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General product obligations

Basic laws

What are the basic laws governing the safety requirements that products must meet?

The Framework Act on Consumers and the Framework Act on Product Safety are the basic laws governing the safety requirements for products.

The Framework Act on Consumers, as the general law applying to all consumer products, obliges the government to stipulate standards of safety, indication of manufacturer and advertisement that must be complied with by producers and sellers of products, and sets forth the obligation of business operators to report product defects, and the voluntary and involuntary recall system. The obligation of the government to stipulate standards of safety, indication and advertisement under the Framework Act on Consumers is specified in the individual laws such as the Food Sanitation Act, the Electrical Appliances Safety Control Act, the Quality Control and Safety Management of Industrial Products Act, the Motor Vehicle Management Act and the Pharmaceutical Affairs Act, and each law regulates the standard of product safety, the recall system, etc by product category.

The Framework Act on Product Safety, as the law applying to the finished products, regulates protection of consumers in connection with products, such as the investigation of product safety, the voluntary recall system and the involuntary recall system.

Traceability requirements

What requirements exist for the traceability of products to facilitate recalls?

In Korea, individual laws for each item regulate traceability of production history or trade records of the relevant products. In the case of food products, the Food Sanitation Act, through the Food History Trace and Management Framework, requires that the relevant information is recorded and managed by each of the production, processing and sale stages so that in case there is an incident relating to food safety, its cause can be traced and necessary measures can be taken (subparagraph 13 of article 2 of the Food Sanitation Act). In the case of products distributed through electronic commerce transactions or mail orders, it is stipulated that the business operator must preserve the history of transactions for a certain period of time and provide its customers with a method to easily inspect and preserve their transaction history (article 6 of the Act on the Consumer Protection in Electronic Commerce, etc).

With respect to the indication of manufacturer on product containers or packages, the Act on Fair Labelling and Advertising sets forth the information that must be included in the label and advertisement. The individual laws, such as the Health Functional Foods Act and the Management of Drinking Water Act, stipulate that customers be informed about who is responsible for the recall of the products by providing the specific standard of indication for a certain product.

Non-compliance penalties

What penalties may be imposed for non-compliance with these laws?

In case of violation of the relevant obligations, the aforementioned laws impose certain penalties.

For example, the Framework Act on Consumers stipulates that those who do not implement the involuntary recall order or the corrective order regarding violation of the standard of indication from the competent authorities may face up to three years in prison and a maximum of 50 million won in fines, and that those who do not implement the product defect reporting obligation or violate the standard of safety may be fined up to 30 million won.

The Framework Act on Product Safety stipulates that those who do not implement the involuntary recall order from the competent authorities may face up to three years in prison and a maximum of 30 million won in fines and that those who do not implement the product defect reporting obligation may be fined up to 30 million won.

Reporting requirements for defective products

Government notification

What requirements are there to notify government authorities (or other bodies) of defects discovered in products, or known incidents of personal injury or property damage?

Under the laws related to consumer protection, the obligation of the business operator to report on product defects is divided into the defect information reporting obligation and the incident reporting obligation.

The defect information reporting obligation is an obligation for a manufacturer or a distributor of products (the ‘business’) to report to the head of the central administrative agency upon discovery of material product defects that would harm the life, body or property of consumers (article 47(1) of the Framework Act on Consumers and article 13(1) of the Framework Act on Product Safety). Upon receiving such report, the head of the central administrative agency can issue advice for recall and destruction of the products or issue an order for recall and destruction of them.

The incident reporting obligation is an obligation for the business to report to the head of the central administrative agency upon the occurrence of a death, an injury that will take four weeks or more to heal completely, a fire or an explosion attributable to products, or of repetitive accidents by the same product (article 13-2 of the Framework Act on Product Safety).

Notification criteria and time limits

What criteria apply for determining when a matter requires notification and what are the time limits for notification?

The ‘material defect’ that triggers the defect information reporting obligation means a defect lacking safety conventionally expected in the course of manufacturing, indication of design, distribution or provision of products, which cause or could cause a death, an injury or disease that will take three weeks or more to heal completely or food poisoning of more than two people (article 47 of the Framework Act on Consumers and article 34 of the Enforcement Decree of the same act). The business must file a defect report to the head of the competent central administrative agency within five days from the date of the discovery of a material defect of products, etc (article 35 of the Enforcement Decree of the Framework Act on Consumers).

The incident reporting obligation is triggered upon the occurrence of a death, an injury or disease that will take four weeks or more to heal completely, a fire or an explosion because of products, or of repetitive accidents by the same product. The business must file an incident report to the head of the competent central administrative agency within 48 hours from the time of the discovery of such incident (article 13-2 of the Framework Act on Product Safety and article 14-2(4) of the Enforcement Decree of the same act).

Competent authority

To which authority should notification be sent? Does this vary according to the product in question?

The business is required to make a defect report or an incident report to the central administrative agency (article 47 of the Framework Act on Consumers and article 13 and 13-2 of the Framework Act on Product Safety), and the competent central administrative agency varies according to the relevant product. For example, automobile defects should be reported to the Minister of Land, Infrastructure and Transport while agricultural machinery defects should be reported to the Minister of Agriculture, Food and Rural Affairs, and defects of other general products having no competent authorities should be reported to the Minister of Trade, Industry and Energy.

Notification information

What product information and other data should be provided in the notification to the competent authority?

A defect report made by the business to the competent central administrative agency should be in the form of a document, and the defect report must include:

  • the name, address and contact information of the business;
  • the names of the products and the date of the manufacture or furnishing thereof;
  • the contents of the serious defect and the danger or injury;
  • the time and process that the business became aware of the serious defect; and
  • the personal information of affected consumers, if any (article 35 of the Enforcement Decree of the Framework Act on Consumers).

When the business makes a defect report in accordance with article 13(1) of the Framework Act on Product Safety, he or she must report on the name, trademark, type, grade and title of the relevant products, and the item number and the date of the manufacture of the relevant products.

When a business reports on an incident that already took place in accordance with article 13-2(1) of the Framework Act on Product Safety, the business needs to submit to the head of the competent central administrative agency the incident report including:

  • the name, trademark and model name of the relevant products;
  • the contents of the incident and the date and place of the incident;
  • the number of sales and the sales period; and
  • the period of manufacture and the number of manufactured products (article 14(2) of the Enforcement Decree of the Framework Act on Product Safety).

Obligations to provide updates

What obligations are there to provide authorities with updated information about risks, or respond to their enquiries?

The Framework Act on Consumers and the Framework Act on Product Safety do not stipulate any obligation to regularly update information about risks. However, when the risks of the products increase or a new defect of the products is discovered and the business becomes aware thereof, the defect information reporting obligation is triggered under the Framework Act on Consumers and the Framework Act on Product Safety.

Under the Framework Act on Consumers, when there is any reasonable ground to suspect the safety of products, the head of the central administrative agency can have any public official under his or her control enter the places of business to conduct an inspection (article 77(2) of the Framework Act on Consumers), and consumer organisations and the Korean Consumer Agency can request the business to provide information necessary for consumer protection. In this case, the business must comply with such request unless there exists any justifiable cause (article 78 of the Framework Act on Consumers). Under the Framework Act on Product Safety, if an accident causes or is likely to cause danger or harm to consumers owing to any defect in products, the head of the central administrative agency can request the relevant business to submit information associated with the accident (article 15 of the Framework Act on Product Safety).

Penalties

What are the penalties for failure to comply with reporting obligations?

If the business fails to make a report on any material defect in products or make a false report, it will be punished by a fine for negligence of up to 30 million won under the Framework Act on Consumers, and by a fine for negligence of up to five million won under the Framework Act on Product Safety (article 86(1)3 of the Framework Act on Consumers and article 27 of the Framework Act on Product Safety). The business that fails to make a report on any incident related to products will be punished by a fine for negligence of up to 30 million won (article 27 of the Framework Act on Product Safety).

Public disclosure

Is commercially sensitive information that has been notified to the authorities protected from public disclosure?

The head of the central administrative agency who received a defect report will not disclose the fact of report on the defect until the matter of whether the defect of the products in question exists or not is confirmed (article 35(4) of the Enforcement Decree of the Framework Act on Consumers). Therefore, the fact of report on the defect is not publicly disclosed unless the defect in question is confirmed to be true.

The Framework Act on Product Safety imposes confidentiality obligation on public officials regarding any information they have obtained from a product safety investigation, a defect report, an incident report and documents requested, and prevents the disclosure and private use of confidential business information by imposing criminal sanctions against a person that discloses any confidential information breaching the law (article 23(2) of the Framework Act on Product Safety).

Use of information in prosecution

May information notified to the authorities be used in a criminal prosecution?

Under the Framework Act on Product Safety, the head of the central administrative agency can establish a product safety information network for gathering and managing the details of product safety investigations, information on recommendations for recall and orders for recall, and information reported by a business, and has to share such information with the heads of other relevant central administrative agencies (article 16(2) of the Framework Act on Product Safety).

Under the Criminal Procedure Act and the Act on the Performance of Duties by Police Officers, the investigation agency can require a public organisation to provide information or make a report on necessary matters regarding an investigation (article 199(2) of the Criminal Procedure Act and article 8(1) of the Act on the Performance of Duties by Police Officers), and therefore the investigation agency can be provided with information on defects and safety investigations by the heads of the relevant central administrative agencies and use the information for its investigation.

Product recall requirements

Recall criteria

What criteria apply for determining when a matter requires a product recall or other corrective actions?

Under Korean laws, the recall system is divided into the voluntary recall and the involuntary recall. Under voluntary recall, a business voluntarily takes measures such as recalling its products (article 48 of the Framework Act on Consumers and article 13(1) of the Framework Act on Product Safety). Under involuntary recall, the government compels a business to recall and destroy its products and, depending on the level of urgency and the defect of product, it is divided into a recommendation for recall and an order for recall (article 49 and 50 of the Framework Act on Consumers and article 10 and 11 of the Framework Act on Product Safety).

The Framework Act on Consumers and the Framework Act on Product Safety stipulate the general provisions regarding the requirements for recall, and the individual laws such as the Automobile Management Act and the Food Sanitation Act stipulate the requirement for recall of each item. Generally, a product that is distributed in the market and causes or is likely to cause danger or harm to the life, health or property of consumers owing to any defect in the manufacture, design, description of the product or technical or structural characteristics of the product is subject to a recommendation for recall (article 10 of the Framework Act on Product Safety). The head of a central administrative agency can order a business to carry out a recall when the business fails to comply with the order for recall, when the results of safety inspection show that relevant products present any risk to safety, or when there are reasonable grounds to acknowledge the risk of the relevant product (article 11 of the Framework Act on Product Safety).

Consumer warnings

What are the legal requirements to publish warnings or other information to product users or to suppliers regarding product defects and associated hazards, or to recall defective products from the market?

Under the Framework Act on Consumers, if a business that has received the recommendation for recall refuses to comply with it without justifiable reason, the head of the central administrative agency can publish the fact that the business has received such recommendation (article 49(4) of the Framework Act on Consumers). Also, the head of the Consumer Safety Center can publish about the matters relating to the safety of products and such like if necessary (article 52(2)2 of the Framework Act on Consumers).

Under the Framework Act on Product Safety, if a business on receipt of a recommendation fails to comply with such recommendation or if a business received the order for recall, the head of the central administrative agency can publicly announce that fact. Also, in cases where a product safety investigation is conducted, the head of the central administrative agency can publish the results of the investigation (article 10(2), 11(4) and 15(2) of the Framework Act on Product Safety).

Recall notices

Are there requirements or guidelines for the content of recall notices?

When a business receives the order for recall, the head of the central administrative agency can publicly announce this through newspapers, broadcasting systems or the Safety Korea website (www.safetykorea.kr), and the publication can include the name and serial number of the products, the reason and contents of the order, the company name, the name of the representative and other matters deemed necessary for protection of consumers by the head of the central administrative agency (article 7 of the Enforcement Decree of the Framework Act on Product Safety).

Media

What media must be used to publish or otherwise communicate warnings or recalls to users or suppliers?

Under the Framework Act on Product Safety, the head of the central administrative agency can make public announcements of recall through newspapers, broadcast systems or product safety information networks. Public announcements of recall are usually made on the website of Safety Korea, and the Korea Consumer Agency posts information about recall on the Consumer Injury Surveillance System (www.ciss.go.kr).

Time frame

Do laws, regulation or guidelines specify targets or a period after which a recall is deemed to be satisfactory?

The consumer-related acts do not stipulate the specific guideline for the method or period of a recall. However, under the Framework Act on Consumers and the Framework Act on Product Safety, the business that completed the order for recall has to report the results of such recall including the contents and results of the order, the measures for the prevention of recurrence of danger or injury and a plan for disposing of products for which the recall has not been completed yet (article 38(6) of the Enforcement Decree of the Framework Act on Consumers and article 10(3), 11(2) and 13(2) of the Framework Act on Product Safety).

Repair and replacement

Must a producer or other supplier repair or replace recalled products, or offer other compensation?

In the case of the involuntary recall, the head of the central administrative agency can recommend or order the business to recall, destroy, repair, exchange, refund, repair, or to prohibit the manufacture, import, sale, provision of the product, or to take other necessary measures (article 10(1) of the Framework Act on Product Safety). In the case of the voluntary recall, the business can decide appropriate measures by itself and report the recall plan but the head of the central administrative agency can request for additional measures. In the case of a recommendation for recall and an order for recall, the business has to submit the report on the planned measures such as recall, and the head of the central administrative agency can request for additional measures when the plan is deemed to be unsatisfactory (article 14(3) of the Enforcement Decree of the Framework Act on Product Safety). In practice, the implementation of both the voluntary recall and the involuntary recall generally involves the recall of the relevant product and the exchange of the relevant product for a new one.

Penalties

What are the penalties for failure to undertake a recall or other corrective actions?

The business that fails to comply with the order for recall under the Framework Act on Consumers will be punished by imprisonment for not more than three years or by a fine not exceeding 50 million won (article 82 of the Framework Act on Consumers). If the business fails to comply with the order for recall under the Framework Act on Product Safety, it will be punished by imprisonment for not more than three years or by a fine not exceeding 30 million won (article 26 of the Framework Act on Product Safety).

Authorities' powers

Corrective actions

What powers do the authorities have to compel manufacturers or others in the supply chain to undertake a recall or to take other corrective actions?

If the business fails to comply with the order for recall, the head of the central administrative agency can directly recall and destroy the relevant products, or prohibit the supply, and the expenses involved in such activities will be borne by the business (article 50(2) of the Framework Act on Consumers, article 38 of the Enforcement Decree of the same act, article 11(3) of the Framework Act on Product Safety). Upon giving an order for recall, the head of the central administrative agency can specifically decide the period and method of the recall (article 9 of the Enforcement Decree of the Framework Act on Product Safety).

Government warnings

Can the government authorities publish warnings or other information to users or suppliers?

The head of the central administrative agency can publicly announce the results of a product safety investigation or an incident report through newspapers, broadcast systems or product safety information networks (article 15-2 of the Framework Act on Product Safety and article 17-2 of the Enforcement Decree of the same act). Also, the director of the Consumer Safety Center can publicly announce the results of the investigation relating to the safety products (article 51(2)2 of the Framework Act on Consumers).

If the business that received the recommendation for recall refuses to comply with it without any justifiable reason, or if the business receives the order for recall, the head of the central administrative agency can publicly announce this (article 49(4) of the Framework Act on Consumers, articles 10(2) and 11(1) of the Framework Act on Product Safety).

Also, citizens can report any defective product or the relevant incident through the Safety Korea website or the Consumer Injury Surveillance System, and the reported contents are utilised for the investigation relating to recall measures.

Government recalls

Can the government authorities organise a product recall where a producer or other responsible party has not already done so?

If the business fails to comply with the order for recall, the head of the central administrative agency can directly recall and destroy the relevant products, or take other necessary measures (article 50(2) of the Framework Act on Consumers, article 11(3) of the Framework Act on Product Safety). Also, if it is deemed that any defect causes or might cause any urgent and significant danger or injury to consumers’ lives, bodies or property, and it is deemed to be avoidable in order to prevent the occurrence or spread of such danger or injury, the head of the central administrative agency can do so without going through the recall procedure (article 50(1) of the Framework Act on Consumers).

Costs

Are any costs incurred by the government authorities in relation to product safety issues or product recalls recoverable from the producer or other responsible party?

In cases where the head of the central administrative agency directly recalls the relevant products, the expenses involved in such measures will be borne by the business (article 50(4) of the Framework Act on Consumers, article 38(9) of the Enforcement Decree of the same act and article 11(3) of the Framework Act on Product Safety).

Challenging decisions

How may decisions of the authorities be challenged?

If a business that has been recommended to carry out a recall of products or that has received an order for recall seeks to challenge such recommendation or order, it can file an application for the cancellation of such recommendation or order in whole or in part with the head of the competent central administrative agency within 30 days from the date it becomes aware that such recommendation or order is given (article 12 of the Framework Act on Product Safety). Also, the business can file an administrative appeal or administrative litigation against the recall or the order for recall without filing an application for the cancellation of such recommendation or order (article 12(3) of the Framework Act on Product Safety).

Implications for product liability claims

Implications for product liability claims

Is the publication of a safety warning or a product recall likely to be viewed by the civil courts as an admission of liability for defective products?

Under the Product Liability Act in Korea, a manufacturer should compensate for damages to the life, body or property of a person caused by a defect of a product (excluding damages inflicted only to the relevant product) (article 3(1) of the Product Liability Act). In such a case, the plaintiff has to prove not only the defect of the product but also the causal relationship between the defect and the damages to his or her life, body or property. However, as it is difficult for consumers to prove the causal relationship between a defect and damages, the Supreme Court of Korea eases the burden of proof for customers by assuming the causal relationship once the customer provides prima facie evidence of the relevant defect and proves that the damages were caused even when he or she used the relevant product in a proper way, unless the manufacturer proves that the damages were caused by other causes (Supreme Court Judgment 2011Da88870, decided 26 September 2013).

In civil cases regarding liability for products, a safety warning or a product recall does not automatically prove the business’s liability for defective products as the customer has to prove the defect of the product, and the causation between the defect and the damages. However, given the above ruling by the Supreme Court of Korea, there is a high probability that the defect of the product will be acknowledged when the customer submits in litigation the contents of the recall order, safety and the results of an incident investigation that are publicly announced.

Furthermore, there is a high probability that the business will bear liability for damages unless it proves that the recall order is improper, that there is no defect in the product, or that the damages were not caused by the alleged defect because the causal relationship between the defect and the damages will be assumed to be proven when the customer proves that he or she used the product in a proper manner.

Can communications, internal reports, investigations into defects or planned corrective actions be disclosed through court discovery processes to claimants in product liability actions?

Korea’s Civil Procedure Act does not adopt the discovery system as it is in the common law system, and therefore there is no obligation to disclose internal information. However, under the Civil Procedure Act, courts can order the concerned parties to submit documents by giving an order for submission of documents (article 344 of the Civil Procedure Act).