Anti-Corruption System
in Korea
March 2, 2015
Eun Jae Park
Yulchon LLC
Copyright ⓒ 2015 Yulchon LLC. All Rights Reserved.
Table of Contents
I. Anti-Corruption Agencies
3
II. Anti-Corruption regarding Domestic Public Officials, etc.
5
1. Bribery of Domestic Public Officials, etc.
6
2. Aggravated Punishment of Bribery
7
3. Scope of Bribery/Expansion of Scope
8
4. Bribery vs. “Bribery through Breach of Fiduciary Duty”
13
III. Anti-Corruption regarding Foreign Public Officials, etc.
(Act on Combating Bribery of Foreign Public Officials in International Business Transactions)
14
1. Background of Legislation
15
2. Difference between the Anti-Bribery Act and other Acts regarding Bribery of Domestic Public Officials, etc.
16
3. Scope of ‘Foreign Public Officials, etc.’
17
4. Criminal Liability of Offerer, etc.
18
5. Dual Punishment and Waiver of Punishment
21
IV. “Kim Young-ran Bill,” Political Hot Potato in Korea
What is the issue of Kim Young-ran Bill?
22
23
Anti- Corruption Agencies
Anti-Corruption Agencies
Board of Audit and
Inspection (BAI)
Police
Criminal Investigation
Administrative Investigation
(strong)
against
Public
Officials
Korea Financial Intelligence Unit
(KoFIU)
Anti-Corruption & Civil
Rights Commission (ACRC)
Identifying illegal or suspicious financial
transaction
Providing
information
to
criminal
Investigation Agencies (No Investigation)
Acquiring Corruption Information
Administrative
Investigation
(weak) against Public Officials
Prosecutors’ Office
Criminal Investigation
Indictment
Court
4
Anti-Corruption regarding
Domestic Public Officials, etc.
Bribery of Domestic Public Officials, etc.
Public
Officials, etc.
Crime
Domestic public Bribery
officials/
Arbitrators
Third party bribery
(delivery and taking)
Applicable Laws
Relevant Illegal Acts
Punishment
Article 129(1) of the
Criminal Act
To receive, agree to receive, express intent to
receive a bribe (demand)
Imprisonment
(up to five (5) years)
Article 130 of the Criminal To make, demand or agree to make a bribe
Act
given to a third party
Illegal Brokerage
Commission
Article 3 of the Act on the
Aggravated Punishment
of Specific Crimes
To receive, demand or agree to receive money Imprisonment (up
or valuables as a brokerage commission for the to five (5) years) or
public officials’ work
fine {up to KRW 10
million (10,000
USD)}
Illegal Brokerage
Commission
Article 111 of the Attorney- To receive, demand or agree to receive money Imprisonment (up
at-Law Act
or valuables as a brokerage commission for the to five (5) years) or
public officials’ work
fine (up to KRW 10
million)
6
Aggravated Punishment of Bribery
• Pursuant to Article 2 of the Act on the Aggravated Punishment, etc. of Specific
Crimes (the “Aggravated Punishment Act”), ‘any person who commits crimes as prescribed in
Articles 129, 130 or 132 of the Criminal Act’ shall be punished according to the
amount of bribe received.
Aggravated Punishment (Article 2 of the Aggravated Punishment Act)
• KRW 100 million (1 million USD) or more: Imprisonment for lifetime or for not less
than ten years
• KRW 50 million (0.5million USD)or more: Imprisonment for not less than seven
years
• KRW 30 million (0.3million USD) or more : Imprisonment for not less than five
years
Concurrent imposition of fine which is not less than two times but not more than
five times the amount of bribe received
7
Scope of Bribery: to whom? (Criminal Act)
Public
Officials
• Public officials are in charge of affairs of the State or local
governments and the status of public officials is in principle,
determined in accordance with the State Public Officials Act
and the Local Public Officials Act.
Arbitrators
• Arbitrators are in charge of arbitration issues based on the laws.
However, simple and private mediators are not arbitrators in
term of the bribe takers.
8
Scope of Bribery: to whom?
※ Public Officials under the State Public Officials Act (Article 2)
Public officials in career service: Public officials appointed based on their performance and general qualifications,
whose status is guaranteed, and who are expected to spend their entire lives (referring to a specified period where public
officials are appointed for such period of service) as public officials
1. Public officials in general service – Public officials who are in charge of technical or research affairs, or general
administration
2. Public officials in special service – Judges, public prosecutors, foreign service officials, police officers, firefighting officers, educational public officials, members of armed forces, military service officials, research officers of
the Constitutional Court and employees of the National Intelligence Service, and public officials in charge of affairs
in special fields, as designated by other Acts as public officials in special service
Public officials in non-career service: Public officials other than those in career service
1. Public officials in political service
a. Public officials who are appointed by election, or whose appointment requires approval of the National Assembly
b. Public officials in charge of affairs regarding sophisticated policy decision-making or of assisting such affairs, who are
designated by the Acts or Presidential Decree (limited to Presidential Decree concerning the organization of the Office
of the President, and Office of the Chief of National Security) as public officials in political service
2. Public officials in extraordinary civil service – Public officials who are designated by the Act and subordinate
statues as public officials in extraordinary civil service to perform such assistance duties as secretarial officer or
secretary, or to perform any specified duties
9
Scope of Bribery: to whom?
※ Public Officials under the Local Public Officials Act (Article 2)
Public officials in career service: Public officials appointed based on their performance and general qualifications,
whose status is guaranteed, and who are expected to spend their entire lives (referring to a specified period where public
officials are appointed for such period of service) as public officials
1. Public officials in general service – Public officials who are in charge of technical or research affairs, or general
administration
2. Public officials in special service – Educational public officials of public universities and junior colleges,
educational expert staff working for the superintendent of education, autonomous police officers, local fire-fighting
officers, and public officials in charge of affairs in special field, as designated by other Acts as public officials in
special service
Public officials in non-career service: Public officials other than those in career service
1. Public officials in political service
a. Public officials who are appointed by election, or whose appointment requires approval of the National Assembly
b. Public officials in charge of affairs regarding sophisticated policy decision-making or of assisting such affairs, who are
designated by the Acts or municipal ordinances as public officials in political service
2. Public officials in extraordinary civil service – Public officials who are designated by the Act and subordinate
statues as public officials in extraordinary civil service to perform such assistance duties as secretarial officer or
secretary, or to perform any specified duties
10
Expansion of Scope of Bribery
• Article 4 of the Aggravated Punishment Act prescribes that executives and employees of some
government-managed corporations or institutions shall be deemed to be the public officials in applying
Articles 129 through 132 of the Criminal Act.
Executives and Employees
45 institutions such as the Bank of Korea, Korea Development Bank, Industrial Bank of Korea,
Korea Mint Corp., Export-Import Bank of Korea
Executives
Nine institutions such as the Korean Broadcasting System (KBS), Local Agricultural Cooperative
Federation, Local Livestock Cooperative Federation, etc.
•
Articles 5 through 7 of the Aggravated Punishment on the Specific Economic Crimes Act have
penal provisions on the case where ‘executives or employees of financial institutions’ are engaged in the
act equivalent to the bribery under the Criminal Act in connection with their duties
• As financial institutions are established in accordance with the special Acts and subordinate
statues and their business or affairs have public nature, they have material effect on the State’s
economic policy and national economy. Therefore, the executives and employees must observe
the strict integrity policy applicable to public officials when they perform their duties.
11
Expansion of Scope of Bribery
• In addition to the Aggravated Punishment Act, many of other Acts have the provisions which expand the
scope of bribery
Type
Applicable Act
A person who is not a public official and serves as an executive or employee of
a public corporation or quasi-government institution, member of the
management committee, or member of the executive recommendation
committee
Article 53 of the Act on the Management of
Public Institutions and Articles 129 through
132 of the Criminal Act
Executive and employees of a public corporation and public organization
Article 83 of the Local Pubic Enterprises
Act and Articles 129 through 132 of the Criminal
Act
Executives and employees of National Health Insurance Corporation
Article 28 of the National Health Insurance Act
and Articles 129 through 132 of the Criminal Act
Chairperson of a promotion committee, executives of an association and the
representative (referring to the executives in case of a corporation) and
employees of a specialized manager of rearrangement project, and his/her
entrusted manager
Article 84 of the Act on the Maintenance and
Improvement of Urban Areas and Dwelling
Conditions for Residents and Articles 129
through 132 of the Criminal Act
Executives and employees of the National Information Society Agency and the
Internet and Security Agency who engage in the business affairs entrusted by
the Minister of Knowledge Economy or the Korea Communications Commission
pursuant to Article 65(2) and (3) of the Act on Promotion of Information and
Communications Network Utilization and Information Protection, etc.
Article 69 of the Act on Promotion of
Information and Communications Network
Utilization and Information Protection, etc.
and Articles 129 through 132 of the Criminal Act
12
Bribery vs. “Bribery through Breach of
Fiduciary Duty”
Bribery (Article 129(1) of the
Criminal Act)
Bribery through Breach of Fiduciary
Duty (Article 357(1) of the Criminal Act)
Recipient of Bribe
Public officials, arbitrators, etc.
Person who administers another’s private
business
Illegal Solicitation
Not necessary
Necessary
Penal Provisions on
Would-be Criminal
None
Yes
Expression of intent to offer bribe
Actual offering of bribe
Punishment
Imprisonment (up to five (5) years)
Imprisonment (up to five (5) years) or fine
(up to KRW 10 million)
13
Anti-Bribery regarding
Foreign Public Officials, etc.
Act on Combating Bribery of Foreign Public Officials in International Business
Transactions
Background of Legislation
U.S. Government’s
request for equal
competition opportunity
1
Before 1997, only the U.S. Government could
punish the bribe to foreign public officials in
accordance with the FCPA
2
1997. 12. 17. Signing the OECD Anti-Bribery Convention
3
1999. 1. 4.
Legislation of the Act on Combating Bribery of
Foreign Public Officials in International Business
Transaction (the “Anti-Bribery Act”)
15
Important Features of the Anti-Bribery Act
• Parties that are offered bribe - Foreign public officials, etc.
• Pursuing illicit gains
• Waiver of punishment
• No punishment of bribe taking
• Due to dual punishment provision, corporation to which a bribe offerer
belong may be punished
• Although there is a provision on confiscation, there is no separate
provision on additional collection
16
Scope of ‘Foreign Public Officials, etc.’
• Any person holding legislative, administrative, or judicial office in a foreign country,
whether appointed or elected (Subparagraph 1 of Article 2 of the Anti-Bribery Act)
Any person
exercising a public
function for a
foreign country
• Carrying out public affairs delegated by a foreign government
(Subparagraph 2 of Article 2)
• Any executive or employee of an enterprise in which a foreign
government has invested in excess of 50% of its paid-in
capital or over which a foreign government has de facto
control as regards to decision-making on important business
operations and the appointment and removal of executives
• Holding office in a public organization or public agency to
carry out specific public affairs
Exception: Any enterprise engaging in a business in competition at
arm’s length with general private business entities
• Any person acting for a public international organization (Subparagraph 3 of Article 2)
17
Criminal Liability of Offerer, etc.
Requirements (Article3(1) of the Anti-Bribery Act)
• Relevance to ‘international business transaction'
• ‘Illicit gains’
• Relevance to duties of ‘foreign public officials, etc. '
• ‘Bribe'
• Promise, offer or express intent to offer bribe
18
Criminal Liability of Offerer, etc.
Circumstances Precluding Wrongfulness
• Where such payment is permitted or demanded pursuant to the
statutes of the country to which the relevant foreign public official
belongs.
• Where any person promises, offers, or expresses his/her intent to offer
a small amount of money or any other interests to a foreign public
official, who performs daily routine duties, in order to encourage the
official to perform his/her duties in a fair manner.
19
Criminal Liability of Offerer, etc.
Penal Provisions (Article 3(1) and (3) of the Anti-Bribery Act)
• Imprisonment for up to five (5) years or fine of up to KRW 20 million
(20,000 USD)
• If criminal proceeds exceed KRW 10 million (10,000 USD),
Imprisonment for up to five(5) years or fine of up to the amount equivalent to
double the criminal proceeds
• Where a relevant person is punished by imprisonment, a fine shall be
concurrently imposed
20
Dual Punishment and Waiver of Punishment
Dual Punishment
(Article 4 of the AntiBribery Act)
Relevant entity shall be punished by a fine of up
to KRW 1 billion (where the criminal proceeds
exceed KRW 500 million, relevant entity shall
be punished by a fine of up to an amount
equivalent to double the criminal proceeds)
• The foregoing provision shall not apply to the case where the relevant entity did
not neglect to take reasonable care or supervision in order to prevent offences
(proviso to Article 4 of the Anti-Bribery Act)
21
“Kim Young-ran Bill,”
Political Hot Potato in Korea
What is the issue of Kim Young-ran Bill?
Official Name of Bill
Act on the Prevention of Illegal Solicitation, Giving and Receiving of Money or
Valuables, etc.
Who is Kim Young-ran?
The first female Supreme Court justice and former Chairperson of ACRC (AntiCorruption & Civil Rights Commission ) from 2011 to 2012
Key Points of Original Bill (proposed in 2011)
- Target: Public officials and their family members and their first cousins or close
relatives
- Criminal punishment for one-time receipt of KRW 1 million (1,000 USD) or KRW 3
million (3,000 USD) for one year
- Regardless of “consideration”
23
What is the issue of Kim Young-ran Bill?
Amended bill of the National Assembly
- Passed at the National Policy Committee on January 8, 2015
- Expansion of Applicable Parties: Including executives and employees of private
press and private schools
 KBS vs. MBC or SBS
 Seoul National University vs. Korea University or Yonsei University
Amended bill may apply to more than 20 million people
Criticism: All people may be criminals/Politicians’ artifice to prevent the
passage of the bill
24
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