As the Financial Supervisory Service said it would expand the scope of duties for special judicial police to a wide range of areas, its confrontation with the Financial Services Commission is intensifying.
According to the financial sector on the 25th, the Financial Supervisory Service recently submitted a plan to the Financial Services Commission to improve the use of special judicial police. Beyond granting ex officio investigative authority to capital market special judicial police and introducing special judicial police for livelihood issues that it had been pursuing, the Financial Supervisory Service is raising the need to expand the scope of duties to accounting oversight and inspections of financial companies. The Financial Supervisory Service reported to the Financial Services Commission that, based on financial expertise, taking on investigative work would create strong synergy and that introducing special judicial police would be beneficial not only for unfair-trade investigations and responses to livelihood crimes but also in inspections and accounting oversight.
The Financial Services Commission has formed a special judicial police task force centered on the Secretary-General to discuss response measures, and is said to be consolidating an internal position that many of the Financial Supervisory Service's proposals "lack basis or validity." There is also a legal debate over whether it is appropriate for the Financial Supervisory Service, a private organization, to have full-spectrum investigative powers such as search and seizure of private corporations and financial companies, account tracing and freezing, and digital forensics.
The Financial Supervisory Service argues that its goal is not to "inflate the organization" or "expand authority," but to draw up review plans in line with instructions given during the president's policy briefing. President Lee Jae-myung on Dec. 19 at a policy briefing by the financial authorities instructed officials to organize what areas should see the addition of special judicial police and whether ex officio investigative authority is necessary, and to report to the prime minister's office. The FSS says this review follows that directive.
To dispel concerns about abuse of power while pushing to expand the scope of special judicial police and grant ex officio investigative authority to capital market special judicial police, the Financial Supervisory Service is preparing its own detailed control measures. Under the plan under review, separate from the current Financial Services Commission investigation deliberation committee (the committee), the FSS would have its own committee to decide whether to commence ex officio investigations. The chairperson would be the FSS deputy governor for disclosure investigations, but to ensure neutrality, members would include commissioners from the FSC committee so that the personnel ratio between the two institutions is at least equal. Outside members, including legal advisers, would also be included.
Ex officio investigation status would be reported in person to the Securities and Futures Commission of the Financial Services Commission. However, because reporting at the start of an investigation could slow the pace, the results would be reported afterward. The bylaws would specify that only planned investigation cases by the FSS Investigation Department are subject to investigation to limit the scope of ex officio investigations, and they would also include provisions to block information sharing between investigation and enforcement departments until before the conversion to an investigation to dispel concerns about evading the warrant principle.