The Ministry of SMEs and Startups is launching an investigation into unfair trade practices involving consignment and entrusted companies.
The ministry announced on the 19th that it will conduct the "2026 Regular Investigation of Consignment Transactions." This annual investigation is mandated by the Act on the Promotion of Cooperative Growth between Large and Small Enterprises. The current investigation will assess unfair trade practices over the past year involving a total of 15,000 companies (3,000 consignors and 12,000 entrusted companies).
Consignment transactions refer to agreements where companies engaged in manufacturing, construction, processing, repair, sales, or services outsource the production of goods, parts, semi-finished products, and raw materials to other small and medium-sized enterprises, which then carry out the work.
Key areas of investigation include compliance with the obligations outlined in Articles 21 to 25 of the Cooperative Growth Act, such as: compliance with delivery price linkage, issuance of contracts, adherence to payment deadlines, unjust reductions in delivery prices, unfair determination of delivery prices, and unreasonable requests for technical data.
Notably, the ministry has improved its investigation method by extending the target transaction period from six months to one year, moving away from its previous focus on the first half of the year.
The investigation will be conducted in three phases: assessing the transaction status of consignors, surveying entrusted companies, and conducting on-site investigations of companies suspected of violating the law. If violations of the Cooperative Growth Act are confirmed, administrative actions will be taken against the offending consignors.
Last year, the ministry also conducted a regular investigation targeting consignment and entrusted companies, increasing the sample ratio for companies in the metropolitan area from 32% to 50% to focus on that region.
Lee Eun-cheong, Director of the Cooperative Growth Policy Bureau at the Ministry of SMEs and Startups, stated, "Cooperative growth begins with establishing fair trade practices. We hope this investigation will carefully consider the voices from the business field and serve as an opportunity to establish a culture of fair trade and seek solutions for cooperative growth. We ask for the active cooperation of companies."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.