On the 9th, it was learned that the Korea Fair Trade Commission and 15 banks and securities firms are engaged in a last-minute tug-of-war over the amount of the penalty surcharge in the government bond rate collusion case. The Korea Fair Trade Commission (FTC) is considering imposing up to 11 trillion won, while the banks and securities firms argue that 60 billion won at most is an appropriate penalty surcharge. The final amount of the penalty surcharge is expected to be decided as early as July.
◇ Korea Fair Trade Commission (FTC) "the 76.2 trillion won winning bid amount for government bonds should be counted as revenue"
Government bond rate collusion refers to a case in which 15 banks and securities firms seeking to buy government bonds from the government are suspected of colluding to coordinate bid prices, that is, interest rates. The Korea Fair Trade Commission (FTC) detected signs of collusion and began an investigation in 2023. The final level of sanctions will be decided this year, three years later. The key is the penalty surcharge. The collusion penalty surcharge is determined by multiplying the "sales related to the collusion" by the "assessment rate based on the severity of the collusion."
The Korea Fair Trade Commission (FTC) holds that the penalty surcharge should be based on the "winning bid amount for government bonds." Article 50 of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act stipulates that, in cases such as bid rigging, the contract amount is deemed to be sales. Since the government bond rate collusion is bid rigging, the FTC's logic is that, under the decree, the winning bid amount corresponding to the contract amount should be used as the base amount for the penalty surcharge.
During the period under suspicion of collusion, the winning bid amount for government bonds by the 15 firms totaled 76.2 trillion won. To this, the Korea Fair Trade Commission (FTC) applied an assessment rate of 10.5% to 15%. In that case, the penalty surcharge could range from at least 8 trillion won to as much as 11.4 trillion won. This far exceeds the previous record-high collusion penalty surcharge of 671 billion won (in 2026 on seven flour milling companies).
◇ Banks and securities firms "operating revenue from government bonds should count as sales"
The banks and securities firms plan to counter that the Korea Fair Trade Commission (FTC) calculated an excessive penalty surcharge by applying the enforcement decree rather than the law. According to research commissioned by the 15 banks and securities firms and obtained by ChosunBiz, the analysis concluded that "it is reasonable to calculate the related sales in this case based on operating revenue." As in manufacturing, where the product sale proceeds are not used, only the fees and commissions earned from selling the product (financial products) should be counted as related sales. The research was conducted by a law school professor who previously served as a judge in charge of fair trade cases and as a nonstanding commissioner of the Korea Fair Trade Commission (FTC).
Their basis is Article 8 of the Monopoly Regulation and Fair Trade Act. This provision stipulates that, for a business that records the total consideration for goods and services as operating revenue in financial statements, the related sales shall be the operating revenue. Because government bonds are also used for financial product hedging (hedge; risk avoidance), it is difficult to calculate the exact operating revenue. When it is difficult to calculate operating revenue in this way, the law requires imposing a fixed-amount penalty surcharge. The maximum is 4 billion won. If all 15 firms were imposed the maximum fixed-amount penalty surcharge, their total would be 60 billion won.
A financial industry source said, "The Korea Fair Trade Commission (FTC) calculated the penalty surcharge excessively by applying the enforcement decree rather than the law," adding, "If, as with government bond operations, it is difficult to calculate operating revenue, the fixed-amount penalty surcharge should be applied in accordance with the law."