Whether it is illegal for a trucking transport business operator or a freight forwarder to provide services, such as packing of board cargo and ancillary services, while running his/her own business (negative), and whether a trucking transport business operator directly hires his/her employees to provide services, such as packing of board cargo and ancillary services, and to carry on transportation with his/her own truck for business purposes (negative)

Article 2 subparag. 3 and subparag. 4 of the former Trucking Transport Business Act (amended by Act No. 11690, Mar. 23, 2013; hereinafter referred to as the “ Trucking Transport Business Act”) provides for the scope of permission for trucking transport business under the name of a trucking transport business operator, and the provision of Articles 3 and 9 of the Enforcement Decree of the Trucking Transport Business Act (hereinafter referred to as the “Enforcement Decree”), and Article 13 [Attachment 1] of the Enforcement Rule of the Trucking Transport Business Act (hereinafter referred to as the “Enforcement Rule”), which provides for the transportation brokerage business under the name of a trucking transport business operator and the entire provision of transportation brokerage business under the name of a trucking transport business (hereinafter referred to as the “motor-freight forwarding business”) for the purpose of regulating the scope of permission for trucking transport business under the name of a trucking transport business operator and the provision of exclusive cargo forwarding services under the name of a trucking transport business operator under the name of an exclusive freight forwarder (hereinafter referred to as the “exclusive cargo forwarding business”). Therefore, it is not an “exclusive cargo transportation business operator”.

In light of the above, it is illegal for a person who has not obtained a permit for a transportation brokerage business or a transportation brokerage business to conclude a transportation contract with a shipping business or to use a transportation business operator as an assistant for the performance of a contract, and thus, it is also illegal as it constitutes an illegal act as a transportation brokerage business even if a transportation business operator allows another transportation business operator to use a truck of another transportation business operator. However, the provision of services related to a director cargo ancillary business while the transportation business operator or the freight forwarder carries out a proper business cannot be deemed to be illegal or illegal. Therefore, the provision of services related to a director cargo ancillary business and the transportation as a truck for the business owned by the transportation business operator by himself/herself is a business belonging to the business territory of the transportation brokerage business,

Articles 2 subparag. 2, 3, and 4, 3(4) and (5), 24(1), (3), and (4), and 67 subparag. 2 (see current Article 67 subparag. 4), Articles 3 and 9 of the Enforcement Decree of the Trucking Transport Business Act, Article 13 [Attachment Table 1] and 38 [Attachment Table 4] of the Enforcement Rule of the Trucking Transport Business Act, Articles 13 [Attachment Table 1] and 38 of the Enforcement Rule of the Trucking Transport Business Act

Defendant

Defendant

Seoul Central District Court Decision 2013No2990 decided October 30, 2013

The judgment below is reversed, and the case is remanded to the Seoul Central District Court.

The grounds of appeal are examined.

1. The summary of the facts charged in the instant case is that a person who intends to operate a freight forwarding business shall obtain permission from the Minister of Land, Transport and Maritime Affairs, as prescribed by Ordinance of the Ministry of Land, Transport and Maritime Affairs. The Defendant, without obtaining permission from the Minister of Land, Transport and Maritime Affairs on September 14, 2012, obtained KRW 240,00 from the non-indicted shipper in the name of incidental services, such as packing, transportation, etc., and provided

2. On the grounds stated in its reasoning, the lower court maintained the first instance judgment convicting the instant charges on the ground that there is sufficient room to deem that the ordinary packing directors’ business, which provides transport means, as well as various ancillary services, such as packaging, packing, and unloading of moving cargo, constitutes “motor-freight forwarding business” under Article 2 subparag. 2 of the former Trucking Transport Business Act (amended by Act No. 11690, Mar. 23, 2013; hereinafter “motor-freight forwarding business”).

3. However, it is difficult to accept the above determination by the court below for the following reasons.

(1) The Trucking Transport Act provides for trucking transport business, freight forwarding business, and franchise trucking business for each type of trucking transport business, and provides for criminal punishment for a person who engages in the business without permission from the Minister of Justice of the competent ministry in order to carry out the business.

First of all, the freight forwarding business (hereinafter referred to as the "freight forwarding business") is defined as the "business that acts as a broker or an agent for a fee in response to a request from a third party, or for the transportation of cargo under his/her name and on his/her own account using a means of transportation from a person who runs a trucking transport business or a franchise trucking business (Article 2 subparagraph 4)." Article 24 (3) of the Enforcement Decree of the Trucking Transport Act provides that the type of such business shall be prescribed by Presidential Decree (Article 24 (3)). As a result of delegation, Article 9 of the Enforcement Decree of the Trucking Transport Act provides that "general freight forwarding business (including ancillary services such as packing and storage)" and "general freight forwarding business (mediation business that handles non-listed cargo)" as the type of freight forwarding business.

In addition, trucking transport business (hereinafter “transport business”) refers to “business for commercial transport of cargo by using a truck in compliance with another person’s request” (Article 2 subparag. 3). The type of the business includes general trucking transport business, individual trucking transport business, and monthly trucking transport business (Article 3(4) of the Trucking Transport Business Act and Article 3 of the Enforcement Decree thereof).

On the other hand, the Trucks Act provides for the criteria for permission for transportation business and transportation brokerage business and delegates the detailed matters to the Minister of Land, Transport and Maritime Affairs. Accordingly, the Enforcement Rule of the Trucks Act provides different criteria for permission for each type of transportation business and transportation brokerage business (Articles 13, 38, 1, and 4 of the Enforcement Rule).

In full view of the provisions of the above Acts and subordinate statutes and the system of trucking transport services, the terms of the trucking transport business and the trucking transport business are divided into the trucking transport business (including directors and cargo) and the trucking transport business, and thus, if a trucking business operator runs the trucking transport business or a freight forwarder runs the trucking business, it shall be deemed an unauthorized act. However, the provision of services incidental to the trucking transport business (hereinafter “director cargo ancillary services”) does not constitute an exclusive business belonging to either of the trucking transport business operators or the freight forwarder’s stores. Article 9 of the Enforcement Decree provides that the trucking transport business and the trucking transport brokerage business shall be deemed to be an exclusive trucking business under the name of the trucking transport broker without a distinction between the terms of the trucking transport business and the trucking transport business under the name of the trucking transport business operator and the entire provision of the trucking transport brokerage business under the name of the former Enforcement Decree. However, the provision of the former Enforcement Decree provides that the provision of the same Act shall not apply to the exclusive trucking transport service under the name of the former Act.

In light of the foregoing, it is illegal for a person who has not obtained a permit for a transportation brokerage business or a transportation brokerage business to conclude a transportation contract with the owner of goods and to use the transportation business as an assistant for the performance of the contract. Likewise, even if a transportation business operator carries out transportation by using a truck of another transportation business operator, it may constitute an illegal act as it constitutes a transportation brokerage business. However, it cannot be said that a transportation business operator or a transportation broker’s provision of services related to a director cargo subsidiary business while carrying out his own businesses is no matter of law or illegality, and therefore, it cannot be said that a transportation business operator provided services for a director cargo subsidiary and carries out transportation as a truck for his own business with his own seal, etc., only falls under the business territory of transportation brokerage business, and does not constitute a transportation brokerage

(2) In light of the record, the Defendant, a trucking transport business entity, is aware of the fact that: (a) the trucking transport business entity received from the Nonindicted Party, the three trucking transport cost of KRW 120,00 for the monthly trucking transport cost of KRW 120,00 and KRW 100,000 for the personnel expenses of KRW 2.40,000 for the employees;

Examining these facts in light of the provisions and legal principles of the Trucking Transport Act as seen earlier, even if the Defendant, who is a trucking business operator, is engaged in the transportation business of moving cargo, and the Defendant’s or his/her employees packed board cargo and transported the packaged board cargo using the truck, it cannot be said that the Defendant was engaged in the transportation brokerage business rather than the transportation business.

Nevertheless, without examining whether the Defendant’s instant act satisfies the requirements for the freight forwarding business under Article 2 subparag. 4 of the Trucking Transport Act, the lower court determined that the Defendant was guilty of the instant charges by deeming that the Defendant engaged in the freight forwarding business without permission on the grounds stated in its reasoning. In so determining, the lower court erred by misapprehending the legal doctrine on the violation of the Trucking Transport Act and failing to exhaust all necessary deliberations,

4. Therefore, without examining the remaining grounds of appeal, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Shin (Presiding Justice)