The Container Deposit System Management Organization

Q. How are deposit and handling fees settled?

A. If corrections are needed for the distribution and collection performance of the relevant year, proceed with the settlement of the performance and the amount already received and paid (deposit and handling fee).
-Corrections for quarterly or monthly distribution and collection performance – distribution and collection information and the fee (deposit and handling fee) settlement - can be made on the following month of the relevant quarter or month. (regular settlement)

※ After the updated Payment Management System (from July 2018), monthly settlement is conducted, so prior consultation with wholesalers about correction details is necessary for proper settlement refund and payment.
- When requested by the manufacturer, the additional settlement can be made for the details not revised during the regular settlement (individual settlement).

The settlement is carried out in the order of the manufacturer’s correction submission, confirmation of correction details by wholesalers and COSMO, and notification of the settlement amount by COSMO (COSMO→manufacturer, wholesaler).
-The settlement details can be found in the collection correction menu, collection correction confirmation menu, and settlement invoice inquiry menu in the Payment Management System.

If the dispatch information needs to be modified due to incorrect registration of empty container information or return, you can change the dispatch information for the relevant month by submitting it to the Payment Management System.
-Payment Management System: https://reuse.cosmo.or.kr
-Collection information can be modified by requesting withdrawal of receipt confirmation to COSMO after confirming the return details of empty containers submitted by the wholesaler, until a notice for handling fee is issued.

However, if the submission period has expired and the information cannot be modified, or if the deposit and handling fee has already been received or paid in the Payment Management System, modification to settle deposit and handling fees is only possible during an additional settlement period.

Manufacturers who release a new product subject to the deposit shall submit information - liquor type, capacity, purpose, label (barcode information) – of the product to COSMO.
The purpose is to:
- facilitate the receipt and payment of deposits and fees by submitting dispatch and collection information of the product to the Payment Management System
- and submit empty container information in the return kiosks (ones installed in supermarkets, etc.) to refund the appropriate deposit to consumers who return empty containers.

In addition, if the product uses the standard container,
- the manufacturer shall submit a registration application to use standard containers according to the format in attached Form 8-2 of Enforcement Rule of Act on the Promotion of Saving and Recycling of Resources to COSMO.

In consideration of retail stores using the automated machines in the sales and collection process, products produced or distributed from January 1, 2017, when the deposit was increased, have different barcodes showing the reuse symbol.

Per Table 3 of the “Notice on Refund Statement of Container Deposit and Reuse Mark,” the nominal dimensions of the barcode are as follows:

[Based on barcode format EAN-13]
⦁ Width: 37.29mm
⦁ Bar height: 22.85mm
⦁ Guard bar height: 24.50mm
⦁ Left margin: 3.63mm
⦁ Right margin: 2.31mm

The size can be adjusted between 80% and 200% based on the above nominal dimensions.

Per Article 2 of the “Notice on Refund Statement of Container Deposit and Reuse Mark” (hereinafter referred to as “Notice”), products produced or distributed from January 1, 2017, when the deposit was increased, are labeled with the updated reuse symbols.

* Brightness and chroma can be adjusted depending on the background color of some products. If it is difficult to decipher the reuse symbol in red when the background color is red or black, etc., white can be used.

Considering consumer awareness and ease of selection for wholesalers and retailers,
-An additional label (such as a bottleneck label) shall be attached per Table 2 of the “Notice.” Brightness and chroma may be adjusted depending on the label's background color.
-Carbonated drinks in unlabeled containers shall have the amount of deposit (100 KRW) printed on the container body (bottleneck).

Most deposit products sold at retail stores are alcoholic beverages, whose sales are prohibited from minors. However, there is no age restriction on returning empty containers subject to the deposit. Therefore, the retail store shall refund the deposit even if minors return them. Refusal to do so may result in a penalty of up to 3 million KRW per applicable laws.

If a wholesaler refuses to pay a deposit or handling fee for a retailer’s empty container without a valid reason, the wholesaler is subject to a penalty.
-Article 41 (2) 5 of the Act on The Promotion of Saving And Recycling of Resources stipulates that a wholesaler’s refusal to refund for the deposit shall be imposed with a penalty of up to 3 million KRW.
-Under attached Table 5 of Article 12-4 in the Enforcement Rule of the same act, wholesalers shall collect empty containers promptly so they are not damaged.

A retail store shall issue a tax invoice to the wholesale store it deals with when collecting handling fees. (Article 32 of the Value-Added Tax Act)
-If the retail store fails to issue a tax invoice, it shall pay a surtax equivalent to 2% of the provided value. (Article 60 of the Value-Added Tax Act)

-However, under Article 36 of the Value-Added Act, the simplified taxpayer (sole proprietor with a small-scale business) is immune from the obligation to issue a tax invoice.
※ The scope of simplified taxpayer eligibility is outlined in Article 61 of the VAT Act)

When the empty container is returned, the total amount shall be refunded without excluding the difference in the card fee.

–The card fee is the amount incurred between a credit card affiliate store (retailer, etc.) and a credit card company through a credit card use contract for the convenience of transactions with consumers under the Specialized Credit Finance Business Act.
-It cannot be regarded as a direct cost incurred for the deposit, so the difference in card fees cannot be applied to the deposit refund.

The receipt for the product with the deposit shall be issued with the deposit fee included.
- The deposit is included in the product's price under Article 15-2 (1) of the Act on the Promotion of Saving And Recycling of Resources and is considered part of the trading unit. Therefore, the product's price, including the deposit, should be considered for the transaction amount.