The Container Deposit System Management Organization

If corrections for the collection performance (confirmed by returning empty bottles to the manufacturer) of the relevant year are needed, a settlement is made for the performance and the paid amount of handling fee.
- Corrections for quarterly or monthly collection performance of the relevant year can be made on the following month of the relevant quarter or month. (regular settlement)
※ After the operation of the improved Payment Management System (from July 2018), as the settlements are made every month, the manufacturer and the wholesaler shall be aware of the correction details in advance to ensure proper refund and payment of the settlement fees.
- An additional settlement can be made for the details that were not revised during the regular settlement by requesting through the manufacturer to COSMO. (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 settlement amount by COSMO (COSMO→manufacturer, wholesaler).
-The settlement details and amounts can be found in the collection correction confirmation menu and settlement invoice/statement inquiry menu in the Payment Management System.
※Depending on the details adjusted, a settlement fee to be returned to COSMO may occur. The settlement fee must be paid to COSMO’s receiving account by the day after the settlement fee notification is issued according to Article 18 of the Payment Management Guidelines.

A. If the deposit and handling fees have already been paid, the manufacturer and wholesaler cannot directly make any changes.
- However, they can correct the information through the deposit and handling fee settlement period.

The increase in the number of empty containers collected from restaurants does not matter.
- However, if there is an abnormal increase or decrease in the number of empty containers collected from restaurants compared to the amount wholesalers purchased from manufacturers, an inspection is conducted to check the situation.
- Furthermore, it should be noted that disguising containers for residential use as ones for business use for return can result in a penalty under applicable laws and regulations.

The number of empty containers collected through retail stores may exceed the amount released.
- Due to the consumer’s relocation after purchase of a product (with the container deposit) or delays in returning, the number of products collected may exceed the amount purchased from (released by) the manufacturer.
- The wholesalers must submit information on the empty containers each retail store collects into the Payment Management System. This information should be verifiable by documents and pieces of evidence.
- If the wholesaler does not submit the collection information, payment of handling fees may inevitably be delayed.
※ Measures will be taken to prevent cases of unjustifiable claims for retail handling fees and other inappropriate payments.

Q. How should the information on the return and collection of empty containers not collected through retail stores or restaurants be submitted?

A. If a wholesaler returns empty containers to the manufacturer, they shall submit the returned amount by collection route.
- Containers collected by retail stores should be submitted as residential use.
- Containers collected from restaurants should be submitted as business use, and the collection results should also be submitted.

However, when a general individual (who is not a retailer or restaurant) is returning containers directly to the wholesaler,
- Containers should be submitted as residential use into the updated Payment Management System, excluding the retail handling fees.
- In this case, the retail store handling fee is not applied because a retail store does not collect the containers.

Act on the Promotion of Saving and Recycling of Resources does not restrict wholesalers from contracting out the collection and transportation of empty containers through private contracts.

However, according to the same act and the Payment Management Guidelines, only wholesalers are eligible to receive deposit and handling fees.
- On the Payment Management System, the wholesaler shall submit collection information of each retail store for containers collected through retailers and information on the total amount collected and returned for the containers collected through restaurants.
- After the manufacturer verifies the collected containers, the wholesaler can individually settle the paid deposit and handling fees with the contractor.

A wholesaler may be subject to administrative penalties if it does not pay the handling fees to the retailer.

If a wholesaler receives fees in a lump sum, including the retail handling fee:
- The wholesaler shall pay the corresponding handling fee to the retailer based on the quantity of empty containers collected from the retail store.
- Wholesalers who fail to pay the fee to the retailer may be subject to a penalty of up to 3 million KRW.

Payment of the retail handling fee for residential-use containers can be proved through tax invoices and simplified receipts.

However, if it is difficult for a wholesaler to verify the sorting status of the empty containers, they can deduct and pay the handling fee within the range not exceeding 50% after consultation with the retail store.

Article 2 (Adjustment of handling fees for retailers) of the “Empty Container Handling Fee Agreement (as of February 3, 2022) states that (1) When a wholesaler collects empty containers from a retailer, if the retailer stored them in a burlap bag rather than a plastic box without a valid reason and it is difficult to verify the quantity and sorting status of containers with the deposit at the relevant retail store place, the handling fee for the retailer may be adjusted in the range not exceeding 50% after a consultation between the wholesaler and the retailer.
However, the amount agreed upon by the wholesaler and the retailer takes priority.

Note that the wholesaler shall pay handling fees to retailers according to the Act on Recycling of Resources to promote the collection of empty containers.
- COSMO shall verify whether the wholesalers have paid the handling fees to the retailers.
- If it is found that the handling fees for a retailer have been adjusted without legitimate reasons, the wholesaler shall immediately pay the difference to the retailer and send the result to COSMO.

In the return statement on the Payment Management System (https://reuse.cosmo.or.kr), new and old bottles should be distinguished and recorded separately.
- New and old bottles should be distinguished from the time they are loaded on the vehicle for return.
- If the bottles are not distinguished or the reuse symbol is damaged, it is recognized as an old bottle return.

To be specific,
-In accordance with attached Table 5 of Enforcement Rule of Act on Recycling of Resources and Article 6 of the Payment Management Guidelines, etc.
(1) The person returning the empty container shall distinguish between empty bottles before the deposit increase (old bottles) and bottles after the increase (new bottles)
(2) The number of containers collected as new and old bottles should be separately recorded in the return statement of the Payment Management System.
- The containers to be returned should be distinguished when they are loaded onto the truck.

When the empty containers are returned, the number of new containers returned on the spot is verified for proper return.

Once all verifications are completed, the manufacturer applies the final verified information in the receiving statement of the Payment Management System.

How to submit collection information of containers for residential use:
- When a wholesaler uses a computing system connected to the Payment Management System (https://reuse.cosmo.or.kr), they can:
(1) submit relevant information to the wholesaler’s internal computing system
(2) automatically transmit the necessary information to the Payment Management System through the network. ※ Information about the number of containers collected and sales by each retail store is not transmitted.

However, if it is difficult to transmit data through the computing system,
(1) Submit documentary evidence, such as receipts, into the system to verify receipt of handling fees at retail stores, or
(2) Attach the documentary evidence.

Verification of collection information by each retail store is necessary because the handling fees vary depending on whether the container is collected and returned by the retail store.

According to Article 19 (2) of the Payment Management Guidelines, wholesalers shall submit the collection results by each business partner for the containers collected.
- Wholesalers collect empty containers from business partners (such as retailers and restaurants).
- Wholesalers should submit the collection results and documentary evidence for the retail handling fees into the Payment Management System by noon on the day after the collection.
- The handling fees vary depending on the supply of products and the empty container collection route, and wholesalers are paid individually according to the handling fee agreement from February 3, 2022.
- Since handling fees vary depending on whether the containers are collected through the retail store or not, verification of the collected information by each retail store is necessary.
(1) If the collection does not pass through a retail store (including cases where the retail store’s collection information is not verified), only the handling fee for wholesalers is paid.
(2) If the collection passes through a retail store, the wholesaler receives both wholesale and retail handling fee and pays the fee to the retailer.

In contrast, containers for restaurants do not pass through retail stores.
- Wholesalers submit the information on the total amount collected instead of collection information of each business partner.
- However, if necessary for an inspection, it should be able to provide and verify information on the container collection details of each trading partner.
- Payment of deposit and handling fees may inevitably be delayed if the relevant information is not submitted.
- Failure to submit the collection results may result in a penalty of up to one million KRW.

When using automated return kiosks for returns, a receipt is provided, instead of cash. The receipt can be exchanged for cash at the customer center of the relevant supermarket.
- Before inserting empty bottles into the return kiosk, remove the bottle caps for separate recycling, as well as any foreign substances from inside the bottle.

There are 147 return kiosks installed and operating currently at 107 retail stores in Korea.
- You can find the location of kiosks installed at COSMO website (www.cosmo.or.kr), accessing following tabs in order:
(1) Return Support Services tab on the top of the center
(2) Beverage Container Return Support Service tab
(3) Locations can be found on the Automated Return Kiosk tab.