SOUTH KOREA Law and Practice Contributed by: Sung Jin Kim, Jay J. Kim, Chunsoo Lee and Joe Kim, Kim & Chang
food. The Ministry of Land, Infrastructure and Transport (MOLIT) enforces statutes concerning automobiles, and the Ministry of Food and Drug Safety (MFDS) enforces food-related laws and regulations. 1.3 Obligations to Commence Corrective Action Under both the FAPS and FAC, if a product is found to be defective, the business entity is required to implement a voluntary recall, or in certain cases, a mandatory recall. Voluntary Recall When a business entity discovers a significant defect in its product that may cause harm to the consumer’s life, body or property, the business owner is obligated to conduct a voluntary recall (which may include corrective actions such as removal, destruction, repair, exchange, refund, improvement or prohibition of manufacture or distribution of products) under the FAPS. Involuntary (Mandatory) Recall Similar to a voluntary recall, if the product defect poses a significant risk to the life, health or property of the consumers, KATS or the com - petent agency may issue a recommendation or an order to the business entity to implement a recall. While the standard for triggering a volun - tary versus mandatory recall is similar, manda - tory recall often occurs if the regulator finds out about the product defect before the manufac - turer, for instance, through market monitoring or a consumer report. In addition, under the FAPS, KATS may issue a mandatory recall order if a safety inspection conducted by a government agency identifies a safety risk or a manufacturer fails to comply with a recall recommendation issued by a competent agency without justifiable grounds.
The obligation to implement a voluntary or man - datory recall also arises under the FAC, and the relevant criteria and requirements are very simi - lar to those under the FAPS. If the recall obliga - tion is triggered under both the FAPS and FAC, a manufacturer may fulfil its obligation under either the FAC or the FAPS. 1.4 Obligations to Notify Regulatory Authorities FAPS Under the FAPS, if a company learns of any seri - ous defect in the manufacture, design, labelling or other indication of a product manufactured, imported or supplied by it to consumers, it must file a report immediately to the head of the com - petent central administration agency, such as KATS, and commence a voluntary recall. The obligation to report a defect is triggered if the defect is “serious” , which refers to any product defect that causes or is likely to cause (i) death or physical injury/disease that will require medi - cal treatment of four weeks or longer, or (ii) a fire or an explosion. In addition, the reporting requirement is triggered if the same product is the subject of a voluntary or a mandatory recall in an overseas market. The FAPS does not specify a timeline for the reporting requirement, but in practice, compa - nies are advised to file the report within ten days of becoming aware of the defect, in accordance with the subordinate regulations issued by the enforcement agencies. In general, if the company decides to conduct a voluntary recall, it must report the recall to KATS and submit a recall plan using the “Form 7-2” , as specified in the Enforcement Decrees to the FAPS along with a power of attorney (if the company is reporting through local counsel). If
199 CHAMBERS.COM
Powered by FlippingBook