The Same Clause Pays Suppliers 25 Days Sooner and Takes 25 Days of Float

Two deadlines moved and the counting dates did not

Korea's Fair Trade Commission said the amendment to the Act on Fair Transactions in Large Retail Business cleared the National Assembly plenary on September 17. Two deadlines shrink. Consignment, agency and tenancy deals, the structures department stores, duty-free shops, TV home shopping and complex malls run on, must now be settled within 20 days of the monthly sales cutoff instead of 40. Direct purchases, the structure used by hypermarkets, convenience stores and e-commerce operators that buy inventory outright, fall from 60 days after goods are received to 35.

What changed is the number, not the clock it runs on. The first group still counts from the day a month of sales closes. The second still counts from the day the goods arrive. A direct purchaser that settles once a month can satisfy the rule instead by paying within 20 days of the purchase cutoff, which is the last day of the month.

The regulator asked for 30 days and the assembly wrote 35

The commission's own proposal was 30 days for direct purchases. During legislative review it was adjusted to 35 on grounds of the burden on retailers and how workable the change would be. The amendment traces back to the collapse of Tmon and WeMakePrice and to Homeplus entering rehabilitation. The commission said it decided to re-examine how retailers actually pay, and from February 2025 it surveyed 111 retail brands across 11 business formats.

Reading the extra five days as a softening misses where this is going. Sixty to 35 is still close to a halving, and the detail that is left sits in subordinate legislation. The commission said it will start that work as soon as the amended act is promulgated.

Two lines decide who counts as a large-scale retailer

The obligation lands on a large-scale retail business, and the commission's guidance sets two tests where crossing either one is enough. A company is covered if its retail revenue in the previous fiscal year was 100 billion won or more, or if the combined floor area of the stores it uses for retail is 3,000 square meters or more.

For a team that builds a brand and ships it into that kind of retail, the amendment simply moves money in earlier, by up to 25 days on direct purchases, which also shortens the window the team has been bridging with working capital. For a team that grew by buying inventory and reselling it, crossing either line means the day cash leaves for that inventory moves in by the same amount. Supplier credit that stretched further as revenue grew changes character above the threshold.

One of the two deferral routes needs approval

The exceptions are written as two separate tracks. Causes outside the retailer's control, such as a natural disaster or a court attachment on the supplier's receivables, are recognized without any approval step. Separately, and only for direct purchases, the deadline can be extended where there is an urgent management concern such as bankruptcy, rehabilitation or a sharp deterioration in cash flow. That second track requires approval from the Fair Trade Commission.

Read as one block, the two tracks invite the assumption that a retailer short on cash can simply pay late. Deferring because funding dried up means filing and waiting for a decision, and the time that takes runs independently of whatever the supplier waiting on the money is dealing with. Rehabilitation appearing by name in the exception list says plainly which events this amendment came out of.

Check the counting date before you check the number

The act takes effect one year after promulgation and applies to goods received or sold after that date. The trigger is the day goods move, not the day a contract was signed, so payment terms in supply agreements in use today cannot simply carry past the effective date.

A year sounds generous until you try to move a settlement cycle, which pulls accounting, systems and cash planning along with it. A supplier should first check whether its contract counts from the monthly sales cutoff or from the receipt date. A buyer should first work out which of the two structures its own transactions fall under. The shift from 60 to 35 matters less to the actual deposit date than the question of which day the count begins.