President Lee Jae-myung on the 19th ordered a review of the system to allow imposing a significantly higher penalty surcharge on corporations that repeatedly engage in unfair practices. Saying that a response centered on criminal punishment lacks deterrence, he said economic sanctions should be the main tool.
At a Fair Trade Commission work briefing held at Government Complex Seoul that day, the president said, "As long as the perception remains that even if you commit unfair practices you only get caught if you are unlucky, these practices will continue," adding, "We need to change the system so people think that if they (engage in unfair practices), they will definitely be caught."
The president said, "Criminal punishment takes years of investigation and trial, and often ends in a suspended sentence," stressing, "We should make it possible to impose a sweeping penalty surcharge and deploy sufficient investigators." He then said, "We need to take the money," calling it "a matter on which the fate of the Korean economy depends."
There was also a blunt critique of the level of the penalty surcharge. The president said, "What is the point of writing 'a major strengthening (of the penalty surcharge)' and raising the penalty surcharge by 2 billion won," adding, "That amount is nothing from the perspective of corporations."
On the plan to raise the fixed penalty surcharge, he said, "They say it was raised from 4 billion won to 10 billion won, but it is not a burden for large corporations," noting, "Sanctions for violating Korea's economic order are generally weak."
The president also addressed the effectiveness of FTC investigations. Referring to the plan in the briefing materials to introduce "compulsory investigative powers," he asked, "Are you saying compulsory investigations are impossible in probes of unfair practices?"
When Korea Fair Trade Commission (FTC) Chairperson Ju Biung-ghi explained, "The FTC currently does not have compulsory investigative powers, and if parties do not comply with an investigation, we can only file a complaint," the president shot back, "Is there any reasonable justification for the FTC not to have investigative powers?"
The president said, "Conducting a compulsory criminal investigation and imposing an obligation to comply with an administrative investigation are different issues," adding, "If there is not even an obligation to submit materials or comply with investigations necessary for the public interest, there must be a sanction mechanism." He instructed, "Create a mechanism to impose economic sanctions for noncompliance with investigations."
When the chairperson explained that in the European Union (EU) a penalty surcharge may be imposed for refusing an investigation, the president replied, "A penalty surcharge would be good."