Reasons for Proposal 

The provisions of the current Act state that, in the case of transactions effected on consignment and commission, the commissioning enterprise shall issue to the commissioned enterprise a written agreement specifying the contents of the commission, the amount of the price of delivered goods, the payment method of the price, the payment date, etc., and that the commissioned enterprise may file an application for an adjustment of the price of delivered goods in case the supply prices of their goods, etc. have changed. 

However, due to the prolonged rise in the prices of raw materials such as crude oil, iron ore, and pulp caused by instabilities in global supply chains, commissioned enterprises that process raw materials and supply their goods to commissioning enterprises are under mounting pressure. Nevertheless, due to the vertical relationship between commissioning enterprises and commissioned enterprises and the complexity of the procedure, only a small number of commissioned enterprises are filing for adjustment. As a result, most of the burdens caused by higher raw materials prices are being shouldered by commissioned enterprises. 

In this regard, the Amendment intends to lessen the burdens borne by commissioned enterprises due to the steep rise in raw materials prices, by prescribing that commissioning enterprises shall state the details regarding the adjustment of the price of delivered goods as a result of the changes in raw materials prices in the written agreement that they issue when commissioning the manufacture of goods, etc. to commissioned enterprises, and that any commissioning enterprise that does not adjust and pay the price of delivered goods accordingly shall be subject to an administrative fine. 

Major Provisions 

A. Prescribe that the commissioning enterprises shall state such details as the types and prices of major raw materials, and the adjustment of the price of delivered goods in the case of any changes in raw materials prices in the written agreement that they issue to commissioned enterprises (Article 21 (1)).

B. Make efforts for the widespread use of standard agreements by, for instance, having the Minister of SMEs and Start-ups enact a standard agreement and encourage the use of such standard agreement (Article 21 (3) newly inserted). 

C. Prescribe that the price of delivered goods shall be adjusted and paid in accordance with the written agreement in cases where the prices of major raw materials have changed by more than 3 percent, and that an administrative fine of not more than 10 times the adjustment in the price of delivered goods shall be levied on any person who violates the aforementioned provision (Article 22 (7) and Article 43 (5) newly inserted).