FTC Operates Unpaid Subcontract Fee Centers, Inducing Payment of 28.9 Billion Won

▲ Fair Trade Commission

The Fair Trade Commission (FTC) announced today (Oct. 2) that as a result of setting up and operating Unpaid Subcontract Fee Resolution Centers nationwide ahead of the Chuseok holiday, 173 small and medium-sized subcontracting companies have received approximately 28.9 billion won in unpaid subcontract fees.

The centers were operated across 12 locations, including six regional offices of the FTC, from August 5 to September 23.

The FTC explained that it encouraged primary contractors to make payments and urged agreements between the parties from the consultation stage through the centers, thereby inducing prompt payment.

In addition, to alleviate the financial burden on small and medium-sized enterprises ahead of Chuseok, the FTC requested major corporations to cooperate by paying subcontract fees scheduled for release after the holiday in advance, ahead of Chuseok when capital demand is concentrated.

It was found that 108 companies preemptively paid approximately 2.2359 trillion won in subcontract fees to 16,175 small and medium-sized subcontractors before the holiday.

An FTC official explained, "This is a tally compiled from the performance gathered through the centers, and the actual amount of subcontract fees paid early is likely even higher."

The FTC plans to induce prompt voluntary rectification for cases received during the center's operation period that exceeded the statutory subcontract payment deadline of 60 days from the date of receipt of goods, such as by having them pay the fees including delayed interest.

If voluntary rectification is not made, the agency plans to conduct on-site investigations and take strict measures.

(Photo: Provided by the Fair Trade Commission, Yonhap News)

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