Going forward, if someone is caught fraudulently receiving state subsidies, additional monetary sanctions of up to eight times the aggregates of the fraudulent take will be imposed. Previously, the maximum was five times. This measure came 15 days after President Lee Jae-myung, at the end of last month, pointed to cases of fraudulent receipt of state subsidies and said, "Make sure everyone can clearly recognize that if you are caught stealing taxpayers' money, you will be ruined."
On the 10th at Government Complex Seoul, the government held a meeting of relevant ministers to eradicate fraudulent receipt of state subsidies, chaired by Prime Minister Kim Min-seok, and discussed measures to this effect. Forty ministries and agencies related to state subsidies, including the Ministry of Planning and Budget, attended.
First, it will greatly expand additional monetary sanctions. Typically, when fraudulent receipt is detected, the entire amount wrongfully received and the additional monetary sanctions are imposed, and if not paid by the deadline, an additional charge in the nature of arrears is levied. Among these, in cases of "receipt by false or fraudulent means," the additional monetary sanctions will be increased from five to eight times the amount fraudulently received. For example, if 10 billion won was fraudulently received, 80 billion won would be added, making it 90 billion won.
A Ministry of Planning and Budget official said, "In the case of stock manipulation, fines reach six times and the penalty surcharge is twice, totaling eight times," adding, "We have significantly raised the additional monetary sanctions to a level similar to the sanctions for stock manipulation."
It also decided to strengthen informant rewards. Currently, 30% of the aggregates of the fraudulent take is paid as a reward within the budget, but going forward, it will pay 30% of all amounts recovered to the national treasury (fraudulently received amount + additional monetary sanctions + additional charge).
A Ministry of Planning and Budget official said, "From each ministry's standpoint, they often do not even allocate a budget because they do not know how many reports will come in, so if it says 'within the budget,' there may be cases where a reward cannot be paid," adding, "From now on, we will pay regardless of the budget and increase the size of the rewards themselves." Even for small amounts, 5 million won will be paid.
The Ministry of Planning and Budget will drastically expand the scope of inspections of fraudulent receipt cases this year. Field inspections, which were limited to 606 cases last year, will be conducted across a total of 13,200+α (alpha) private and local government subsidy projects. The determination of whether fraudulent receipt occurred and the level of sanctions, which each ministry had previously set on its own, will henceforth be decided collectively by the Ministry of Planning and Budget's Subsidy Management Committee.
A Ministry of Planning and Budget official said, "As the heads of each ministry carried out sanctions separately, it is true that leniency prevailed or that sanction procedures were customary or a slap on the wrist," adding, "For cases of 10 million won or more in fraudulent receipt, the ministry will take charge, and for cases of 10 million won or less, the ministries will decide as before."
According to the Ministry of Planning and Budget, the number of detected cases of fraudulent receipt of state subsidies last year was 992 (66.77 billion won), the highest on record. The government plans to pursue revisions to relevant laws and guidelines and improvements to the system reflecting the measures discussed on this day.