S. Korea to cut commissions on corporate intermediaries

By Shin Hae-in
SEOUL, Jan. 14 (Yonhap) -- Corporate agents will be banned from taking more than
five percent in commissions in the arms trade, South Korea's weapons procurement
agency said Thursday, as part of the country's goal to increase direct government
purchases of weapons.
The plan comes after President Lee Myung-bak called September last year on the
country's defense ministry to push to reduce transaction costs generated when
arms dealers are involved.
"To set up and strengthen a direct purchase system, we plan to control
intervention of corporate intermediaries in arms sales," Byun Moo-keun, head of
Seoul's Defense Acquisition Program Administration (DAPA) said in a press
briefing Thursday.
"When agents due take part in the trade, they will be obliged to disclose the
amount of commissions they received and will be banned from taking more than five
percent."
About 560 weapons sales intermediaries are working in South Korea to promote
weapons produced by their employers and about 65 percent of weapons purchases are
made through them, according to recent government data.
"This would also help in shutting off corruption and increasing transparency in
arms dealings," Byun said, adding his agent will work on training and increasing
roles of civil servants and officers in weapons deals.
South Korea is one of the largest arms buyers in the world, purchasing US$800
million worth of U.S. arms on a foreign military sales basis in 2008, according
to the most recent data by the U.S. Congressional Research Service.
hayney@yna.co.kr
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