City Hall tells Costco to play by rules

By Kim Rahn

Seoul Metropolitan Government (SMG) strongly protested Costco Wholesale Korea’s violation of a Sunday closure regulation, Wednesday, after the latter opened its outlets for a second time over the weekend.

Officials of the SMG said they sent a letter of protest to the headquarters of the wholesaler’s Korean branch.

The letter follows Costco’s operations on Sept. 9 and 23 when it was obliged to close according to an ordinance, despite district offices’ warnings of fines. The American company claimed the ordinance has been ruled illegal by several courts in lawsuits, although it was not a partner.

“Costco is a foreign company but as long as it operates in Korea, it should abide by domestic laws. It is an improper act to ignore the principle of the law from an emotional judgment and to push ahead with operations,” the city government said in the letter.

“It didn’t participate in the lawsuit, so the ordinance is still valid for Costco and thus the company is obliged to follow it. So fining Costco is proper,” it said.

The city government also urged Costco Korea to fulfill its social responsibility for the coexistence of large-sized discount malls and mom-and-pop neighborhood stores.

Following the first violation on Sept. 9, Seoul’s three district offices overseeing Costco’s outlets — Seocho, Yeongdeungpo and Jungnang — imposed 10 million won in fines each. The fine goes up to 20 million won for a second violation and 30 million won for a third.

“We levied the first fine, but the procedure is still ongoing, so the 10-million-won fine has not been finalized. Thus we haven’t decided on the amount of the second fine, because according to the law, the fine goes up to 20 million won only when those who have paid the first fine disobey the rule again,” a city official said.

For the Sept. 23 violation, the city has asked lawyers whether it can impose a 10 million won fine again because the first fine hasn’t been finalized, or 20 million won because it was the second time Costco didn’t follow the rule.

“The lawyers haven’t decided yet, but they say what matters is not the amount but the act of disobedience,” the official said.

But the city government and the district offices don’t have any legal means to force them to close if Costco keeps opening by paying the fines.

“As the maximum fine of 30 million won is too small to effectively punish violators, we will propose related ministries to revise the law for a heavier penalty,” the official said.

Recently, Rep. Park Hong-keun of the main opposition Democratic United Party proposed a revision bill of the law to cancel operation licenses of stores that don’t keep the mandatory shutdown guideline.