Minister of SMEs and Startups: “Delivery payment linkage system needs a full review; fines for technology theft should be introduced”

[Financial News] Lee So-young, minister of SMEs and Startups, said she would review the delivery payment linkage system in its entirety, noting that weak sanctions mean it sometimes fails to work properly on the ground, as the system enters its third year. On technology theft, she pointed to the limits of the ministry’s administrative measures, which are restricted to corrective recommendations, and raised the need to introduce a system of administrative fines.
The minister gave that answer on the 7th during the ministry’s parliamentary audit by the National Assembly’s Trade, Industry, Energy, SMEs and Startups Committee, after Democratic Party lawmaker Song Jae-bong asked about the effectiveness of the delivery payment linkage system. “In practice, sanctions are weak, and there are cases where the system does not work,” she said.
The delivery payment linkage system, established under the Act on the Promotion of Mutually Beneficial Cooperation between Large Enterprises and Small and Medium Enterprises (the Mutual Cooperation Act), adjusts delivery payments in line with changes in raw material prices. It took full effect in October 2023.
The minister said she would “review the system as a whole again, including improvements to the conditions for triggering it, sanctions, and automatic application in contracts.” She explained that Japan’s related system is advisory and has no legally binding force, but that aspects such as the government’s publication of price indices could serve as benchmarks.
She added that, regarding improvements to the system, “we proposed and made a request to the Ministry of Finance and Economy, but there has been no concrete progress yet.”
The audit also heard calls to ease the burdens faced by companies harmed by technology theft during lawsuits and dispute mediation.
The minister explained that the Ministry of SMEs and Startups’ administrative measures for technology theft are currently limited to corrective recommendations, and that it is preparing guidelines for calculating damages by the end of this year.
“If a system of administrative fines is introduced under the Technology Protection Act, I think the best arrangement would be to put the fines into a fund and use it to compensate victims,” she said.
The minister voiced concern over the Financial Services Commission’s plan to tighten KOSDAQ delisting criteria, saying that sound small and venture companies could also be harmed if listing eligibility were judged solely on market capitalization.
“Some companies have low market capitalization but solid operating profits, and if they have a sound capital base, it is difficult to conclude that they are financially unsound,” the minister said. “Listing eligibility should be assessed by taking growth potential, profitability and other factors into account in a balanced way.” She added, “I will make sure the Ministry of SMEs and Startups’ views are reflected on this issue, even if that means discussing it with the Financial Services Commission chair, so that these concerns are addressed.”
The minister also reiterated her position that the plan to abolish the Youth Startup Academy should be reversed. The ministry has fully cut the Academy’s budget for next year as it consolidates startup programs within the ministry this year.
“The Youth Startup Academy’s alumni network, built over 16 years, is a valuable asset that could not be recreated even for several hundred billion won once lost,” the minister explained. “We are looking for ways to ensure the Academy continues, and will also discuss the matter actively with the National Assembly.”
[email protected] Kim Hyun-cheol Reporter