As the government reviews the easing of criminal punishment regulations related to economic crimes, it has decided to exclude unlawful acts committed by the parties involved, knowing they violate the law, from the target of easing. Collusion is a representative example.
The government plans to quickly extract the punishment regulations subject to easing, create a bill for amendment, and submit it to the regular National Assembly meeting scheduled for next month.
According to the Ministry of Economy and Finance on the 24th, the Economic Criminal Law Rationalization Task Force (TF), launched this month, is currently working to identify cases where penalties can be reduced from punitive measures defined in laws such as imprisonment and fines to penalty surcharges and fines.
The 15 ministries participating in the Economic Criminal Law Rationalization TF, including the Ministry of Justice, Fair Trade Commission, Ministry of Land, Infrastructure and Transport, and Ministry of Oceans and Fisheries, will select which laws have excessive punishments under their jurisdiction and finalize it by September. The ultimate goal is to reduce the economic criminal regulations across all ministries by 30%.
The government cites the predictability of legal violations by actors as one of the criteria for selecting the types of crimes for which the punishment will be mitigated. This intends to ease the penalties primarily for actions where individuals or corporations have little opportunity to recognize that they are violating the law. That is, collusion among similar businesses to fix prices or production volumes indicates a higher likelihood that they are aware of their unlawful conduct, thus they are not subject to penalty reduction.
A government official explained, "Collusion involves businesses conspiring to raise prices, and the actors recognize that this constitutes a legal violation. Therefore, it is necessary to maintain punishment regulations for this type of unlawful behavior."
Conversely, in cases where individuals recognize little possibility of legal violations while engaging in exclusionary conditional transactions, penalties may be mitigated. Exclusionary conditional transactions are acts of conducting transactions under conditions that unfairly constrain the business activities of the trading partner. A typical example is when a headquarters prevents a specific agency from selling products online at low prices. While this requirement to attract customers to stores may improve the quality of in-store service, it also leads to the adverse effect of hindering price competition.
Previously, in 2021, the Fair Trade Commission eased the punishments for exclusionary conditional transactions involving general businesses from imprisonment and fines to penalty surcharges. Currently, punishment regulations remain only for market-dominant businesses with a high market share. If a market-dominant business engages in exclusionary conditional transactions, it faces up to three years in prison or fines of less than 200 million won. However, the mitigation of penalties for exclusionary conditional transactions by market-dominant businesses is not yet a finalized measure.
As the Economic Criminal Law TF began operations, economic organizations have raised concerns that the obligation to retain documents during the Fair Trade Commission's investigation is excessively burdensome. Corporations that fail to submit relevant documents or report falsely during a Fair Trade Commission investigation face up to two years in prison or fines of less than 150 million won. The Federation of Korean Industries noted, "This violates the constitutional principle of excessive prohibition."
Also, if an obstruction occurs against Fair Trade Commission staff entering the scene during an investigation, a prison sentence of up to three years or fines of less than 200 million won may be imposed, which is also considered excessive by the Federation of Korean Industries. A government official stated, "We are discussing which laws to ease among the ministries," adding, "It is expected to be organized by early next month."
The government plans to promote discussions on improving the crime of breach of trust. During the emergency economic review TF meeting on the 30th of last month, President Lee Jae-myung remarked, "It seems that the time has come to seek institutional improvements regarding the fact that the crime of breach of trust is being abused and is stifling corporate activities."
The Economic Criminal Law Rationalization TF has also included the economic crimes of ordinary citizens in the targets for easing. Economic crimes that ordinary individuals may commit include applying for a disabled person vehicle sign without being a disabled person. This act can result in imprisonment of up to two years or fines of less than 5 million won. Similar cases include those for pregnant women and low-emission vehicle stickers. Meanwhile, the government does not consider livelihood theft to fall under the economic crimes subject to easing.