BUTCHERY RESTRUCTURING

Enactment Date 13. Jun, 2008, Enforcement date 14. Dec, 2008 ~ 31. Dec, 2015

Article 1 (Purpose)

The purpose of this Act is to contribute to the sound development of abattoir business and the improvement of public sanitation
by providing for matters regarding the restructuring of abattoirs in order to promote the sanitary control of livestock products
and the improvement of quality of livestock products.

Article 2 (Definitions)

The term "abattoir operator" in this Act means a person who has been permitted to engage in abattoir business
under Article 22 of the Livestock Products Sanitary Control Act (referring to the business of slaughtering cattle and hogs;
the same shall apply hereinafter).

Article 3 (Establishment of Council for Promotion of Restructuring of Abattoirs)

1. ① In order to perform the restructuring of abattoirs efficiently, abattoir operators may establish a council
   for the promotion of restructuring of abattoirs (hereinafter referred to as the "Council").
2. ② The Council shall be a legal entity.
3. ③ The Council shall be duly formed upon obtaining authorization by the Minister of Agriculture, Food and Rural Affairs
   for its articles of association prepared and completes the registration of its establishment with the registry office
   having jurisdiction over its principal place of business. <Amended by Act No. 11690, Mar. 23, 2013>
4. ④ The Council's articles of association shall stipulate the following matters :
   1. 1. Objectives
   2. 2. Name
   3. 3. Principal place of business
   4. 4. Matters regarding the general meetings
   5. 5. Matters regarding the board of directors and members
   6. 6. Matters regarding executives and employees
   7. 7. Matters regarding business activities
   8. 8. Matters regarding property and accounting
   9. 9. Matters regarding the amendment of its articles of association
5. ⑤ When the Council intends to amend articles of association, it shall obtain authorization from the
   Minister of Agriculture, Food and Rural Affairs therefor. <Amended by Act No. 11690, Mar. 23, 2013>
6. ⑥ The Council shall carry on the following business:
   1. 1. Establishment and implementation of plans for restructuring abattoirs;
   2. 2. Matters regarding financing and spending of funds used for restructuring abattoirs.
7. ⑦ Except as provided for in this Act, the provisions regarding incorporated associations
   in the Civil Act shall apply mutatis mutandis to the Council.

Article 4 (Executives and Board of Directors)

1. ① The Council shall have not more than 15 directors, including one chairperson, and not more than two auditors as its executives.
2. ② Directors shall be comprised of the following persons: <Amended by Act No. 11690, Mar. 23, 2013; Act No. 12950, Dec. 31, 2014>
   1. 1. Eight persons from among the heads and directors of the organizations designated by the Minister of Agriculture, Food and Rural Affairs, among abattoir operators' organizations in the form of nonprofit legal entities under Article 32 of the Civil Act;
   2. 2. One person designated by the president for livestock of the National Agricultural Cooperative Federation (including NongHyup Agribusiness Group) under Article 126 of the Agricultural Cooperatives Act, from among its directors;
   3. 3. One person appointed by the Minister of Agriculture, Food and Rural Affairs from among public officials under his/her control;
   4. 4. The head of an organization designated by the Minister of Agriculture, Food and Rural Affairs from among nationwide non-profit legal entities under Article 32 of the Civil Act, in which all or some of livestock farmers participate as members;
   5. 5. A person appointed by the head of an organization designated by the Minister of Agriculture, Food and Rural Affairs, among consumer organizations under Article 2 of the Framework Act on Consumers;
   6. 6. One person recommended by the head of the abattoir operators' organization under subparagraph 1 from among experts from academic circles or the distribution industry.
3. ③ Directors, except the chairperson, and auditors shall be non-standing.

Article 5 (Establishment, etc. of Fund for Restructuring Abattoirs)

1. ① In order to cover expenses incurred in restructuring and raise funds necessary for the establishment and operation of the Council, the Council may establish the fund for restructuring abattoirs (hereinafter referred as the "Restructuring Fund") with the following financial resources:
   1. 1. Charges allocated to abattoir operators who are members of the Council;
   2. 2. Contributions by persons who are not abattoir operators;
   3. 3. Gains from the management of the Restructuring Fund and other earning.
2. ② When the Council intends to establish the Restructuring Fund, it shall present the issue before the general meeting of the Council for resolution. In such cases, the resolution shall be adopted by an affirmative vote of not less than two-thirds of members.
3. ③ Matters necessary for the methods and procedures for the collection of charges allocated to abattoir operators shall be prescribed by Ordinance of the Ministry of Agriculture, Food and Rural Affairs. <Amended by Act No. 11690, Mar. 23, 2013>

Article 6 (Limit on Charges)

The limit on charges shall not exceed 3/1000 of the average sale price of livestock or livestock products.

Article 7 (Use of Restructuring Fund)

1. ① The Restructuring Fund shall be used for the following business activities:
   1. 1. Assistance to abattoirs to be closed down;
   2. 2. Other business activities considered necessary by the Council in connection with the restructuring of abattoirs.
2. ② Expenses used for the management of the Restructuring Fund shall not exceed 2/100 of the amount of the fund raised.

Article 8 (Accounting of Restructuring Fund)

1. ① The accounting year of the Restructuring Fund shall coincide with the government's fiscal year.
2. ② The budget and settlement of accounts of the Restructuring Fund shall be subject to the resolution by the Council and then the approval by the Minister of Agriculture, Food and Rural Affairs. <Amended by Act No. 11690, Mar. 23, 2013>
3. ③ The Council shall keep accounts for the procurement and management of the Restructuring Fund clear and separate such accounts from other accounts.

Article 9 (Application for Restructuring Fund)

An abattoir operator who wishes to close down his/her business may file an application to the Council for the payment of money out of the Restructuring Fund, accompanied by evidential documents, as prescribed by Ordinance of the Ministry of Agriculture, Food and Rural Affairs. <Amended by Act No. 11690, Mar. 23, 2013>

Article 10 (Assistance, etc. to Abattoir Operators Applying for Close-down)

1. ① The Council may pay money out of the Restructuring Fund to a abattoir operator who files an application for the payment of money out of the Restructuring Fund pursuant to Article 9, as prescribed by Ordinance of the Ministry of Agriculture, Food and Rural Affairs. <Amended by Act No. 11690, Mar. 23, 2013>
2. ② The criteria for the payment under paragraph (1) shall be prescribed by Ordinance of the Ministry of Agriculture, Food and Rural Affairs, taking the following factors into account: <Amended by Act No. 11690, Mar. 23, 2013>
   1. 1. Results of performance of the relevant abattoir during the last three years proceeding the date of promulgation of this Act;
   2. 2. Reasonable profits of the relevant abattoir.
3. ③ An abattoir operator shall not be qualified for filing an application for the payment of the Restructuring Fund under paragraph (1), if he/she has no record of performance of slaughter during the last six months proceeding the date of promulgation of this Act, he/she has no membership of the Council, or he/she has not paid charges to the Council.
4. ④ Matters necessary for the criteria for assistance to closed-down abattoir operators and reasonable profits shall be prescribed by Ordinance of the Ministry of Agriculture, Food and Rural Affairs. <Amended by Act No. 11690, Mar. 23, 2013>
5. ⑤ When the Council pays the Restructuring Fund pursuant to paragraph (1), it shall notify a Special Metropolitan City Mayor, Metropolitan City Mayor, Do Governor, or Special Self-Governing Province Governor having jurisdiction over the abattoir of the payment.

Article 11 (Restriction on Business Operation of Abattoir)

No one shall run a abattoir business for ten years from the date of closure at the place in which a abattoir closed down with the payment of the Restructuring Fund under Article 10 (1) was located (referring to the site permitted for the abattoir business).

Article 12 (Preferential Assistance under Policies on Livestock Industry)

When the Minister of Agriculture, Food and Rural Affairs establishes and implements a policy on the livestock industry, he/she may provide preferential assistance to abattoir operators who have paid charges to the Council with membership of the Council. <Amended by Act No. 11690, Mar. 23, 2013>

Article 13 (Guidance and Supervision)

The Minister of Agriculture, Food and Rural Affairs may guide and supervise the Council in regard to its business activities for the establishment and operation of the Restructuring Fund and may issue orders necessary for the sound management of the Council, as prescribed by Ordinance of the Ministry of Agriculture, Food and Rural Affairs. <Amended by Act No. 11690, Mar. 23, 2013>

Article 14 (Legal Fiction of Public Officials in Application of Penal Provisions)

Executives and employees of the Council shall be construed as public officials in the application of penal provisions under Articles 129 through 132 of the Criminal Act.

Enforcement Regulation of Butchery Restructuring Act

Article 1 [Purpose)

The purpose of this rule is to define the matters entrusted by the Butchery Restructuring Act and the requirements for their implementation.

Article 2 (Methods and Procedures of Collection of Contributions)

1. ① The butcheryrestructuring promotion council (hereinafter referred to as "the council") shall, in accordance with Article 5 (3) of the Butchery Restructuring Act(hereinafter referred to as the "Act"), , The notice of payment of the contribution form in the attached Form 1 shall be served no later than 30 days before the due date of payment.
   1. 1. Contribution amount
   2. 2. Due date
   3. 3. How to Pay
   4. 4. Place of Payment
   5. 5. Failure to pay by due date means that it may be excluded from the scope of application for restructuring funds for slaughterhouse restructuring funds and priority support for livestock production pursuant to Article 12 of the Act
2. ② The council shall collect the contribution to the slaughterhouse manager belonging to the council every month.
3. ③ The Council may extend the deadline for payment if it is recognized that the slaughterhouse manager can not pay the contribution due to any of the following subparagraphs before the payment deadline.
   1. 1. In case of natural disasters or other disasters, there is a serious loss of property of slaughterhouse manager
   2. 2. In the event of significant damage to the business
   3. 3. In cases where it is deemed inevitable that an extension of the due date due to reasons falling under items 1 and 2 is inevitable
4. ④ The Council may cancel the extension of the payment period and collect the contribution if it is recognized that there is no need to extend the due date due to the change of the property situation or other circumstances of the obligor. In this case, the council should inform the person in charge of the payment in advance.
5. ⑤ The council shall determine the necessary matters such as the period of extension of payment period and application method in accordance with paragraph 3.

Article 3 (Application of Adjustment Fund)

The manager of the slaughterhouse who intends to receive the slaughterhouse restructuring funds (hereinafter referred to as the "adjustment funds") pursuant to Article 9 of the Act shall submit the following documents to the council with the application for the slaughterhouse restructuring fund provided in attached sheet No. 2. <Amended on November 26, 2010>

1. 1. A copy of the permit (Form No.17 of the 「Enforcement Rule of the Livestock Hygiene Control Act」)
2. 2. A copy of business closure notification form (Form No. 21 of the 「Enforcement Rule of the Livestock Sanitation Management Act」)
3. 3. Documents that fall under any of the following items for the past three years end.
   1. A taxpayer registered in accordance with Article 6 of the 「Tax Officer Act」 or a certified public accountant registered in the Tax Officer Registration Office pursuant to Article 20-2 of the same Act (Including the balance sheet and profit and loss statement as verified under Article 2 (7) of the same Act)
   2. Financial statements (certified by a certified public accountant pursuant to Article 7 of the 「Public Accounts Act」 or certified by a tax accountant pursuant to Article 6 of the 「Tax Accountant Act」, including balance sheet and income statement)

Article 4 (Procedures for Payment of Adjustment Funds)

1. ① In order to pay the adjustment fund pursuant to Article 10, Paragraph 1 of the Act, the Council shall confirm the dismissal notification of the relevant slaughterhouse and pay it in accordance with the payment standard of Article 5 through deliberation by the board of directors.
2. ② When the Council has paid the Adjustment Fund pursuant to Paragraph (1), the Council shall prepare and manage the payment record card for the slaughterhouse restructuring funds in Form No. 3 attached hereto.

Article 5 (Payment Standard)

The standard for payment of the arbitration funds under Article 10 (2) of the Act is the same as the attached table.

Article 6 (Calculation of Appropriate Profit)

1. ① The appropriate profit of the relevant slaughterhouse pursuant to Article 10 (2) 2 of the Act shall be calculated according to the following formula.
   Asset Base (Asset Base) (Tangible Assets + Intangible Assets + Other Non-Current Assets + Working Funds) × Funding Rate [(Equity Capital Ratio × Average Average Sales Profit Margin) + (Percentage of Other Capital x Average Borrowing Rate of Industry)]
2. ② Of the calculation formula in Paragraph (1), working capital shall be calculated according to the following formula.Cash expenses Operating expenses (COGS - corporate tax - depreciation) × 2/12

Article 7 (Guidance and Supervision)

The Minister of Agriculture, Forestry, Livestock and Livestock Food may, when deemed necessary for guidance and supervision pursuant to Article 13 of the Act, order the submission of data or investigate his officials. <Amended on March 23, 2013>