Response to a Fair Trade Commission Investigation | Unfair Intra-Group Support, Minimal Penalty Surcharge Through the Assistance of a Corporate Law Attorney

The client, a domestic manufacturing company, was the subject of an internal audit finding that certain affiliated companies had received preferential benefits during the process of contracting for overseas raw material supply.

After receiving notice of an on-site investigation by the Fair Trade Commission over this issue, the client requested the assistance of an attorney specializing in fair trade in order to minimize the company's legal liability and the scale of any potential penalty surcharge.

The matter became the subject of investigation as a result of an external report alleging that the client's transactions could operate to the advantage of certain affiliated companies.

The transaction terms and the internal decision-making process became the subject of review by the Fair Trade Commission.

From the early stages of the matter, the client requested the assistance of an attorney specializing in corporate matters in order to minimize the risk of a criminal accusation and the burden of a penalty surcharge.

Where an unfair trade practice, such as unfair intra-group support, is confirmed, the Fair Trade Commission may impose corrective measures and a penalty surcharge.

1. Corrective Measures

2. Penalty Surcharge

The attorney specializing in fair trade closely analyzed the overseas raw material prices, transportation costs, and supply chain risks at the time of the contract.

Through this, it was demonstrated that the transaction did not differ significantly from the market average and was an unavoidable choice from the company's standpoint.

On the basis of the analysis results, the reasonableness of the transaction was logically explained to the Fair Trade Commission.

In order to demonstrate that there had been no involvement of any affiliated company in the transaction decision-making process, the internal meeting minutes, approval documents, and the statements of the persons in charge were compiled.

Through this, it was objectively demonstrated that there was no intent to misappropriate private profit.

As a result, the aim was to strengthen the client's defense and to forestall unnecessary suspicion during the investigation.

It was explained as a matter of legal principle that the criteria for taxation under tax law and for a determination of unfair support under the Monopoly Regulation and Fair Trade Act are different.

By emphasizing that a tax disposition does not automatically lead to a finding of unfair support, the aim was to minimize the client's legal burden.

A Fair Trade Commission investigation is a procedure that closely reviews a company's transactions as a whole and its internal decision-making process, and it requires both legal judgment and analysis of the facts.

When a company responds on its own, it is difficult to demonstrate the reasonableness of a transaction and whether a person with a special relationship was involved, and the resulting burden of a penalty surcharge and corrective measures may become unnecessarily large, so a strategic response with the assistance of a specialized attorney is necessary.

Drawing on its practical experience in fair trade matters, this firm provides a tailored response and a proactive defense strategy suited to the client's circumstances, and works diligently to reduce unnecessary risk.

If you are facing a Fair Trade Commission investigation and need legal assistance, 🔗Legal Consultation Booking, please reach out for assistance.