Assembly committee passes bill cutting retail payment deadline to 35 days

The National Assembly's Political Affairs Committee on Thursday passed an amendment to the Act on Fair Transactions in Large-Scale Retail Business that shortens the deadline for large retailers to pay their suppliers.

The key provision cuts the statutory payment deadline for direct-purchase transactions from 60 days to 35 days and reduces the deadline for consignment purchases and online marketplace transactions from 40 days to 20 days.

Under the amended law, retailers that settle accounts once a month must pay suppliers within 20 days of the purchase cutoff date. An exception to the deadline may be granted when a large retailer's payment difficulties are beyond its control.

Rep. Park Sang-hyeok, the ruling party's floor manager on the committee, urged the government to set presidential decrees with a clear understanding that "a critical deterioration in operating cash flow is not a simple excuse but something on par with bankruptcy or rehabilitation proceedings."

People Power Party Rep. Park Sung-hoon raised concerns that the amendment could backfire. "We cannot rule out the possibility that, contrary to the intended outcome, small businesses end up bearing the damage when retailers go under," he said, calling on the Fair Trade Commission to monitor order volumes, the number of suppliers and consumer prices after the law takes effect to ensure a soft landing.

The committee also passed an amendment to the Act on Support for People's Financial Life that extends by 10 years a provision requiring financial companies to contribute funds to a supplementary account for low-income financial support.

In addition, the panel approved an amendment to the Act on the Prevention of Conflicts of Interest of Public Officials that consolidates with the Anti-Corruption and Civil Rights Commission the authority to impose and collect fines on those who violate protections for whistleblowers reporting conflict-of-interest cases involving public officials.