Amendment To Subcontracting Act

Maximum 5 Times Punitive Damages for Misappropriation of Technology

The Korea Fair Trade Commission's (KFTC) proposed amendment to the Fair Transactions in Subcontracting Act (Subcontracting Act) was approved by the National Assembly during its plenary session on February 1, 2024 and will take effect on August 28, 2024. The amended Subcontracting Act strengthens the overall regulation on the misappropriation of technology by (i) raising the maximum limit on punitive damages for the misappropriation of technology from 3 times to 5 times the amount of damages incurred, (ii) implementing standards for calculating the amount of damages and establishing a burden of proof that is favorable to the subcontractor for the misappropriation of technology. The main changes to the amended Subcontracting Act are as follows.