2024.07.22. The Fair Economy — The Korea Fair Trade Commission recently announced that it decided to impose a corrective order and an administrative fine of 38 million won on NDS (CEO Kim Jung-won) for failing to issue written documents such as contracts when it commissioned subcontractors to provide "information system construction and maintenance" services.
NDS was established from the computer room that developed and operated Nongshim Group's information systems. It is a company engaged in computer system integration consulting and construction services.
According to the Fair Trade Commission, NDS commissioned 199 subcontractors for information system construction and maintenance services from January 2020 to June 2022. In this process, for a total of 347 transactions, it issued written documents specifying subcontracting contract details at least one day and up to 228 days after the start of the service performance, and for some transactions, it issued the documents after the contract had been terminated.
NDS's actions violate Article 3, Paragraph 1 of the Subcontracting Transaction Fairness Act, which obligates the principal contractor to issue written documents specifying subcontracting contract details before the subcontractor performs the services.
Accordingly, the KFTC ordered NDS to prevent recurrence of identical or similar acts in the future and imposed a surcharge.
The Fair Trade Commission said, "This measure is significant because it detected and sanctioned the practice of delayed issuance of written documents that has been customary in the software industry, thereby raising the principal contractor's awareness to prevent recurrence of similar or identical conduct in the future. The Commission plans to continue strengthening monitoring of violations of the written document issuance obligation that could further deteriorate the subcontractor's position or serve as a catalyst for subcontracting-related disputes, and will take strict measures upon detection."
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