| Article
1 [Purpose] |
| The purpose
of this Act is to
prevent unfair labelling
and advertising that
may deceive or mislead
consumers and to facilitate
provision of fair
and useful information
to consumers, thereby
establishing a fair
trade order and protecting
consumers. |
| Article
2 [Definitions] |
| For the
purpose of this Act
- |
| (1) |
the term
"labeling" means a
container or package
(including attachment
and contents) of the
goods
or services (hereinafter
"products") on which
the enterprises or
trade associations
put a notice
of the following information;
or Chinese characters
or figures featured
on the signboards
that are
installed in the shops
and containers or
package that characterize
the given products:
|
| |
| a. |
information
regarding
the enterprise
and the
trade
association
along
with that
of other
enterprises and
trade
associations;
|
| b. |
information
regarding
the contents,
terms
of trade,
and others
in relation
with the
product
by the enterprise
and the
trade
association
along
with that
of others.
|
|
| (2) |
The term
"Advertising" means
enterprises or trade
associations' letting
known to or informing
consumers
of the product-related
information set forth
in the items of Subparagraph
1 through newspapers,
broadcasting, magazines
and other means as
prescribed under the
Presidential Decree.
|
| (3) |
The term
"Enterprise" means
those as defined in
Article 2, Paragraph
1 of the Monopoly
Regulation
and Fair Trade Act
(hereinafter, the
"MRFTA"). |
| (4) |
The term
"Trade Association"
means those as defined
in Article 2, Paragraph
4 of the Monopoly
Regulation
and Fair Trade Act.
|
| (5) |
The term
"Consumer" means those
who use goods and
services provided
by enterprises or
trade
associations (hereinafter
"enterprises"). |
| Article
3 [Prohibition of
Unfair labeling and
Advertising] |
| (1) |
Enterprises,
etc. shall not post
labels or advertisements
as set forth in the
following subparagraphs
that may deceive or
mislead consumers,
thus impairing fair
trade order, nor shall
they
force other enterprises
to do so: |
| |
| 1. |
false
or exaggerating
labeling
and advertising;
|
| 2. |
deceptive
labeling
and advertising;
|
| 3. |
unduly
comparative
labeling
and advertising;
|
| 4. |
slanderous
labeling
and advertising. |
|
| (2) |
The specifics
of the aforementioned
Subparagraphs of Paragraph
1 shall be determined
by the Presidential
Decree. |
| Article
4 [Designation of
Critical Information
to Be Included in
Labeling and Advertising]
|
| (1) |
In case
where the failure
to include, in the
labeling and advertising,
product-related information
that
the Fair Trade Commission
(FTC) deems critical
to protect consumers
and maintain fair
trade
order may give rise
to the following situations,
the FTC, after due
consideration of the
nature
of the product and
area of trade, may
designate by notice
such matters to be
included in
labelling
or advertising: Provided,
however, that information
stipulated to be labelled
and
advertised
inother Decrees shall
be excluded. |
| |
| 1. |
Situation
where
consumer
interests
are frequently
damaged
and remedy
of such
damage
is difficult;
|
| 2. |
Situation
where
consumers
remain
unaware
of the
critical
defects
or functional
limitations
of products,
and such
unawareness
has a
decisive
impact
on consumers'
purchase
decision;
|
| 3. |
other
situations
where
fair trade
order
is significantly
undermined.
|
|
| (2) |
The FTC,
in placing a notice
pursuant to Paragraph
1, shall consult with
the heads of relevant
agencies
and listen to the
testimonies at a hearing
of the concerned trade
association, consumer
group, etc. that is
officially registered
pursuant to Article
19, Paragraph 1 of
the Consumer
Protection Act (hereinafter
referred to as "Consumer
Group"). |
| (3) |
Enterprises,
in posting labels
or advertisements,
shall include the
critical information
notified by the
FTC pursuant to aforementioned
paragraph 1. |
| Article
5 [Substantiation
of Labels and Advertisements]
|
| (1) |
Enterprises
shall be able to substantiate
matters related with
facts included in
their labels and advertisements.
|
| (2) |
The FTC
may request in writing
enterprises to submit
related documents
when it is deemed
necessary
to have substantiation
pursuant to Paragraph
1 for fear of possible
violation of Article
3-1
by enterprises, etc.
|
| (3) |
The requested
enterprises pursuant
to paragraph 2 shall
submit the documents
for verification in
no
less than 30 days
after receiving the
request: Provided,
however, that the
FTC may extend the
submission
deadline if it is
deemed justifiable.
|
| (4) |
When the
FTC deems it necessary
to keep consumers
from getting false
ideas about the
product
or to protect fair
trade order, it may
allow the general
public the access
to the documents submitted
by requested enterprises,
etc. in accordance
with paragraph 3 or
make such public by
due
methods: Provided,
however, that if such
documents contain
business confidentiality
of the given
enterprises, etc.,
thus their disclosure
to the public being
feared to damage business
of enterprises,
etc., this shall not
apply. |
| Article
6 [Prohibition of
Trade Associations'
Restricting labeling
and Advertising Activities
by Members] |
| (1) |
Unless
set forth otherwise
in the Decree, trade
associations shall
not restrict labeling
and advertising
of their members:
Provided, however,
that if the FTC deems
it necessary to protect
consumer
interests or maintain
fair trade order,
this shall not apply.
|
| (2) |
The FTC,
when permitting trade
associations to restrict
labeling and advertising
activities pursuant
to the proviso of
paragraph 1, shall
seek prior consultation
with the heads of
related agencies.
|
| (3) |
The FTC
may issue the following
corrective measures
against violations
of paragraph 1: |
| |
| 1. |
Cease
and desist
order;
|
| 2. |
Alteration
of th
e articles
of incorporation
and by-laws
which
set forth
such violations;
|
| 3. |
Other
necessary
measures
to correct
the violations.
|
|
| Article
7 [Corrective Measures]
|
| (1) |
In the
case where any enterprise,
etc. posts undue labels
or advertisements
in violation of Article
3, paragraph 1, the
FTC shall take the
following corrective
measures against such
enterprises,
etc. |
| |
| 1. |
Cease
and desist
order;
|
| 2. |
Public
notification
on the
fact of
law violation; |
| 3. |
Corrective
advertisements; |
| 4. |
Other
measures
necessary
to correct
the violations.
|
|
| (2) |
Specifics
regarding public notification
of the violation and
corrective advertisements
pursuant to subparagraphs
2 and 3 of paragraph
1 shall be determined
by the Presidential
Decree. |
| Article
8 [Temporary Cease
and Desist Order]
|
| (1) |
The FTC
may issue a temporary
cease and desist order
against enterprises,
etc. whose labels
or
advertisements are-
|
| |
| 1. |
suspected
to be
in clear
violation
of Article
3, paragraph
1; or,
|
| 2. |
likely
to cause
irreparable
injury
to consumers
or rival
enterprises,
and thus
preventive
measures
are in
urgent
need.
|
|
| (2) |
Consumer
groups and other organizations
set forth in the Presidential
Decree may file a
petition with
the FTC in writing
to issue a temporary
cease order against
labels and advertisements
which
are deemed to fall
under any subparagraph
of paragraph 1. |
| (3) |
Any person
who is unsatisfied
with an order issued
pursuant to paragraph
1 may raise an objection
to the FTC within
7 days upon receiving
the order. |
| (4) |
Upon receiving
such objection, the
FTC shall promptly
notify the fact to
the Seoul High Court,
and
the Court shall put
this to trial in accordance
with the Non-Contentious
Case Litigation Procedure
Act. |
| (5) |
In a trial
pursuant to paragraph
4, Article 15 of the
Non-Contentious Case
Litigation Procedure
Act
shall not apply. |
| Article
9 [Surcharge] |
| (1) |
The FTC
may impose upon enterprises
in violation of Article
3, paragraph 1 surcharges
not exceeding
2% of their turnover
as set forth in the
Presidential Decree
(meaning operational
profits as
for the enterprises
set forth in the Presidential
Decree. Hereinafter,
the same shall apply):
Provided,
however, that where
the violating party
does not have sales
turnover or is in
a difficult situation
to settle sales turnover
and at the same time
it is an enterprise
or trade association
set forth
in the Presidential
Decree, the FTC may
impose surcharges
not exceeding 500
million Won.
|
| (2) |
The FTC
may impose surcharges
not exceeding 500
million Won upon trade
associations that
restricted
labeling and advertising
of their member enterprises
in violation of Article
6, 1. |
| (3) |
In assessing
surcharges pursuant
to paragraphs 1 and
2, the FTC shall take
into account - |
| |
| 1. |
the nature
and degree
of the
violation;
|
| 2. |
the duration
and number
of the
violation;
and |
| 3. |
the extent
of gains
arising
from the
violation.
|
|
| (4) |
When the
corporation violating
Article 3, paragraph
1 is a party to merger,
the FTC shall impose
and
collect surcharges
against the violation
upon the corporation
that is remaining
or newly incorporated
after merger. |
| (5) |
The criteria
for assessing surcharges
pursuant to paragraphs
1 and 2 shall be determined
by the
Presidential Decree.
|
| Article
10 [Liability of Damages
Claim] |
| (1) |
Any enterprise,
etc. shall be liable
to damages claims
by consumers whose
interests were injured
by their unfair labeling
and advertising in
violation of Article
3, paragraph 1. |
| (2) |
Any enterprise,
etc. liable to damages
pursuant to paragraph
1 shall not be cleared
of the
liability
for reasons of lack
of will or negligence. |
| Article
11 [Restriction on
Damages Claim in Civil
Action] |
| (1) |
When
corrective measures
are issued against
the violations of
Article 3, paragraph
1, the right to damage
claim pursuant to
Article 10 shall not
be raised in a civil
action unless corrective
measures
of Article 7 are finalized:
Provided, however,
that this shall not
restrict a lawsuit
claiming
damages pursuant to
Article 750 of the
Civil Code. |
| (2) |
The right
to damages claim as
referred to under
paragraph 1 shall
expire three years
after the day
of its exercise. |
| Article
12 [Obligation of
Confidentiality] |
| Any former
and current FTC commissioners
and staff who is or
has been engaged in
duties pursuant to
this Act shall not
disclose or use for
any other purpose
than for enforcement
the confidential information
that they come across
while undertaking
their duties. |
| Article
13 [Consultations
on the Enactment of
Acts Prohibiting or
Restricting Labeling
or Advertising] |
| The head
of relevant agencies
shall seek prior consultations
with the FTC when
he/she intends to
enact or revise acts
that may prohibit
or restrict enterprises
from posting labels
and advertisements. |
| Article
14 [Voluntary Establishment
of a Code of Labeling
and Advertising] |
| (1) |
Enterprises
may voluntarily establish
a code of labeling
and advertising to
prevent activities
that breach
Article 3, paragraph
1. |
| (2) |
Enterprises
may file a request
with the FTC to review
whether their Codes
pursuant to
paragraph
1 are in violation
of Article 3, paragraph
1. |
| (3) |
The FTC,
upon receiving the
request as referred
to under paragraph
2, shall notify the
results of the
review to the requesting
party in no less than
sixty days. |
| Article
15 [Cooperation by
the Heads of Relevant
Agencies, etc.] |
| (1) |
The FTC,
when it is deemed
necessary for the
enforcement of this
Act, may seek consultations
with
heads of relevant
agencies, or organizations.
|
| (2) |
The FTC,
when it deems it necessary
for the enforcement
of this Act, may request
heads of relevant
agencies or organizations
to initiate necessary
investigations or
to transmit necessary
materials.
|
| (3) |
The FTC,
when it deems it necessary
for effective implementation
of measures pursuant
to
Article
6, paragraph 3 or
Article 7, paragraph
1, may seek cooperation
from heads of
relevant
agencies and organizations.
|
| (4) |
The FTC,
when it has reasons
to believe that finance
and insurance companies
violated the provisions
of Article 3, paragraph
1 and that investigation
on its own authority
is necessary, shall
notify
the Financial Supervisory
Commission ("FSC")
of the fact, without
initiating investigation,
and
have the FSC handle
the case. |
| (5) |
The FSC,
upon receiving the
notification from
the FTC pursuant to
paragraph 4, shall
carry out the
investigation in earnest
and notify the FTC
of the result thereof.
|
| Article
16 [Application of
Monopoly Regulation
and Fair Trade Act]
|
| (1) |
The provisions
of Article 42 or 45
and 52 of the Monopoly
Regulation and Fair
Trade Act ("MRFTA")
may apply with necessary
modifications to any
activity of the FTC
in accordance with
this
Act and the provisions
of Articles 53, 53-2,
54, 55 and 55-2 of
the MRFTA shall apply
mutatis mutantis
to granting exclusive
jurisdiction and handling
cases in association
to filing of objection,
filing of a suit,
and raising of dissatisfaction
as to the remedies
given by the FTC (except
"temporary cease and
desist order" pursuant
to Article 8, paragraph
1). |
| (2) |
The provisions
of Article 49 of the
MRFTA may apply with
necessary modifications
to the recognition
and reporting of violations
of the MRFTA and in
the meantime, the
provisions of Article
50 and 51 may apply
to investigation and
hearing of the FTC
and its remedies upon
violations. |
| (3) |
The provisions
of Article 55-4 and
55-5 may apply with
necessary modification
to the extension
of
the period and collection
of surcharge set forth
in the Act and the
provisions of Article
71 may apply
with necessary modification
to filing a complaint
against unlawful activities
as defined in the
following Article
17. |
| Article
17 [Penal Provisions]
|
| Any party
or person shall be
subject to imprisonment
of 2 years or less
and to a fine of 150
million Won or less
if he/she - |
| (1) |
posts
false or undue labels
or advertisements,
or forces other enterprises
to do so in violation
of
Article 3, Paragraph
1; or |
| (2) |
fails
to comply with remedies
pursuant to Article
6, Paragraph 3 or
Article 7, Paragraph
1. |
| Article
18 [Penal Provisions]
|
| Any party
or person in violation
of Article 12 shall
be subject to imprisonment
of 2 years of less
and to a fine of 5
million Won or less.
|
| Article
19 [Concurrent Punishment]
|
| If the
representative of
a corporation (including
associations without
status of corporation)
or the agent, employee,
or any other person
working either for
a corporation or for
an individual is in
violation of Article
17 in connection with
the said corporation
or individual's business,
the corporation and
the individual as
well as actual violators
shall be subject to
monetary penalty.
|
| Article
20 [Fines for Negligence]
|
| (1) |
Any enterprise
falling under any
of the following categories
shall be subject to
a fine for negligence
of 100 million Won
or less, and an executive,
employee, or any person
related to a corporation
or a trade association
meeting any of the
followings shall be
subject to a fine
of 10 million
Won or less: |
| |
| 1. |
failing
to provide
designated
product-related
information
in labels
or advertisements
in violation
of
Article
4, Paragraph
3; |
| 2. |
failing
to submit
documents
for substantiation
in violation
of Article
5, Paragraph
3; |
| 3. |
failing
to comply
with the
temporary
cease
and desist
order
in violation
of Article
8, Paragraph
1 of
the Act;
|
| 4. |
failing
to attend
the hearings
without
any justifiable
reason
in violation
of Article
50, Paragraph
1,
Subparagraph
1 of the
MRFTA
in modified
application
of Article
16, Paragraph
2 of the
Act; |
| 5. |
Either
failing
to file
a report
nor submit
requested
documents
or filing
a false
report
or submitting
false
documents
in violation
of Article
50, Paragraph
1, Subparagraph
3 or Paragraph
3 of the
MRFTA
in modified
application
of Article
16, Paragraph
2 of the
Act; or
|
| 6. |
Refusing,
obstructing,
or avoiding
investigations
in violation
of Article
50, Paragraph
2 of the
MRFTA
in modified
application
of Article
16, Paragraph
2 of the
Act. |
|
| (2) |
Any party
failing to comply
with the FTC's order
to maintain order
pursuant to Article
43-2 of the MRFTA
in modified application
of Article 16, Paragraph
1 of the Act shall
be subject to a fine
of 1 million
Won or less. |
| (3) |
Fines
pursuant to paragraphs
1 and 2 shall be imposed
and collected by the
FTC by such methods
as set forth in the
Presidential Decree. |
| (4) |
Any party
unsatisfied with a
fine pursuant to paragraph
3 may file an objection
to the FTC within
30
days of receiving
the imposition thereof.
|
| (5) |
Upon receiving
a duly raised objection
pursuant to paragraph
4, the FTC shall notify
the competent
court thereof without
delay and the court
shall initiate a trial
on surcharges pursuant
to the
Non-Contentious Case
Litigation Act. |
| (6) |
If any
party fails to pay
a fine without raising
any objection within
the set period of
time as defined
in paragraph 4, the
FTC shall collect
the fines in accordance
with the ways of collecting
overdue
national taxes. |
| Article
1 [Effective Date
] |
| This Act
shall take effect
on July 1, 1999. |
| Article
2 [Interim Measures
Regarding Corrective
Orders, Fines and
other Penalties ]
|
| With respect
to the violations
of Article 23, Paragraph
1, Subparagraph 6
or Article 26, Paragraph
1 Subparagraph 5 of
the previous MRFTA
that were committed
prior to the enforcement
of the Act, the FTC
shall apply previous
provisions relating
to corrective orders,
fines and other penalties.
|
| Article
3 [Interim Measures
Regarding Fair Competition
Code ] |
| Enterprises'
codes of fair competition
regarding labeling
or advertising which
were reviewed by the
FTC in accordance
to Article 23, Paragraph
4 of the previous
MRFTA prior to the
enactment of the Act
shall be deemed to
have already been
reviewed pursuant
to Article 14. |
| Article
4 [Amendment of Other
Related Acts ] |
| (1) |
Following
amendments shall be
made to the MRFTA.
Article 23, Paragraph
1, Subparagraph 6
of the
MRFTA shall be deleted
and Subparagraph 4
of the same Article
altered from "luring
of consumers
by unfair methods
and labeling and advertisements
that are false or
may either deceive
or mislead consumers"
to "unfair luring
of consumers". The
phrase in Article
24 of the MRFTA,
"...delete the pertinent
provisions from the
contract, publish
a corrective notice
of an offensive
advertisement..."
shall read "...delete
the pertinent provisions
from the contract,..."
Article
26, Paragraph 1, Subparagraph
5 shall be deleted.
The phrase of Article
27 of the MRFTA, "...to
suspend the act, correct
the advertisement..."
shall be altered to
"...to suspend the
act..." |
| (2) |
Following
amendments shall be
made to the Unfair
Competition Prevention
Law. Phrase in
Article27
of the Unfair Competition
Prevention Law has
been altered from
"...Monopoly Regulation
and
Fair Trade Act..."
to "..Monopoly Regulation
and Fair Trade Act
, the Fair Labeling
and
Advertising
Act..." |
| Article
5 [Relations with
Other Statutes ] |
| If other
statutes have been
citing the previous
MRFTA or parts thereof
before the enactment
of this Act and if
the cited parts are
pertinent to provisions
of this Act, the FTC
shall deem that the
statutes are citing
this Act or parts
hereof. |
|
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