The current Act prescribes that the Minister of Food and Drug Safety, etc. may impose a penalty surcharge not exceeding 200 million won, in lieu of suspension of business or suspension of manufacturing, on persons who manufacture, process, import, and sell functional health foods.

However, under the Enforcement Decree of the Act, the amount of a penalty surcharge in lieu of business or manufacturing shall be calculated by multiplying the period of suspension by daily penalty. As a result, even in a case where a person's total annual sales exceed 40 billion won, the penalty surcharge is merely 2.2 million won per day. Worse yet, the upper limit on penalty surcharges is fixed at 200 million won, thus undermining the effectiveness of regualtion on persons who manufacture, process, import and sell functional health foods whose total annual sales amount to billions of won.

Accordingly, the Amendment sets the upper limit on penalty surcharge at not more than 3/100 of sales, when imposed in lieu of suspension of business or suspension of manufacturing, thereby ensuring the effectiveness of the imposition of penalty surcharge and of regulation on illegal practices (Article 37, paragraph 1).

Where penalty surcharge is imposed in lieu of business or manufacturing suspension, the upper limit on penalty surcharge shall be not more than 3/100 of the total sales (Article 37).