JIPYONG LLC

1. Amendment of Public Announcement on Detailed Criteria for Imposition of Penalty Surcharges on Offender of Act on Fair Labeling and Advertising (Public Announcement No. 2012-62 enforced on 2012, Oct. 16, 2012)
- Upward revision of penalty surcharge imposition standard rate and rationalization of provisions on aggravated penalty surcharges regarding obstruction of investigation

A. Upward revision of standard rate of penalty surcharges imposed on offenders of Act on Fair Labeling and Advertising and limit on imposition standard amount: the imposition standard rate has been raised to 2% against related turnover from the previous 1%, and the imposition standard amount (in case it is difficult to calculate the related turnover) has been raised to 500,000,000 KRW from 400,000,000 KRW.

B. Penalty surcharge may only be reduced if substantial measure to relieve consumer damage has been taken: Previously, penalty surcharges had been reduced to up to 20% even if the business operator simply suspended or changed the relevant false or exaggerated advertisement by recognizing such act as voluntary correction. However, from now on penalty surcharges will only be reduced in case there was an actual effort to relieve consumer damage arising from unfair advertising such as providing monetary compensation, etc.

C. Upward revision and subdivision of provisions on aggravation of penalty surcharges regarding obstruction of investigation: In previous occasions, penalty surcharges had been weighted up to 30% with no relevance to the type of obstruction. From now on, the rate of aggravation of penalty surcharges will be categorized by materializing the types of investigation obstruction and the maximum rate of aggravation will also be increased to 40% from the previous 30%. For example, (i) in case of abusive language, violence, intentional hindrance of site entry, aggravation up to 40%, (ii) in case of concealment, destruction, refusal of access, forging, or alteration, aggravation up to 30%, and (iii) for other acts of obstruction of investigation, aggravation up to 20%.