutandis to reports referred to in paragraphs (1) and (2). <Amended by Act
No. 5335, Dec. 30, 1996; Act No. 6371, Jan. 16, 2001; Act No. 7315, Dec. 31, 2004>
(4)Deleted. <by Act No. 5335, Dec. 30, 1996>
Article 14 (Designation, etc. of Enterprise Group, etc. Subject to Limitations on Mutual Investment)
(1)The Fair Trade Commission shall designate an enterprise group subject to the limitations on mutual investment, an enterprise group
subject to the limitations on total investment amount and an enterprise group subject to the limitations on debt guarantees (hereinafter
referred to as an enterprise group, etc. subject to the limitations on mutual investment ), under the conditions as prescribed in
the Presidential Decree, and shall notify companies belonging to such groups thereof. <Amended by Act No. 4513, Dec. 8, 1992;
Act No. 6651, Jan. 26, 2002>
(2)The provisions of Articles 9 through 11 and 13 shall apply from the date of the receipt of notification referred to in paragraph
(1). <Amended by Act No. 5335, Dec. 30, 1996; Act No. 5813, Feb. 5, 1999>
(3)Notwithstanding paragraph (2), where a company designated as an enterprise group, etc. subject to the limitations on mutual investment
pursuant to the provisions of paragraph (1) and notified as a company belonging to an enterprise group, etc. subject to the limitations
on mutual investment, or a company incorporated as an affiliated company into an enterprise group, etc. subject to the limitations
on mutual investment pursuant to the provisions of Article 14-2 (1) and notified as a company belonging to an enterprise group, etc.
subject to the limitations on mutual investment, is in violation of the provisions of Article 9 (1) or (3), 10 (1) or 10-2 (1) at
the time of receiving such notice, such violation shall be dealt with according to the classification falling under each of the following
subparagraphs: <Amended by Act No. 6043, Dec. 28, 1999; Act No. 6371, Jan. 16, 2001; Act No. 6651, Jan. 26, 2002; Act No. 7428,
Mar. 31, 2005>
1.Where the company is in violation of the provisions of Article 9 (1) or (3) [including the case where the company issuing the stocks
acquired or owned is newly incorporated as an affiliated company and comes to violate Article 9 (3)], the provisions of the said
paragraph shall not be applied for one year from the date of designation or affiliation;
2.Where the company is in violation of the provisions of Article 10 (1), the total amount of investment as of the date of designation
or affiliation shall be deemed the investment limit amount for one year from the date of such designation or affiliation: Provided,
That the same shall not apply to the case where an investment limit amount exceeds the amount to be deemed an investment limit amount
following an increase of the net asset value; and
3.Where the company is in violation of the provisions of Article 10-2 (1) (including the case where the company receiving debt guarantees
is newly incorporated as an affiliated company and comes to violate), the same shall not apply for two years from the date of designation
or incorporation: Provided, That where the procedure for company reorganization under the Company Reorganization Act or the procedure
for company composition under the Composition Act (hereafter in this subparagraph, referred to as the procedure, etc. for company
reorganization ), has been commenced on the company under the provision of other portion than each subparagraph, not later than the
end of the procedure, etc. for company reorganization, and where the company under the provision of other portion than each subparagraph
renders a debt guarantee to the company for which the procedure, etc. for company reorganization has been commenced, not later than
the end of the procedure, etc. for company reorganization on the company subjected to the debt guarantee, limited only to the said
debt guarantee, the same shall apply.
3.Where the company is in violation of the provisions of Article 10-2 (1) (including the case where a violation is committed as a
company receiving a debt guarantee is newly incorporated as an affiliated company), the same paragraph shall not apply for two years
from the date of designation or incorporation: Provided, That the provisions of the same paragraph shall not apply until the end
of the procedure for rehabilitation in case where the procedure for rehabilitation under the Debtor Rehabilitation and Bankruptcy
Act has been commenced for the company under the provision of other portion than each subparagraph, and until the end of the procedure
for rehabilitation for the company subjected to the debt guarantee, limited only to the said debt guarantee, in case where the company
under the provision of other portion than each subparagraph renders a debt guarantee to the company for which the procedure for rehabilitation
has been commenced. Enforcement Date: Apr. 1, 2006
(4)The Fair Trade Commission may request the presentation of documents necessary for designating an enterprise group as referred to
in paragraph (1) from a company or person with a special interest in the company.
(5)Any company (excluding any company whose total amount of assets falls short of the amount that is set by the Presidential Decree
as of the end of the immediately preceding business year, or any other company that is under liquidation or has suspended its business
for not less than one year) belonging to an enterprise group, etc. subject to the limitations on mutual investment shall undergo
an audit by a certified public accountant, and the Fair Trade Commission shall use the balance sheet revised according to the opinions
on audit of the certified public accountant. <Newly Inserted by Act No. 5528, Feb. 24, 1998; Act No. 6651, Jan. 26, 2002; Act
No. 7315, Dec. 31, 2004>
Article 14-2 (Incorporation in and Exclusion from Affiliated Companies)
(1)Where a company is to be incorporated in or excluded from affiliated companies of an enterprise group, etc. subject to the limitations
on mutual investment, the Fair Trade Commission shall, upon request by the company concerned (including a person with a special interest
in the company; hereinafter the same shall apply) or ex officio, determine whether the company may be categorized as an affiliated
company of a large enterprise group, and either incorporate the company in the affiliated companies, or exclude it from the affiliated
companies. <Amended by Act No. 6651, Jan. 26, 2002>
(2)Where the Fair Trade Commission deems it necessary for determination referred to in paragraph (1), it may request that the company
concerned submit data such as the composition of stockholders and directors, status of debt guarantees, financial standing, transaction
data, and other related matters.
(3)Upon requests of determination referred to in paragraph (1), the Fair Trade Commission shall notify the requesting person of the
results within thirty days: Provided, That the Fair Trade Commission may, if deemed necessary, extend such period within the limits
of sixty days.
[This Article Newly Inserted by Act No. 5335, Dec. 30, 1996]
Article 14-3 (Incorporation into Affiliated Company and Presumption of Notification Date)
Where a company which receives a request under Article 14 (4) or 14-2 (2) refuses to submit data without any justifiable reason or
submits false data, and thereby is not incorporated into an enterprise group, etc. subject to the limitations on mutual investment
though it should be incorporated, the Fair Trade Commission deems that the company is incorporated into an enterprise group, etc.
subject to the limitations on mutual investment and is given notification thereof on the date on which the Presidential Decree may
determine. <Amended by Act No. 6651, Jan. 26, 2002>
[This Article Newly Inserted by Act No. 5813, Feb. 5, 1999]
Article 14-4 (Requests for Confirmation of Documents before Competent Authorities)
The Fair Trade Commission may, if deemed it necessary for enforcing Articles 9 through 11 and 13 through 14-2, request any authorities
falling under each of the following subparagraphs to confirm or investigate the data relating to the status of the ownership of stockholders
of domestic affiliated companies belonging to an enterprise group, etc. subject to the limitations on mutual investment, the data
relating to debt guarantees, the data relating to advanced payments, loans, or securities, the data relating to transactions or provision
of immovable assets, and other necessary matters: <Amended by Act No. 5491, Dec. 31, 1997; Act No. 5498, Jan. 8, 1998; Act No.
5528, Feb. 24, 1998; Act No. 6651, Jan. 26, 2002>
1.The Financial Supervisory Service established under the Act on the Establishment, etc. of Financial Supervisory Organization;
2.Deleted; <by Act No. 5528, Feb. 24, 1998>
3.Domestic financial institutions pursuant to each subparagraph of Article 10-2 (2); or
4.Other institutions set forth in the Presidential Decree as relating to financial transactions and stock exchange.
[This Article Newly Inserted by Act No. 5335, Dec. 30, 1996]
Article 15 (Prohibition on Evasion of Law)
(1)No one shall perform any act of evading the application of the provisions of Articles 7 (1) and (3), 8-2 (2) through (4), 8-3,
9, 10 (1), 10-2 (1), or 11. <Amended by Act No. 4513, Dec. 8, 1992; Act No. 5335, Dec. 30, 1996; Act No. 5528, Feb. 24, 1998;
Act No. 5813, Feb. 5, 1999; Act No. 6043, Dec. 28, 1999; Act No. 6371, Jan. 16, 2001; Act No. 6651, Jan. 26, 2002; Act No. 7315,
Dec. 31, 2004>
(2)The categories and standards for acts of evasion of law under paragraph (1) shall be determined by the Presidential Decree. <Newly
Inserted by Act No. 5335, Dec. 30, 1996>
Article 16 (Corrective Measures)
(1)Where any company has violated or is likely to violate the provisions of Articles 7 (1) and (3), 8-2 (2) through (4), 8-3, 9, 10
(1), 10-2 (1), 11, or 15, the Fair Trade Commission may order such a company (referred to the company involved in the combination
of enterprises for a violation of Article 7 (1) 1 or 5) or violator to take one of the corrective measures falling under the following
subparagraphs. In this case, where the Fair Trade Commission issues the order, upon the report under the proviso of Article 12 (6),
it shall do so within the period prescribed in Article 12 (6): <Amended by Act No. 5335, Dec. 30, 1996; Act No. 5528, Feb. 24,
1998; Act No. 5813, Feb. 5, 1999; Act No. 6043, Dec. 28, 1999; Act No. 6371, Jan. 16, 2001; Act No. 6651, Jan. 26, 2002; Act No.
7315, Dec. 31, 2004>
1.Cessation of the practice concerned;
2.Disposal of all or part of the stocks;
3.Resignation of officers;
4.Transfer of business;
5.Cancellation of debt guarantees;
6.The publication of the fact that it is ordered to take corrective measures;
7.Restrictions on business method or business scope which are able to prevent the negative effects of restricted competition pursuant
to the combination of enterprises; and
8.Other necessary corrective measures with respect to such a violation.
(2)The Fair Trade Commission may, where a company has been established or merged in violation of the provisions of Article 7 (1) and
(3), 8-3, or 12 (7), file a lawsuit to nullify the said establishment of a company or the said merger of companies. <Amended by
Act No. 5335, Dec. 30, 1996; Act No. 5813, Feb. 5, 1999; Act No. 6371, Jan. 16, 2001; Act No. 6651, Jan. 26, 2002; Act No. 7315,
Dec. 31, 2004>
Article 17 (Surcharge)
(1)The Fair Trade Commission may impose a surcharge on a company which has acquired or owned stocks in violation of Article 9 or 10
(1) within the limits not exceeding ten percent of purchase price of the stocks so acquired or owned. <Amended by Act No. 5335,
Dec. 30, 1996; Act No. 5528, Feb. 24, 1998; Act No. 6043, Dec. 28, 1999>
(2)The Fair Trade Commission may impose a surcharge on a company which has guaranteed debt in violation of the provisions of Article
10-2 (1) within the limits not exceeding ten percent of the value of the debt guarantee in question. <Newly Inserted by Act No.
4513, Dec. 8, 1992; Act No. 5335, Dec. 30, 1996; Act No. 5528, Feb. 24, 1998; Act No. 6371, Jan. 16, 2001>
(3)Deleted. <by Act No. 5813, Feb. 5, 1999>
(4)The Fair Trade Commission may impose a penalty charge within the limit of not exceeding the amount obtained by the multiplication
of the amount falling under each of the following subparagraphs by 10/100 on anyone who has violated the provisions of Article 8-2
(2) through (4): <Amended by Act No. 7315, Dec. 31, 2004>
1.The amount of liabilities that exceeds the total amount of capital on the balance sheet that is prescribed by the Presidential Decree
(hereafter in this Article referred to as the standard balance sheet ) in case where he has violated the provisions of Article 8-2
(2) 1;
2.The amount that is calculated by dividing the amount obtained by multiplying the total amount of the book value on the standard
balance sheet of the stocks of the relevant subsidiary by the ratio that subtracts the ownership ratio of the stocks of the subsidiary
from the ratio falling under each of the following items, by the ownership ratio of the stocks of the subsidiary, in case where he
has violated the provisions of Article 8-2 (2) 2:
(a) In case where the relevant subsidiary is a corporation whose stock certificates are listed or Association-registered corporation
provided for in the Securities and Exchange Act, or a joint stock corporation, 30/100;
(b) In case where the relevant subsidiary is a subsidiary of any venture holding company, 20/100; and
(c) In case where the relevant subsidiary does not fall under either (a) and (b), 50/100;
3.In case where he has violated the provisions of Article 8-2 (2) 3 through 5 and paragraph (3) 2 of the same Act or paragraph (4)
of the same Act, the total amount of the book value on the standard balance sheet of the stocks that he holds by violating such provisions;
and
4.In case where he has violated the provisions of Article 8-2 (3) 1, the amount that is calculated by dividing the amount obtained
by multiplying the total amount of the book value on the standard balance sheet of the stocks of the relevant business related sub-subsidiary
by the ratio that subtracts the ownership ratio of the stocks of the business related sub-subsidiary from the ratio falling under
each of the following items, by the ownership ratio of the shares of the business related sub-subsidiary:
(a) In case where the relevant business related sub-subsidiary is a corporation whose stock certificates are listed or Association-registered
corporation provided for in the Securities and Exchange Act, or a joint stock corporation, 30/100; and
(b) In case where the relevant business related sub-subsidiary does not fall under (a), 50/100.
Article 17-2 (Special Case of Corrective Measures, etc.)
(1)In case where the affiliate of any enterprise group designated as the enterprise group subject to the limitations on total investment
amount, or a company incorporated as an affiliate into the enterprise group subject to the limitations on total investment amount,
has violated Article 10 (1) by continually holding stocks of other domestic company which are acquired and owned in excess of the
investment limit at the time of designation or incorporation after the lapse of one year from the date of designation and incorporation
or continually holding stocks that are held at the time of the designation or incorporation after the lapse of the deadline for which
the exception of restrictions on the total amount of investment is recognized under the proviso of Article 10 (1), the Fair Trade
Commission may order a prohibition of exercising voting rights on the stocks that are acquired and owned in excess of the investment
limit, in lieu of the provisions of Articles 16 and 17. <Amended by Act No. 7315, Dec. 31, 2004>
(2) The company subjected to an order to prohibit any exercise of the voting right under paragraph (1) (hereinafter referred to as
the subject company ) shall notify the Fair Trade Commission of the details of stocks subjected to an order to prohibit any exercise
of the voting right, within the period prescribed by the Presidential Decree within the limit of one month from the date of receiving
such an order of prohibition.
(3)Where the subject company fails to notify the details of stocks subjected to an order to prohibit any exercise of the voting right
within the period under paragraph (2), the Fair Trade Commission may make ex officio a decision on the stocks incapable of exercising
the voting right, under the conditions as prescribed by the Presidential Decree.
(4)The subject company shall make a public notification, under the conditions as prescribed by the Presidential Decree, of the details
of stocks, which are to be notified to the Fair Trade Commission under paragraph (2), or which are to be subjected to an ex officio
order of prohibition by the Fair Trade Commission under paragraph (3).
(5)Where a company has exercised the voting right in contravention of an order to prohibit any exercise of the voting right under
paragraph (1), the Fair Trade Commission may levy on the company the penalty surcharge within the limit not exceeding the amount
obtained by multiplying the acquisition price of stocks whose voting rights have been exercised by 10/100.
[This Article Newly Inserted by Act No. 6651, Jan. 26, 2002]
Article 17-3 (Compulsory Performance Money)
(1)The Fair Trade Commission may impose a compulsory performance money on a person who fails to fulfill corrective measures within
the specified period after he was subject to them pursuant to Article 16 in violation of Article 7 (1) or (3) within the limits not
exceeding the amount obtained by multiplying 3/10,000 by the following amount per day: Provided, That the Fair Trade Commission may
impose a compulsory performance money on a person who made the combination of enterprises listed in Article 7 (1) 2 within the limits
not exceeding two million won per day:
1.The total amount of the book value of stocks acquired or owned and liabilities accepted, for the combination of enterprises listed
in Article 7 (1) 1 or 5;
2.The total amount of the book value of stocks granted in compensation for a merger and liabilities accepted, for the combination
of enterprises listed in Article 7 (1) 3; and
3.The amount of business takeover, for the combination of enterprises listed in Article 7 (1) 4.
(2)The matters necessary for the imposition, payment, collection and refund of compulsory performance money shall be determined by
the Presidential Decree: Provided, That a compulsory performance money in arrears shall be collected according to the examples of
the disposition on the national taxes in arrears.
(3)The Fair Trade Commission may entrust the Commissioner of the National Tax Administration with the business on the collection or
disposition on default of compulsory performance money under paragraphs (1) and (2).
[This Article Newly Inserted by Act No. 5813, Feb. 5, 1999]
Article 18 (Enforcing Compliance with Corrective Measures)
(1)No company which has been ordered to dispose of stocks pursuant to Article 16 (1) shall exercise voting rights with respect to
such stocks from the date of receiving of such order. <Amended by Act No. 5335, Dec. 30, 1996>
(2)No company which has made a cross-capital investment in violation of the provisions of Article 9 shall exercise voting rights to
the whole of such stocks from the date of receiving a corrective order, until the violation has been corrected. <Amended by Act
No. 5335, Dec. 30, 1996>
(3)In giving an order to a company that has violated the provisions of Article 10 (1) to dispose of its stocks in accordance with
the provisions of Article 16 (1) 2, where the Fair Trade Commission does not affirm stocks subject to such disposal, the company
under such order shall notify the Fair Trade Commission of details of stocks for which no voting right is exercised by the date falling
under the 10th day from the date of such order. In this case, the company shall, notwithstanding the provisions of paragraph (1),
be prohibited from exercising its voting right on the stocks, of which the company notifies the Fair Trade Commission, after the
lapse of 10 days from the date of such order. <Newly Inserted by Act No. 6043, Dec. 28, 1999>
(4)The Fair Trade Commission may, where it is not notified within a period as prescribed in paragraph (3), designate stocks on which
the company cannot exercise its voting right as prescribed by the Presidential Decree. <Newly Inserted by Act No. 6043, Dec. 28,
1999>
[This Article Wholly Amended by Act No. 4513, Dec. 8, 1992]
CHAPTER IV RESTRICTIONS ON UNFAIR COLLABORATIVE ACTS
Article 19 (Prohibition of Unfair Collaborative Acts)
(1)No enterpriser shall agree with other enterprisers by contract, agreement, resolution, or any other means, to jointly engage in
any of the act falling under any of the following subparagraphs, which unfairly restrict competition (hereafter referred to as the
unfair collaborative act ) or allow any other enterpriser to perform such unfair collaborative act: <Amended by Act No. 4513,
Dec. 8, 1992; Act No. 4790, Dec. 22, 1994; Act No. 5335, Dec. 30, 1996; Act No. 5813, Feb. 5, 1999; Act No. 7315, Dec. 31, 2004>
1.The act of fixing, maintaining or changing the price;
2.The act of determining terms and conditions for the transaction of goods or services, or for payment of prices thereof;
3.The act of restricting production, delivery, transportation, or transaction of goods or of restricting transaction of services;
4.The act of limiting the territory of trade or customers;
5.The act of preventing or restricting the establishment or extension of facilities or the installation of equipment necessary for
the production of goods or the rendering of services;
6.The act of restricting kinds and standards of goods or services when they are produced or traded;
7.The act of jointly carrying out, managing the main parts of business or establishing a company, etc. to jointly carry out and manage
it; or
8.The act of practically restricting competition in a particular business area by means of interfering or restricting the activities
or contents of business by other persons, which is other than the act referred to in subparagraphs 1 through 7.
(2)The provisions of paragraph (1) shall not apply, where unfair collaborative practices are authorized by the Fair Trade Commission
as satisfying the requirements as determined by the Presidential Decree, and they are conducted for the purposes of each of the following
subparagraphs: <Newly Inserted by Act No. 5335, Dec. 30, 1996>
1.Industry rationalization;
2.Research and technology development;
3.Overcoming of economic depression;
4.Industrial restructuring;
5.Rationalization of trade terms and conditions; or
6.Enhancement of competitiveness in small and medium enterprises.
(3)Any necessary matters with respect to the standards, methods, and procedures of authorization under paragraph (2) and modification
of authorized matters shall be determined by the Presidential Decree. <Newly Inserted by Act No. 5335, Dec. 30, 1996; Act No.
5813, Feb. 5, 1999>
(4)Any contract, etc. stipulating unfair collaborative acts as referred to in paragraph (1) shall be null and void between enterprisers.
(5)Where two or more enterprisers are committing any of the acts listed in each subparagraph of paragraph (1) which practically restrict
competition in a particular business area, they shall be presumed to have committed an unfair collaborative act despite the absence
of an express agreement to engage in such act. <Amended by Act No. 4513, Dec. 8, 1992>
Article 20 Deleted.
<by Act No. 5335, Dec. 30, 1996>
Article 21 (Corrective Measures)
When any collaborative act is performed in violation of the provisions of Article 19 (1), the Fair Trade Commission may order the
enterpriser concerned to discontinue such an act, publish the fact that the enterpriser is ordered to correct such collaborative
act, or publish the fact that the relevant enterpriser is ordered to take corrective measures. <Amended by Act No. 5335, Dec.
30, 1996; Act No. 7315, Dec. 31, 2004>
Article 22 (Surcharge)
When any act is performed in violation of Article 19 , the Fair Trade Commission may impose a surcharge on the relevant enterpriser
within the limits not exceeding the amount equivalent to 10/100 of the turnover determined by the Presidential Decree: Provided,
That in the case of an absence of the turnover, etc., a surcharge may be imposed within the limits not exceeding 2 billion won. <Amended
by Act No. 7315, Dec. 31, 2004>
[This Article Wholly Amended by Act No. 5335, Dec. 30, 1996]
Article 22-2 (Reduction and Exemption for Persons, etc. who have Reported)
(1)With respect to the persons falling under any of the following subparagraphs, the corrective measures under Article 21or the surcharge
under Article 22 may be mitigated or exempted: <Amended by Act No. 6371, Jan. 16, 2001; Act No. 7315, Dec. 31, 2004>
1.Persons who have reported on the fact of unfair collaborative acts; and
2.Persons who have cooperated in the investigation by means of furnishing evidence, etc.
(2)Matters necessary for the scope of persons to be mitigated or exempted under paragraph (1) and the standard or extent, etc. of
a mitigation or exemption shall be determined by the Presidential Decree. <Amended by Act No. 6371, Jan. 16, 2001>
[This Article Newly Inserted by Act No. 5335, Dec. 30, 1996]
CHAPTER V PROHIBITIONOFUNFAIR TRADE PRACTICES
Article 23 (Prohibition of Unfair Trade Practices)
(1)No enterpriser shall commit any act which falls under any of the following subparagraphs, and which is likely to impede fair trade
(hereinafter referred to as unfair trade practices ), or make an affiliated company or other enterprisers perform such an act: <Amended
by Act No. 5335, Dec. 30, 1996; Act No. 5813, Feb. 5, 1999>
1.An act of unfairly refusing any transaction, or discriminating against a certain transacting partner;
2.An act of unfairly excluding competitors;
3.An act of unfairly coercing or inducing customers of competitors to deal with oneself;
4.An act of making a trade with a certain transacting partner by unfairly taking advantage of his position in trade;
5.An act of trade under terms and conditions which unfairly restrict or disrupt business activities;
6.Deleted; <by Act No. 5814, Feb. 5, 1999>
7.An act of assisting a person with a special interest, or other companies by providing advanced payment, loans, manpower, immovable
assets, stocks and bonds, intellectual properties thereto, or by transacting under substantially favorable terms therewith; and
8.An act which threatens to impair fair trade other than those listed in subparagraphs 1 through 7.
(2)The categories or standards for unfair trade practices shall be determined by the Presidential Decree. <Amended by Act No. 5335,
Dec. 30, 1996>
(3)If it is necessary for the prevention of acts of violating the provisions of paragraph (1), the Fair Trade Commission may make
and announce publicly the guidelines to be observed by enterprisers.
(4)In order to prevent an unreasonable inducement of customers, the enterprisers or enterprisers organization may voluntarily make
a code (hereinafter referred to as the fair competition code ). <Amended by Act No. 5814, Feb. 5, 1999>
(5)Enterprisers or an enterprisers organization may request that the Fair Trade Commission examine whether or not the fair competition
code as referred to in paragraph (4) is in violation of the provisions of paragraph (1) 3 or 6.
Article 24 (Corrective Measures)
The Fair Trade Commission may, when there exists an act of violating the provisions of Article 23 (1), order the enterpriser concerned
to discontinue the unfair trade practices, to delete the pertinent provisions from the contract, to publish the fact that the enterpriser
is ordered to take corrective measures or to take any other necessary corrective measures against the said act. <Amended by Act
No. 5335, Dec. 30, 1996; Act No. 5814, Feb. 5, 1999; Act No. 7315, Dec. 31, 2004>
Article 24-2 (Surcharge)
When any act is performed in violation of the provisions of Article 23 (1), the Fair Trade Commission may impose upon the person concerned
a surcharge not exceeding the amount obtained by multiplying the turnover determined by the Presidential Decree by two percent (five
percent in case of violating the provisions of subparagraph 7). In the case of absence of the turnover, a surcharge may be imposed
not exceeding five hundred million won. <Amended by Act No. 6043, Dec. 28, 1999; Act No. 7315, Dec. 31, 2004>
[This Article Wholly Amended by Act No. 5335, Dec. 30, 1996]
CHAPTER VI ENTERPRISERS ORGANIZATION
Article 25 Deleted.
<by Act No. 5813, Feb. 5, 1999>
Article 26 (Prohibited Activities of Enterprisers Organization)
(1)No enterprisers organization shall commit any of the following acts: <Amended by Act No. 5335, Dec. 30, 1996; Act No. 5813,
Feb. 5, 1999>
1.An act of unfairly restricting competition through an act falling under any subparagraph of Article 19 (1);
2.An act of restricting the present or future number of enterprisers in any business area;
3.An act of unreasonably restricting the business contents or activities of member enterprisers (referred to an enterpriser who is
a member of the enterprisers organization; hereinafter the same shall apply);
4.An act of inducing or assisting a person to conduct unfair trade practices under each subparagraph of Article 23 (1), or to conduct
practices of resale price maintenance under Article 29; and
5. Deleted. <by Act No. 5814, Feb. 5, 1999>
(2)The provisions of Article 19 (3) shall apply mutatis mutandis to thecases as referred to in paragraph (1) 1. In this case, the
term enterpriser shall be read as enterprisers organization . <Amended by Act No. 5335, Dec. 30, 1996>
(3)If it is necessary for preventing any act of violating the provisions of paragraph (1), the Fair Trade Commission may establish
and publicly notify any guidelines to be observed by the enterprisers organization.
(4)If the Fair Trade Commission intends to establish the guidelines as referred to in paragraph (3), it shall hear opinions from the
heads of the related administrative agencies.
Article 27 (Corrective Measures)
The Fair Trade Commission may, when there exists an act of violating the provisions of Article 26, order the enterprisers organization
concerned (if necessary, it includes the member enterprisers concerned) to discontinue the said act, to publish the fact that the
enterprisers organization is ordered to take corrective measures or to take any other necessary corrective measures. <Amended
by Act No. 4513, Dec. 8, 1992; Act No. 5335, Dec. 30, 1996; Act No. 5814, Feb. 5, 1999; Act No. 7315, Dec. 31, 2004> <The part,
to publish the fact that violation occurred , which was decided to be incompatible with the Constitution on Jan. 31, 2002 by the
Constitutional Court, is amended by Act No. 7315 on Dec. 31, 2004>
Article 28 (Surcharge)
(1)In the case of violations of each subparagraph of Article 26 (1), the Fair Trade Commission may impose upon the enterprisers organization
concerned a surcharge not exceeding five hundred million won.
(2)The Fair Trade Commission may impose upon an enterpriser involved in practices violating any subparagraph of Article 26 (1) a surcharge
withing the scope not exceeding the amount obtained by multiplying the turnover determined by the Presidential Decree by five percent:
Provided, That in the case of absence of the turnover, a surcharge may be imposed within the limits not exceeding five hundred million
won.
[This Article Wholly Amended by Act No. 5335, Dec. 30, 1996]
CHAPTER VII RESTRICTIONS ON RESALE PRICE MAINTENANCE
Article 29 (Restrictions on Resale Price Maintenance)
(1)No enterpriser shall engage in a resale price maintenance: Provided, That this shall not apply to the case where there exist justifiable
reasons in terms of the maximum price maintenance preventing the transactions of commodities or services in excess of specified prices.
<Amended by Act No. 6371, Jan. 16, 2001>
(2)The provisions of paragraph (1) shall not apply to literary works prescribed by the Presidential Decree, or to those commodities
which meet all of the following conditions and have been designated in advance by the Fair Trade Commission as being eligible for
a resale price maintenance:
1.The uniformness in quality of the commodity concerned shall be easily identified;
2.The commodity concerned shall be used daily by ordinary customers; and
3.Free competition shall exist with respect to the commodity concerned.
(3)In a case where an enterpriser desires to be so designated as provided for in paragraph (2), he shall apply to the Fair Trade Commission
under the conditions as prescribed by the Presidential Decree.
(4)The Fair Trade Commission shall make it public whenever it designates a commodity as being eligible for resale price maintenance
under paragraph (2).
Article 30 (Modification of Resale Price Maintenance)
Where an enterpriser who produces or sells a commodity which the Fair Trade Commission designates and makes public under Article 29
(4) concludes a contract in order to determine the resale price of the said commodity and maintain the said price, but the contract
threatens to cause serious injury to the interests of consumers or goes against public interests, the Fair Trade Commission may order
modification of the contents of the contract.
[This Article Wholly Amended by Act No. 5813, Feb. 5, 1999]
Article 31 (Corrective Measures)
The Fair Trade Commission may, when there exists an act in violation of the provisions of Article 29 (1), order the enterpriser concerned
to discontinue the said act, to publish the fact that the enterpriser is ordered to take corrective measures or to take any other
necessary corrective measures against the said act. <Amended by Act No. 5335, Dec. 30, 1996; Act No. 7315, Dec. 31, 2004>
Article 31-2 (Penalty)
In the case of a resale price maintenance in violation of Article 29, the Fair Trade Commission may impose upon the enterpriser concerned
a surcharge not exceeding the amount obtained by multiplying the turnover determined by the Presidential Decree by two percent: Provided,
That in the case of an absence of the turnover, a surcharge may be imposed not exceeding five hundred million won.
[This Article Wholly Amended by Act No. 5335, Dec. 30, 1996]
CHAPTER VIII RESTRICTIONS ON CONCLUSION OF UNFAIR INTERNATIONAL CONTRACTS
Article 32 (Restrictions on Conclusion of Unfair International Contracts)
(1)No enterpriser or enterprisers organization shall enter into an international agreement or international contract as prescribed
by the Presidential Decree, (hereinafter referred to as international contract ) containing matters concerning unfair collaborative
acts, unfair trade practices or resale price maintenance: Provided, That this shall not apply to the case where the Fair Trade Commission
deems the effect of the said international contract upon competition in a particular business area to be negligible or deems that
there are other unavoidable reasons for the said contract. <Amended by Act No. 4790, Dec. 22, 1994>
(2)The types and standards of unfair collaborative acts, unfair trade practices or resale price maintenance as referred to in paragraph
(1) may be determined and notified publicly by the Fair Trade Commission. <Amended by Act No. 4513, Dec. 8, 1992>
Article 33 (Request for Review of International Contracts)
Upon entering into an international contract, the enterpriser or enterprisers organization may request that the Fair Trade Commission
review whether the contract violates any provisions of Article 32 (1) in accordance with the procedure set forth in the Presidential
Decree. <Amended by Act No. 5335, Dec. 30, 1996>
[This Article Wholly Amended by Act No. 4790, Dec. 22, 1994]
Article 34 (Corrective Measures)
The Fair Trade Commission may, when an international contract violates or is likely to violate the provisions of Article 32 (1), order
the enterpriser or the enterprisers organization concerned to cancel the contract, to amend or alter the said contract, or to take
other necessary corrective measures. <Amended by Act No. 4790, Dec. 22, 1994; Act No. 5335, Dec. 30, 1996>
Article 34-2 (Surcharge)
In the case of the conclusion of international contracts in violation of the main sentence of Article 32, the Fair Trade Commission
may impose upon the relevant enterprisers organization surcharges not exceeding five hundred million won, or upon the enterpriser
concerned surcharges not exceeding the amount obtained by multiplying the turnover determined by the Presidential Decree by two percent:
Provided, That in the case of an absence of turnover, surcharges may be imposed not exceeding five hundred million won.
[This Article Wholly Amended by Act No. 5335, Dec. 30, 1996]
CHAPTER IX ENFORCEMENT AGENCY
Article 35 (Establishment of Fair Trade Commission)
(1)The Fair Trade Commission shall be established under the jurisdiction of the Prime Minister for the purpose of independently performing
the objectives of this Act.
(2)The Fair Trade Commission shall carry out its functions as one of the central administrative organizations pursuant to Article
2 of the Government Organization Act.
[This Article Wholly Amended by Act No. 5335, Dec. 30, 1996]
Article 36 (Matters under Jurisdiction of Fair Trade Commission)
The following matters shall be under the jurisdiction of the Fair Trade Commission:
1.Matters relating to regulating the abuse of market-dominating positions;
2.Matters relating to restricting the combination of enterprises and preventing the concentration of economic power;
3.Matters relating to regulating unfair collaborative acts and anti-competitive behavior on the part of an enterprisers organization;
4.Matters relating to regulating unfair trade practices and resale price maintenance;
5.Matters relating to preventing the conclusion of unfair international contracts;
6.Matters relating to competition encouragement policies through consultation, coordination with respect to Acts and subordinate statutes
and administrative measures which restrict competition; and
7.Other matters which are to be handled by the Fair Trade Commission under other Acts and subordinate statutes.
Article 36-2 (International Cooperation of Fair Trade Commission)
(1)The Government may conclude treaties with foreign governments within the scope of not violating Acts and not infringing on interests
of the Republic of Korea in order to enforce this Act.
(2)The Fair Trade Commission may assist foreign governments in enforcing Acts according to the treaties that are concluded pursuant
to paragraph (1).
(3)In case where any foreign government with which any treaty is not concluded pursuant to paragraph (1) asks for the Government s
assistance in the enforcement of Acts on the condition that the former complies with the request of the Republic of Korea s assistance
in the enforcement of Acts on the same or similar matters, the Fair Trade Commission may assist the foreign country in the enforcement
of Acts.
[This Article Newly Inserted by Act No. 7315, Dec. 31, 2004]
Article 37 (Composition of Fair Trade Commission and Related Matters)
(1)The Fair Trade Commission shall be composed of nine commissioners, including a chairman, a vice-chairman, and four commissioners
who shall be non-standing members of the Fair Trade Commission. <Amended by Act No. 5335, Dec. 30, 1996>
(2)The standing and non-standing commissioners of the Fair Trade Commission (hereinafter referred to as the commissioners ) shall
be appointed by the President from among those persons who meet any of the following qualifications. In this case, the chairman and
vice-chairman shall be appointed upon the recommendation of the Prime Minister and the other commissioners, upon the recommendation
of the chairman: <Amended by Act No. 4831, Dec. 23, 1994>
1.Any person who has served as a public official of Grade or higher in the field of monopoly regulation and fair trade;
2.Any person who has careers as a judge, prosecutor, or attorney for fifteen years ore more;
3.Any person who has majored in law, economics, or business administration at a university, and has served for fifteen years or more
at a university or publicly authorized research institute as an associate professor or higher or as a staff member holding a corresponding
position; and
4.Any person who has served in the field of business management and consumer protection activities for fifteen years or more.
(3)The chairman and the vice-chairman shall be considered political appointees, while the other standing commissioners shall be considered
public officials equivalent to Grade I.
(4)The chairman, the vice-chairman, and the chief-officer of the Secretariat under Article 47 shall be an executive representative,
despite the provisions of Article 10 (Executive Representative) of the Government Organization Act. <Newly Inserted by Act No.
5335, Dec. 30, 1996; Act No. 5529, Feb. 28, 1998>
Article 37-2 (Types of Meetings)
Meetings of the Fair Trade Commission shall be categorized as a meeting comprising of all members (hereinafter referred to as the
plenary session ), and a meeting consisting of three members including a standing commissioner (hereinafter referred to as a chamber
).
[This Article Newly Inserted by Act No. 5335, Dec. 30, 1996]
Article 37-3 (Subjects of Plenary Session and Chamber)
(1)The plenary session shall deliberate and determine matters falling under each of the following subparagraphs: <Amended by Act
No. 6371, Jan. 16, 2001>
1.Matters as to an interpretation or application of Acts and subordinate statutes and public notice under the jurisdiction of the
Fair Trade Commission;
2.Matters as to an appeal under Article 53;
3.Matters on which resolutions have not been made in a chamber, or which a chamber has decided to refer them to the plenary session;
4.Matters necessary to make or reform regulations or public notice; or
5.Matters having substantial economic impacts or those recognized as necessary for being dealt with by the plenary session itself.
(2)A chamber may deliberate or determine matters other than those falling under each of subparagraphs of paragraph (1).
[This Article Newly Inserted by Act No. 5335, Dec. 30, 1996]
Article 38 (Chairman)
(1)The chairman shall represent the Fair Trade Commission.
(2)The chairman may attend and take the floor at State Council.
(3)If the chairman is unable to carry out his duties due to any accident, the vice-chairman shall act for him. If both of the chairman
and the vice-chairman are unable to perform their duties due to any accident, standing commissioners shall act for them in the order
of seniority. <Amended by Act No. 5813, Feb. 5, 1999>
Article 39 (Term of Office of Commissioner)
The term of office of the chairman, vice-chairman and commissioners shall be three years, and may be renewed only once. <Amended
by Act No. 6371, Jan. 16, 2001>
Article 40 (Guarantee of Commissioner s Status)
No commissioner shall be removed from his office contrary to his intention except in the following cases:
1.In a case where he has been sentenced to imprisonment without prison labor or severer; and
2.In a case where he becomes incapable of performing his duties due to prolonged physical or mental weakness.
Article 41 (Prohibition of Commissioner s Political Activities)
No commissioner may enter a political party, or participate in any political activity.
Article 42 (Proceedings and Quorum of Meetings)
(1)Proceedings of the plenary session shall be presided over by the chairman, and resolutions shall be passed with the concurrent
vote of a majority of all members. <Amended by Act No. 5813, Feb. 5, 1999>
(2)Proceedings of a chamber shall be presided over by one of the standing members, and resolutions shall be passed with the presence
of all members, and by a unanimous vote of the members present.
[This Article Wholly Amended by Act No. 5335, Dec. 30, 1996]
Article 43 (Disclosure of Trial and Resolutions and Confidentiality of Agreement)
(1)The trial and resolution by the Fair Trade Commission shall be disclosed: Provided, That this shall not apply to the case where
the Fair Trade Commission deems it necessary to protect trade secrets of an enterpriser or enterprisers organization.
(2)The agreement on a resolution for a case by the Fair Trade Commission shall not be disclosed.
[This Article Wholly Amended by Act No. 5813, Feb. 5, 1999]
Article 43-2 (Maintenance of Good Order in Venue of Adjudicatory Proceedings)
The chairman of the plenary session or a chamber is authorized to make necessary orders to maintain good order in the venue of the
adjudicatory proceedings with regard to the parties, those having interest in the result of the proceedings, witnesses, and those
attending the venue.
[This Article Newly Inserted by Act No. 5335, Dec. 30, 1996]
Article 44 (Challenge, Discharge, and Withdrawal of Members)
(1)Any member may be challenged with regard to deliberation or resolution of cases falling under any of the following subparagraphs:
<Amended by Act No. 7315, Dec. 31, 2004>
1.In case where the challenged member himself, his spouse or ex-spouse is one of the parties, or has rights or liabilities held jointly
with other persons;
2.In case where the challenged member has a relationship of affinity with one of the parties, or he or a corporation to which he belongs
is involved in advisory or consulting services as to legal or managerial matters of one of the parties;
3.In case where the challenged member or a juristic person for which the member is working has testified or attested;
4.In case where the challenged member or a juristic person for which the member is working has acted or is acting as an agent of one
of the parties;
5.In case where the challenged member or a juristic person for which the member is working has participated in any act or its omission
which have been subject matter of cases; and
6.In case where anyone who is a public official belonging to the Fair Trade Commission investigates or examines the relevant case.
(2)One of the parties may apply for the discharge of members, where it appears to him to be impossible that deliberations or resolutions
may be made on fair terms. An application for the discharge of members shall be determined by the chairman without any resolutions
from the plenary session.
(3)One of the members may withdraw himself from the deliberation and resolution of cases before him, where there are matters falling
under each of the following subparagraphs of paragraph (1) or under the causes of any paragraph (2).
[This Article Wholly Amended by Act No. 5335, Dec. 30, 1996]
Article 45 (Signatures and Seals by Commissioners)
Where the Fair Trade Commission makes a decision on matters violating the provisions of this Act, it shall make a written decision
specifying the reason thereof, and such a written decision shall be signed and sealed by the commissioners who have participated
in the decision. <Amended by Act No. 5813, Feb. 5, 1999>
Article 46 (Fictitious Public Officials in Application of Penal Provisions)
Any commissioner of the Fair Trade Commission who is not a public official, shall be considered as a public official in the application
of penal provisions under the Criminal Act or other Acts.
Article 47 (Establishment of Secretariat)
The Secretariat shall be established in the Fair Trade Commission for the purpose of carrying out the affairs of the Fair Trade Commission.
Article 48 (Provisions concerning Organization)
(1)Matters not provided for in this Act but which are necessary for the organization of the Fair Trade Commission shall be determined
by the Presidential Decree.
(2)Matters not provided for in this Act but which are necessary for the operation of the Fair Trade Commission shall be determined
by the Rules of the Fair Trade Commission. <Newly Inserted by Act No. 5335, Dec. 30, 1996>
CHAPTER X INVESTIGATION PROCEDURES AND OTHER RELATED MATTERS
Article 49 (Identification and Reporting of Violations)
(1)The Fair Trade Commission may, if it deems that a suspicion of violating the provisions of this Act exists, make a necessary investigation
ex officio. <Amended by Act No. 6371, Jan. 16, 2001>
(2)Any person may, if he deems that a fact violating the provisions of this Act exists, report it to the Fair Trade Commission.
(3)In the case of investigation under paragraph (1) or (2), the Fair Trade Commission shall give notice, in writing, to the parties
concerned, with regard to the results of the investigation (including the contents of measures in the case of the implementation
of corrective measures as a result of investigation). <Newly Inserted by Act No. 5335, Dec. 30, 1996>
(4)If five years have passed since an act of violating the provisions of this Act was committed, the Fair Trade Commission shall not
make orders for corrective measures or impose any surcharge as prescribed by this Act, against such an offense: Provided, That in
case where the corrective measures or the imposition of surcharge are cancelled by a judgment of court, and where a new disposition
is made under the relevant reasons for judgment, this shall not apply. <Newly Inserted by Act No. 4790, Dec. 22, 1994; Act No.
5335, Dec. 30, 1996; Act No. 6371, Jan. 16, 2001>
Article 50 (Investigation, etc. of Violations)
(1)The Fair Trade Commission may, if it deems it necessary to enforce this Act, take the following measures in accordance with the
procedures set forth in the Presidential Decree:
1.Summons of the parties concerned, interested parties, or witnesses to a hearing and seeking their opinions;
2.Designation of appraiser and entrustment of appraisal; and
3.Issuance of an order to an enterpriser, an enterprisers organization, an officer or employee thereof for the report on the cost
and business situation or for the presentation of other necessary materials or things, or detention of presented materials or things.
(2)The Fair Trade Commission may, where it deems it necessary to enforce this Act, have a public official under its control (including
those under the control of an agency as commissioned under Article 65) enter the office or business place of an enterpriser or an
enterpriser s organization in order to examine the business and management situation, books, documents, electronic materials, voice-recording
materials, video materials and other materials or things as prescribed by the Presidential Decree, and hear statements from the parties
concerned, interested parties or witnesses at a designated place under the conditions as prescribed by the Presidential Decree. <Amended
by Act No. 5235, Dec. 30, 1996; Act No. 5813, Feb. 5, 1999; Act No. 6371, Jan. 16, 2001>
(3)Any public official who conducts an examination under paragraph (2), may order an enterpriser, enterprisers organization or officer
or employee thereof to present materials or things necessary for such an examination, or detain the presented materials or things
in accordance with the procedures set forth in the Presidential Decree.
(4)Any public official who conducts an examination under paragraph (2), shall show to a related person a certificate indicating his
authority.
(5)In case where it is deemed impossible to confirm whether fund, etc. are provisioned without depending on information or data pertaining
to financial transactions (hereinafter referred to as the information pertaining to financial transactions ) in connection with
any company liable to publish its insider trading that is highly suspected of violating the provisions of Article 23 (1) 7, the Fair
Trade Commission may ask the head of the specific branch of any financial institution to submit information pertaining to his branch
s financial transactions by means of a document that contains matters falling under each of the following subparagraphs after going
through a resolution thereon of the meeting provided for in Article 37-3, notwithstanding Article 4 of the Act on Real Name Financial
Transactions and Guarantee of Secrecy and the head of the specific branch shall comply with the request: <Amended by Act No. 7315,
Dec. 31, 2004>
1.Matters concerning the identities of traders;
2.The term of trade subject to the request;
3.The legal basis of the request;
4.The purposes of using the information;
5.Contents of information pertaining to financial transactions that is requested (limited to the information pertaining to the financial
transactions involving the illegal loaning act with the financial institution of the person who is suspected of being involved in
the illegal loaning act); and
6.Matters concerning identities such as names and positions of persons in charge of making the request or persons responsible for
making the request in the agency.
(6)The request for submitting the information pertaining to the financial transactions referred to in paragraph (5) shall be limited
to the minimum need for the investigation, <Amended by Act No. 7315, Dec. 31, 2004>
(7)In case where any financial institution furnishes the Fair Trade Commission with the information pertaining to the financial transactions
pursuant to paragraph (5), the relevant financial institution shall notify in writing the relevant trader of major contents of the
furnished information pertaining to the financial transactions, the purpose of using the information, the person who is furnished
with the information and the date on which the information is furnished within 10 days from the date on which the information pertaining
to the financial transactions is furnished. In this case, the provisions of Article 4-2 (4) of the Act on Real Name Financial Transactions
and Guarantee of Secrecy shall apply mutatis mutandis to expenses required for the notification. <Amended by Act No. 7315, Dec.
31, 2004>
(8)In case where the Fair Trade Commission asks any financial institution to furnish the information pertaining to the financial transactions
pursuant to paragraph (5), it shall enter the fact in its record book and keep the record book for 3 years from the date on which
it asks the financial institution to furnish the information pertaining to the financial transactions. <Amended by Act No. 7315,
Dec. 31, 2004>
(9)Anyone who is furnished with the information pertaining to the financial transactions pursuant to paragraph (5) shall be prohibited
from furnishing any other person with it, leaking it to any other person or using it for other purpose. <Newly Inserted by Act
No. 7315, Dec. 31, 2004> The amended provisions of this Article lose the effect from Jan. 1, 2008, pursuant to the provisions
of Article 2 of the Addenda of Act No. 7315 on Dec. 31, 2004
Article 50-2 (Prohibition on Abusing Investigation Authority)
Public officials in charge of the investigation shall conduct their investigations within the necessary minimum limit in order to
enforce this Act and they shall be prohibited from abusing their investigation authority for any other purpose, etc.
[This Article Newly Inserted by Act No. 7315, Dec. 31, 2004]
Article 50-3 (Application for Postponing Investigation, etc.)
(1)In case where any business operator or any business organization who or that is subjected to a disposition or an investigation
by the Fair Trade Commission pursuant to the provisions of paragraphs (1) through (3) of Article 50 is difficult to implement such
disposition or undergo the investigation on the grounds of natural disaster or other grounds that are prescribed by the Presidential
Decree, the business operator or the business organization may ask the Fair Trade Commission to postpone implementing such disposition
and conducting such investigation under the conditions as prescribed by the Presidential Decree.
(2)The Fair Trade Commission shall, when it receives an application for postponing the disposition and investigation under paragraph
(1), examine the grounds of such application and if the grounds thereof are recognized as being reasonable, it may postpone the disposition
and the investigation.
[This Article Newly Inserted by Act No. 7315, Dec. 31, 2004]
Article 51 (Recommendation for Correction of Violation)
(1)If a violation of this Act has occurred, the Fair Trade Commission may determine a scheme for correction and recommend that the
enterpriser or enterprisers organization concerned comply with it.
(2)Any person who has been recommended under paragraph (1), shall notify the Fair Trade Commission within ten days of receiving the
notice of recommendation of correction, as to whether or not he accepts the recommendation. <Amended by Act No. 5335, Dec. 30,
1996>
(3)If a person who received a recommendation for correction under paragraph (1), accepts it, it shall be considered that a corrective
measure has been taken under this Act. <Amended by Act No. 5335, Dec. 30, 1996>
Article 52 (Opportunity to State Opinion)
(1)The Fair Trade Commission shall, before taking corrective measures or levying a surcharge in response to violations of this Act,
provide the parties concerned or interested parties with the opportunity to state their opinions.
(2)The parties concerned or interested parties may attend a hearing of the Fair Trade Commission to state their opinions or present
necessary materials.
Article 52-2 (Request for Access to Data)
Any party concerned or interested person may request the Fair Trade Commission to have access to or make a copy of data relating to
the measures taken under this Act. In this case, the Fair Trade Commission shall comply with such request, if it deems it necessary
for the public interest or a consent is granted by the person providing such data.
[This Article Newly Inserted by Act No. 5813, Feb. 5, 1999]
Article 53 (Appeal)
(1)Any party who is dissatisfied with any measures taken by the Fair Trade Commission pursuant to this Act, may file an appeal stating
the reasons thereof with the Fair Trade Commission within thirty days from the receipt of a notification of the said measure. <Amended
by Act No. 5813, Feb. 5, 1999>
(2)The Fair Trade Commission shall make a decision with respect to an appeal under paragraph (1) within sixty days: Provided, That
where it is unable to make such decisions within such period for unavoidable causes, the period may be extended within the limits
of thirty days. <Newly Inserted by Act No. 5335, Dec. 30, 1996; Act No. 5813, Feb. 5, 1999>
Article 53-2 (Suspension of Enforcement of Orders for Corrective Measures)
(1)Where an appeal under Article 53 (1) has been made by a person against whom corrective measures have been taken by this Act, or
where the Fair Trade Commission deems it necessary to prevent irrevocable damage or harm caused by the enforcement of such measures
or the continuance of procedures, the Fair Trade Commission may, if requested by one of the parties or ex officio, decide whether
to suspend enforcement of such measures or continuance of procedures (hereinafter referred to as a suspension of enforcement ).
(2)The Fair Trade Commission may, upon a request by one of the parties, or ex officio, revoke a decision with the effect of suspension
of enforcement, where the grounds for suspension of enforcement are disappeared after the decision of suspension of enforcement has
been made. <Amended by Act No. 5813, Feb. 5, 1999>
[This Article Newly Inserted by Act No. 5335, Dec. 30, 1996]
Article 53-3 (Delivery of Documents)
(1)The provisions of Articles 14 through 16 shall apply mutatis mutandis to the delivery of documents provided for in Articles 14
through 16 of the Administrative Procedures Act.
(2)Notwithstanding the provisions of paragraph (1), any business operator or any business operators organization that each has its
domicile abroad shall be asked to designate his or its domestic agent to whom any document is delivered and in case where relevant
business operator or the relevant business operators organization fails to designate his or its domestic agent, such document shall
be published in not less than one of either of the Official Gazette, official bulletins, bulletin boards, dailies or on the Internet.
[This Article Newly Inserted by Act No. 7315, Dec. 31, 2004]
Article 54 (Institution of Lawsuit)
(1)Where a person intends to file a lawsuit against any measure taken by the Fair Trade Commission under this Act, he shall do so
within thirty days from the date of receiving a notice of disposition or receiving the written decision of the Fair Trade Commission
against such appeal. <Amended by Act No. 5335, Dec. 30, 1996; Act No. 5813, Feb. 5, 1999; Act No. 6371, Jan. 16, 2001>
(2)The period as referred to in paragraph (1) shall be a peremptory period.
Article 55 (Exclusive Jurisdiction over Lawsuits for Appeal)
The Seoul Appellate Court having jurisdiction over the seat of the Fair Trade Commission shall have exclusive jurisdiction over any
lawsuits for appeal cases filed pursuant to Article 54. <Amended by Act No. 5335, Dec. 30, 1996>
Article 55-2 (Procedures for Dealing with Cases, etc.)
Matters necessary for procedures in dealing with cases in violation of this Act shall be determined by the Fair Trade Commission.
[This Article Newly Inserted by Act No. 5335, Dec. 30, 1996]
CHAPTER X-2 IMPOSITION AND COLLECTION OF SURCHARGES, ETC.
Article 55-3 (Imposition of Surcharges)
(1)In imposing surcharges under this Act, the Fair Trade Commission shall take into account factors falling under each of the following
subparagraphs:
1.The nature and degree of the unlawful practice;
2.The duration and frequency of the unlawful practice; or
3.The amount of benefits, etc. accrued from the unlawful practice.
(2)In the case of a merger with a company violating this Act, surcharges may be imposed on the company established or maintained through
the merger, on the grounds that unlawful practices conducted by the former have been deemed conducted by the latter.
(3)The standards for the imposition of surcharges shall be determined by the Presidential Decree. <Amended by Act No. 5813, Feb.
5, 1999>
[This Article Newly Inserted by Act No. 5335, Dec. 30, 1996]
Article 55-4 (Extension of Period of Surcharge Payment and Payment in Installments)
(1)The Fair Trade Commission may extend the period of the surcharge payment or allow the surcharge to be paid in installments, where
a person on whom the surcharge has been imposed (hereinafter referred to as a person subject to surcharge payment ) is considered
to have difficulty in paying the surcharge as a lump sum because the sum of the surcharge is above the amount determined by the Presidential
Decree on the grounds falling under the following subparagraphs. In these circumstances, security, where necessary, may be required:
1.In cases where substantial damage has been caused to properties because of fire, theft, etc.;
2.In cases where a business is at considerable risk because of unfavorable business conditions;
3.In cases where a lump sum payment of the surcharge is likely to bring considerable financial difficulties; or
4.In cases where there are other relevant factors deemed to fall under subparagraphs 1 through 3.
(2)In the case of application for the extension of the period of surcharge payment or for payment in installments under paragraph
(1), a person subject to the surcharge payment shall apply to the Fair Trade Commission within 30 days from the date of receiving
a notice of surcharge payment. <Amended by Act No. 6651, Jan. 26, 2002>
(3)In the case where a person subject to a surcharge payment for whom the period of surcharge is extended under paragraph (1), and
a surcharge is allowed to be paid in installments, falls under any of the following subparagraphs, the Fair Trade Commission may
revoke the decision on the extension of the period of the surcharge payment or the payment in installments, and collect such a surcharge
in a lump sum:
1.In cases where installments of a surcharge are overdue;
2.In cases where orders by the Fair Trade Commission with regard to the modification of or the preservation of security are not complied
with; or
3.In cases where it is deemed impossible to collect all or the remaining amount of a surcharge on the grounds of a forced enforcement,
the commencement of an auction, a declaration of insolvency, the dissolution of a juristic person, national or local taxes in arrears.
(4)In relation to the extension of the period of the surcharge payment, or payment in installments pursuant to paragraphs (1) through
(3), necessary matters shall be determined by the Presidential Decree. <Amended by Act No. 5813, Feb. 5, 1999>
[This Article Newly Inserted by Act No. 5335, Dec. 30, 1996]
Article 55-5 (Liability to Jointly Pay Penalty Surcharge)
(1)In case where the enterpriser of any company on which a penalty surcharge is imposed splits his company or merges his company with
any other company (including a case where the enterpriser splits his company or merges his company with any other company on the
date on which the penalty surcharge is imposed), the company falling under each of the following subparagraphs shall be liable to
jointly pay the penalty surcharge:
1.The company that splits;
2.The company that is incorporated as a result of split and merger; and
3.In case where part of the company that splits and merges with other company that survives, other company that survives.
(2)In case where the enterpriser of any company on which a penalty surcharge is imposed dissolves his company on the grounds of split
and merger (including a case where the company is dissolved on the date on which the penalty surcharge is imposed), the company falling
under each of the following subparagraphs shall be liable to jointly pay the penalty surcharge:
1.The company that is incorporate as a result of split and merger; and
2.In case where part of the company that splits and merges with other company that survives, other company that survives.
[This Article Newly Inserted by Act No. 7315, Dec. 31, 2004]
Article 55-6 (Collection of Surcharge and Surcharge in Arrears)
(1)The Fair Trade Commission shall collect an additional surcharge that is calculated based on the interest rate that is determined
and published by the Fair Trade Commission taking into account the overdue interest rate that is widely applied by financial institutions
provided for in Article 2 of the Banking Act within the scope of 40/100 of the annual overdue interest rate for the period from the
next day of the expiration of the period of the surcharge payment to the date of payment inclusive, in case the person subject to
surcharge payment fails to pay the surcharge within the period of payment. <Amended by Act No. 5813, Feb. 5, 1999; Act No. 7315,
Dec. 31, 2004>
(2)The Fair Trade Commission may, in case a person subject to the surcharge payment fails to pay the sum of surcharge within the period
of payment, give a notice with the period of payment specified in it and, in case original and additional surcharges under paragraph
(1) are not paid within the period of payment, collect surcharges in similar to national taxes in arrears.
(3)The Fair Trade Commission may delegate to the Commissioner of the National Tax Office its affairs relating to the collection of
surcharges or additional surcharges, or the procedures for surcharges in arrears under paragraphs (1) and (2).
(4) The Fair Trade Commission may, in case where deemed necessary for the collection of surcharges in arrears, request the Commissioner
of the National Tax Office to furnish the information on the imposition of national taxes on persons who failed to pay the surcharges.
<Newly Inserted by Act No. 6371, Jan. 16, 2001>
(5)The public officials in charge of the affairs of surcharges may, in case where necessary for the collection of surcharges, request
the heads of registry offices and other relevant administrative agencies to allow them to have access to required documents, or to
deliver their transcripts or abstracts, without compensation. <Newly Inserted by Act No. 6371, Jan. 16, 2001>
(6)Matters necessary for the collection of surcharges shall be determined by the Presidential Decree.
[This Article Newly Inserted by Act No. 5335, Dec. 30, 1996]
Article 55-7 (Additional Payment for Refund of Surcharge)
The Fair Trade Commission shall, in case where it makes a refund of surcharge on account of the adjudication of appeal or the ruling
of court, make the additional payment of refund for the period from the date of paying the surcharge to the date of refund, under
the conditions as prescribed by the Presidential Decree.
[This Article Newly Inserted by Act No. 6371, Jan. 16, 2001]
CHAPTER XI DAMAGES
Article 56 (Liability for Damages)
(1)If an enterpriser or an enterprisers organization violates the provisions of this Act, and thereby gives a person any damage,
he or the organization shall be liable for compensation of such damage to the person: Provided, That the same shall not apply to
a case where the enterpriser or the enterprisers organization verifies that he or it violates the provisions of this Act without
any deliberation or any negligence. <Amended by Act No. 7315, Dec. 31, 2004>
(2) Deleted. <by Act No. 7315, Dec. 31, 2004>
Article 56-2 (Transmission of Records)
Where a lawsuit for liability for damages is instituted under Article 56, the court may request the Fair Trade Commission to transmit
the records of the particular case (including protocols and stenographic records of examination of persons concerned, references
or expert witnesses, or all judicial evidence).
[This Article Newly Inserted by Act No. 5813, Feb. 5, 1999]
Article 57 (Recognition of Damages Amount)
In case where it is recognized that damage is caused by the act of violating the provisions of this Act and it is extremely difficult
to verify the fact that is necessary to determine the amount of such damage in light of the character of the fact, the court may
recognize a reasonable amount of damage based on the gist of entire arguments and the outcome of investigating evidences.
[This Article Wholly Amended by Act No. 7315, Dec. 31, 2004]
CHAPTER XII EXEMPTIONS
Article 58 (Lawful Acts Conducted Pursuant to Acts and Subordinate Statutes)
This Act shall not apply to lawful acts of an enterprise or an enterprisers organization conducted in accordance with other Acts
and subordinate statutes.
Article 59 (Exercise of Right to Intangible Property)
This Act shall not apply to any act which is deemed as an exercise of the right under the Copyright Act, the Patent Act, the Utility
Model Act, the Design Act or the Trademark Act. <Amended by Act No. 7289, Dec. 31, 2004>
Article 60 (Act of Specified Associations)
This Act shall not apply to any acts of an association established according to the following requirements (including a federation
of associations): Provided, That this shall not apply to unfair trade practices or price hikes by restricting unfairly competition:
<Amended by Act No. 5813, Feb. 5, 1999>
1.It shall aim at mutual aid among small-sized enterprise owners or consumers;
2.It shall be established voluntarily, and its members may enter and withdraw voluntarily;
3.Each member shall have an equal voting right; and
4.In a case where profits are distributed to members, the limit thereof shall be determined by the articles of incorporation.
Article 61 Deleted.
<by Act No. 5335, Dec. 30, 1996>
CHAPTER XIII SUPPLEMENTARY PROVISIONS
Article 62 (Duty to Preserve Confidentiality)
No commissioner or public official who performs or has performed his duties under this Act shall divulge any secret of an enterpriser
or an enterprisers organization which he learned in the course of carrying out his duties, or use it for the purpose other than
to enforce this Act.
Article 63 (Consultation on Enactment of Acts and Subordinate Statutes which Restrain Competition)
(1)The chief-officer of the competent administrative authority shall seek, in advance, consultation with the Fair Trade Commission,
in a case where he wishes to propose legislation or an amendment of enactments containing anti-competitive factors such as the restrictions
on the fixing of prices or the terms of transaction, entry to markets, or business practices, unfair collaborative acts, prohibited
practices of an enterpriser or an enterprisers organization, etc. and where he wishes to make approvals or other measures containing
anti-competitive factors against an enterpriser or an enterprisers organization.
(2)The chief-officer of the competent administrative authority shall give, in advance, notice to the Fair Trade Commission, in a case
where he intends to enact or amend any rules or regulations containing anti-competitive factors.
(3)In the case of approvals or other measures containing anti-competitive factors under paragraph (1), the chief-officer of the competent
administrative authority shall give notice to the Fair Trade Commission with regard to the contents of the approval concerned or
other measures.
(4)In relation to notice under paragraph (2), in a case where it is recognized that rules or regulations to be enacted or amended
contain anti-competitive factors, the Fair Trade Commission may give advice to the chief-officer of the competent administrative
authority as to the rectification of such anti-competitive factors. This shall also apply to enactments made or amended without consultation
prescribed by paragraph (1), Acts and subordinate statutes enacted or amended without notice, approvals or other measures made without
notice.
[This Article Wholly Amended by Act No. 5335, Dec. 30, 1996]
Article 64 (Cooperation from Chief-Officer of Competent Authority, etc.)
(1)If it is deemed necessary for the enforcement of this Act, the Fair Trade Commission may hear the opinions of the heads of competent
administrative authorities, other authorities, or associations. <Amended by Act No. 5335, Dec. 30, 1996>
(2)If it is deemed necessary for the enforcement of this Act, the Fair Trade Commission may entrust the heads of competent administrative
authorities, other authorities, or associations with any necessary investigation, or request necessary materials. <Amended by
Act No. 5335, Dec. 30, 1996>
(3)If it is deemed necessary for securing fulfillment of a corrective measure under this Act, the Fair Trade Commission may request
any necessary cooperation to the chief-officers of the competent administrative authorities, other authorities, or associations.
<Amended by Act No. 5335, Dec. 30, 1996>
Article 64-2 (Payment of Bounty)
(1)The Fair Trade Commission may pay the bounty to anyone who has blown the whistle on the act of violating this Act or submitted
evidential materials verifying the act of violating this Act within limits of budget.
(2)Necessary matters concerning the act of violating this Act on which the whistle blowing is paid the bounty under paragraph (1),
the scope of persons who are entitled to the payment of the bounty and standards and procedures, etc. for paying the bounty shall
be prescribed by the Presidential Decree.
[This Article Newly Inserted by Act No. 7315, Dec. 31, 2004]
Article 65 (Delegation and Entrustment of Authority)
The Fair Trade Commission may delegate a part of his authority as prescribed by this Act to the head of an agency under his control,
Seoul Special Metropolitan City Mayor, Metropolitan City Mayor, or Do governor, or entrust it to the head of another administrative
agency, in accordance with the procedures set forth in the Presidential Decree. <Amended by Act No. 5335, Dec. 30, 1996>
CHAPTER XIV PENAL PROVISIONS
Article 66 (Penal Provisions)
(1)Any person who falls under any of the following subparagraphs, shall be punished by imprisonment for not more than three years
or a fine not exceeding two hundred million won: <Amended by Act No. 4513, Dec. 8, 1992; Act No. 5335, Dec. 30, 1996; Act No.
5528, Feb. 24, 1998; Act No. 5813, Feb. 5, 1999; Act No. 6043, Dec. 28, 1999; Act No. 6371, Jan. 16, 2001; Act No. 6651, Jan. 26,
2002; Act No. 7315, Dec. 31, 2004>
1.A person who has committed an abusive act in violation of the provisions of Article 3-2;
2.A person who has combined enterprises in violation of the text of Article 7 (1) or (3);
3.A person who has violated the provisions of Article 8-2 (2) through (4);
4.A person who has established a holding company or converted a company into a holding company in violation of Article 8-3;
5.A person who has acquired or owned stocks in violation of the provisions of Article 9 or 10 (1): Provided, That the person subjected
to an order of prohibition under Article 17-2 (1) (including the case applied under Article 4 of the Addenda), from among those violating
Article 10 (1), shall be excluded;
6.A person who has guaranteed a debt in violation of the provisions of Article 10-2 (1);
7.A person who has exercised his voting right in violation of the provisions of Article 11 or 18;
8.A person who has committed an evasion of the law in violation of the provisions of Article 15;
9.A person who has performed a collaborative act in violation of Article 19 (1); and
10.A person who has conducted prohibited practices of enterprises organization in violation of Article 26 (1) 1.
(2)The punishments of imprisonment and fine as referred to in paragraph (1) may be imposed concurrently.
Article 67 (Penal Provisions)
Any person who falls under any of the following subparagraphs, shall be punished by imprisonment for not more than two years, or a
fine not exceeding one hundred fifty million won: <Amended by Act No. 4513, Dec. 8, 1992; Act No. 4790, Dec. 22, 1994; Act No.
5335, Dec. 30, 1996; Act No. 5528, Feb. 24, 1998; Act No. 5813, Feb. 5, 1999; Act No. 6651, Jan. 26, 2002>
1.Deleted; <by Act No. 5335, Dec. 30, 1996>
2.A person who has committed an unfair trade practice in violation of the provisions of Article 23 (1);
3.A person who has violated the provisions of Article 26 (1) 2 through 5;
4.A person who has committed resale price maintenance in violation of the provisions of Article 29 (1);
5.A person who has concluded an international contract in violation of the provisions of Article 32 (1);
6.A person who has failed to comply with corrective measures or an order of prohibition, etc. under Articles 5, 16 (1), 17-2 (1),
21, 24, 27, 30, 31 or 34; and
7.A person who has failed to undergo an audit by a certified public accountant in violation of the provisions of Article 14 (5).
Article 68 (Penal Provisions)
Any person who falls under any of the following subparagraphs, shall be punished by a fine not exceeding one hundred million won:
<Amended by Act No. 5335, Dec. 30, 1996; Act No. 5813, Feb. 5, 1999; Act No. 6651, Jan. 26, 2002; Act No. 7315, Dec. 31, 2004>
1.A person who fails to make a report on the establishment of or conversion into a holding company or made a false report in violation
of Article 8;
2.A person who has failed to make a report on the business activities of a holding company, a subsidiary or a business related sub-subsidiary,
or made a false report in violation of Article 8-2 (5);
3.A person who has failed to make a report on the status of the stockholdings or the debt guarantee or made a false report in violation
of the provisions of Article 13 (1) and (2);
4.A person who has refused to submit data requested under Article 14 (4) without any justifiable reason or submitted false data;
5.A person who has made a false appraisal in violation of the provisions of Article 50 (1) 2;
6.Deleted; <by Act No. 7315, Dec. 31, 2004>
7.Deleted; and <by Act No. 4790, Dec. 22, 1994>
8.Deleted. <by Act No. 5813, Feb. 5, 1999>
[This Article Wholly Amended by Act No. 4513, Dec. 8, 1992]
Article 69 (Penal Provisions)
(1)In spite of failing to fall under the requirements provided for in Article 50 (5), anyone who has asked the head of the specific
branch of any financial institution to submit information pertaining to financial transactions by abusing his authority or has violated
the provisons of paragraph (9) of the same Article shall be punished by imprisonment with prison labor for not more than 5 years
or by a fine not exceeding 30 million won. <Newly Inserted by Act No. 7315, Dec. 31, 2004>
(2)Anyone who has violated the provisions of Article 62, shall be punished by imprisonment for not more than two years, or a fine
not exceeding two million won. <Amended by Act No. 5335, Dec. 30, 1996>
Article 69-2 (Fine for Negligence)
(1)An enterpriser or enterprisers organization shall be punished by a fine for negligence not exceeding 100 million won in the case
falling under subparagraphs 1 through 6 and 8, and not exceeding 200 million won in the case falling under subparagraph 7, and the
officers, employees and other interested parties of a company or enterprisers organization shall be punished by a fine for negligence
not exceeding 10 million won in the case falling under subparagraphs 1 through 6 and 8, and not exceeding 50 million won in the case
falling under subparagraph 7: <Amended by Act No. 5335, Dec. 30, 1996; Act No. 5528, Feb. 24, 1998; Act No. 5813, Feb. 5, 1999;
Act No. 6043, Dec. 28, 1999; Act No. 6371, Jan. 16, 2001; Act No. 6651, Jan. 26, 2002; Act No. 7315, Dec. 31, 2004>
1.In making a publication pursuant to the provisions of Article 11-2 or 11-3, a person who has not gone through a resolution of the
board of directors or has failed to make a publication, or a person who has omitted major contents of such publication or made a
false publication;
2.A person who has failed to make a report on the combination of enterprises under Article 12 (1) or (6) or made a false report or
a person who violates the provisions of paragraph (7) of the said Article;
3.In relation to the request for documents under Article 14-2 (2), a person who has failed to submit the documents without any justifiable
reason, or submitted false documents;
4.A person who has violated the provisions of Article 17-2 (4);
5.A person who has failed to attend without any justifiable reason in violation of the provisions of Article 50 (1) 1;
6.A person who has failed to make a report or present necessary materials or things as prescribed in Article 50 (1) 3 or (3), or made
a false report or who presents false materials or things;
7.A person who has refused, interfered with or evaded the investigation as prescribed in Article 50 (2); and
8.A person who has refused to submit the information pertaining to financial transactions required under Article 50 (5).
(2)A person who has not complied with the orders for the maintenance of good order in violation of Article 43-2 shall be punished
by a fine for negligence not exceeding one million won. <Newly Inserted by Act No. 5335, Dec. 30, 1996>
(3)The fine for negligence as referred to in paragraph (1) shall be imposed and collected by the Fair Trade Commission in accordance
with the procedures set forth in the Presidential Decree. <Amended by Act No. 5335, Dec. 30, 1996>
(4)Any person who is dissatisfied with the disposition of a fine for negligence as referred to in paragraph (2), may file an objection
with the Fair Trade Commission within thirty days after receiving notice of the fine. <Amended by Act No. 5335, Dec. 30, 1996>
(5)If a person who is subject to a disposition of a fine for negligence as referred to in paragraph (2), has made an objection under
paragraph (3), the Fair Trade Commission shall notify without delay the competent court, which shall, upon receiving the notification,
bring the case of a fine for negligence to trial under the Non-Contentious Case Litigation Procedure Act. <Amended by Act No.
5335, Dec. 30, 1996>
(6)If no objection is made, and no fine for negligence is paid, in the period as referred to in paragraph (3), it shall be collected
according to the procedures for collecting national taxes in arrears. <Amended by Act No. 5335, Dec. 30, 1996>
[This Article Newly Inserted by Act No. 4513, Dec. 8, 1992]
Article 70 (Joint Penal Provisions)
If a representative of a juristic person (including an unincorporated association; hereafter the same shall apply in this Article),
or an agent, employee or any other person working for a juristic person, or for an individual has committed an offense as prescribed
in Articles 66 through 68 with respect to any business of the said juristic person or individual, the applicable fine as prescribed
in each corresponding Article shall be imposed on the said juristic person or individual as well as on the person who has actually
committed the violation. <Amended by Act No. 5335, Dec. 30, 1996>
Article 71 (Filing of Complaint)
(1)Any offense as prescribed in Articles 66 and 67 shall be prosecuted by a public action only after a complaint is filed by the Fair
Trade Commission. <Amended by Act No. 5335, Dec. 30, 1996>
(2)The Fair Trade Commission shall file with the Prosecutor General the complaints under Articles 66 and 67 where it deems it necessary
because the degree of violations is so obvious and considerable that such violations may substantially suppress competition. <Newly
Inserted by Act No. 5335, Dec. 30, 1996>
(3)The Prosecutor General may give notice to the Fair Trade Commission with regard to the existence of factors requiring filing under
paragraph (2), and may request the Fair Trade Commission to file with him. <Newly Inserted by Act No. 5335, Dec. 30, 1996>
(4) The Fair Trade Commission may not withdraw the filing after the prosecution has commenced. <Newly Inserted by Act No. 5335,
Dec. 30, 1996>
[This Article Wholly Amended by Act No. 4513, Dec. 8, 1992]
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on April 1, 1990.
Article 2 (General Transitional Measures)
(1) Any authorization, approval, recognition, designation, corrective measures, etc. granted or taken by the Minister of the Finance
and Economy pursuant to the previous provisions at the time of the enforcement of this Act, shall be considered as those by the Fair
Trade Commission under this Act.
(2) Matters reported, requested or notified to the Minister of the Finance and Economy pursuant to the previous provisions at the
time of the enforcement of this Act, shall be considered as those reported, requested or notified to the Fair Trade Commission under
this Act.
(3) Any public notice made by the Minister of the Finance and Economy pursuant to the previous provisions at the time of the enforcement
of this Act, shall be considered as that made by the Fair Trade Commission under this Act.
Article 3 (Transitional Measures concerning Prohibition of Mutual Contribution)
If a company which belongs to an enterprise group designated as a large enterprise group, and operates a financing or insurance business
at the time of the enforcement of this Act, violates the provisions of Article 9 (1), the provisions of the said Article shall not
apply to it for one year from the enforcement date of this Act.
Article 4 (Transitional Measures concerning Total Amount of Contribution)
(1) If a company which belongs to an enterprise group designated as a large enterprise group at the time of the enforcement of this
Act or within two years from the enforcement date of this Act, and which received a notification as prescribed in Article 14 (1)
at the time of designation, has made a contribution in excess of the maximum contribution amount at the time of notification, the
total contribution existing on the date of notification (hereinafter referred to as the special maximum amount ) shall be considered
as the maximum contribution amount for two years from the enforcement date of this Act in applying the provisions of Article 10 (1):
Provided, That if the maximum contribution amount exceeds the special maximum amount due to increase of the net assets value, this
provision shall not be applicable, and if it is shorter than that as prescribed in Article 14 (3) 2, it shall be one year.
(2) The Fair Trade Commission may, if necessary, have a company for which the special maximum amount is recognized, prepare and submit
a yearly plan to settle the excess of the maximum contribution amount.
(3) Notwithstanding the provisions of Article 10 (1), if a company belonging to a large enterprise group owns on April 1, 1987 stocks
of a company more than thirty percent of the total issued stocks of which is owned by the government, local governments or government-invested
institutions under the Framework Act on the Management of Government-Invested Institutions, and if the Fair Trade Commission approves
it, the company may own the stocks after the period as referred to in paragraph (1) has passed. In this case, the Fair Trade Commission
may separately determine the period in which the company may own such stocks.
(4) Notwithstanding the provisions of Article 10 (1), if a company belonging to a large enterprise group owns on April 1, 1987 stocks
issued by a foreign-invested enterprise under the Foreign Capital Inducement Act, and the Fair Trade Commission approves it, the
company may own such stocks for up to three years after the period as referred to in paragraph (1) has passed.
Article 5 Omitted.
ADDENDA <Act No. 4501, Nov. 25, 1992>
Article 1 (Enforcement Date)
This Act shall enter into force at the expiration of six months after its promulgation.
Articles 2 through 8 Omitted.
ADDENDA <Act No. 4513, Dec. 8, 1992>
Article 1 (Enforcement Date)
This Act shall enter into force on April 1, 1993.
Article 2 (Transitional Measures concerning Total Contribution)
In application of the proviso of Article 10 (1), the revised provisions of subparagraph 5 of the said paragraph shall be applicable
only to stocks to be acquired or owned after the enforcement date of this Act.
Article 3 (Transitional Measures concerning Debt Guarantee)
(1) If a company which belongs to an enterprises group designated as a large enterprise group subject to limitations on debt guarantee
at the time this Act enters into force, or within three years after this Act enters into force, and which has received the notification
as prescribed in Article 14 (1), has guaranteed any debt in excess of the maximum debt guarantee amount at the time of the notification
thereof, the total debt guarantee on the day the notification is made (hereinafter referred to as the special maximum debt guarantee
amount ) shall, in application of the provisions of Article 10-2 (1), be considered as the maximum debt guarantee amount for three
years after this Act enters into force: Provided, That this shall not apply, in a case where the maximum debt guarantee amount exceeds
the special maximum debt guarantee amount due to the increase of the owner s capital.
(2) The Fair Trade Commission may, if necessary, have a company having the special maximum debt guarantee amount recognized under
paragraph (1), prepare and submit a plan to solve yearly the excess maximum debt guarantee amount through a consultation with domestic
financial institutions.
ADDENDA <Act No. 4790, Dec. 22, 1994>
(1) (Enforcement Date) This Act shall enter into force on April 1, 1995.
(2) (Transitional Measures concerning Total Contribution) If a company which belongs to an enterprise group designated as a large
enterprise group at the time this Act enters into force, or within three years after this Act enters into force, and which has received
the notification as prescribed in Article 14 (1) at the time of such designation, holds a contribution in excess of the maximum contribution
at the time it receives the notification, the total contribution existing on the day it receives the notification (hereinafter referred
to as the special ceiling ) shall be considered as the ceiling of contribution for three years after this Act enters into force:
Provided, That if the ceiling of contribution exceeds the special ceiling due to an increase in the net assets, this shall not apply,
and if the period is shorter than that as prescribed in the text of Article 14 (3) 2, it shall be one year.
(3) (Examples of Application) The revised provisions of Article 10 (2) shall apply only to stocks acquired or owned after this Act
enters into force.
ADDENDA <Act No. 4831, Dec. 23, 1994>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 4 Omitted.
ADDENDA <Act No. 5235, Dec. 30, 1996>
(1) (Enforcement Date) This Act shall enter into force on April 1, 1997.
(2) (Transitional Measures as to Aggregate Contributions) In relation to the application of amended provisions of Article 10, where
the book value of shares acquired before this Act takes effect is below the purchase price of such shares, the book value of the
shares concerned shall be treated as the purchase price of the shares concerned.
(3) (Transitional Measures as to Guarantee of Liabilities) After this Act enter into force, where a member company of a large enterprise
group subject to limitations on debt guarantee has provided guarantees over the maximum debt guarantee prescribed by the amended
provisions of Article 10-2 (1) with domestic affiliated companies at the time when this Act enter into force, the aggregate debt
guarantee shall be construed as the maximum debt guarantee for the company concerned by March 31, 1998: Provided, That in a case
where the aggregate debt guarantee has exceeded the maximum debt guarantee for the company concerned because of an increase in the
owner s equity, this paragraph shall not apply.
(4) (Transitional Measures as to Surcharge Provisions) The former provisions of this Act shall apply to the practices conducted before
this Act takes effect.
ADDENDA <Act No. 5403, Aug. 30, 1997>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Articles 2 through 8 Omitted.
ADDENDUM <Act No. 5454, Dec. 13, 1997>
This Act shall enter into force on January 1, 1998. (Proviso Omitted.)
ADDENDA <Act No. 5491, Dec. 31, 1997>
Article 1 (Enforcement Date)
This Act shall enter into force on April 1, 1998.
Articles 2 through 8 Omitted.
ADDENDA<Act No. 5498, Jan. 8, 1998>
Article 1 (Enforcement Date)
This Act shall enter into force on April 1, 1998. (Proviso Omitted.)
Articles 2 through 15 Omitted.
ADDENDA <Act No. 5503, Jan. 13, 1998>
Article 1 (Enforcement Date)
This Act shall enter into force on April 1, 1998. (Proviso Omitted.)
Articles 2 through 12 Omitted.
ADDENDA <Act No. 5528, Feb. 24, 1998>
(1) (Enforcement Date) This Act shall enter into force on April 1, 1998: Provided, That the amended provisions of Article 10 shall
enter into force on the date of its promulgation.
(2) (Transitional Measures on Debt Guarantee) If the total debt guarantees for domestic affiliated companies which a company belonging
to an enterprise group designated in the year 1998 as a large enterprise group subject to the limitations on debt guarantee, which
was designated in the year 1997, guarantees for domestic affiliated companies at the time of its designation, exceed the limitations
on debt guarantee pursuant to the previous provisions of Article 10-2 (1), the previous provisions shall apply: Provided, That the
period exceptionally recognized pursuant to the decrease of share-holder s equity referred to in the previous provisions of Article
10-2 (4) shall not expire on or before March 31, 2000.
ADDENDA<Act No. 5529, Feb. 28, 1998>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 7 Omitted.
ADDENDA<Act No. 5559, Sep. 16, 1998>
Article 1 (Enforcement Date)
This Act shall enter into force two months after the date of its promulgation.
Articles 2 through 9 Omitted.
ADDENDA<Act No. 5813, Feb. 5, 1999>
(1) (Enforcement Date) This Act shall enter into force on April 1, 1999: Provided, That the amendments to Article 50 (5), (6), (7)
and (8), subparagraph 6 of Article 68, Articles 69 (1) and 69-2 (1) 7 shall enter into force on the date of its promulgation.
(2) (Validity Term) The amendments to Article 50 (5), (6), (7) and (8), subparagraph 6 of Article 68, Articles 69 (1) and 69-2 (1)
7 shall remain in force for five years from the date of promulgation of this Act. <Amended by Act No. 6371, Jan. 16, 2001>
(3) (Transitional Measures Pursuant to Expiration of Validity Term) The application of the penal provisions or a fine for negligence
to any act committed prior to the expiration of validity term under paragraph (2) of this Addenda shall be governed by the previous
provisions.
(4) (Transitional Measures on Penal Provisions) The application of the penal provisions to any act committed prior to the entry into
force of this Act shall be governed by the previous provisions.
ADDENDA<Act No. 5814, Feb. 5, 1999>
Article 1 (Enforcement Date)
This Act shall enter into force on July 1, 1999.
Article 2 (Transitional Measures concerning Corrective Measures, Surcharges, and Penal Provisions)
The application of the corrective measures, surcharges, and penal provisions to any act committed in violation of Article 23 (1) 6
and 26 (1) 5 of the former Monopoly Regulation and Fair Trade Act prior to the entry into force of this Act shall be governed by
the previous provisions.
Article 3 (Transitional Measures concerning Fair Competition Code)
The fair competition code on indication and advertisement examined by the Fair Trade Commission pursuant to Article 23 (4) and (5)
of the former Monopoly Regulation and Fair Trade Act at the time of the entry into force of this Act shall be deemed the self-governing
code on indication and advertisement examined pursuant to Article 14.
Articles 4 and 5 Omitted.
ADDENDA<Act No. 5825, Feb. 8, 1999>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation.
Articles 2 through 10 Omitted.
ADDENDA <Act No. 6043, Dec. 28, 1999>
Article 1 (Enforcement Date)
This Act shall enter into force on April 1, 2000: Provided, That the amended provisions of Articles 10 and 14 (3) 2 shall enter into
force on April 1, 2001.
Article 2 (Special Case for Application concerning Investment for Corporate Restructuring)
Of the amended provisions of Article 10 (1) 4, where acquiring or owning stocks for the purpose of corporate restructuring, with regard
to the stocks that may be acquired or owned in excess of the amount of investment limit, the provisions of the same Article, same
paragraph, and same subparagraph shall also be applicable to the stocks that were acquired or owned during a period from January
1, 1998 to March 31, 2002. In this case, in calculating the period according to the provisions of the same subparagraph, what have
been acquired or owned during the period from January 1, 1998 to March 31, 2001 shall be deemed to have been acquired or owned on
April 1, 2001. <Amended by Act No. 6651, Jan. 26, 2002>
Article 3 (Transitional Measures concerning Total Amount of Investment)
In applying the amended provisions of Article 10 (1) to a case where a company belonging to an enterprise group designated as a large
enterprise group makes investment in excess of the investment limit amount at the time of enforcing this Act, the total amount of
investment made by such company as of the date of enforcing this Act shall be deemed the investment limit amount for one year from
the date of enforcing this Act: Provided, That the same shall not apply to the case where the investment limit amount exceeds an
amount deemed the total amount of investment limit following an increase in the net asset value.
Article 4 (Transitional Measures concerning Investment in Infrastructure)
Any person who has acquired or owned, or received recognition of period extension with respect to, stocks of a company incorporated
to carry on the first-class facility business as prescribed in the provisions of subparagraph 2 of Article 2 of the previous Promotion
of Private Capital into Social Overhead Capital Investment Act (referring to the Act before it was amended by Act No. 5377) in accordance
with the provisions of Article 10 (2) of the previous Monopoly Regulation and Fair Trade Act (referring to the Act before it was
amended by Act No. 5528) prior to the enforcement of this Act shall be deemed to have acquired or owned such stocks or have received
recognition of period extension under the amended provisions of Article 10 (1) 3 for a period recognized by the Fair Trade Commission
at the time of recognition.
Article 5 (Transitional Measures concerning Investment Made to Attract Foreign Investment)
Where any stocks acquired or owned to attract foreign investment prior to the enforcement of this Act fall under the amended provisions
of Article 10 (1) 4, such stocks shall be deemed to be acquired or owned on April 1, 2001.
ADDENDA<Act No. 6371, Jan. 16, 2001>
(1) (Enforcement Date) This Act shall enter into force on April 1, 2001: Provided, That the amendments to Article 2 of Addenda of
the Monopoly Regulation and Fair Trade Act (Act No. 5813) shall enter into force from the date of its promulgation.
(2) (Application Example to Additional Payment for Refund of Surcharge) The amendments to Article 55-6 shall be applicable from the
portion of incurrence of the causes for refund for the first time after the enforcement of this Act.
(3) (Transitional Measures on Application of Penal Provisions) In applying the penal provisions against the activities prior to the
enforcement of this Act, the previous provisions shall govern.
ADDENDA <Act No. 6651, Jan. 26, 2002>
Article 1 (Enforcement Date)
This Act shall enter into force on April 1, 2002: Provided, That the amended provisions of Article 11, and of Article 2 of the Addenda
of Act No. 6043; Amended Act of the Monopoly Regulation and Fair Trade Act, shall enter into force on the date of its promulgation.
Article 2 (Period of Validity)
Matters related to corporate restructuring in Article 10 (1) 4 shall be valid not later than March 31, 2003.
Article 3 (Retroactive Application in Relation to System of Limitation on Total Amount of Investments)
(1) The amended provisions of Article 10 shall also be applicable to the stocks that are acquired or owned at the time of enforcement
of this Act. In this case, the stocks acquired or owned under the amended provisions of Article 10 (6) 2 shall be limited to those
acquired or owned after January 1, 1998.
(2)In applying the provisions of paragraph (1), where the stocks acquired or owned at the time of enforcement of this Act in order
to induce foreign investments (excluding the stocks falling under Article 5 of the Addenda of Act No. 6043; amended Act of the Monopoly
Regulation and Fair Trade Act) come to fall under the amended provisions of Article 10 (1) 3, and were acquired or owned before March
31, 2001, they shall be deemed to have been acquired or owned on April 1, 2001.
Article 4 (Retroactive Application to Enterprises Exceeding Investment Limit)
The amended provisions of Article 17-2 and subparagraph 6 of Article 67 shall apply to a case where the affiliate of any enterprise
group that is designated as a large enterprise group at the time of the enforcement of this Act acquires and holds stocks of other
domestic company that holds such stocks in excess of the investment limit amount as of April 1, 2001 (in the case of the affiliate
of any enterprise group that is designated as a large enterprise group in 2001, refers to the date on which the enterprise group
is designated as a large enterprise group) and continues to hold such stocks after the lapse of one year from April 1, 2001 and violates
the provisions of the proviso of Article 10 (1) by continuously holding such stocks even after the lapse of the deadline prior to
which the exception of restrictions on the total investment amount is recognized pursuant to the main sentence of the same Article
and the same paragraph.
[This Article wholly Amended by Act No. 7315, Dec. 31, 2004]
Article 5 (Transitional Measures for Designation, etc. of Enterprise Group Subject to Limitations on Mutual Investment)
The enterprise group designated as a large enterprise group or that subject to limitations on debt guarantee under the previous provisions
of Article 14 (1) at the time of enforcement of this Act, shall be deemed to be designated as an enterprise group subject to limitations
on mutual investment under the amended provisions of Article 14 (1).
Article 6 (Transitional Measures for Application of Penal Provisions)
An application of penal provisions to the acts committed before the enforcement of this Act shall be governed by the previous provisions.
ADDENDA<Act No. 6705, Aug. 26, 2002>
Article 1 (Enforcement Date)
This Act shall enter into force three months after the date of its promulgation.
Articles 2 through 4 Omitted.
ADDENDA <Act No. 7289, Dec. 31, 2004>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDA <Act No. 7315, Dec. 31, 2004>
Article 1 (Enforcement Date)
This Act shall enter into force on April 1, 2005: Provided, That the amended provisions of Article 50 (5) through (9), 69 (1) and
69-2 (1) 8 shall enter into force on the date of the promulgation of this Act.
Article 2 (Validity Period)
The validity period of the amended provisions of Article 50 (5) through (9) shall be 3 years from the date on which they enter into
force.
Article 3 (Application Example, etc. concerning Report on Corporate Combination)
(1)The corporate combination on which the obligation of making a report accrues pursuant to the previous provisions at the time of
the enforcement of this Act shall be governed by the previous provisions, notwithstanding the amended provisions of Article 12 (1),
(2) and (5) through (7).
(2)The amended provisions of Article 12 (1) 2 shall apply to the corporate combination on which the obligation of making a report
accrues pursuant to the previous provisions of Article 12 (1) 1 at the tine of the enforcement of this Act even if the corporate
combination falls under the amended provisions of Article 12 (1) 2 after the enforcement of this Act.
(3)In case where the corporate combination on which no obligation of making a report accrues, the corporate combination falls under
the amended provisions of Article 12 (1) 1 and not less than one company are large-scale companies from among companies involving
the corporate combination at the time of the enforcement of this Act, the amended provisions of Article 12 (2), (5) and (7) shall
apply to such case and a report on the corporate combination shall be made within 30 days from the date on which the corporate combination
is performed, notwithstanding the amended provisions of paragraph (6) of the same Article.
(4)The amended provisions of Article 12 (9) shall apply, starting with the corporate combination for the examination of which an application
is first filed with the Fair Trade Commission after the enforcement of this Act.
Article 4 (Transitional Measures concerning Restrictions on Holding of Stocks of Domestic Companies Other Than Subsidiaries of General
Holding Companies)
In case where any holding company on which a report is made to the Fair Trade Commission holds stocks of any domestic company other
than its subsidiaries in excess of 5/100 of the total number of the stocks issued at the time of the enforcement of this Act, the
stocks of the relevant domestic company shall be brought into conformity with the amended provisions of Article 8-2 (2) 3 within
2 years from the date on which this Act enters into force.
Article 5 (Transitional Measures concerning Restrictions on Stockholding Ratio on Business Related Sub-Subsidiaries of Subsidiaries
of General Holding Companies)
In case where the subsidiary of any general holding company holds the stocks of its business related sub-subsidiary, which is reported
to the Fair Trade Commission, at the time of the enforcement of this Act, the stocks of such business related sub-subsidiary shall
be brought into conformity with the amended provisions of Article 8-2 (3) 1 within 2 years from date on which this Act enters into
force.
Article 6 (Transitional Measures concerning Prohibition on Investments Made by Subsidiaries of General Holding Companies in Other
Subsidiaries)
In case where any subsidiary of the general holding company holds stocks of other subsidiary in control of the general holding company,
which is reported to the Fair Trade Commission at the time of the enforcement of this Act, the stocks of such subsidiary shall be
brought into conformity with amended provisons of Article 8-2 (3) 2 within 2 years from the date on which this Act enters into force.
Article 7 (Transitional Measures concerning Total Investment Amount)
(1)The stocks that are acquired or held by any company pursuant to the previous provisions of Article 10 (1) 3, which belongs to the
enterprise group that is designated as the enterprise group subject to the restrictions on the total investment amount at the time
of the enforcement of this Act shall be governed by the previous provisions even if they fail to meet the requirements provided for
in the amended provisions of Article 10 (1) 3.
(2)The stocks that are acquired or held by any company pursuant to the previous provisions of Article 10 (1) 4, which belongs to the
enterprise group that is designated as the enterprise group subject to the restrictions on the total investment amount at the time
of the enforcement of this Act shall be governed by the amended provisions of Article 10 (1) 4.
Article 8 (Transitional Measures concerning Penalty Surcharge Imposed on Collaborative Act)
The application of the penalty surcharge to the act that is performed or terminated prior to the enforcement of this Act or continues
to be performed after the enforcement of this Act shall be governed by the previous provisions.
Article 9 (Special Case of Restrictions on Voting Rights of Financial Companies or Insurance Companies)
The number of stocks on which the voting right can be exercised from among the stocks of the domestic affiliates of a company, which
are acquired or held by the company pursuant to the previous provisions of the proviso and subparagraph 3 of Article 11, which belongs
to the enterprise group subject to mutual equity investment limit and runs the financial business or the insurance business, plus
the number of stocks on which persons can exercise the voting right, with the exception of persons who are prescribed by the Presidential
Decree, from among persons who are specially related to the domestic affiliates, notwithstanding the amended provisions of subparagraph
3 of Article 11, shall not exceed 30/100 of the total number of stocks issued by the domestic affiliates by March 31, 2006, 25/100
from April 1, 2006 to March 31, 2007, 20/100 from April 1, 2007 to March 31, 2008 and 15/100 from April 1, 2008, respectively.
Article 10 Omitted.
ADDENDA<Act No. 7386, Jan. 27, 2005>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 6 Omitted.
ADDENDA<Act No. 7428, Mar. 31, 2005>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 6 Omitted.
ADDENDUM<Act No. 7492, Mar. 31, 2005>
This Act shall enter into force three months after the date of its promulgation.
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