Enforcement Decree Of The Monopoly Regulation And Fair - MONOPOLY by lonyoo

VIEWS: 5 PAGES: 102

									 ENFORCEMENT DECREE OF
THE MONOPOLY REGULATION
    AND FAIR TRADE ACT
          ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 105


         ENFORCEMENT DECREE OF
THE MONOPOLY REGULATION AND FAIR TRADE ACT

                Enacted by Presidential Decree No. 10267, April 1, 1981
                Amended by Presidential Decree No. 11475, July 21, 1984
                Amended by Presidential Decree No. 12120, April 1, 1987
                Amended by Presidential Decree No. 12979, April 14, 1990
                Amended by Presidential Decree No. 13842, Feb. 20, 1993
                Amended by Presidential Decree No. 14566, April 1, 1995
                Amended by Presidential Decree No. 15328, March 31, 1997
                Amended by Presidential Decree No. 15765, April 1, 1998
                Amended by Presidential Decree No. 16221, March 31, 1999
                Amended by Presidential Decree No. 16777, April 1, 2000
                Amended by Presidential Decree No. 17176, March 27, 2001
                Amended by Presidential Decree No. 17317, July 24, 2001
                Amended by Presidential Decree No. 17564, March 30, 2002
                Amended by Presidential Decree No. 18536, April 1, 2004
                Amended by Presidential Decree No. 18736, March 8, 2005
                Amended by Presidential Decree No. 18768, March 31, 2005


                      CHAPTER 1 General Provisions


Article 1 Purpose


  The purpose of this Decree is to elaborate upon matters delegated to it by the
Monopoly Regulation and Fair Trade Act (hereinafter, the “Act”) and matters
necessary for the implementation of the Act.


Article 2 Classification of a Holding Company


  (1) “Any company... whose total asset exceeds the amount set forth in the
     Presidential Decree” stipulated in the Act, Article 2 (Definitions),
     Subparagraph 1-2 means a corporation whose net assets on the balance
     sheet exceeds one hundred billion Won on the final date of the previous
     business year. [for corporations that were newly established or
     underwent a merger or division/merger through division/real division
     (hereinafter referred to as “Division”) during the year in question, the
106 Competition Laws & Enforcement Decrees


     establishment date, merger date or Division date, respectively; hereinafter,
     the same shall apply]

  (2) “Primary area of business” under the Act, Article 2 (Definitions),
     Subparagraph 1-2 means the activity of a subsidiary company whose total
     amount of share (including equity) price (i.e. the sum of the price
     indicated on the balance sheet as of the final date of the previous business
     year) constitutes more than fifty percent (50%) of the corporation's total
     assets.

  (3) “...the criteria established in the Presidential Decree” stipulated in the Act,
     Article 2 (Definitions), Subparagraph 1-3 means they satisfy the following
     conditions:

     1. Affiliated Corporations (excluding affiliated corporations whose shares
       are acquired by a Small and Medium Enterprise Establishment
       Investment Company established in accordance with the Support for
       Small and Medium Enterprise Establishment Act or by a financing
       business for new technology projects established by the Specialized
       Credit Financial Business Act for the purposes of investing in enterprise
       establishment or supporting new technology business) of a Holding
       Company; and

     2. The amount of shares owned by a Holding Company or the total amount
       of shares owned by a Holding Company, its Subsidiary Companies and
       business related sub-subsidiaries shall equal or exceed the amount of
       shares owned by the largest investor among the persons defined in
       Article 11 (Scope of Specially Related Persons), Subparagraph 1 or 2.

Article 2-2 Criteria for Business Related Sub-subsidiaries

   “A domestic company closely related to subsidiaries concerned deter-
mined by Presidential Decree” means a company which carries out any of the
following businesses:
           ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 107




    1. Transporting, storing and selling goods produced by subsidiaries or
      selling services of subsidiaries;


    2. Managing and maintaining goods and services produced by sub-
      sidiaries or providing services such as repair of goods;


    3. Producing or selling goods and services whose major production factors
      are goods and services of subsidiaries;


    4. Providing production factors such as raw materials and services that
      subsidiaries need;


    5. Researching and developing products or services produced by
      subsidiaries;


    6. Producing or selling products and services which are identical to or
      share most production technologies of the goods and services produced
      by subsidiaries; and


    7. Other businesses closely related to the businesses of subsidiaries.


Article 3 Scope of Business Groups


  “An entity that in fact controls businesses, as defined in the Presidential
Decree” of the Act, Article 2 (Definitions), Subparagraph 2 means a company
that falls under one of the following categories:


    1. A corporation in which a single person, either alone or together with any
      of the following Enterprises (hereinafter, “Related Persons”), owns
      thirty percent (30%) or more of total outstanding shares [excluding non-
      voting shares as set forth in Article 370 of the Commercial Code; the
108 Competition Laws & Enforcement Decrees


       same shall apply to Article 3, Article 3-2 (Exemption from Business
       Groups), Article 17-5 (Conditions for Exemption from Limitations on
       Debt Guarantees), and Article 18 (Reporting, etc. of Combination of
       Enterprises)] and is the largest shareholder; and


        a. A Spouse, a blood relative within eight degrees of kinship, or an in-law
          within four degrees of kinship (hereinafter, “Relatives”);


        b. A non-profit corporation or organization (referring to unin-
          corporated associations or foundations; hereinafter, the same shall
          apply), founded either by a person or a Related Person, and whose
          thirty plus percent (30%+) of donations are from that Person, either
          alone or together with a Related Person, who is/are the highest
          contributor(s);


        c. A non-profit corporation or organization over which a person, either
         directly or indirectly through a Related Person, exercises a controlling
         influence on matters such as composition of officers or operation of
         business, etc.;


        d. A corporation whose businesses are in fact controlled by a person,
          pursuant to Subparagraphs (1) and (2); and


        e. The Person and Employees of the relationships falling under items b
         through d (officers in the case of corporations; commercial employees
         and those under employment contracts in the case of individuals).


     2. A corporation falling under any of the following categories and
       considered to exercise a dominant influence over the concerned
       company:


        a. A corporation in which a person, through a contract or agreement
          with another major shareholder, has appointed/dismissed the chief
   ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 109


 executive or has appointed or may appoint fifty percent (50%) or
 more of the officers;


b. A corporation in which a person, either directly or indirectly through
 a Related person, exercises a controlling influence over major business
 decisions or executions, such as organizational readjustment and
 investments in new companies;


c. A company that engages in a personnel exchange of any of the below
 with the corporation controlled by a person (in cases where the person
 is an Enterprise, includes the person; hereinafter, the same shall
 apply):


 ①Cases of interlocking directorate between said company and the
   corporation controlled by the Person;


 ②Cases where officers or employees of the corporation controlled by
   the Person were appointed as officers of said company, and
   subsequently re-appointed as officers or employees of the
   corporation controlled by the person (including cases of re-
   appointment to different corporations owned by the Person); and


 ③Cases where officers of said company were appointed as officers or
   employees of the corporation controlled by the person, and
   subsequently re-appointed either to said company or affiliates
   thereof.
d. Companies engaged in acts that are, according to social norm, deemed
 to be acts of a single economic entity, such as trading funds, assets,
 products, services with the person or the Related Person; granting or
 receiving guarantees in excess of normal scope to and from the person
 or the Related Person; and acts of representation in sales that render
 the company as an affiliate of the Person's Business Group.
110 Competition Laws & Enforcement Decrees




Article 3-2 Exclusion from Business Groups

  (1) If a corporation falls into one of the following categories and its business
     is not deemed to be controlled by the Person, the Fair Trade Commission
     may, upon request from interested parties, exclude the corporation from
     the Business Group controlled by the Person, notwithstanding the
     provisions of Article 3:

     1. Companies which, through agreements, contracts, etc. among investors,
       are in fact managed by persons other than those below:

        a. Appointees of the Person; and

        b. An Enterprise related to the Person by relationships specified in
          Article 3 (Scope of Business Groups), Subparagraph 1, Item a or e.

     2. Companies that meet the following requirements (hereinafter, “Criteria
       for Recognition of Independent Management”) and are deemed as being
       independently managed by a Relative of the Person:

        a. The total amount of each company's shares that is owned by the
         Person and Related Persons [excluding independent managers of
         Affiliates of Relatives (hereinafter, “Independent Manager”) and those
         who, upon request of the Independent Managers, were excluded by the
         Fair Trade Commission from the scope of Related Persons] shall be
         less than three percent (3%) (less than ten percent (10%) for other
         than listed corporations or association-registered corporations) of the
         total amount of the outstanding shares of each company requesting
         exemption       from     the    Business   Group   controlled   by   the
         Person(hereinafter, “Affiliates of Relatives”);
     ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 111


  b. The total amount of each of the Person-controlled companies'
   (referring to the Business Group controlled by the Person, excluding
   the Affiliates of Relatives; hereinafter, “Affiliates of the Person”) shares
   owned by the Independent Manager and those related to the
   Independent Manager by any of the relationships outlined in Article 3
   (Scope of Business Groups), Subparagraph 1 (excluding Related
   Persons of the Person, under the provisions of Item a) shall be less
   than three percent (3%) of each company's total outstanding shares
   (less than fifteen percent (15%) for other than listed corporations or
   association-registered corporations);


  c. Affiliates of the Person and Affiliates of Relatives shall not have an
   interlocking directorate; and


  d. Between the Affiliates of Relatives and the Affiliates of the Person,
   there shall be no debt guarantees or financial loans; provided,
   however, that debt guarantees and financial loans arising from the
   ordinary process of debt guarantees and transaction pursuant to
   Article 10-2, Paragraph (1), Subparagraph 1 of the Act, shall be
   excluded.


  e. <Deleted>


3. Companies that are undergoing bankruptcy procedure after they were
 declared bankrupt under the Bankruptcy Law.


4. Companies that are falling under those contracting an agreement as
  defined under Subparagraph 2 Article 2 of the Corporate Res- tructuring
  Vehicle Act, and meet each of the following categories;

  a. Among the shares owned by the Person or the Related Person,
    disposal and voting rights over the shares, surpassing 3% of total
    number of shares issued by the company concerned (in case of
112 Competition Laws & Enforcement Decrees


         companies which are not listed on the stock market nor registered in
         the Korea Securities Dealers Association, it is 10%), shall be
         transferred to creditor financial institution (financial institutions
         under the Banking Act and other related acts, which grant a credit to
         the company concerned).

        b. The Person and the Related Person shall make a special arrangement
          to abandon the right to terminate the authorization contract under the
          provisions of item a.

     5. Companies that are undergoing reorganization procedure under the
       Corporate Reorganization Act, and meet each of the following categories.

        a. Among the shares owned by the Person or the Related Person,
          disposal and voting rights over the shares, surpassing 3% of total
          number of shares issued by the company concerned (in case of
          companies which are not listed on the stock market nor registered in
          the Korea Securities Dealers Association, it is 10%)shall be transferred
          to supervisor under the provisions of Article 94 of the Corporate
          Reorganization Act. Provided, however, that after completing the
          corporate reorganization process, the rights shall be succeeded to the
          reorganized company.

        b. The Person and the Related Person shall make a special arrangement
          to abandon the right to terminate the authorization contract under the
          provisions of item a.

  (2) Notwithstanding Article 3 (Scope of Business Group), the Fair Trade
     Commission, upon request from the interested parties, may exempt, from
     the scope of business groups controlled by the Single Person, corporations
     that fall under any of the below Subparagraphs:

     1. Private investment corporations established under the Private
       Investment in Indirect Public Facilities Act, when twenty percent (20%)
       ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 113


   or more of whose total outstanding shares are being owned by the
   person falling under one of the followings; provided however, that the
   said private investment corporations shall not engaged in cross share-
   holdings with other corporations and not receive debt guarantees from
   persons other than investors;

    a. National/local autonomous bodies;

    b. A government-invested institution, pursuant to the Governmental
      Institution Management Act, Article 2 (Scope of Application); and

    c. Public companies, organizations and other corporations established
      under special statutes.

  2. Corporations falling under one of the followings, which have more than
    two largest investors (including the cases where a Single Person and
    his/her Related Persons made investments) and the said investors are
    deemed not to wield controlling influence on the composition of
    executive managers, business operation, etc;

    a. A corporation established by two or more corporations engaged in the
      same business through the investment in kind of assets or merger for
      the purpose of corporate restructuring.
    b. A corporation in the list of private investment business entity under
     the Act on Private Participation in Infrastructure that is pursuing
     private investment projects pursuant to the methods set forth under
     the Article 4, Subparagraphs 1 through 4 of the said Act.


(3) If a corporation exempted from the Business Group controlled by the
  Person as stipulated in Paragraphs (1) and (2) no longer meets the
  exemption criteria, the Fair Trade Commission may, at the request of
  interested parties or on its own initiative, invalidate the exemption:
  Provided, however, that as for companies exempted from the Business
  Group controlled by the Person under Paragraph 1, Subparagraph 2, the
114 Competition Laws & Enforcement Decrees


     foregoing shall apply only to cases where the company no longer meets
     the exemption conditions within three years from the date of exemption.


  (4) An Enterprise that desires to request exemption from the Business Group
     controlled by the Person under Paragraph (1), Subparagraph 2 shall
     submit the following documents to the Fair Trade Commission. However,
     when the information on the submitted document can be confirmed
     through co-usage of administrative information pursuant to Article 21
     Paragraph 1 of the Act on Promoting Paperless Work on Public
     Administration to Realize e-Government, such confirmation shall be
     replaced to the submitted document.:


     1. In the case of Paragraph (1), Subparagraph 2, Items a and b, register of
       shareholders. In such case, registered corporations shall include a
       written confirmation of a stock transfer agency;


     2. In the case of Paragraph (1), Subparagraph 2, Item c, the registrations of
       the Affiliates of the Person and the Affiliates of Relatives; and


     3. In the case of Paragraph (1), Subparagraph 2, Item d, status report of
       debt guarantees and capital loans by a certified public accountant.
Article 4 Computation of Sales or Purchase Amount


  (1) “Annual turnover or purchase amount” under the provisions of Article 2
     (Definitions), Subparagraph 7 of the Act means the price of the goods or
     services that the company supplied or purchased (referring to the price
     excluding indirect taxes on the goods or services; hereinafter, the same
     shall apply) during the year immediately before the year that includes the
     date in which the activity suspected of violating the Act's Article 3-2
     (Prohibition of Abuse of Market-Dominant Positions) by the company
     ended (in the event that the activity continues until either the recognition
     or reporting date, the recognition or reporting date).
            ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 115


  (2) “Market share” of Article 2 (Definitions), Subparagraph 7 and of Article 4
     (Ex-Post Facto Judgment of Market-Dominant Enterprises) of the Act
     means the ratio of the price of goods or services that the concerned
     company has supplied or purchased domestically to the total price of
     goods or services supplied or purchased domestically during the year
     immediately before the year that includes the date in which the activity
     suspected of violating the Act's Article 3-2 (Prohibition of Market-
     Dominant Positions) by the company ended: Provided, however, that
     where it is difficult to compute the market share based on price, the
     market share may be computed based on quantity or production capacity.


  (3) In applying the provisions of Article 2 (Definitions), Subparagraph 7 and
     Article 4 (Ex-post Facto Judgment of Market-dominant Enterprises) of the
     Act, an Enterprise and Affiliated Corporations thereof shall be regarded as
     a single entity.


  (4) The Fair Trade Commission may determine and announce the specific
     criteria necessary for the judging of Market-Dominant Enterprises under
     the Act, Article 2 (Definitions), Subparagraph 7.
Article 4-2 Commissioning of Investigations of Market Structure and Public Announcement


  (1) The Fair Trade Commission may commission the tasks of investigating
     monopolistic and oligopolistic market structures, making public
     announcements, or requesting the submission of pertinent documents
     under Article 3 (Improvement of Monopolistic and Oligopolistic Market
     Structures), Paragraph (5) to the heads of the relevant administrative
     agencies or state-funded research centers.


  (2) The head of the agency entrusted with the investigation of market
     structure or the making of public announcements pursuant to Paragraph
     (1) shall report his/her performance of task to the Fair Trade Commission.
116 Competition Laws & Enforcement Decrees



   CHAPTER 2 Prohibition of Abuse of Market-Dominant Positions


Article 5 Types of and Criteria for Abusive Activities


  (1) “Unreasonable fixing, maintenance, or alteration of price” under Article 3-
     2 (Prohibition of Abuse of Market-Dominant Positions), Paragraph (1),
     Subparagraph 1 of the Act means a sharp increase or insignificant
     decrease, without justifiable reason, in the price/cost of goods or services
     relative to changes in the supply and demand or in supply cost (limited to
     the general level of the like or similar businesses).


  (2) “Unreasonable controlling of the sale of goods or rendering of services”
     under Article 3-2 (Prohibition of Abuse of Market-Dominant Positions),
     Paragraph (1), Subparagraph 2 of the Act means -


     1. significantly decreasing, without justifiable reason, the supply of goods
       or services in light of recent trends; or
     2. decreasing, without justifiable reason, the supply of goods or services
       despite a supply shortage in distribution.


  (3) “Unreasonable hampering of another Enterprise's Business Activities” of
     Article 3-2 (Prohibition of Abuse of Market-Dominant Positions),
     Paragraph 1, Subparagraph 3 of the Act means the retarding of another
     Enterprise's Business Activities by engaging, directly or indirectly, in any
     of the following acts:


     1. Hindering without justifiable reason, the purchase of raw materials
       needed for the other Enterprise's production;


     2. Employing human capital indispensable to the business activities of
       another firm by granting or promising excessive economic compensation
       compared to normal practices;
        ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 117




  3. Refusing discontinuing, or limiting, without justifiable reason, the use of
   or the access to essential facilities for the manufacturing providing
   selling of the products or services of other Enterprises; and


  4. Engaging in unreasonable Acts other than those under Subparagraphs 1,
   2 and 3 pronounced by the Fair Trade Commission as hindering the
   business activities of other Enterprises.


(4) “The unreasonable hindering of the entry of a new competitor” under
  Article 3-2 (Prohibition Against Abuse of Market-Dominant Positions),
  Paragraph (1), Subparagraph 4 of the Act means the obstructing of the
  entry of new competitors by engaging, directly or indirectly, in any of the
  following acts:


  1. Entering into, without justifiable reason, an exclusive contract with a
   transaction partner;
  2. Purchasing, without justifiable reason, the rights, etc. necessary for the
    continued business activities of an established Enterprise;

  3. Refusing or limiting, without justifiable reason, the use of or the access
    to essential facilities for the manufacturing providing selling of the
    products or services of new competitors; and

  4. Engaging in unreasonable acts other than those under Subparagraphs 1,
    2 and 3 pronounced by the Fair Trade Commission as hindering the
    entry of new competitors.

(5) “Unreasonable transaction to exclude competitors” means any of the
   following:

  1. Where the possibility of excluding a competitor exists due to supplying
    goods or services at unreasonably low prices or purchasing goods or
118 Competition Laws & Enforcement Decrees


       services at unreasonably high prices relative to the normal transaction
       price; and

     2. Unreasonably transacting with a partner under the condition that the
       partner does not transact with a competing Enterprise.

  (6) The Fair Trade Commission may determine and announce the specific
     types and criteria of Abusive Acts as referred to under Paragraphs (1)
     through (5).

Article 6 Request for Price Investigation

   When there is a substantial ground to suspect that a Market-Dominant
Enterprise have unreasonably fixed, maintained or altered the price of goods or
services, the Fair Trade Commission may request an investigation of the price
of goods or services from the head of relevant administrative agencies or from
public institutions responsible for investigating consumer price.
Article 7 <Deleted>


Article 8 Method for the Public Announcement of the fact of receiving corrective
           order


  When the Fair Trade Commission intends to order the concerned Enterprise
pursuant to Article 5 (Corrective Measures), Article 16 (Corrective Measures),
Paragraph 1, Article 21 (Corrective Measures), Article 24 (Corrective
Measures), Article 27 (Corrective Measures), or Article 31 (Corrective
Measures) of the Act [in the case of Article 27 (Corrective Measures) of the Act,
a Business Group (including member Enterprises when necessary)] to publicize
the fact of receiving corrective order, the Commission must do so by setting the
standards for the content of, the type and number of the medium for, and the
size of space for such publication, taking into account the followings.


     1. the content and degree of violations;
           ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 119




    2. the duration and frequency of violations.


Article 9 Computation of Surcharges


  (1) “Turnover set forth in the Presidential Decree” under Article 6
     (Surcharges), Article 22 (Surcharges), Article 24-2 (Surcharges), Article
     28 (Surcharges), Paragraph (2), Article 31-2 (Surcharges) and Article 34-2
     (Surcharges) of the Act means an Enterprise's average turnover during
     the previous three years (hereinafter, “average turnover”): Provided,
     however, that if the firm is less than three years old at the time of the
     beginning of the concerned business year, the turnover shall be the annual
     average turnover adjusted from the total amount of turnover from the first
     day of business until the last day of business of the year immediately prior
     to the concerned business year; if the firm commenced business during
     the concerned business year, the turnover shall be the annual average
     turnover calculated from the total turnover from the first day of operation
     until the date of violation.

  (2) Other specifics necessary for the computation of the average turnover
     shall be determined by the Fair Trade Commission.

Article 9-2 Scope of Enterprises Using Operating Revenue

  “An Enterprise provided by the Presidential Decree” under Article 6
(Surcharges) of the Act means an Enterprise which enters, in its financial
statements, the total price of goods or services as operating revenue.

Article 10 Cases Where There is No Turnover, etc.

  “The case where turnover does not exist or there is difficulty in calculating
turnover and which is provided by the Presidential Decree” under Article 6
(Surcharges) of the Act means a case where -
120 Competition Laws & Enforcement Decrees


     1. there is no operating result either because business was not commenced
       or was suspended;

     2. <Deleted>

     3. computation of an objective turnover is difficult due to any disaster,
       thereby damaging or missing the data calculating the turnover.


CHAPTER 3        Restrictions on Combination of Enterprises and Constraints
                  on the Concentration of Economic Power

Article 11 Scope of Specially Related Party

  “Specially Related Person, as defined by the Presidential Decree” under
Article 7 (Restrictions on Combination of Enterprises), Paragraph (1) of the Act
means a Person other than a corporation who -
     1. in fact controls the concerned company;

     2. is a Related Person: Provided, however, that Persons who are
       distinguished from Related Persons under Article 3-2 (Exemption from
       Business Groups), Paragraph (1) are excluded; and

     3. engages in the Combination of Enterprises with the joint purpose of
       controlling management.

Article 12 Criteria for Total Assets or Sales Revenues

  (1) “Total assets” under Article 7 (Restrictions on Combination of
     Enterprises), Paragraph (1) and Article 12 (Notification of Combination of
     Enterprises), Paragraph 1 of the Act means the total assets in the balance
     sheet as of the closing date of the fiscal year immediately prior to the year
     of the Combination of Enterprises: Provided, however, that as for financial
     or insurance companies, between the total shareholders' equity and
            ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 121


     capital in the balance sheet as of the closing of the previous fiscal year, the
     larger of the two shall be used.

  (2) In the case of Paragraph (1), if the issuance of new shares or bonds
     during the fiscal year of the Combination of Enterprises results in the
     increase in total assets, Total Assets mean the sum of the total assets in the
     balance sheet as of the closing date of the previous year and the increased
     amount.

  (3)“Sales Revenues” under Article 7 (Restrictions on Combination of
     Enterprises), Paragraph (1) and Article 12 (Notification of Combination of
     Enterprises), Paragraph (1) of the Act means the sales revenues in the
     income statement of the year immediately prior to the year of the
     Combination of Enterprises: Provided, however, that as for financial or
     insurance companies, “Sales Revenues” means operating revenues in the
     income statement of the previous fiscal year.
Article 12-2 Criteria for Large-Scale Company

  “Enterprise whose total assets or sales revenues meets the criteria provided
for by the Presidential Decree” under Article 7 (Restrictions on Combination of
Enterprises), Paragraph 1 of the Act means a company whose total assets or
sales revenues exceed two trillion Won.

Article 12-3 Exceptions from the Scope of Specially Related Persons

  “Those set forth under the Presidential Decree” under Article 7, Paragraph
(1), Subparagraph 5, Item a of the Act, under Article 8-2, Paragraph (1),
Subparagraph 1 of the Act and under Article 11, Subparagraph 3 of the Act are
the Person defined by Article 11, Subparagraph 3 of this Decree.

Article 12-4 Combination of Enterprises with a Company with No Possibility of
                 Revitalization
122 Competition Laws & Enforcement Decrees


  “Conditions set forth under the Presidential Decree” under Article 7
(Restrictions on Combination of Enterprises), Paragraph (2), Subparagraph 2
means cases where -

     1. the continued use of the company's production facilities, etc. in the
       relevant market is difficult without a Combination of Enterprises;

     2. it is difficult to achieve a Combination of Enterprises that is less anti-
       competitive than the Combination of Enterprises concerned

Article 13 <Deleted>

Article 14 <Deleted>

Article 15 Reporting the Establishment of or Conversion into a Holding Company, Etc.
   (1) A person who established or converted into a holding company shall
submit, under Article 8 of the Act following the procedures established and
pronounced by the Fair Trade Commission, along with certifying documents, an
application including the name of reporting person, the title of a holding
company, subsidiaries and business related sub-subsidiaries, total assets and
liabilities, shareholder status, share ownership status, business content, etc., to
the Fair Trade Commission within each of the following time frames:

     1. When establishing a Holding Company, within thirty days of the
       establishment registration date;

     2. When converting into a Holding Company through a merger or Division,
       within thirty days of the merger or the Division;

     3. When a company is exempted from the application of Article 8 of the Act
       pursuant to other Act, within thirty days of the conclusion of the
       exemption period; and
        ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 123


  4. When converting into a Holding Company through the acquisition of
    shares, change in assets or other method, within four months of the
    conclusion of the concerned business year.

(2) If the Person reporting under Paragraph (1) is also the Entity that
   controls a corporation belonging to a Large Business Group Subject to
   Limitations on Debt Guarantees, as referred to under Article 10-2
   (Prohibition of Debt Guarantees for Affiliated Corporations), Paragraph
   (1) of the Act, or is a Specially Related Person of the Entity, an Elimination
   Record of Debt Guarantees shall be additionally submitted pursuant to all
   of the Subparagraphs of Article 8-3 (Restrictions on the Establishment of
   Holding Companies by Large Business Groups Subject to Limited Debt
   Guarantees) of the Act.

(3) If there are more than two Persons involved in the reporting of the
   establishment of a Holding Company under Paragraph (1), the report shall
   be filed jointly: Provided, however, that if one of the Persons subject to
   reporting is appointed as the Representative and this Representative files
   the report, the forgoing does not apply.

(4) If during a business year as a Holding Company, a company, due to an
   event such as a decrease in owned shares or change in assets, etc., is no
   longer subject to Article 2 (Criteria for Holding Companies), Paragraphs
   (1) or (2), and the company has reported this to the Fair Trade
   Commission, the company shall no longer be considered a Holding
   Company as of the date of the concerned event.

(5) A corporation filing a report under Paragraph (4) shall, following the
   procedures set forth by the Fair Trade Commission, submit to the Fair
   Trade Commission balance sheet and share ownership status audited by a
   certified public accountant as of the date of the event in question. In such
   case, the Fair Trade Commission shall notify the review results to the filer
   of the report within thirty days of the reporting.
124 Competition Laws & Enforcement Decrees


Article 15-2 Criteria for a Holding Company for Venture Business

   “The criteria provided by the Presidential Decree” under Article 8-2,
Paragraph (1), Subparagraph 2 of the Act means the case in which the total
amount of share value of venture company pursuant to Article 2, Paragraph (1)
of the Act on Special Measures for the Promotion of Venture Business under the
ownership of Holding Company amounts to fifty percent (50%) or more of the
total amount of share values of all subsidiaries under the said Holding Company.

Article 15-3 <Deleted>

Article 15-4 Restrictions on Financial Holding Company's Ownership of
                 Subsidiary Shares
  “Corporations closely related to financial or insurance business, etc. and
meeting the criteria set forth in the Presidential Decree” under Article 8-2,
Paragraph (2), Subparagraph 4 of the Act means a corporation whose primary
purpose is -


     1. providing services such as computation or information processing to
       financial or insurance companies;


     2. managing real estate and other assets owned by financial or insurance
       companies;


     3. conducting survey or research related to financial or insurance
       businesses; or


     4. engaging in other activities directly related to the characteristic
       businesses of financial or insurance companies.


Article 15-5 <Deleted>


Article 15-6 Reporting of Share Ownership Status of Holding Company, etc.
       ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 125




(1) As stipulated under Article 8-2, Paragraph (5) of the Act, a Holding
  Company shall, as defined and notified by the Fair Trade Commission,
  submit to the Fair Trade Commission, within four months of the last day of
  the relevant business year, a report containing the following information:


  1. General information of the Holding Company, subsidiaries and business
   related sub-subsidiaries thereof (hereinafter Holding Company, etc.),
   such as name, place, date of establishment, business content, and names
   of representative executives, etc.;
  2. Information on shareholders of the Holding Company, etc.;


  3. Share ownership status of the Holding Company, etc.; and


  4. Financial information of the Holding Company, etc., such as paid-in-
   capital, total capital, total liabilities, and total assets, etc.


  5. <Deleted>


(2) The following documents shall be submitted along with the report as
  referred to under Paragraph (1):


  1. The Holding Company, etc.’s financial statements of the previous year,
   such as balance sheets and income statements, etc. (including
   consolidated     financial    statements      if   the   corporation   prepares
   consolidated financial statements pursuant to the Act on the External
   Auditing of Joint-stock Companies) and the audit report of those financial
   statements by an auditor [The submission of the audit report is confined
   to companies falling under Large Business Groups Subject to Limitations
   on Cross- Shareholding, Large Business Groups Subject to Restrictions on
   Total Amount of Shareholding of Other Companies, and Large Business
   Groups Subject to Limitations on Debt Guarantees (hereinafter “Large
126 Competition Laws & Enforcement Decrees


       Business Groups Subject to Limitations on Cross-Shareholding and etc.”)
       and the target companies for external auditing under the provisions of
       the Act on the External Auditing of Joint-stock Companies.];


     2. Shareholders registers of Subsidiaries and business related sub-
       subsidiaries; and


     3. Business report of subsidiaries and business related sub-subsidiaries.


  (3) In the event that the report and included documents submitted under
     Paragraphs (1) and (2) are insufficient, the Fair Trade Commission may
     order the revision thereof within a set period.

Article 16 <Deleted>

Article 17 Scope of Business Groups Subject to Limitations on Cross -
               Shareholding

  (1) “Business Group subject to limitations on cross-shareholding” under
     Article 9 (Prohibition of Cross-Shareholding), Paragraph (1) of the Act
     refers to those Business Groups whose domestic member corporations'
     combined total assets (in case of financial or insurance companies, the
     larger of the total shareholders' equity or the capital stock; and in the case
     of a newly incorporated corporation having no previous year's balance
     sheet, the paid-in capital as of the designation date; the same shall apply in
     this Article, Article 17-8, and Article 21) marked on the balance sheet of
     the year immediately prior to the year of designation as a Large Business
     Group subject to limitations on cross-shareholding are 2 trillion won and
     more: Provided, with the exception of the Business Groups falling under
     any of the following subparagraphs:

     1. Business Groups solely engaged in financial or insurance businesses;
        ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 127


  2. Business Groups whose member financial or insurance corporation is an
    entity as defined in Article 2 (Definitions), Subparagraph 2 of the Act;

  3. <Deleted>

  4. <Deleted>


  5. Business Groups, where total assets of its member companies falling
    under the following Items are fifty percent (50%) or more of the
    combined total assets of the Business Group: Provided, with the
    exception of Business Groups whose member companies other than
    those falling under the following Items have combined total assets of 2
    trillion won or more:

    a. Companies undergoing the corporate reorganization process in
      accordance with the Corporate Reorganization Act;

    b. Companies undergoing the management process under Sub-
      paragraphs 1-3 Paragraph 1 Article 12 of the Corporate Res-
      tructuring Promotion Act.

(2) Business Groups subject to limitation of total equity investment pursuant
   to Article 10, Paragraph 1 of the Act shall mean those whose domestic
   member corporation’s combined total assets, indicated on their balance
   sheets of the previous year of designation as Business Groups subject to
   limitation of total equity investment, are 6 trillion won or more: Provided,
   with the exception of Business Groups falling under any of the following
   subparagraphs:

  1. Business Groups falling under Subparagraph 1 or 2 of Paragraph (1);

  2. Business Groups where total assets of its member companies falling
    under Item a or b of subparagraph 5 paragraph (1) are fifty percent
    (50%) or more of the combined total assets of the Business Group:
128 Competition Laws & Enforcement Decrees


       Provided, with the exception of Business Groups whose member
       companies other than those falling under Item a or b of subparagraph 5
       paragraph (1) have combined total assets of 6 trillion won or more;

     3. <Deleted>

     4. Among Business Groups whose Person is natural person, Business
       Groups where the proportion obtained by subtracting ownership right
       ratio of stocks of the Person and a Relative of the Person from voting
       right ratio of stocks of the Person and Related Persons derived in
       accordance with Articles 3 and 4 as of April 1 every year is not exceeding
       25/100 and where the voting right ratio of the Person and Related
       Persons is not exceeding three times the ownership right ratio of stocks
       of the Person and a Relative of the Person; and


     5. Business Groups where the number of their affiliated companies falling
       under Article 10, Paragraph (1) of the Act is five or less and the affiliated
       companies engage in no more than two-tiered equity investment
       (meaning the case where the affiliated companies acquire or own shares
       of other affiliates and the other affiliated companies acquire or own
       shares of another affiliates).


  (3) The ownership right ratio of stocks of the Person and Relatives of the
     Person pursuant to Subparagraph 4 Paragraph (2) is calculated by adding
     up figures obtained by multiplying the ownership percentage of the
     Person and Relatives of the Person in each affiliated company [meaning
     the ratio of the number of shares owned by the Person and Relatives of the
     Person to the total number of each affiliated company’s issued stocks
     (excluding non-voting shares pursuant to Articles 369 and 370 of the
     Commercial Act; the same shall apply in this Article)] by the larger of the
     total capital or the capital stock of each affiliated company, and then
     dividing the added amount by the sum total of the larger of the total
     capital or the capital stock of each affiliated company.
          ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 129




  (4) The voting right ratio of the Person and Related Persons pursuant to
     Subparagraph 4 Paragraph (2) is calculated by adding up figures obtained
     by multiplying the ownership percentage of the Person and Related
     Persons in each affiliated company (meaning the ratio of the number of
     shares owned by the Person and Related Persons to the total number of
     each affiliated company’s issued stocks) by the larger of the total capital or
     the capital stock of each affiliated company and then dividing the added
     amount by the sum total of the larger of the total stockholders’ equity or
     the capital stock of each affiliated company.


  (5) Large Business Groups Subject to Limitations on Debt Guarantees under
     Article 10-2 (Prohibition of Debt Guarantees of Affiliated Corporations),
     Paragraph (1) of the Act shall be deemed to coincide with Large Business
     Groups subject to limitations on cross equity investment under Paragraph
     (1) above.


Article 17-2 Exceptions to the Ceiling on Total Amount of Shareholding in Other
                   Companies


  (1) “Other industries prescribed by the Presidential Decree” under Article 10,
     Paragraph (1), Subparagraph 4 of the Act refers to the industries falling
     under one of the following subparagraphs:


    1. Industries related to information and communication under Paragraph
      (3) Article 2 of the Framework Act on Informatization Promotion;


    2. Industries using bioengineering under Article 2 of the Act on
      Bioengineering Promotion;


    3. Industries related to alternative energy under Article 2 of the Act on
      Development, Usage and Spread of Alternative Energy;
130 Competition Laws & Enforcement Decrees




     4. Industries related to environment under Paragraph (3) Article 2 of the
       Act on Development and Support to Environment Technology.


  (2) “Conditions set forth in the Presidential Decree” under Article 10,
     Paragraph 1, Subparagraph 4 of the Act refers to one of the following
     subparagraphs;
     1. Acquisition or ownership of stocks of another company engaged in the
       same kind of business (based on mid-category of the Korean Standard
       Industry Classification notified by the Commissioner of the National
       Statistical Office pursuant to Article 17, Paragraph 1 of the Statistical Act),
       by way of transfer or investment-in-kind of business which has been run
       on an on-going basis for 3 or more years or of the primary properties
       used in such business to that company: Provided, That in case of
       acquiring or owning stocks of a newly established company by way of
       transfer of business or investment-in-kind in the new company, it shall
       be applied to transfer of business or investment-in-kind in the new
       company by another company engaged in the same kind of business;


     2. <Deleted>


     3. <Deleted>


     4. Acquisition or ownership of stocks of a corporation newly incorporated
       through the spin-off or split-off of operation on-going for three years and
       more or primary assets used in such operation: Provided, That in case of
       a split-off, the same shall be applied to acquisition or ownership of stocks
       of a newly-established company within the ratio of treasury stocks.


     5. Acquisition or ownership of less than 30 % of outstanding shares of a
       newly incorporated corporation that meets the following criteria
       through the investments-in-kind into the corporation of operation or
       primary assets used in such operation;
     ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 131




  a. The combined equity investments of officers and employees engaged
   in the concerned business shall be the largest among the equity
   investments of the concerned corporation; and
  b. The concerned corporation shall not be another affiliated firm.


6. <Deleted>


7. <Deleted>


7-2. <Deleted>


7-3. <Deleted>


8. <Deleted>


9. Acquisition or ownership of less than 50% of total outstanding shares of
 a Small-and-Medium-sized Enterprise pursuant to the Framework Act on
 Small and Medium Enterprises which fall under one of the followings:


  a. A small-and-medium-sized enterprise that mainly produces/supplies
   raw materials, parts or materials;


  b. A venture company pursuant to the Act on Special Measures for the
    Promotion of Venture Businesses: Provided, That in case of acquisition
    or ownership of shares issued by a non-venture company, the same
    shall be applied for six months after the issuance.


10.Acquisition or ownership of shares of the corporations which
  commercialize the new technologies as in the following items in order
  to enhance international competitiveness of the industries falling under
  any of the subparagraphs under Paragraph (1). In this case,
132 Competition Laws & Enforcement Decrees


        “commercialize” means the case where the sales proportion of the
        product using such new technologies accounts for not less than 30% of
        total sales of a company during the recent one year (in case of
        acquisition or ownership of shares of a newly established company
        which tries to commercialize new technologies, the company shall be
        deemed to commercialize using new technologies for two years after its
        establishment despite the sales proportion of the product using new
        technologies as in each item of Subparagraph 10 among total sales of
        the company during the recent one year).


        a. Distinguished new technology in information and communications
         designated under Article 22 of the Framework Act on Infor- matization
         Promotion.


        b.New technology acknowledged by Article 6 of the Technology
          Development Promotion Act.


        c. Imported technology reported pursuant to Paragraph (1) Article 25
         (Report on Contracts for Introduction of Technology) of the Foreign
         Investment Promotion Act.


        d. New environment technology designated under Subparagraph 1
          Paragraph (1) Article 18 of the Enforcement Decree of the Act on
          Development and Support to Environment Technology.


        e. Technology certified under subparagraph 3 Paragraph (2) Article 28
         of the Enforcement Decree of the Industrial Development Act.


        f. Technology included in a comprehensive plan for the next generation
         growth engine industries pursuant to Article 13, Paragraph (4),
         Subparagraph 1 of the Enforcement Decree of the Framework Act on
         Science and Technology, which is acknowledged by the head of related
         administrative agency in accordance with related law.
        ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 133




(3) <Deleted>


(4) “Government-invested institution set forth in the Presidential Decree”
  under Item c Subparagraph 2 Paragraph (6) Article 10 (Restriction on
  Total Amount of Cross- Shareholding) means companies falling under any
  of the following subparagraphs.


  1. Korea Electric Power Corporation established by the Korea Electric
    Power Corporation Act;


  2. Korea District Heating Corporation established by the Collective Energy
    Business Act.


(5) “Companies meeting the conditions set by the presidential decree” under
  Article 10, Paragraph (6), Subparagraph 3 of the Act means companies
  falling under any of the following subparagraphs. Provided, that if they
  become not conforming to the conditions under the following
  subparagraphs, regulations on Article 10, Paragraph (6) of the Act shall be
  applied for no longer than 6 months from the date they become not
  conforming to the following conditions.


  1. Corporations running the same business with the companies subject to
    restrictions on total amount of cross-shareholding (hereinafter referred
    to as “investing company” in this paragraph). In this case, the businesses
    run by investing company and the company issuing shares acquired or
    owned by investing company (hereinafter “investee company” in this
    paragraph) shall comply with the criteria set forth in the following Items,
    categorized by mid-category of the Korean Standard Industry
    Classification notified by the Commissioner of the National Statistical
    Office pursuant to paragraph 1 Article 17 of the Statistical Act:
134 Competition Laws & Enforcement Decrees


        a. For investing company, business which generates not less than 25% of
          total turnover of business the company was conducting at the time of
          investment in the recent three business years shall be regarded as the
          basis; if there exists only one such business, business commanding
          second proportion (confined to those which occupies at least 15% of
          total turnover) shall be included; and if there is no business with more
          than 25% of total turnover in the recent three business years, the basis
          shall be the business accounting for the largest proportion.

        b. For investee company, business which accounts for the largest
          proportion and with not less than 25% of total turnover of business
          the company was conducting at the time of investment in the recent
          three business years shall be regarded as the basis.

     2. Companies conforming to any of the following conditions, based on the
       amount of commerce during the recent three business years.

        a. When an investee company sells 50% or more of goods produced by
          the investing company, or sales of goods produced by the investing
          company account for not less than 50% of total sales of the investee
          company.

        b. When an investing company sells 50% or more of goods produced by
          the investee company, or sales of goods produced by investee
          company account for not less than 50% of total sales of the investing
          company.

        c. When an investee company does 50% or more of maintenance, management
          and repair of goods or production facilities produced by the investing
          company, or not less than 50% of an investee company’s total sales is
          attributed to maintenance, management and repair of goods and
          production facilities produced by the investing company.
        d. When an investing company does 50% or more of maintenance,
          management and repair of goods or production facilities produced by
        ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 135


      the investee company, or not less than 50% of an investing company’s total
      sales is attributed to maintenance, management and repair of goods and
      production facilities produced by the investee company.


    e. When 50% or more of goods produced by an investing company are
      supplied to the investee company for raw material and parts, or not
      less than 50% of raw material and parts consumed by the investee
      company are supplied by an investing company.


    f. When 50% or more of goods produced by an investee company are
      supplied to the investing company for raw material and parts, or not
      less than 50% of raw material and parts used by the investing
      company are supplied by an investee company.


  3. Companies mainly focusing on research and development for the
    production of an investing company.


  4. Companies falling under any of the following Items directly related to
    the business of an investing company:


    a. Companies which are clear to run the same businesses with those of
      Subparagraph 1.a of an investing company as their main businesses on
      the basis of authorization/approval or the statute;


    b. Companies providing facilities or services indispensable for an
      investing company to run a business in the relevant market.


(6) If companies falling under business groups subject to restrictions on total
  amount of cross-shareholding, pursuant to Subparagraph 4 Paragraph (1)
  Article 10 of the Act, intend to get recognition of their acquisition or
  ownership of shares under Subparagraphs of Paragraph (2), the
  companies concerned shall submit each of the following documents to the
136 Competition Laws & Enforcement Decrees


     Fair Trade Commission in accordance with conditions set forth by the Fair
     Trade Commission:


     1. Application form and other documents showing the particulars of equity
       investment;


     2. Documentary evidence such as proportions of sales and transaction
       confirmed by certified accountant or licensed tax accountant, in case of
       Subparagraph 10 Paragraph (2), and Subparagraph 1 and 2 of Paragraph
       (5);


     3. Other documents proving the fact that they satisfy the related
       requirements.


  (7) Under Subparagraph 5 Paragraph 1 Article 10 of the Act, “Conditions set
     forth by the Presidential Decree” means when there is decision of
     shareholder meeting (if the company concerned is not stock company, the
     decision means the one for changing articles of incorporation) about
     shifting into holding company and transformation into companies which
     are not stock company.


Article 17-3 <Deleted>


Article 17-4 <Deleted>


Article 17-5 Conditions for Exemption from the Limitations on Debt Guarantees


  (1) “Guarantees given with respect to the debts of companies undertaken”
     under Article 10-2, Paragraph (1), Subparagraph 1 of the Act means:
     1. Guarantees by the underwriting corporation or Affiliates thereof given
       to the existing or to-be-assumed debt at the time of the takeover of the
       firm taken over through share transfer, merger, etc.; or
        ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 137


  2. Guarantees by Affiliates given to the debt of the undertaken corporation,
    transferred in installments.

(2) “Guarantees given with respect to debts which are necessary to enhance
   a corporation's international competitiveness or others as defined by the
   Presidential Decree” under Article 10-2, Paragraph (1), Subparagraph 3 of
   the Act means:

  1. guarantees for loans given by the Export-Import Bank of Korea for the
    purposes of financing the production of capital and other goods or for
    providing technology under the provisions of Export-Import Bank of
    Korea Act, Article 18 (Duties) Paragraph (1), subparagraphs 1 and 2, or
    guarantees for loans given by other domestic financial institutions in
    conjunction therewith;

  2. guarantees of execution of bid warranty contracts, advance payment
    refund, reserve refund, warranties, and tax payments, etc. made by
    domestic financial institutions in connection with overseas building and
    plant construction, export ship building, service exports, and other
    export of goods acknowledged by the Fair Trade Commission;

  3. guarantees of funds provided by domestic financial        institutions in
    connection with technology development projects,            such as the
    commercialization of new domestically developed             or imported
    technology, procurement of facilities and materials        necessary for
    technology development, etc.;

  4. guarantees with respect to the purchase of bills by domestic financial
    institutions issued for exports on the condition of documents against
    payment or documents against acceptance or with respect to the opening
    of local letters of credit;

  5. guarantees of loans given by an overseas branch of a domestic financial
    institution in connection with:
138 Competition Laws & Enforcement Decrees




        a. foreign direct investment under the Foreign Exchange Control Act;

        b.overseas construction and service projects performed by overseas
          construction and service businesses; or

        c. other overseas businesses approved by the Fair Trade Commission;

     6. guarantee directly related to a third party's acquisition of a corporation
       that has filed a court application for corporate reorganization under the
       Corporation Reorganization Act;

     7. guarantee of loans given by a domestic financial institution to an
       affiliated firm in the event of an investment into the concerned affiliated
       firm that is engaged in private investment projects pursuant to Article 4,
       Paragraphs 1 through 4 of the Act on Private Participation in
       Infrastructure; and

     8. counter-guarantee for the newly established entity in direct relation to
       the new company’s succession of a guarantee done by the original
       company for the non-affiliate company, in case that a company falling
       under Subparagraph 2.a or c of Paragraph (6) Article 10 of the Act is
       divided for structural reform.

Article 17-6 Scope of Domestic Financial Institutions

  “Other financial institutions as set forth under the Presidential Decree” under
Article 10-2 (Prohibition of Debt Guarantees for Affiliated Companies),
Paragraph (2), Subparagraph 6 of the Act means a specialized lending
institution, as defined by the Specialized Financial Business Act.


Article 17-7 <Deleted>
           ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 139


  “Cases as defined by the Presidential Decree” under Article 10-3 (Elimination
of previous Debt Guarantees), Paragraph (1) of the Act means -


     1. Cases where the merger, sell-off, or capital increase with consideration
       of the guaranteed firm for the purposes of elimination of previous debt
       guarantees is in progress as of March 31, 2000;


     2. Cases where an application for corporate reorganization under the
       Corporate Reorganization Act, for composition under the Composition
       Act, or for bankruptcy under the Bankruptcy Act has already been filed
       before March 31, 2000 and is still pending as of March 31, 2000; and


     3. Other cases that apply to Subparagraphs 1 and 2.


Article 17-8 Resolution of the Board of Directors on Large-scale Intra-group
                  Transactions and Public Disclosure


  (1) Large business groups that are subject to the resolution of the board of
     directors on large-scale intra-group transactions and to public disclosure
     of such transactions pursuant to Article 11-2, Paragraph (1) of the Act
     shall be the Large Business Groups subject to limitation on cross equity
     investment pursuant to Paragraph (1) of Article 17 (Scope of Large
     Business Groups Subject to Restriction on Cross-Shareholding).


  (2) Large-scale intra-group transactions that are subject to the resolution of
     the board of directors and public disclosure pursuant to Article 11-2,
     Paragraph (1) of the Act shall be transactions whose amounts exceed 10%
     of the larger one between the total capital and the capital stock of the
     concerned corporation, or 10 billion Won.


  (3) Pursuant to Article 11-2, Paragraph (2) of the Act, the followings shall be
     subject to the disclosure:
140 Competition Laws & Enforcement Decrees




     1. The purpose and subject of transaction;


     2. The other party to the transaction (if the transaction is carried out for a
       specially related person, including the specially related person, even
       though the specially related person is not a direct party to the
       transaction);


     3. Contract amount and terms and conditions;


     4. Total amount of transactions of the same kind with the other party to
       the transaction;


     5. Matters which are similar in nature with Subparagraphs 1 through 4 and
       which are determined and notified by the Fair Trade Commission.


  (4) Transactions that can be carried out without acquiring the approval of
     the board of directors pursuant to Paragraph 4, Article 11-2 of the Act
     shall meet the following criteria:


     1. they shall be conducted in accordance with an adhesion contract
       pursuant to Article 2 of the Adhesion Contract Regulation Act; and


     2. they shall constitute transactions in the ordinary area of business of the
       concerned companies.


Article 17-9 Companies not Subject to the Restriction on Total Amount of Shareholding in
                  Other Domestic Companies


  (1) “Company equipped with monitoring and controlling mechanism set by
     the Presidential Decree” under Article 10, Paragraph (7), Subparagraph 4
     of the Act means a company acknowledged by the Fair Trade Commission
     to meet three or more of the following criteria:
       ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 141




1. Company able to exercise the voting rights in writing pursuant to Article
 368-3 of the Commercial Act;


2. Company able to exercise the voting rights by means of a cumulative
 voting pursuant to Article 382-2 of the Commercial Act;


3. Company which establishes a committee in accordance with Article 393-
 2 of the Commercial Act (hereinafter referred to as “an intra-group
 transaction committee”) with the right to review and approve a
 transaction with specially-related persons (excluding Subparagraph3
 Article11; the same shall apply to this subparagraph) or for specially-
 related persons (hereinafter referred to as “internal trading”), and which
 receives the majority vote of the intra-group transaction committee for
 an internal transaction whose one-time or annual amount is one billion
 or more (in case of goods and service, the amount of single transaction is
 10/100 or more of the capital stock or 5 billion won or more). In this
 case, the intra-group transaction committee shall be composed of outside
 directors pursuant to Article 2, Paragraph 19 of the Securities and
 Exchange Act, and the number of outside directors shall be four or more;
 and


4.Company which establishes/operates the outside director candidate
 nominating committee pursuant to Article 54-2, Paragraphs (2) and (3)
 of the Securities and Exchange Act and establishes/operates the outside
 director candidate nominating advisory group under the committee to
 recommend candidates for outside directors. In this case, the outside
 director candidate nominating committee shall comprise outside
 directors in accordance with Article 2, Paragraph (19) of the Securities
 and Exchange Act and have not less than 4 outside directors. The outside
 director candidate nominating advisory group shall comprise those not
 belonging to business groups and have not less than 5 members.
142 Competition Laws & Enforcement Decrees




  (2) The Fair Trade Commission may establish/operate an advisory
     organization to deliberate matters regarding Paragraph (1).

Article 17-10 Disclosure of Important Matters of Non-listed Companies, etc.

  (1) “Companies falling under business conglomerates meeting the standards
     set by the Presidential Decree” under Article 11-3, Paragraph (1) of the
     Act means a company belonging to a large business group subject to
     limitations on cross-shareholding under Paragraph (1) Article 17:
     Provided, that those in the process of liquidation or under a suspension of
     business for a year or more and whose total assets as of the end of the
     fiscal year immediately prior to the year is less than 7 billion won shall be
     excluded.

  (2) “Important issues set by the Presidential Decree” under Article 11-3,
     Paragraph (1), Subparagraph 1 of the Act means those falling under one of
     the following categories:

     1. Changes in situation of share ownership and the proportion of shares
       owned by a largest shareholder (including the Person and the Related
       Person if the Person alone or in combination with the Related Person
       becomes the largest investor), surpassing 1% of total number of shares
       issued by the corporation;

     2. Status of officer composition and its changes; and

     3. Status of share ownership of affiliates or changes in the proportion of
       shares, surpassing 1% of total number of shares issued by the corporation.

  (3) “Activities set by the Presidential Decree” under Article 11-3, Paragraph
     (1), Subparagraph 2 of the Act means those falling under one of the
     following categories:
        ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 143


  1. Decisions regarding acquisition or disposal [including acquisition or
    disposal through trust contract (limited to cases where the corporation
    has the authority of operational instructions) pursuant to the Trust
    Business Act or private offering indirect investment fund (limited to
    cases where the corporation has influence on asset management)
    pursuant to the Act on Operating Indirect Investment and Asset
    Businesses] of fixed assets, exceeding 10/100 of total assets as of the end
    of recent business year;

  2. Decisions regarding acquisition or disposal (meaning the aggregate
    amount of that business year excluding that already reported) of shares
    or investment certificates of other corporation (excluding affiliates), not
    less than 5% of equity capital;

  3. Decisions to give or receive donation (meaning the aggregate amount of
    that business year excluding that already reported) not less than 1% of
    equity capital;

  4. Decisions regarding provision of securities (meaning the amount of
    aggregate balance of that business year, excluding that already reported)
    for others or debt guarantees (meaning the amount of aggregate balance
    of that business year, excluding debt guarantees for guaranteeing
    compliance with contract, etc or tax payment) not less than 3% of equity
    capital;
  5. Decisions to forgive or take over debts not less than 3% of equity capital,
    or to receive debt forgiveness;


  6. Decisions regarding capital increase or capital decrease; and


  7. Decisions regarding issuance of Convertible Bond or Bond with Warrant.


(4) “Activities set by the Presidential Decree” under Article 11-3, Paragraph
  (1), Subparagraph 3 of the Act means those falling under one of the
  following categories:
144 Competition Laws & Enforcement Decrees




     1. Decisions in accordance with Articles 374, 522, 527-2, 527-3 or 530-2 of
       the Commercial Act;


     2. Decisions regarding an all-inclusive share exchange in accordance with
       Article 360-2 of the Commercial Act or a share transfer in accordance
       with Article 360-15 of the Commercial Act;


     3. Reasons for dissolution arising in accordance with Article 517 of the
       Commercial Act or other Act;


     4. Decisions to commence, conclude or repeal company reorganization
       proceedings in accordance with the Company Reorganization Act;


     5. Decisions to commence or rescind composition in accordance with the
       Composition Act;


     6. Decisions to commence, suspend or cancel management procedures
       pursuant to Article 12, Paragraph (1), Subparagraphs 1 through 3 of the
       Corporate Restructuring Promotion Act; and


     7. Decisions to enter into or terminate a single sales contract or supply
       contract not less than 10/100 of turnover of recent business year.

  (5) In applying Paragraphs (1) through (4), total assets and equity capital as
     of the end of recent business year and turnover of recent business year
     shall be applied to the period from the day after three months from the
     closure of each business year through the day after three months from the
     closure of the next business year, and “the aggregate amount of that
     business year” and “the amount of aggregate balance of that business
     year” are calculated by adding up the amounts from the day after three
     months from the closure of each business year through the day after three
     months from the closure of the next business year.
           ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 145


Article 18 Notification, etc. of Combination of Enterprises

  (1) “Enterprises whose total amount of assets or turnover is set by the
     Presidential Decree” under Article 12, Paragraph (1) of the Act shall mean
     an enterprises whose total amount of assets or turnover is at least 100
     billion Won.

  (2) “Counterpart enterprise whose total amount of assets or turnover is set
     by the Presidential Decree” under Article 12, Paragraph (1) of the Act shall
     mean an enterprise whose total amount of assets or turnover is at least 3
     billion won.

  (3) An Enterprise which desires to file a notification under Article 12
     (Notification of Combination of Enterprises), Paragraph (1) of the Act
     shall, following the procedures set forth and notified by the Fair Trade
     Commission, submit to the Fair Trade Commission a notification form
     stating the names, sales, total assets, line of business of both the enterprise
     subject to notification and its counterpart enterprise, the nature of the
     said Combination of Enterprises, and the status of the relevant markets
     along with documents necessary to substantiate anything asserted in the
     the notification.
  (4) If the notification or certification documents submitted under Paragraph
     (3) is insufficient, the Fair Trade Commission may order the revision
     thereof within a set period. In such event, the time spent revising the
     documents (including the day on which the revision order is sent and the
     day the revised documents arrive at the Fair Trade Commission) shall not
     be included in the period set forth in Article 12, Paragraphs (7) and (9) of
     the Act.

  (5) “Where an enterprise owns more than twenty percent (20%) (fifteen
     percent (15%) for the enterprises listed on the stock market or registered
     in the Korea Securities Dealers Association)” under Article 12
     (Notification of Combination of Enterprises), Paragraph (1),
     Subparagraph 1 of the Act means cases where share ownership increased
146 Competition Laws & Enforcement Decrees


     from below twenty percent (20%) (fifteen percent (15%) for the
     enterprises listed on the stock market or registered in the Korea Securities
     Dealers Association; the same applies hereinafter in this Paragraph) to
     above twenty percent (20%).

  (6) “In the case of becoming the largest shareholder” under Article 12,
     Paragraph (1), Subparagraph 2 of the Act means cases of not having been
     the largest shareholder before being the largest shareholder.

  (7) “The date of Combination of Enterprises” under Article 12, Paragraphs
     (2) and (6) of the Act means the following days:

     1. When acquiring or increasing ownership right ratio of another firm's
       stocks, any of the following days:

        a. When transferring the stocks of a joint-stock corporation, the date on
          which the share certificate is delivered: Provided, however, that if the
          share certificate has not been issued, the day on which the purchased
          shares are paid for, and if, through an agreement, contract, etc., voting
          and other rights associated with the shares are in actuality transferred
          before receiving the share certificate or making a full payment for the
          shares, then the day such rights are transferred;

        b. When paying for the purchase of a joint-stock company's newly-
          issued shares, the day immediately following the day on which the
          payment is made;

        c. When transferring the shares of non joint-stock company, the day on
          which the equity transfer becomes effective; or

        d. When increasing ownership right ratio of stocks on the account of
          capital decrease, retirement of shares, etc. and not falling under items
          a through c, the day on which the ownership right ratio increase is
          confirmed.
        ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 147


  2. When there is an interlocking directorate, the day on which the officers
    are elected at general shareholders' or members' meeting;

  3. In the case of asset acquisition, the day on which the payment for the
    business transfer is completed: Provided, however, that if the payment is
    completed after ninety days from the contracting date, then the 90th day
    from the contract;

  4. In the case of a merger with another corporation, the day of merger
    registration; and

  5. When participating in the establishment of a new company, the day
    immediately following the day on which the payment for the allocated
    shares is made.

(8) “Day set by the Presidential Decree” under Article 12, Paragraph (6) of
   the Act means any of the following days:
  1. When acquiring another firm’s stocks or becoming the largest
    shareholder, any of the following days:

    a. When acquiring shares by a contract or agreement with owners of the
      shares outside the securities market and the Kosdaq market, the day
      on which the contract or agreement is made;

    b. When owning shares not falling under a tender offer pursuant to the
      Securities and Exchange Act and item a, the day falling under any item
      of Subparagraph 1 Paragraph (7).

  2. In the case of a merger or takeover of business, the day on which a
    merger contract or a contract for takeover of business is concluded; and

  3. When participating in the establishment of a new company, the day on
    which resolution is made at shareholders’ meeting or board of directors
    instead thereof as to the participation in the establishment of a company.
148 Competition Laws & Enforcement Decrees




  (9) A large-scale company which has filed a notification under the proviso of
     Article 12, Paragraph (6) of the Act shall notify any significant changes, if
     any, in the content of the notification by the date of stock acquisition, the
     date of the merger registration/ the date of business transfer or by the
     date of the establishment of corporation.

  (10) “Cases set by the Presidential Decree” under Article 12, Paragraph (7) of
     the Act means cases falling under item b Subparagraph 1 Paragraph (8).

Article 19 Appointment of Representative for the Filing on Combination of
              Enterprises

  (1) A person who desires to be appointed as a Representative under the
     proviso of Article 12, Paragraph (10) of the Act shall submit to the Fair
     Trade Commission an application form stating the name, total assets, sales,
     etc. of the corporation.


  (2) In cases where the Fair Trade Commission has, upon application under
     Paragraph (1), appointed a Representative, the Commission shall notify
     such fact to the concerned Representative.


Article 20 Reporting of Share Ownership Status


  (1) A Person who desires to file a report under Article 13 (Reporting of Share
     Ownership Status), Paragraph (1) and (2) of the Act shall submit a report
     containing the information below by April of every year to the Fair Trade
     Commission: Provided, however, that in the case of a corporation
     belonging to a newly-designated Large Business Group subject to the
     limitations on cross-equity investment, the report shall be filed within
     thirty days from the date of notification in the relevant year, as outlined in
     Article 21 (Designation of Large Business Groups subject to Limitation on
     Cross-Equity Investment), Paragraph (2):
         ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 149




  1. A profile of the said corporation including its name, capital stock, total
   assets, etc.;


  2. The number of the said corporation's shares owned by Affiliated
   Corporations and Specially Related persons;


  3. Net assets, investment ceiling amount, total investment amount of the
   said corporation pursuant to Paragraph 1, Article 10 of the Act; and


  4. The amount of debt guarantees of the said corporation.


(2) The following documents shall be submitted along with the report
  described in Paragraph (1):
  1. Detailed statement of the stocks owned by the concerned corporation;


  2. Status report on cross-equity investments with Affiliated Corporations;
   and


  3. Previous business year's audit report of the concerned corporation.


  4. Detailed statement of the debt guarantees given by the concerned
   corporation to Affiliated Corporations and statement of changes in such
   debt guarantees for the previous one (1) year;


  5. Detailed statement of the debt guarantees given by Affiliated
   Corporations to the concerned corporation and statement of changes in
   such debt guarantees for the previous one (1) year; and


  6. A confirmation document verifying the content of the above
   Subparagraph 4. 5 and Subparagraph 4 of the foregoing Paragraph (1)
   written after the form set by the Fair Trade Commission by a domestic
150 Competition Laws & Enforcement Decrees


       financial institution under Article 10-2 (Prohibitions on Debt Guarantees
       for Affiliated Corporations).


  (3) Where the acquisition of shares, etc. results in the change in the member
     corporations of a Large Business Group subject to the limitations on cross-
     shareholding under Paragraph (1) Article 13 of the Act, a corporation
     belonging the Large Business Group shall report on the nature of such
     change to the Fair Trade Commission within thirty days of the change.


     1. <Deleted>


     2. <Deleted>


     3. <Deleted>

Article 20-2 <Deleted>

Article 21 Designation of Large Business Group Subject to Limitation on Cross-
               Shareholding

  (1) Under the provisions of Article 14 (Designation of Large Business Groups
     Subject to Limitation on Cross-Shareholding), Paragraph (1) of the Act, the
     Fair Trade Commission shall designate those Business Groups meeting the
     conditions set forth in the Decree Article 17 (Scope of Large Business
     Groups and Large Business Groups Subject to Limitations on Debt
     Guarantees) as a Large Business Groups and exclude the Large Business
     Groups that no longer meet the criteria for Large Business Groups by April
     1st of every year (by April 15th if necessary).

  (2) When newly designating or excluding business groups from Large
     Business Groups subject to restriction on cross-shareholding under
     Paragraph (1), the Fair Trade Commission shall promptly notify in writing
     such facts to the member corporations of the concerned Large Business
     Group subject to limitations on cross-shareholding and to the Person who
        ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 151


  in fact controls the business contents of the member corporations, as
  defined under Article 2 (Definitions), Subparagraph 2 of the Act.

(3) If there is a change in the corporations belonging to a Large Business
   Group subject to limitations on cross-shareholding after the designation
   and notification under Paragraphs (1) and (2), the Fair Trade Commission
   shall notify the nature of change to the concerned corporation and the
   Person in writing once every month.

(4) “The amount set by the Presidential Decree” under Article 12, Paragraph
   (5) of the Act means 7 billion won.
(5) "The date set forth under the Presidential Decree" under Article 14-3 of
   the Act means any of the following days:

  1. For corporations which should have been but were not incorporated as
    members of the Large Business Group subject to limitations on cross-
    shareholding at the time of designation, the date of receiving the said
    Large Business Group's designation and notification; or

  2. For corporations which should have been but were not incorporated as
    members of the Large Business Group subject to limitations on cross
    sharehodling after the designation, the first day of the month
    immediately following the month in which the cause for the
    incorporation into the Large Business Group subject to limitations on
    cross-shareholding arose.

(6) The provisions of Paragraphs (1) through (5) shall apply mutatis
   mutandis to the designation and notification of Large Business Groups
   Subject to Limitations on Debt Guarantees and those subject to limitations
   on total amount of shareholding of other companies, as prescribed under
   Article 14, Paragraph (1) of the Act. In such case, the Large Business
   Group subject to limitations on cross-shareholding shall be deemed a
   Large Business Group Subject to Limitations on Debt Guarantees or that
   subject to limitations on total equity investment.
152 Competition Laws & Enforcement Decrees




  (7) When a business group designated as large business group subject to
     limitation on cross equity investment pursuant to Paragraph (1) or that
     designated as a large business group subject to limitation on debt
     guarantee pursuant to Paragraph (6) falls under any of the following
     subparagraphs, it can be excluded from the designation of such large
     business groups at the time the reason takes place:

     1. In the event that total assets of the companies falling under
       Subparagraph 5.a. or b. of Paragraph (1) Article 17 (Scope of Large
       Business Groups Subject to Limitations on Cross-Shareholding) among
       the affiliated companies become 50% or more of the sum total of assets
       of a business group as a whole after the date of designation. Provided
       that business groups in which companies other than those falling under
       Subparagraph 5.a. or b of Paragraph (1) Article 17 (Scope of Large
       Business Groups Subject to Limitations on Cross Equity Investment)
       have total assets of not less than 1.4 trillion won shall be excluded.


     2. In the event that the sum total assets of the domestic affiliated
       companies in the business group concerned reduce to less than 1.4
       trillion won due to changes in affiliated companies.


  (8) In the event that large business groups appointed as those subject to
     limitation on total amount of shareholding of other companies under the
     provisions of Paragraph (1) and (6) become falling under the following
     subparagraphs, they may be excluded from the large business groups
     subject to limitation on total amount of shareholding.


     1. When, after the date of designation, the sum of total assets of companies
       falling under items a or b Subparagraph 5 of Paragraph (1) Article 17
       among affiliated firms accounts for 50% or more of the total assets of the
       overall business group. Provided that business groups in which
       companies other than those falling under items a or b Subparagraph 5 of
          ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 153


      Paragraph (1) Article 17 have total assets of not less than 4.2 trillion won
      shall be excluded.


    2. When the sum of total assets of the domestic affiliated companies in the
      business group concerned reduce to less than 4.2 trillion won due to
      changes in affiliated companies.


    3. <Deleted>
    4. When falling under Subparagraph 5 Paragraph (2) of Article 17, after
      the date of designation.

Article 21-2 Scope of Relevant Institutions

  “Institutions designated in the Presidential Decree” under Article 14-4
(Request for Certification of Documents to Relevant Institutions),
Subparagraph 4 of the Act means those institutions effecting change of
ownership under the Securities and Exchange Act; as well as institutions
handling comprehensive credit information, as defined by the Use and
Protection of Credit Information Act, Article 2 (Definitions), Subparagraph 5.

Article 21-3 Type of and Criteria for Law Evasions

  (1) Evasive acts prohibited under Article 15, Paragraph (1) of the Act mean
     any of the following categories of acts:

    1. <Deleted>

    2. Any act falling under any of the followings which is committed by a
      company belonging to a large business group subject to limitations on
      debt guarantee pursuant to Paragraph 1, Article 10-2 of the Act:
154 Competition Laws & Enforcement Decrees


        a. without the write-off of liability of an affiliated company to a domestic
          financial institution pursuant to Paragraph 2, Article 10-2 of the Act,
          assuming liability of the same content

        b. in return for having another corporation gives debt guarantee to an
          affiliated company, giving debt guarantee to the corporation or the
          affiliated corporation.

    3. An act similar to the acts defined in Subparagraph 2 which is determined
      and notified by the Fair Trade Commission.
  (2) <Deleted>

Article 22 <Deleted>

Article 23 <Deleted>

Article 23-2 Scope of Standard Balance Sheet

  “The balance sheet set by the Presidential Decree” under Article 17,
Paragraph (4), Subparagraph 1 of the Act means the balance sheet that shows
for the first time the fact of violating the provisions of Article 8-1, Paragraphs
(2) through (4) of the Act: Provided, that when the fact of violation does not
appear on the balance sheet since the act of violation (excluding acts of
violation under Article 8-2, Paragraph (2), Subparagraph 1 of the Act) is
corrected before the balance sheet is made, this shall follow the balance sheet
made as of the date of violation.

Article 23-3 Special Case of Corrective Measures, etc.

  (1) “Period set by the Presidential Decree” on Paragraph 2 Article 17-2
     (Special Case of Corrective Measures, etc.) of the Act means 10 days.

  (2) When the KFTC is to decide the shares without voting rights pursuant to
     Article 17-2 (Special Case of Corrective Measures, etc.) Paragraph 3 of the
     Act, it shall put first the shares recently acquired or owned. Provided that
        ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 155


  shares, surpassing the limit of total amount of shareholding of other
  companies under Subparagraph 2 Paragraph 3 Article 14 of the Act,
  acquired or owned after the date of designation or entry, and shares
  acquired or owned after one year from the date of designation or entry
  shall be excluded.

(3) The company receiving prohibition order of exercising voting rights
   under Paragraph 1 Article 17-2 (Special Cases of Corrective Measures,
   etc.) of the Act (hereinafter, the target company) shall make public
   announcement of each of the following subparagraphs within 5 days from
   the date when it notify the Fair Trade Commission of the target shares that
   it shall not exercise its voting rights under Article 17-2, Paragraph 3 of the
   Act or from the date the target company is notified from the Fair Trade
   Commission of the shares of which the voting rights cannot be exercised
   under Article 17-2, Paragraph 2 of the Act.

  1. Corporation issuing the shares with restriction on voting rights

  2. Total number of shares acquired or owned by the target company and
    the number of shares with restriction on voting rights among the shares
    issued by the corporation of subparagraph 1,

(4) In the event that the target company make public announcement under
   Paragraph 3, it shall notify the fact to the Fair Trade Commission within 3
   days.

(5) In the event that the target company disposes its shares after the
   announcement under Paragraph 3 or increases its net assets, and so there
   happens a change in shares with restriction on voting rights, it shall
   inform the reason and particulars of the change to the Fair Trade
   Commission within 10 days and shall make public announcement within 5
   days after such notification to the Fair Trade Commission. In this case, the
   shares falling into change shall be determined within the scope of shares
156 Competition Laws & Enforcement Decrees


     disclosed just before among the shares disclosed pursuant to Paragraph 3
     or the first sentence of this Paragraph.

   (6) The Fair Trade Commission can entrust the organization concerned
       under Article 186 (Duty of Report and Disclosure of Listed Corporations)
       of the Securities and Exchange Act with the tasks related to the public
       disclosure under Paragraph 3. In this case, the Fair Trade Commission sets
       method, procedure and other details for disclosure through the
       consultation with the organization concerned.
Article 23-4 Assessment, Collection, etc. of Compulsory Enforcement Charges

  (1) When imposing compulsory enforcement charges under Article 17-3
     (Compulsory Enforcement Charges) of the Act, the Fair Trade Commission
     shall assess charges from the date after the expiration date of the period
     set by the corrective measure to the date of implementation of the
     corrective measure. In so doing, compulsory enforcement charges shall be
     assessed, except under special circumstances, within thirty days of the
     expiration date of the period set by the corrective measure.

  (2) In designating the date of performing the corrective measure as outlined
     in Paragraph (1), the following dates shall apply; if the corrective measure
     involves disposal of stock, the delivery date of stock certificate; if the
     corrective measure involves the resignation of an officer, the registration
     date of such fact; and if the corrective measure involves the transfer of
     business, the date of transfer registration of the ownership of the relevant
     real estate, etc.

  (3) Notwithstanding paragraph 1, when imposing compulsory enforcement
     charges against a corporation that fails to carry out corrective measure
     under Article 16 (Corrective Measures), Paragraph (1), Subparagraphs 7
     and 8 of the Act which set forth specific duties for specific time period
     such as every quarter or every business year, the Fair Trade Commission
     shall impose compulsory enforcement charges for the non-compliance
     period. In so doing, compulsory enforcement charges shall be assessed,
        ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 157


  except under special circumstances, within thirty days after the date on which
  whether the corrective measure has been performed or not can be confirmed.

(4) In setting the amount of compulsory enforcement charges, the Fair Trade
   Commission shall take into consideration the reason for non-compliance
   of the corrective measure and the extent of benefits obtained as a result of
   non-compliance.
(5) When imposing compulsory enforcement charges, the Fair Trade
  Commission shall provide a written notification on the details of daily
  charges (for compulsory enforcement charges described in Paragraph (3),
  the amount confirmed for the concerned non-performance period), reason
  for assessment, payment due date and receiving institution, procedures
  and institutions for appeal, etc.


(6) A person notified under Paragraph (5) shall remit the compulsory
  enforcement charges within the period described below; provided,
  however, that if timely remittal is rendered impossible by natural disaster
  or other unavoidable circumstances, the charges shall be paid within
  thirty days from the removal of those unavoidable circumstances.


  1. For compulsory enforcement charges imposed under Paragraph (1),
    within thirty days of notice after the Fair Trade Commission confirmed
    the completion date of the performance of corrective measure and
    determined the total amount of compulsory enforcement charges; or


  2. For compulsory enforcement charges pursuant to Paragraph (3), within
    thirty days after the Fair Trade Commission gave notice.


(7) In collecting compulsory enforcement charges described in Paragraph
  (1), if the corrective measure is not performed ninety days after the
  termination of the set period, the Fair Trade Commission may collect the
  charges every ninety days starting from the termination date.
158 Competition Laws & Enforcement Decrees


  (8) The provisions of Article 64 (Demanding Payment) and Article 64-2
     (Delegation of Handling Payment Arrears) shall apply mutatis-mutandis to
     demanding payment and delegation of handling of payment arrears
     concerning compulsory enforcement charges



Article 23-5 Criteria for Designation of Non-voting Shares

  The Fair Trade Commission shall follow the orders of the below in
designating shares that cannot exercise voting rights pursuant to Paragraph 4,
Article 18 of the Act:

     1. Shares newly acquired or owned in excess of the ceiling on equity
       investment pursuant to Paragraph 1, Article 10 of the Act;

     2. Shares recently acquired or owned.


          CHAPTER 4 Restrictions on Improper Concerted Acts

Article 24 Criteria for Authorization of Concerted Acts

   “Criteria set forth in the Presidential Decree” in Article 19 (Restrictions on
Improper Concerted Acts), Paragraph (2) of the Act means those conditions
stipulated in Articles 24-2 (Criteria for Concerted Acts for the Purposes of
Industry Rationalization) through 28 (Criteria for Concerted Acts for the
Purposes of Enhancing the Competitiveness of Small- and Medium-Sized
Enterprises) of the Decree.

Article 24-2 Criteria for Concerted Acts for the Purpose of Industry
                   Rationalization

  Authorization of Concerted Acts for the purpose of industrial rationalization
under Article 19 (Prohibition of Improper Concerted Acts), Paragraph (2),
Subparagraph 1 of the Act shall be limited to those Concerted Acts which meet
the following conditions:
          ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 159




    1. The effects such as technological enhancement, quality improvement,
      cost reduction and efficiency increases arising from the Concerted Act
      are clear;
    2. The rationalization of the industry by means other than the Concerted
      Act is difficult; and


    3. The beneficial effects of industrial rationalization are greater than the
      effects of prohibiting restriction of competition. <Amended in March 30,
      2002>


Article 24-3 Criteria for Concerted Acts for the Purpose of Research and
                     Technological Development


  Authorization of Concerted Acts for the purpose of research and
technological development under Article 19 (Prohibition of Improper
Concerted Acts), Paragraph (2), Subparagraph 2 of the Act is limited to
Concerted Acts that meet all of the following conditions:


    1. The research and technological development is indispensable to the
      strengthening of industrial competitiveness and its economic impact is
      substantial;


    2. The scale of investment necessary for the research and technological
      development is too large for a single Enterprise;


    3. Collaboration is necessary for the dispersion of risks associated with the
      uncertainties of research and technological development results; and


    4. The beneficial effects of research and technological development
      outweigh the effects of prohibiting restriction of competition.<Amended in
      March 30, 2002> [Newly established in February 20, 1997]
160 Competition Laws & Enforcement Decrees


Article 25 Criteria for Concerted Acts for the Purpose of Overcoming Economic
                  Depression
   Authorization of Concerted Acts for the purpose of overcoming economic
depression under Article 19 (Prohibition of Improper Concerted Acts),
Paragraph (2), Subparagraph 3 of the Act is limited to Concerted Acts that meet
all of the following conditions:

     1. There has been a continued decline on the demand for a particular good
       or service for a substantial period of time, with a continued large
       oversupply, and it is obvious that the situation will continue into the
       future;

     2. The transaction price of a particular good or service has persistently
       fallen short of their average production cost;

     3. It is likely that a considerable number of companies in a Given Area of
       Trade will be unable to continue their business; and

     4. The circumstances in Subparagraphs 1 through 3 cannot be overcome
       through rationalization of Enterprises.

Article 26 Criteria for Concerted Acts for the Purpose of Industrial
                 Restructuring

   Authorization of Concerted Acts for the purpose of industrial restructuring
under Article 19 (Prohibition of Improper Concerted Acts), Paragraph (2),
Subparagraph 4 of the Act is limited to Concerted Acts that meet all of the
following conditions:

     1. There is a marked supply-side excess capacity in a particular industry
       due to a change in the economic environment at home or abroad, or due
       to the degeneration of production facilities and methods, the production
       efficiency or international competitiveness has substantially decreased;
            ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 161


     2. The situation described in Paragraph (1) cannot be overcome through
       the rationalization of Enterprises; and
     3. The benefits of industrial restructuring are greater than the effects of
       restriction on competition

Article 27 Criteria for Concerted Acts for the Purpose of Rationalization of
                Terms of Trade

   Authorization of Concerted Acts for the purpose of rationalization of terms of
trade of Article 19 (Prohibition of Improper Concerted Acts), Paragraph (2),
Subparagraph 5 of the Act is limited to Concerted Acts that meet all of the
following conditions:

     1. The Concerted Act, by rationalizing the terms of trade, significantly
       contributes to an increase in production efficiency, facilitation of
       transaction, and enhancement of conveniences of consumer;

     2. The nature of rationalization of the terms of trade is technologically and
       economically viable for most Enterprises in the Given Area of Trade; and

     3. The benefits of rationalization of terms of trade are greater than the
       effects of restriction on competition.

Article 28 Criteria for Concerted Acts for the Purpose of Enhancing the Competitiveness of
                Small-and-Medium-Sized Enterprises

  Authorization of Concerted Acts for the purpose of enhancing the
competitiveness of small-and-medium-sized enterprises under Article 19
(Prohibition of Improper Concerted Acts), Paragraph (2), Subparagraph 6 of
the Act is limited to Concerted Acts that meet all of the following conditions:

     1. The Concerted Act has a significantly positive effect on the productivity
       of small-and-medium-sized enterprises, such as quality and
       technological improvement or on the strengthening of their bargaining
       power with respect to terms of trade;
162 Competition Laws & Enforcement Decrees


     2. All of the participating Enterprises are small-and-medium-sized
       enterprises; and

     3. There is no means other than the Concerted Act to compete effectively
       with or counter large-scale companies.

Article 29 Limits on Authorization of Concerted Acts

  Notwithstanding Articles 24-2 (Criteria for Concerted Acts for the Purposes
of Industry Rationalization) through 28 (Criteria for Concerted Acts for the
Purposes of Enhancing the Competitiveness of Small-and-Medium-Sized
Enterprises) of the Decree, the Fair Trade Commission shall not grant
authorization to Concerted Acts that fall under any one of the following
categories:

     1. The Concerted Act exceeds the extent necessary for the achievement of
       its purpose;

     2. It is likely that the interests of consumers and other related Enterprises
       can be unreasonably compromised;

     3. The nature of the Concerted Act unreasonably discriminates against
       participating Enterprises; or

     4. Participation in or withdrawal from the Concerted Act is unreasonably
       restricted.

Article 30 Procedures for Authorization of Concerted Acts

  (1) A Person who wishes to obtain the authorization of the Fair Trade
     Commission under Article 19 (Prohibition of Improper Concerted Acts),
     Paragraph (2) of the Act shall submit to the Fair Trade Commission an
     application specifying -
    1. Number of participating Enterprises;
        ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 163




  2. Names of the participating Enterprises and their office locations;

  3. Addresses and names of representative directors and officers;

  4. Reasons for and nature of the Concerted Act;

  5. Proposed duration of the Concerted Act; and

  6. Business content of the participating Enterprises.

(2) The following documents shall be attached to the application described in
   Paragraph (1):

  1. The past two years' business reports, balance sheets, and income
    statements of the participating Enterprises;

  2. A copy of the agreement or resolution statement of the Concerted Act;

  3. Documents verifying the satisfaction of criteria for authorization; and

  4. Documents verifying the satisfaction of the provisions of Decree Article
    29 (Limits on Authorization of Concerted Acts).

(3) If, upon application under Paragraph (1), the Fair Trade Commission
   grants authorization, it shall deliver a certificate of authorization to the
   applicant.

(4) If a Person, who has been granted authorization, wishes to modify its
   details, s/he shall submit to the Fair Trade Commission an application for
   change containing those documents of Paragraphs (1) and (2) that are
   relevant to the modified particulars along with the certification of
   authorization.
(5) When the Fair Trade Commission receives an authorization application
  under Article 19 (Prohibition of Improper Concerted Acts), Paragraph (2)
164 Competition Laws & Enforcement Decrees


     of the Act, it shall reach a decision within thirty days [when making a
     public notification as outlined in Article 31 (Public Notification of the Contents of
     Application for Authorization of Concerted Acts), Paragraph (3) of the Decree,
     thirty days in addition to the public notification period] of that application;
     provided, however, that when it is deemed necessary, the Fair Trade
     Commission may extend the period for up to thirty days.


Article 31 Public Notification of the Contents of Application for Authorization of
                 Concerted Acts


  (1) When it is deemed necessary, the Fair Trade Commission may publicly
     announce the contents of an application for authorization of concerted
     acts submitted under Article 19 (Prohibition of Improper Concerted Acts),
     Paragraph (2) of the Act and hear the opinions of interested parties. The
     same shall apply to cases of authorization modification.


  (2) When publicly announcing the contents of applications for authorization of
     concerted acts or applications for modification of some details, the following
     information shall be included in the announcement:


     1. Name and address of applicant Enterprise;


     2. Nature of the Concerted Act;


     3. Reasons for the Concerted Act;


     4, Proposed time period of the Concerted Act; and


     5, In the case of application for modification, reason and nature of change.
  (3) The duration of the public announcement under Paragraph (1) shall not
     exceed thirty days.
          ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 165


  (4) An interested party with an opinion concerning the contents of the public
     announcement described in Paragraph (2) may, within the duration of the
     public announcement period, submit to the Fair Trade Commission an
     opinion statement containing the following information:

    1. Name and address of the Person stating the opinion;

    2. The opinion and the reasons for its submission; and

    3. Other materials necessary for stating the opinion.

Article 32 Discontinuance of Authorized Concerted Acts

  If a Person, who has received an authorization for a Concerted Act under
Article 19 (Prohibition of Improper Concerted Acts), Paragraph (2) of the Act,
discontinues the authorized Concerted Act, the person shall, without delay,
report it to the Fair Trade Commission.

Article 33 <Deleted>

Article 34 <Deleted>

Article 35 Criteria for the Mitigation of or Exemption from Punishment for
                Informants, etc.

  (1) Criteria for mitigation of or exemption from corrective measures or
     surcharges under Article 22-2, Paragraph (2) of the Act are as follows:

    1. Any company which reports before the Fair Trade Commission begins
      an investigation and which falls under all of the following items shall be
      exempted from surcharges and corrective measures;
       a. Any company which is the first to independently provide the evidence
        necessary for proving the Improper Concerted Act;
166 Competition Laws & Enforcement Decrees


        b. Reporting is made when the Fair Trade Commission either has no
          knowledge of the Improper Concerted Act or lacks evidence necessary
          for proving the Improper Concerted Act;


        c. Cooperation has been provided until the completion of the
         investigation, such as stating all the facts regarding the Improper
         Concerted Act and submitting related data;


        d. The Improper Concerted Act is ceased.


     2. Any company which reports before the Fair Trade Commission begins
       an investigation and which falls under all of the following items may be
       subject to 30/100 reduction of surcharge and reduction of corrective
       measures:


        a. Any company which is the second to independently provide the
         evidence necessary for proving the Improper Concerted Act;


        b. Cooperation has been provided until the completion of the
          investigation, such as stating all the facts regarding the Improper
          Concerted Act and submitting related data;


        c. The Improper Concerted Act is ceased.


     3. Any company which cooperates in an investigation after the Fair Trade
       Commission begins the investigation and which falls under all of the
       following items shall be exempted from surcharges and subject to
       reduction of or exemption from corrective measures:


        a. Any company which is the first to independently provide the evidence
          necessary for proving the Improper Concerted Act;
        ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 167


    b. Cooperation is provided when the Fair Trade Commission either has
      no knowledge of the Improper Concerted Act or lacks evidence
      necessary for proving the Improper Concerted Act;

    c. Cooperation has been provided until the completion of the
      investigation, such as stating all the facts regarding the Improper
      Concerted Act and submitting related data;

    d. The Improper Concerted Act is ceased.

  4. Any company which cooperates in an investigation after the Fair Trade
    Commission begins the investigation and who falls under all of the
    following items may be subject to 30/100 reduction of surcharge and
    reduction of corrective measures:

    a. Any company which is the second to independently provide the
      evidence necessary for proving the Improper Concerted Act;

    b. Cooperation has been provided until the completion of the
      investigation, such as stating all the facts regarding the Improper
      Concerted Act and submitting related data;

    c. The Improper Concerted Act is ceased.

  5. If a company subject to surcharges or corrective measures for an
    Improper Concerted Act satisfies the conditions under items of
    Subparagraphs 1 or 3 for another Improper Concerted Act the person is
    involved with besides the Improper Concerted Act, the company may be
    subject to reduction of or exemption from surcharges and reduction of
    corrective measures again for the Improper Concerted Act.
(2) No public official involved in investigation shall, without prior consent of
  an informant or a person cooperating in investigation, disclose or provide
  to other persons matters regarding report or information providing, such
168 Competition Laws & Enforcement Decrees


     as details of reports or identity of informants or persons cooperating in
     investigation.


  (3) Matters regarding degree of leniency for informants, etc., operating
     procedure of the Leniency Program and how to submit evidence shall be
     determined and publicly announced by the Fair Trade Commission.


           CHAPTER 5 Prohibition of Unfair Business Practices


Article 36 Designation of Unfair Business Practices


  (1) The types of and criteria for Unfair Business Practices of Article 23
     (Prohibition of Unfair Business Practices), Paragraph (2) of the Act are as
     listed in Appendix 1.


  (2) When it is deemed necessary, the Fair Trade Commission may establish
     and publicly announce detailed standards of types of and criteria for
     Unfair Business Practices of Paragraph (1) for the purposes of its
     application to a particular area or act. In this case, the Fair Trade
     Commission shall hear the opinions of the heads of relevant
     administrative agencies in advance.


Article 37 Fair Competition Code


  When the Fair Trade Commission has received a request for the examination
of the Fair Competition Code under Article 23 (Prohibition of Unfair Business
Practices), Paragraph (5) of the Act, the Commission shall notify the requester
of the examination results within sixty days of the request.
                    CHAPTER 6 Enterprisers Organzation


Article 39 < Deleted >
          ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 169


Article 40 Authorization of Acts Restraining Competition


  (1) Any Enterprisers Organzation that wishes to, under Article 26
     (Prohibited Activities of Enterprisers Organzation), Paragraph (2) of the
     Act, obtain approval for a competition-restraining act as defined under
     Article 26 (Prohibited Activities of Enterprisers organzation), Paragraph
     (1), Subparagraph 1 of the Act, shall submit to the Fair Trade Commission
     an application containing the following information, along with documents
     proving the necessity of the competition-restraining act.


    1, The reasons for and nature of the competition-restraining act; and


    2. Standard for and scope of participating Enterprises.


  (2) The provisions of Articles 24-2 (Criteria for Concerted Acts for the
     Purpose of Industry Rationalization) through 29 (Limits on Authorization
     of Concerted Acts), Article 30 (Procedures for Authorization of Concerted
     Acts), Paragraphs (3), (4), and (5), Article 31 (Public Notification of the
     Contents of Application for Authorization of Concerted Acts), and Article
     32 (Discontinuance of an Authorized Concerted Act) of the Act shall apply
     to the authorization of competition-restraining acts.


Article 41 < Deleted >


Article 42 < Deleted >



         CHAPTER 7 Restrictions on Resale Price Maintenance

Article 43 Publications Eligible for Resale Price Maintenance
170 Competition Laws & Enforcement Decrees


  “Publications specified in the Presidential Decree” of Article 29 (Restrictions
on Resale Price maintenance), Paragraph (2) of the Act means those
publications defined in the Copyright Act, Article 2 (Definitions), which, after
consultation with the head of relevant central administrative agency, were
designated by the Fair Trade Commission (including electronic publications).

Article 44 Procedures for Designating Products Eligible for Resale Price
               Maintenance

  (1) An Enterprise wishing to receive designation of eligibility for Resale Price
     Maintenance under Article 29 (Restrictions on Resale Price Maintenance),
     Paragraph (3) of the Act shall submit to the Fair Trade Commission an
     application specifying -

     1. Nature of business;

     2. Operating results of the previous year;

     3. Nature of the product in question;

     4. The distribution channel of the concerned product and previous year's
       trends in sales price of each distribution level;

     5. Organization of the product sellers; and

     6. Reasons for application for designation of eligibility.

  (2) The following documents shall be attached to the application described in
     Paragraph (1):
    1. Documents verifying that the Resale Price Maintenance of the product in
      question does not unreasonably harm general consumer interests; and

     2. Documents verifying the satisfaction of all conditions outlined in
       Subparagraphs of Article 29 (Restrictions on Resale Price Maintenance),
       Paragraph (2) of the Act.
          ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 171




Article 45 < Deleted >

Article 46 < Deleted >

Article 46-2 < Deleted >


  CHAPTER 8 Restrictions on Concluding of International Contracts

Article 47 Types of International Contracts

  “International agreements or contracts set forth in the Presidential Decree”
under Article 32 (Restrictions on the Conclusion of Unreasonable International
Agreements), Paragraph (1) of the Act means any of the following international
agreements or contracts (hereinafter, “International Contracts”).

    1. Industrial Property Rights Contracts;

       A contract introducing the licensing or usage rights of industrial
       property rights such as patents, utility models, design rights, and
       trademarks.

    2. Copyright License Contracts;

       A contract introducing the copyrights of books, phonogram, audio-visual
       products, computer programs, etc.
    3. Know-How License Contracts;


       A contract introducing the licensing or usage rights of trade secrets and
       other similar rights concerning technology.


    4. Franchise Contracts;
172 Competition Laws & Enforcement Decrees


        A contract introducing the licensing or usage rights of a franchise status
        for the purpose of providing goods or services or for the purpose of
        supervising business operation by using the business mark of the
        franchiser.


     5. Joint Research and Development Agreements;


     6. Import Distribution Contracts;


        An Import Distribution Contract with the purpose of importing the
        products or providing of the services on a continuous basis (excluding
        the business of issuing bill of sale) whose term is one year or longer.


     7. Joint Venture Agreements


Article 48 Request for Review of International Contracts


  (1) A Person intending to enter into an International Contract who wishes to
     request a review of contents thereof under Article 33 (Request for Review
     of International Contracts) of the Act shall submit to the Fair Trade
     Commission a review request application determined and publicly
     announced by the Commission.


  (2) A Person who has already concluded an International Contract and
     wishes to request a review of contents thereof under Article 33 (Request
     for Review of International Contracts) of the Act shall submit to the Fair
     Trade Commission a review request application determined and publicly
     announced by the Commission, along with a copy of the said contract
     (including a translation) within sixty days of the conclusion of the
     contract. The same shall apply in the cases where the contract has been
     amended or changed.
          ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 173


  (3) When the Fair Trade Commission receives a request for review under
     Paragraphs (1) and (2), it shall, except when there is a reasonable
     justification, notify in writing the result of the review to the requester
     within twenty days after receiving the request.

  (4) A requester who receives notification from the Fair Trade Commission
     that the contents of the reviewed contract are in violation of Article 32
     (Restrictions on Unreasonable International Contracts), paragraph (1) of
     the Act may revise the relevant contract provisions and request a
     reexamination thereof within sixty days after receiving the notification.


         CHAPTER 9 Operation of the Fair Trade Commission


Article 49 Composition of the Subcommittee

  (1) As stipulated in Article 37-2 (Classification of the Committees) of the Act,
     there shall be less than five subcommittees in the Fair Trade Commission.

  (2) The chairman of the Fair Trade Commission (hereinafter, "Chairman")
     may designate the members of each subcommittee and, when necessary,
     change the member composition.

  (3) The Chairman may, when a member of a subcommittee has reasons for
     exclusion, challenge, or abstention from a certain case under Article 44
     (Exclusion, Challenge, or Abstention of Commissioners) of the Act, order
     the case to be deliberated by another subcommittee, or appoint a member
     of another subcommittee to the subcommittee in question for the
     purposes of deliberating the concerned case.

Article 50 Affairs of Each Subcommittee

  The Chairman shall designate tasks of each subcommittee, and when
necessary, change the allocation of each committee's tasks.
174 Competition Laws & Enforcement Decrees




Article 51 Challenge and Abstention of Commissioners

  (1) A commissioner who wishes to apply for challenge under Article 44
     (Exclusion, Challenge and Abstention of Commissioners), Paragraph (2) of
     the Act shall submit to the Chairman an application stating reasons
     therefor.

  (2) The reasons for challenge shall be offered in a written statement of
     presumptive proof within three days of submitting the application for
     challenge.

  (3) Any commissioner who has received an application for challenge shall,
     without delay, submit to the Chairman a written opinion regarding the
     application.

  (4) Any commissioner who wishes to abstain under Article 44 (Exclusion,
     Challenge and Abstention of Commissioners), Paragraph (3) of the Act
     shall obtain the permission of the Chairman.

Article 52 Establishment of Local Administrative Bodies

  The Fair Trade Commission may, as defined under the Presidential Decree,
establish a separate local administrative bodies for the purposes of carrying out
local fair trade responsibilities.

Article 53 Allowance, etc. for Commissioners


  Allowances and other necessary expenses may, within the limits of the
budget, be paid to non-standing Commissioners of the Fair Trade Commission.


                 CHAPTER 10 Procedures for Investigation


Article 54 Procedures for Reporting Violations
          ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 175




  A person who wishes to file a report under Article 49 (Identification and
Reporting of Violations), Paragraph (2) of the Act shall submit to the Fair Trade
Commission a written statement containing the following information;
provided, however, that in the cases where the reported matter demands
immediate attention or where there exist unavoidable circumstances, the
report may be filed by telephone or in person.

    1. Name and address of reporter;

    2. Address, name of representative, and nature of business of the reported
      person;

    3. Nature of the violation of the reported person; and

    4. Other matters that may clarify the nature of the violation.

Article 55 Investigation, etc. by the Fair Trade Commission

  (1) In summoning and hearing the opinions of concerned parties under
     Article 50 (Investigation, etc. of Violations), Paragraph (1), Subparagraph
     1 of the Act, the Fair Trade Commission shall issue a summon describing
     the name of the case, name of other party, and the date, time and place, etc.
     of hearing.
  (2) The designation of an expert witness under Article 50 (Investigation, etc.
     of Violations), Paragraph (1), Subparagraph 2 of the Act shall be made in a
     written statement outlining the name of the case, name of the expert
     witness, time period of the testimony, and the purpose and nature of the
     testimony.


  (3) The order to submit reports on cost and management conditions and
     other necessary materials under Article 50 (Investigation, etc. of
     Violations), Paragraph (1), Subparagraph 3 of the Act shall be made in a
176 Competition Laws & Enforcement Decrees


     written statement outlining the name of the case, submission date, and the
     names of the reports and documents to be submitted, etc; provided,
     however, that the request may be made orally to Persons, etc. who were
     summoned to a Fair Trade Commission hearing.


Article 56 Investigation, etc. of Member Public Officials

  (1) The designated "Place" in Article 50 (Investigation, etc. of Violations),
     Paragraph 2 of the Act means the office or place of business of an
     Enterprise or a Trade Association and that place stipulated in the summon
     issued by the Fair Trade Commission.

  (2) The submission order of documents or materials or detainment thereof
     under Article 50 (Investigation, etc. of Violations), Paragraph (3) of the
     Act is limited to cases where there is the possibility of destruction of
     evidence.

Article 57 Payment of Expenses

   When the Fair Trade Commission hears the opinions of interested parties or
of witnesses under Article 50 (Investigation, etc. of Violations), Paragraph (1),
Subparagraph 1 of the Act; or when it commissions an appraiser under Article
50 (Investigation of Violations), Paragraph (1), Subparagraph 2 of the Act, it
may pay the expenses of relevant parties within the limits of the budget;
provided, however, that the foregoing shall not apply when hearing the
opinions of interested parties or witnesses at their respective offices or places
of business.

Article 57-2 Application for Delaying the Investigation and etc.

  (1) “Reasons set by the Presidential Decree” under Article 50-3, Paragraph
     (1) of the Act means a reason that falls under any of the following cases:
          ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 177


    1. When going through a merger or acquisition, composition or court
      receivership application, bankruptcy and similar process;

    2. When legers and evidentiary documents are confiscated by or under the
      custody of an organization with authority;

    3. When a material impediment arises to business activities of enterprises
      and trade associations.

  (2) A person who desires to apply for delaying the investigation and any
     measures in accordance with Article 50-3, Paragraph (1) of the Act shall
     submit to the Fair Trade Commission a document stating the following
     matters;

    1. Name of an enterprise or trade association desiring to delay the
      investigation and measures, or name and address of executive
      representatives;

    2. Period of delaying the investigation and measures;

    3. Reasons for delaying the investigation and measures;

Article 58 Procedures of Recommendations for Correction

  Recommendations for Correction under Article 51 (Recommendation for
Correction of Violation), Paragraph (1) of the Act shall be made in a written
statement stating:

    1. Nature of the law violation;

    2. Recommendation;

    3. Time period of correction;

    4. Deadline for the notification of acceptance of recommendation; and
178 Competition Laws & Enforcement Decrees


     5. Measures upon rejection of recommendation.

Article 59 Procedures for Filing an Appeal and Processing Period

  (1) A Person who wishes to file an appeal under Article 53 (Appeal),
     Paragraph (1) of the Act shall submit to the Fair Trade Commission an
     application stating the subject and nature of appeal and reasons therefor,
     along with documents necessary for the verification of the reasons or
     nature of the appeal.

  (2) If the application and related documents submitted under Paragraph (1)
     are insufficient, the Fair Trade Commission may order the revision
     thereof. In this case, the time spent on revision (including the date the
     order of revision is mailed and the date the revised documents arrive at
     the Fair Trade Commission) shall not be included in the duration
     described in Article 53 (Appeal), Paragraph (2) of the Act.

  (3) “Unavoidable Circumstances” in the proviso of Article 53 (Appeal),
     Paragraph (2) of the Act means any of the following cases:

     1. When additional economic analyses concerning the scope, structure,
       share, and export/import trends of a market are needed in order to
       determine whether a disposition is illegal or unreasonable;
     2. When a highly accurate legal analyses and review are needed in order to
       determine whether a disposition is illegal or unreasonable;


     3. When, in the course of reviewing an appeal, additional arguments or
       materials are submitted, resulting in a long-term investigation;


     4. When the immediate or interested parties are uncooperative, such as
       exercising the right to remain silent or fail to submit materials in a timely
       manner; and
          ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 179


    5. Circumstances similar to Subparagraphs (1) through (4), rendering the
      extension of the period unavoidable.


Article 60 Suspension of Execution of Corrective Order


  A Person who wishes to apply for suspension of execution of a corrective
order or to apply for nullification of the decision to suspend execution under
Article 53-2 (Suspension of Execution of Corrective Order) of the Act shall
submit to the Fair Trade Commission an application stating its purpose and
reasons, along with documents necessary for the minimal verification of the
reasons and contents of the application.


         CHAPTER 11 Imposition and Collection of Surcharge


Article 61 Standard of Surcharge Imposition


  (1) Standards of surcharge imposition under Article 6 (Surcharges), Article
     17 (Surcharges), Article 17-2 (Special Case of Corrective Measures, etc.),
     Article 22 (Surcharges), Article 24-2 (Surcharges), Article 28 (Surcharges),
     Article 31-2 (Surcharges) and Article 34-2 (Surcharges) of the Act are
     listed by type in Appendix 2.


  (2) <Deleted>

  (3) The Fair Trade Commission shall determine and publicly announce
     detailed imposition standards other than those stipulated in this decree
     for the imposition of surcharges.

Article 61-2 Collection of Surcharges and Additional Fines

  (1) The Fair Trade Commission, when intending under Article 55-3
     (Imposition of Surcharges), Paragraph (1) of the Act to impose surcharges,
180 Competition Laws & Enforcement Decrees


     shall make a written notification thereof clearly stating the type of
     violation and amount of surcharge.

  (2) A party who has received a notification under Paragraph (1) shall remit
     the surcharges to the remittal institution designated by the Fair Trade
     Commission within sixty days of notice; provided, however, that when
     he/she is unable to pay the surcharges due to natural disaster or other
     unavoidable circumstances, the amount shall be paid within thirty days of
     the removal of those circumstances.

  (3) <Deleted>

Article 62 Criteria for and Limits of Approval for Extension of Payment Period
                and of Payment by Installments

  (1) “The amount provided for in the Presidential Decree” of Article 55-4
     (Extension of Surcharge Payment Period and Payment in Installments),
     Paragraph (1) of the Act means one percent (1%) of the sales, as defined
     by Article 9 (Computation Method for Surcharges) of the Decree or ten
     million Won.

  (2) Extension of payment period under Article 55-4 (Extension of Surcharge
     Payment Period and Payment in Installments), Paragraph (1) of the Act
     shall not exceed one year from the day immediately following the original
     payment period.

  (3) When paying in installments under Article 55-4 (Extension of Surcharge
     Payment Period and Payment in installments), Paragraph (1) of the Act,
     the time between installments shall not exceed six months, and the
     number of installments shall not exceed three.


Article 63 Application for Extension of Payment Period or Payment by
                 Installments
          ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 181


  Applications for extension of payment period or payment in installments
under Article 55-4 (Extension of Surcharge Payment Period and Payment in
Installments), Paragraph (2) of the Act shall follow the format determined by
the Fair Trade Commission.


Article 64 Demanding Payment


  (1) Demanding payment under Article 55-6, Paragraph (2) of the Act shall be
     made in writing within fifteen days of the termination of the original
     payment period.


  (2) When issuing payment demand notices as outlined in Paragraph (1), the
     payment period of the surcharges in arrears shall be set within ten days of
     the issue date.


Article 64-2 Delegation of Handling of Payments in Arrears


  (1) When delegating the handling of payment in arrears to the head of the
     National Tax Service under Article 55-6, Paragraph (3) of the Act, the Fair
     Trade Commission shall do so in a written statement with the following
     documents attached:
    1. Decision statement of the Fair Trade Commission;


    2. Resolution statement of revenue collection and invoice; and

    3. Notice of demanding payment.

  (2) When the head of the National Tax Service has been delegated the
     responsibility of handling late payment cases as outlined in Paragraph (1),
     s/he must, within thirty days of the such delegation, give written
     notification to the Fair Trade Commission specifying the following:
182 Competition Laws & Enforcement Decrees


     1. In the case where the handling of the delegated late payment is
       completed, the completion date and other related matters; or

     2. In the case where the Fair Trade Commission makes a request for a
       progress report, a report of the progress.

Article 64-3 Procedures for the information on the imposition of the national
                 tax

  (1) When requesting the Head of the National Tax Service to provide the
     information on the imposition of the national tax under Article 55-6,
     Paragraph (4) of the Act, the Fair Trade Commission shall do so in a
     written statement with the following documents attached:

     1. Decision statement of the Fair Trade Commission;

     2. Resolution statement of revenue collection and invoice; and

     3. Notice of demanding payment.

  (2) When the head of the National Tax Service received the request of the
     information on the imposition of the national tax as outlined in Paragraph
     (1), s/he must, unless there are unavoidable circumstances, provide the
     said information in a written statement within thirty days to the Fair
     Trade Commission.


Article 64-4 The Rates for the Interest Payment on the Returning Surcharges

  Additional payments for return as outlined in the Article 55-7 shall be
assessed on the surcharges to be returned, using the rate decided and
announced by the Fair Trade Commission taking into account time deposit
interest rates provided by financial institutions.

Article 64-5 Payment of Reward
        ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 183




(1) A violation subject to reward in accordance with Article 64-2, Paragraph
   (2) of the Act shall be an act that falls under one of the following
   subparagraphs:

  1. An unfair collaborative act falling under any subparagraph of Article 19-
    1, Paragraph (1) of the Act;

  2. An unfair trade practice in the newspaper business (meaning a business
    publishing or selling newspapers prescribed by Article 2, Subparagraphs
    2, 3, 5 and 6 of the Registration, etc. of Periodicals Act) falling under
    Subparagraphs 1 through 5, Paragraph (1), Article 23 of the Act;

  3. An unfair trade practice, among those under Article 23, Paragraph (1),
    Subparagraph 4 of the Act, in the large retail store business (meaning a
    business retailing various kinds of products, which consumers use in
    their daily lives, to general customers in the store with total area
    exceeding a specific scale determined by the Fair Trade Commission);
  4. An unfair trade practice under Article 23, Paragraph (1), Subparagraph
    7 of the Act; and

  5. A prohibited activity of enterprisers organization under Article 26,
    Paragraph (1), Subparagraphs 1 through 3 of the Act.


(2) Informers eligible for reward under Article 64-2, Paragraph (2) of the Act
  shall be the person who informs the Fair Trade Commission of the
  violation of this Act and provides the evidence that proves this violation:
  Provided, that an enterpriser which engages in the violation shall be
  excluded.


(3) The Fair Trade Commission, excluding the case where there exists any
  special reason, shall pay the reward within 3 months after the date of
  deciding the informed act as a violation (in the case of an appeal, the date
  of a decision with respect to the appeal).
184 Competition Laws & Enforcement Decrees




  (4) No investigating officials involved in payment of reward shall disclose or
     provide to other persons matters regarding report, such as identity of
     informants.


  (5) Specific standards of reward by type of violation shall be determined and
     publicly announced by the Fair Trade Commission after considering the
     extent of seriousness of violations and the quality of evidence.


  (6) The reward deliberation committee (hereinafter “the deliberation
     committee”) may be established within the Fair Trade Commission for the
     purpose of deliberating matters regarding payment of reward.


  (7) Matters regarding establishment and operation of the deliberation
     committee and other matters necessary for paying reward shall be
     determined and publicly announced by the Fair Trade Commission.
Article 65 Imposition of Administrative Fines

  (1) When imposing administrative fines described in Article 69-2
     (Administrative Fines), Paragraphs (1) or (2) of the Act, the Fair Trade
     Commission shall, after investigating and confirming the violation, order
     the Person subject to the fines to pay such fines in writing clearly
     specifying the violation, method of appeal, duration of appeal, and the
     amount of administrative fines.

  (2) When imposing administrative fines as outlined in Paragraph (1), the
     Fair Trade Commission shall provide the Person subject to the fines with
     an opportunity to state his/her opinions either orally or in writing
     (including the electronic document) within a time period of ten or more
     days. If no opinion is submitted within the set period, it shall be
     considered that there is none.
          ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 185


  (3) In determining the amount of administrative fines, the Fair Trade
     Commission shall take into consideration the motives, results, etc. of the
     concerned violation.

Article 66 Detailed Rules for Execution

  Matters necessary for the execution of this Decree shall be determined and
announced by the Fair Trade Commission.


                           ADDENDUM (April 14, 1990)

Article 1 Effective Date

  This Decree shall be effective as of the date of its promulgation.

Article 2 Interim Measures Regarding Matters in Progress

  Matters, which, at the time of the promulgation of this Decree, were under
investigation or recommendation for revision by city mayors or province
governors under Articles 34 and 35 of the previous Decree shall continue to be
governed by the provisions of the previous Decree.

Article 3 Revision of Relevant Statutes


  (1) The following revisions shall be made to the fair Subcontract
     Transactions Act:
    In Article 7, Paragraphs (2) and Article 13, "Minister of Economic Planning
    Board" shall read, "Fair Trade Commission," and in Article 12, Paragraphs
    (1) and (2), "to the Minister of Economic Planning Board" shall read, "to
    the Fair Trade Commission."
  (2) The following revisions are made to the Enforcement Decree of Securities
     and Exchange Act:
    In Article 3, Paragraph (1), Subparagraph 6, "Enforcement Decree of the
    Monopoly Regulation and Fair Trade Act, Article 5, Paragraph (1)" shall
186 Competition Laws & Enforcement Decrees


     read, "Enforcement Decree of the Monopoly Regulation and Fair Trade Act,
     Article 7, Paragraph (1)."


  (3) The following revisions shall be made to the Enforcement Decree of
     Construction Technology Management Act:
     In Article 51, paragraph (1), "Enforcement Decree of the Monopoly
     Regulation and Fair Trade Act, Article 2, Paragraph (3)" shall read,
     "Enforcement Decree of the Monopoly Regulation and Fair Trade Act,
     Article 2, Subparagraph 3."


  (4) The following revisions shall be made to the Enforcement Decree of the
     Registration, etc. of Periodicals Act:
     In Article 2, Paragraph (1), "Enforcement Decree of the Monopoly
     Regulation and Fair Trade Act, Article 2, Paragraph (2)" shall read,
     "Enforcement Decree of the Monopoly Regulation and Fair Trade Act,
     Article 2, Subparagraph 2."
                        ADDENDUM (February 20, 1993)

Article 1 Effective Date

  This Decree shall be effective as of April 1, 1993.

Article 2 Revision of Relevant Decrees

  (1) The following revisions are made to the Enforcement Decree of the
     Broadcasting Act:
    In Article 2, Paragraph (2), “Article 17” shall read, “Article 17, Paragraph (1).”

  (2) The following revisions are made to the Enforcement Decree of the
     General Wire Radio Act:
    In Article 2, paragraph (2), “Article 17” shall read, “Article 7, Paragraph (1).”


                           ADDENDUM (April 1, 1995)
            ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 187




Article 1. Effective Date

  This Decree shall be effective as of the date of its promulgation.

Article 2 Interim Measures Regarding Investment Identified as Exceptional

   Investments, which, at the time of the promulgation of this Decree, had
already been identified by the Fair Trade Commission as exceptions under the
provisions of the previous Decree, Article 17-2, Subparagraph 3, shall remain
governed by the previous Decree.

Article 3 Example of Application

  The revised regulations of Article 17-2, Subparagraph 3 shall only be applied
to those shares that were acquired or owned after the effective date of this
Decree.
                           ADDENDUM (March 31, 1997)


Article 1 Effective Date


  This Decree shall be effective as of April 1, 1997.


Article 2 Example of Application of Matters Related to the Submission of
            Financial Statements, Audit Reports, etc.


  The revised provisions of Article 3-2 (Exemption from Business Groups),
Paragraph (4); Article 17 (Scope of Large Business Groups and Large Business
Groups Subject to Limits on Debt Guarantees), Paragraph 3; and Article 17-4
(Criteria for and Certification of a Sound Deconcentrated-Ownership
Corporation), Paragraph (2) shall be effective as of January 1, 1998.
188 Competition Laws & Enforcement Decrees


Article 3 Interim Measures Regarding Investments for the Purpose of Enhancing Industrial
             International Competitiveness


  The acquisition or ownership of shares, which, at the time of the
promulgation of this Decree, had been authorized by the Fair Trade
Commission under the previous Decree, Article 17-2 (Criteria for Investments
for the Purpose of Enhancing Industrial International Competitiveness) shall
continue to be governed by the provisions of the previous Decree.


Article 4 Interim Measures Regarding Sound Deconcentrated-Ownership
                  Corporations


  Corporations that had already been designated as Sound Deconcentrated-
Ownership Corporations at the time of the promulgation of this Decree shall be
considered as having been identified by the Fair Trade Commission as a Sound
Deconcentrated-Ownership Corporation under this Decree, Article 17-4
(Criteria   for     and   Certification      of   Sound   Deconcentrated-Ownership
Corporation); provided, however, that matters related to the criteria for Sound
Deconcentrated-Ownership Corporation shall continue to be governed by the
previous Decree for three years from the effective date of this Decree.


Article 5 Revisions of Other Statutes


  (1) The following revisions shall be made to the Enforcement Decree of the
     Telecommunications Business Act:
     In Article 4, Paragraph (1), “Monopoly Regulation and Fair Trade Act,
     Article 3, Subparagraphs 1 through 5,” shall read, “Monopoly Regulation
     and Fair Trade Act, Article 3, Subparagraph 1, items a through e.”


  (2) The following revisions shall be made to the Enforcement Decree of the
     Housing Construction Promotion Act:
          ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 189


    In Article 42-2, Paragraph (3), “Monopoly Regulation and Fair Trade Act,
    Article 7, Paragraph (1)” shall read, “Monopoly Regulation and Fair Trade
    Act, Article 2, Subparagraph 3.”


                           ADDENDUM (April 1, 1998)


  This decree shall be effective as of April 1, 1998; provided, however, that the
revised provisions of Articles 17-2 through 17-4 shall be effective as of the date
of the promulgation.


                       ADDENDUM (March 31, 1999)


Article 1 Effective Date


  This decree shall be effective as of April 1, 1999.



Article 2 Interim Measures Regarding Publications Eligible for Resale Price
              Maintenance

   Publications, which, at the time this Decree went into effect, were deemed
eligible for Resale Price Maintenance shall, until December 31, 2002, continue
to be governed by the provisions of the previous Decree despite the revisions to
Article 43.

Article 3 Interim Measures Regarding Surcharges in Arrears

  Surcharges that were in arrears at the time this Decree went into effect, shall,
notwithstanding Article 61-2, Paragraph (3), continue to be governed by the
provisions of the previous Decree.


                           ADDENDUM (April 1, 2000)
190 Competition Laws & Enforcement Decrees




1. Effective Date
   This decree shall enter into force on April 1, 2000; provided, however, that
   the revised provisions under Article 17-2 shall become effective on April 1,
   2001.

2. Interim Measures Regarding Debt Guarantees of Investors related to Social
  Overhead Capital
  Debt guarantee given by a corporation belonging to a large business group to
  an affiliated company which is invested by the said corporation and which is
  engaged in private investment projects pursuant to Paragraph 1 or 2, Article
  4 of the Act on Private Investment in Social Overhead Capital at the time this
  Decree enters into force shall be deemed a debt guarantee given pursuant to
  the revised provisions of Subparagraph 7, Paragraph 2, Article 17-5.


                           ADDENDUM (July 24, 2001)

  This Decree shall enter into force on the date of promulgation.
                          ADDENDUM (March 30, 2002)


(1) Effective Date
  This decree shall enter into force on April 1, 2002.


(2) Amendment of other decree
  The Enforcement Decree on Improving Business Structure and Privatization
   of Public Enterprises shall be amended as follows: Article 2 of Addendum in
   the Enforcement Decree on Improving Business Structure and Privatization
   of Public Enterprises (Presidential Decree No. 15488) shall be deleted.


(3) Progress Measures on Exceptions of Restriction on Total Amount of
   Shareholding of Other Companies
  The shares falling under the provisions of Article 17-2, Paragraph 1,
   Subparagraph 6 of the previous decree among shares acquired or owned
          ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 191


  before this decree is enforced shall be subject to the previous provisions
  despite the amendment of Article 17-2.


                       ADDENDUM (March 17, 2004)


  This decree shall enter into force from the day of promulgation.


                        ADDENDUM (April 1, 2004)


(1) Effective Date
  This Decree shall enter into force from the day of promulgation


(2) Interim Measures on Imposing Surcharges
  Imposing surcharges against any illegal practice before the enforcement of
  this decree shall follow the previous provisions.


                       ADDENDUM (March 31, 2005)


(1) Effective Date
  This Decree shall enter into force on April 1, 2005.


(2) Interim Measures Regarding Debt Guarantees of Investors related to
  Infrastructure
  Debt guarantee given by a corporation belonging to an business group
  subject to the limitations on debt guarantees to an affiliated company which
  is invested by the said corporation and which is engaged in private
  investment projects pursuant to Paragraphs 1 through 4, Article 4 of the Act
  on Private Participation in Infrastructure at the time this Decree enters into
  force shall be deemed a debt guarantee given pursuant to the revised
  provisions of Subparagraph 7, Paragraph 2, Article 17-5.
192 Competition Laws & Enforcement Decrees


(3) Interim Measures Regarding Scope of Business Group Subject to the Ceiling
   on Total Amount of Shareholding
  Business groups not subject to Paragraph 1, Article 10 of the Act pursuant to
  Subparagraph 3, Paragraph 2, Article 17 at the time this Decree enters into
  force shall follow the previous provisions for one year from the date of
  enforcement of this Decree despite the amendment of Subparagraph 3,
  Paragraph 2, Article 17.


(4) Interim Measures Regarding Surcharges on Undue Concerted Acts
  Imposing surcharges on the practice carried out before the enforcement of
  this Decree, which is terminated before the enforcement of this Decree or
  continues after the enforcement of this Decree shall follow the previous
  provisions.




APPENDICES

Appendix 1 <Amended in June 30, 1999, Changes of title, March 30, 2002>

                 Types of and Criteria for Unfair Business Practices
                       [Related to Article 36, Paragraph (1)]

1. Refusal to Deal
   “Unreasonably refusing to transact” stipulated in the first half of
   Subparagraph 1 of Article 23 (Prohibition on Unfair Business Practices)
   Paragraph (1) of the Act means as follows:

  (1) Collective refusal to deal
    Without justifiable reason, in collusion with one's competitors, one refuses
     to initiate business with a certain enterprise; or suspends transaction or
     significantly restricts the quantity or nature of commodities or service in
          ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 193


     transaction with regard to a certain enterprise in a continuous transaction
     relation.

  (2) Other types of refusal to deal
     Unreasonably, one refuses to initiate business with a certain enterprise; or
     suspends transaction or significantly restricts the quantity or nature of
     commodities or services in transaction with regard to with a certain
     enterprise in a continuous transaction relation.

2. Discriminatory Treatment
   “Unreasonable discrimination against certain transacting partners”
   stipulated in the second half of Subparagraph 1 of Article 23 (Prohibition on
   Unfair Business Practices) Paragraph (1) of the Act means as follows:

  (1) Price Discrimination
     Unreasonably, depending on the transacting partner or transacting
     territory, one transacts at a significantly favorable or unfavorable price.

  (2) Discrimination in terms and conditions of transaction
     Unreasonably, one discriminates terms and conditions, such as quantity or
     quality, significantly favorable or unfavorable toward a certain Enterprise.


  (3) Discrimination in favor of Affiliated Corporations
     Without justifiable reasons, discriminating trading terms and conditions,
     such as price, quantity or quality, significantly favorable or unfavorable
     toward certain partners in order to benefit affiliated corporations.


  (4) Collective discrimination
     A group unreasonably discriminates for or against a certain enterprise,
     thereby putting such Enterprise at a significant advantage or disadvantage.


3. Elimination of Competitors
194 Competition Laws & Enforcement Decrees


  “Unreasonably excluding competitors” stipulated in Subparagraph 2 of
  Article 23 (Prohibition on Unfair Business Practices) Paragraph (1) of the Act
  means as follows.


  (1) Unjustifiable discount
     One continues to supply one's commodities or services at a price
     considerably lower than the supply cost without a justifiable reason or to
     supply commodities or services at an unduly lower price, thereby
     threatening the viable existence of one's competitors or competitors of its
     Affiliated Corporations.


  (2) Unjustifiably high-priced purchase
     Unjustifiably, one purchases commodities or services at a higher cost than
     the normal transaction price, thereby threatening the viable existence of
     one's competitors or the competitors of its Affiliated Corporations.
4. Unfair Luring of Customers
  “Unreasonably luring customers of competitors to deal with oneself” as
  stipulated in the first half of Subparagraph 3 of Article 23 (Prohibition on
  Unfair Business Practices) Paragraph (1) of the Act means as follows:


  (1) Luring customers by promising unjustifiable gains
     One provides or promises to provide unjust or excessive gains in light of
     the normal business practices and thus lures away competitor's customers.


  (2) Luring customers by fraudulent means
     Other than through labeling or advertising provided for in Subparagraph 9,
     mislead competitors’ customers by falsely claiming that the content, terms
     and    conditions,     or   other       transactional   matters   involving   one’s
     commodities or services are significantly superior to or much more
     advantageous than they actually are or those of competitors; or that the
     content, terms and conditions, or other transaction matters involving the
     competitor’s commodities or services are significantly less advantageous
     than or inferior to what they actually are or those of one's own
          ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 195


     commodities or services, thereby luring away the customers of one's
     competitors.


  (3) Luring customers by other methods
     Unduly hinder transactions between a competitor and its customers by
     impeding the execution of contracts or by encouraging such customers to
     breach the contracts, thereby luring away the competitors’ customers.


5. Coercion in Dealing
  “Unreasonably coercing customers of competitors to deal with oneself” as
  stipulated in the second half of Subparagraph 3 of Article 23 (Prohibition on
  Unfair Business Practices) Paragraph (1) of the Act means as follows:


  (1) Tie-in sales
     In supplying one's commodities or services to a transaction partner, one
     forces the partner wrongfully, in light of the normal business practice, to
     purchase another commodity or service from oneself or from an
     enterprise whom one designates.


  (2) Sales to employees
     Wrongfully, one forces one's or one's Affiliated Corporation's officers or
     employees to purchase or sell one's or the Affiliated Corporation's
     commodities or services.


  (3) Other types of coercion
     One offers one's transaction partner undue terms and conditions and
     other disadvantages in light of normal practice and thus forces the partner
     to transact with oneself or an enterprise whom one designates.


6. Abusing Dominant Position
196 Competition Laws & Enforcement Decrees


  “Unreasonably taking advantage of one’s bargaining position in transacting
  with others” as stipulated in Subparagraph 4 of Article 23 (Prohibition on
  Unfair Business Practices) Paragraph (1) of the Act means as follows:


  (1) Coercion to purchase
     One forces one's transacting partner to purchase commodities or services
     which the partner does not wish to purchase.


  (2) Coercion to provide benefit
     One forces one's transacting partner to provide one with economic
     benefits such as money, commodities or services.


  (3) Coercion of sales target
     Concerning the commodities or services which one supplies, one
     designates to one's transacting partner a target for their transaction and
     forces the partner to fulfill the target.


  (4) Offering disadvantages
     By methods other than those in the above Subparagraphs 1 to 3, one
     establishes or alters transaction conditions to the disadvantage of one's
     transacting partner, or gives the partner disadvantages in the execution
     process of the transaction.


  (5) Interference in management
     Interfering in the management activities of transaction partners by
     requiring one's approval or directions in hiring or firing officers or
     employees of the transacting partner, or by restricting manufacturing
     articles, scale of facility, production quantity or content of transaction.


7. Transaction Based upon Restrictive Conditions
  “Transacting with others on terms and conditions which unreasonably
  restrict business activities” as stipulated in the first half of Subparagraph 5 of
          ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 197


  Article 23 (Prohibition on Unfair Business Practices) Paragraph(1) of the Act
  means as follows:


  (1) Exclusive Dealings
     Wrongfully, one transacts with an enterprise on the condition that the
     enterprise does not deal with one's competitor or an Affiliated
     Corporation’s competitors.


  (2) Restriction on transaction area or partner
     Transact with a partner on the undue condition that the partner limits its
     transaction area or partner(s).



8. Interference in Business Activities of Other Enterprises
  “Acts which unreasonably disrupt business activities of other Enterprises” as
  stipulated in the second half of Subparagraph 5 of Article 23 (Prohibition on
  Unfair Business Practices) Paragraph (1) of the Act refers to any of the
  following acts:


  (1) Unfair use of technology
     Unduly using the technology of other Enterprise to the point of seriously
     hampering the business activities thereof.


  (2) Unfair luring or hiring of personnel
     Unjustifiably luring away or hiring the personnel of other Enterprise to
     the point of seriously hampering the business activities thereof.


  (3) Interference in the change of transacting partner
     Unjustifiably interfering in the change of transaction counterpart of other
     Enterprise, to the point of seriously hampering the business activities
     thereof.
198 Competition Laws & Enforcement Decrees


  (4) Interference by other methods
     Interfering with business activities of other Enterprise through
     unjustifiable means other than those in Subparagraphs 1 to 3 to the point
     of seriously hampering the business activities thereof.


9. <Deleted June 30, 1999. Enacted by the Enforcement Decree of Fair Labeling
  and Advertising>


10. Undue financial, asset, and manpower support
  The following acts constitute unreasonably "providing Specially Related
  Persons or other corporations with temporary payment, loan, manpower,
  real estate, securities, intangible property rights, etc., or aid Special Related
  Person or other corporations by trading at extremely favorable terms" in
  Subparagraph 7 of Article 23 (Prohibition on Unfair Business Practices)
  Paragraph (1) of the Act.


  (1) Undue financial support
     Aid a Specially Related Person or other corporations through the
     provision of excessive economic benefit by providing or transacting them
     with funds, such as temporary payment, loan, etc., at substantially high or
     low costs or by providing or transacting with such funds in substantial
     amounts.


  (2) Undue asset support
     Aid a Specially Related Person or other corporations through the
     provision of excessive economic benefit by providing or transacting them
     with assets, such as real estate, securities intangible property rights, etc.,
     at substantially high or low costs or by providing or transacting with such
     assets in substantial amounts.


  (3) Undue manpower support
     Aid a Specially Related Person or other corporations through the
     provision of excessive economic benefit by providing them with
     ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 199


manpower at substantially high or low costs or by providing such
manpower in substantial amounts.
200 Competition Laws & Enforcement Decrees


Appendix 2 <Amended in April 1st 2000, March 27th 2001, July 24th 2001,
                 March 30th 2002, April 1, 2004>


                  Criteria to impose surcharges by type of offence
                        [Related to Article 61, Paragraph (1)]


1. Determine whether to impose surcharges or not
  Whether to impose surcharges or not is determined by the content and
  extent of violation first and then comprehensive consideration of market
  situation. If any behavior concerned falls under one of following lists, it is
  imposed with surcharges in principle.


  Any behavior which hampers free and fair competition in the market
  Any behavior which has huge influences on consumers
  Any case where undue profits take place due to violation
  Besides, any case pursuant to list a and b, which is set and notified by the
  KFTC.


2. Standards to calculate surcharges
  Surcharges shall be calculated by considering the lists mentioned in each
  subparagraph under Article 55-3, Paragraph 1 of the Act, and their impact.
  Depending on the order of basic surcharges, obligatory adjusting surcharges,
  voluntarily adjusting surharges, and imposed surcharges, surcharges shall be
  calculated per each step.


  a. Basic Surcharges
    Depending on the contents and degree of any violating behavior pursuant
    to the provisions of Article 55-3, Paragraph 3, Subparagraph 1, violating
    behavior shall be classified into “less serious violating behavior”, “serious
    violating behavior”, and “very serious violating behavior”. Depending on the
    degree of its seriousness of violation, the amount set by following standards
    shall be defined as basic surcharges.
  Types of       Detailed        Related                Basic Surcharges
              ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 201


  Violation          Types            Articles

                                                  Within the scope not surpassing the amount,
                                                  which multiplies 0.03 with the sales (including
                                                  purchasing amount. Hereinafter the same) of
                                                  the relevant products (including goods and
                                                  services. Hereinafter the same) sold or
                                                  purchased during the violation period, the
1. Abuse of                       Article 3-2,
             Abuse of                             surcharge shall be set to multiply the relevant
   Market-                        Paragraph 1,
             Market                               sales with the imposition standard rate set by
   Dominant                       and Article 6
             Dominance                            the extent of seriousness. However, when it is
   Positions                      of the Act
                                                  hard to set the relevant sales, or the behavior
                                                  concerned falls under one of subparagraphs of
                                                  Article 10 of this Decree (Hereinafter, “the case,
                                                  which is hard to set the relevant sales and
                                                  etc.”), the amount shall be settled depending on
                                                  the extent of violation within 1 billion won.

                                                  Within the scope not exceeding the amount
                             Article 8-2,         multiplies 0.1 with the amount pursuant to the
                Violation of Paragraph 1          provisions of each paragraph of Article 17,
                Restraint on and 2,               Paragraph 4 of the Act, the surcharge amount
                Holding      Article 17,          is set by multiplying the amount under the
                Companies Paragraph 4             provisions of each subparagraph in Article 17,
                             of the Act           Paragraph 4 with the imposition standard rate
                                                  set by the extent of seriousness.
                                                  Within the scope not exceeding the amount
                                  Article 9,      multiplying 0.1 with the acquired price of
                  Cross-          Article 17      shares owned or acquired by violation, the
2. Violation of Shareholdings     Paragraph 1     surcharge amount is set by multiplying the
    Regulations                   of the Act      acquired price with the imposition standard
    Preventing                                    rate set by the extent of seriousness.
    Economic
    Concentration Violation of
                  The
                  Regulation
                                                  Within the scope not exceeding the amount
                  Setting the     Article 10
                                                  multiplying 0.1 with the acquired price of
                  Ceiling on      Paragraph 1,
                                                  shares owned or acquired by violation, the
                  Total           Article 17
                                                  surcharge amount is set by multiplying the
                  Amount of       Paragraph 1
                                                  acquired price with the imposition standard
                  Shareholdings   of the Act
                                                  rate set by the extent of seriousness.
                  in other
                  domestic
                  companies
                Debt              Article 10-2,   Within the scope not exceeding the amount
202 Competition Laws & Enforcement Decrees


              guarantee for   Paragraph1,     multiplying 0.1 with the debt guaranteed
              affiliates      Article 17      amount by violating the provisions of Article
                              Paragraph 2     10-2 Paragraph 1 of the Act, the surcharge
                              of the Act      amount is set by multiplying the debt
                                              guaranteed amount with the imposition
                                              standard rate set by the extent of seriousness.
                                              Within the scope not exceeding the amount
              Violating the                   multiplying 0.1 with the acquired price of
                              Article 17-2,
              order to                        shares, whose voting rights were exercised by
                              Paragraph 1
              prohibit the                    violating the prohibition order to exercise
                              and 5 of
              exercise of                     voting rights, the surcharge amount is set by
                              the Act
              voting rights                   multiplying the share price with the imposition
                                              standard rate set by the extent of seriousness.
                                              Within the scope not exceeding the
                                              amount multiplying 0.1 with the relevant
                                              turnover, the surcharge amount is set by
              Improper        Article 19,
                                              multiplying the relevant turnover with the
              Concerted       Article 22
                                              imposition standard rate. However, when
              Acts            of the Act
                                              it is hard to calculate the relevant
                                              turnover, the amount is set by the extent
                                              of seriousness within 2 billion won.
                                              Within the scope of 500 million won, the
                            Article 26,       surcharge amount is to multiply the annual
              Prohibited Paragraph 1          budget amount confined to the completion date
3. Improper   Activities of and               of violation with the imposition standard rate set
 Concerted    Enterprises Article 28,         by the extent of seriousness. However, when it is
 Acts         Organization Paragraph 1        hard to set the annual budget amount, it is set by
                            of the Act        the extent of seriousness within 500 million
                                              won.
                                              Within the scope not exceeding the amount
                                              multiplying 0.03 with relevant turnover, the
              Participation
                                              surcharge amount is to multiply the relevant
              in prohibited Article 28,
                                              turnover with the imposition standard rate
              activities of Paragraph 2
                                              set by the extent of seriousness. However,
              Enterprises of the Act
                                              when it is hard to calculate the relevant
              Organization
                                              turnover, the amount is set by the extent of
                                              seriousness within 500 million won.
              Unfair
              Business        Article 23,     Within the scope not exceeding the amount
              Practices       Paragraph 1,    multiplying 0.02 with relevant sales, the
4. Unfair     (Except         Subparagraph    amount is to multiply the imposition standard
  Business    Undue           1 or 5 and 8,   rate set by the extent of seriousness.
  Practices   Supportive      Article 24-2    However, when it is hard to calculate the
              Behavior)                       relevant turnover, the amount is set by the
              Resale Price    Article 29,     extent of seriousness within 500 million won.
              Maintenance     Article 31-2
            ENFORCEMENT DECREE OF THE MONOPOLY REGULATION AND FAIR TRADE ACT 203



                                               Within the scope of 500 million won, the
                                               surcharge against business association is to
                                               multiply the annual budget amount of the year
              Conclusion                       confined to the completed date of violation
                                               with the imposition standard rate set by the
              of an                            extent of seriousness within 500 million won.
              unreasonable Article 32-1,       Within the scope not exceeding the amount
              international Article 34-1       multiplying 0.02 with relevant sales, the
              contract by                      surcharge against enterprise is to multiply the
                                               relevant sales with the imposition standard
              an enterprise                    rate set by the extent of seriousness. However,
                                               when it is hard to calculate the relevant
                                               turnover, the amount is set by the extent of
                                               seriousness within 500 million won.

                                               Within the scope of supported amount
                                               supported by violating the regulations of
                                               Article 23 Paragraph 1 Subparagraph 7,
                             Article 23        the surcharge amount is to multiply the
5. Undue      Undue
                             Paragraph 1       supported amount with the imposition
  Supported   supportive                       standard rate set by the extent of
                             Subparagraph 7,
  Behavior    behavior                         seriousness. However, when it is hard or
                             Article 24-2
                                               impossible to calculate the supported
                                               amount, 10% of supported volume is
                                               regarded as supported amount.
Others : In calculating the relevant sales, the scope of related goods are set by
         considering the kinds and quality of goods directly and indirectly influenced
         by any violation, transaction area, transaction counterpart and transaction
         steps. The violation period is the time from the starting sate of violation to the
         completion date. While the sales will be set by referring to the accounting
         document of an enterprise, each scope shall be judged individually and
         specifically based on the type of behavior.


  b. Obligatory Adjusting Surcharges
     Depending on the period and numbers of undue behavior pursuant to the
    provisions of Article 55-3 Paragraph 1 Subparagraph 2, within the scope of
    50% of basic surcharges, by the amount adding the one following the
    notification standards of the KFTC to the basic surcharges and the amount
    of profits acquired by the violation under the provisions of Article 55-3,
    Paragraph 1, Subparagraph 3, the bigger one shall be the obligatory
    adjusting surcharges.
  c. Discretionarily Adjusting Surcharges
    By considering any purpose and faults of violating enterprise, characteristics and
    situation of violation, fiscal situation and market environment, all of which
204 Competition Laws & Enforcement Decrees


    influencing each list of subparagraphs under Article 55-3, Paragraph 1, the
    amount added or deducted the obligatory adjusting surcharges in
    accordance with the standards notified by the KFTC, shall set as the
    discretionarily adjusting surcharge. In this case, the amount of any addition
    or deduction shall not surpass 50% of obligatory adjusting surcharge.


  d. Final Surcharges


     (1) When the amount of the discretionarily adjusting surcharge is deemed
        to be extremely excessive not fully reflecting the real burden of
        violating enterprises (including violating trade associations) and their
        effects on the market, the final surcharge shall be set by deducting the
        discretionarily adjusting surcharge by less than 50%.


     (2) When the violating enterprise is deemed to be incapable of paying
        surcharges from objective perspective, such as company’s being in
        insolvency or payment suspension, when it is desirable not to impose
        surcharges considering rapidly changing market or industrial
        environment, or when any other situation that shall be similarly
        considered, surcharges shall not be imposed by comprehensively
        considering all the situation.


3. Establishment of Detailed Standards
  Any matters related to the imposition standard rate of basic surcharges,
  detailed standard on calculating relevant sales, standards on calculating
  obligatory and discretionarily adjusting surcharges, and other necessary
  specific standards and methods related to imposing surcharges shall be set
  and notified by the KFTC.

								
To top