The Ministry of Culture Sports and Tourism‘s Popular Culture Industry Act is set to be enforced in full next month with entertainment agencies required to register with the government, but the Big 3 have yet to do so.

According to the new act established last year on July 29th, in order for agencies in South Korea to be legitimately be recognized as a legal business, they must be registered with the government by June 19th. With neither SM, YG or JYP Entertainment registered with the government yet, they are facing the danger of becoming an illegitimate agency in the eyes of the government.

Cube Entertainment, KEYEAST, and even FNC Entertainment have been confirmed to have already completed registering with the government.

The Pop Culture Industry Act was passed last year in attempts to prevent unfair contracts, dubbed as “slave contracts,” between an agency and the entertainer. Furthermore, it also helps to secure the rights of young entertainers who may be deprived of their education due to their schedule.

But why are these agencies delaying their registration?

A lawyer from Hankug Law Firm, Kang Min Ju, commented, “Entertainment agencies seem to be avoiding the responsibilities that will immediately follow once they are registered. For example, when the agency is registered as an official entertainment business by the government, it has to follow the FTC’s rigorous standard contract form – which restricts the maximum contract period to seven years.”

“Contract breach is another issue. When an entertainer cancels a contract in the middle of the term, registered agencies can no longer charge double or triple what they are suppose to ask for.”

The Korean Creative Content Agency (KOCCA) has been publicizing the new law since its inception last year, writing several articles, airing advertisements, and even holding meetings with major agencies in February and March, thus making the chances very slim that the Big 3 are unaware of the law.

An official at KOCCA stated they have contacted nearly every agency that they could find online to remind them to register per the law, and continued to add that, “If the three major agencies are not registered by next month, they will be considered as an illegitimate business.”

“We don’t know why and it’s impossible to find out the reasons behind the three agencies’ late registration despite a year grace period. For SM and YG, if they don’t certify their business by this Friday, they will have to register as a newly established entertainment, which will be another month of delay.”

Newly established agencies, who must provide proof of at least four years of experience in the field and in the office, must register by July 28th.