Attorney Go Jin-won (Judicial Research and Training Institute class 33), who leads the fair trade investigation response team at Barun Law LLC, said in an interview on the 4th that, in connection with the government's plan to toughen punishment for collusion cases, "as there is a possibility that criminal liability could extend to individual officers and employees of corporations, business practices need to be reviewed."
Go is a former prosecutor-turned-attorney seasoned in the fair trade field. Go served as Director General of the Fair Trade Investigation Department at the Seoul Central District Prosecutors' Office and earned certification as a certified specialist prosecutor (Blue Belt) in the fair trade field while in the prosecution service. Go is regarded as being well versed in fair trade investigations and related legal principles, having also co-authored the prosecution's manual, "Practical investigation of fair trade offenses." The following is a Q&A with Go.
—You lead the fair trade investigation response team at Barun. What is the team's strength?
"It is a so-called multidisciplinary expert collaboration structure. Cases involving violations of the Fair Trade Act often see the Korea Fair Trade Commission's administrative investigation, the prosecution's investigation, and court trials proceed simultaneously or sequentially. The more procedures overlap, the more crucial close collaboration among experts at each stage becomes. Senior advisor Shin Dong-kwon, a former Secretary-General of the Korea Fair Trade Commission (FTC), attorney Kim Yong-ha, a former judge at the Seoul High Court, and attorneys Seo Hye-suk, Jung Kyung-hwan, Baek Kwang-hyun, and Jung Yang-hoon, who are experts in the fair trade field, belong to the fair trade group and have established a system for close collaboration with the investigation response team."
—President Lee Jae-myung recently emphasized a strict stance, saying "corporations engaged in collusion should be expelled from the market." What should corporations be particularly careful about?
"Attention is needed regarding informal contact among officers and employees of competing companies. This is because collusion often starts through personal ties among those in charge at competing firms. Informal information exchange at golf gatherings, alumni networks, or industry association events could also be suspected as "unfair concerted acts" under Article 40 of the Fair Trade Act."
—Can private gatherings among industry insiders also be problematic?
"It means caution is necessary. From the parties' perspective it may feel unfair, but even personal social gatherings can become targets of investigations by the Korea Fair Trade Commission (FTC) or the prosecution. In reality, there are many cases where situations not recognized by officers and employees are suspected as elements of legal violations. Also, practices of "this is how we've always done it" are often punished as collusion. Typical examples include pre-bid allocation of volumes among companies and industry notification practices when setting prices."
—Then how should corporations respond?
"It is necessary to commission fair trade experts to diagnose legal risks in current work processes. This can proactively eliminate potential elements of legal violations. Building an effective internal compliance monitoring system is also essential. The Korea Fair Trade Commission (FTC) grants penalty surcharge reductions to corporations that operate a "Fair Trade Compliance Program (CP)" and it is considered a favorable factor in prosecutorial sentencing. Rather than merely introducing a CP, a constant monitoring system must be established in which the legal team, compliance team, and audit team are substantively involved, report improvements to management, and track implementation."
—Minister Jung Sung-ho of the Ministry of Justice recently stressed at a Cabinet meeting that the level of punishment for individual officers and employees involved in collusion cases should be raised.
"In practice, the targets of punishment that investigative authorities focus on are also those at the executive level or higher. This means the chief executive officer (CEO) could become a target of investigation. If a representative director or an executive is detained and indicted, it could be a major blow to the continuity of corporate management. To prevent this, beyond simply revising rules, a culture of internal control must be fostered based on the recognition that an individual executive can be held directly responsible."
—Abolition of the Korea Fair Trade Commission (FTC)'s exclusive authority to file complaints is under discussion. What changes are expected?
"If the exclusive authority to file complaints is abolished, not only the Korea Fair Trade Commission (FTC) but also the police and the soon-to-be-launched Serious Crimes Investigation Agency will be able to initiate investigations ex officio. This means the investigative channels to which corporations are exposed could increase exponentially. This could lead to an increase in corporations' legal risk expense."
—What risks will corporations face?
"Looking at the provisions of the Fair Trade Act, there are quite a few clauses whose concepts are abstract and comprehensive, such as "unfair methods." Even investigators at the Korea Fair Trade Commission (FTC) who have received professional training sometimes find it difficult to determine whether a violation has occurred. If the exclusive authority to file complaints is abolished, investigative bodies that lack sufficient expertise may indiscriminately launch investigations. From the perspective of corporations, it is important to eliminate potential issues altogether. Thoroughly building internal control systems in advance is the fundamental response."
—These days, the Korea Fair Trade Commission (FTC)'s sanction procedures and the prosecution's investigation sometimes proceed simultaneously.
"The two procedures are legally independent, so statements or submitted materials at the Korea Fair Trade Commission (FTC) can be used to one's disadvantage in the prosecution's investigation, and conversely, responses to the prosecution can affect the level of FTC sanctions. If a strategy of admitting allegations is chosen in a collusion case, leniency (a system for reducing or exempting punishment) should be applied for separately with the FTC and the prosecution. However, procedural cooperation does not mean unlimited submission of evidence or condoning unlawful procedures. If unlawful searches and seizures are condoned, opportunities to argue illegality may also be lost. Therefore, to achieve both cooperation and protection of rights, it is necessary to consult a specialist defense attorney immediately upon the commencement of an investigation."
—Are there cases where the course of a case changed with the assistance of defense counsel?
"Recently, we secured an acquittal in a case involving the representative director of Company H charged with breach of trust and receiving bribes. The prosecution indicted on charges including breach of trust and receiving bribes, but by vigorously challenging the evidence as unlawfully collected, we obtained a full acquittal. We specifically proved at trial that the investigative body collected electronic information beyond the scope of voluntary submission, and the court accepted this. It is a case that confirms the importance of complying with due process in the prosecution's fair trade investigations. It shows that corporations should receive assistance from specialist defense counsel from the early stages of an investigation to thoroughly examine the legality of the evidence collection process."
—With the Prosecution Service set to be abolished in October, how should corporations prepare?
"In the initial phase of the launch of the Serious Crimes Investigation Agency, there may be a certain transition period until the expertise and know-how of fair trade investigations are fully transferred. However, it is risky to view this as a monitoring vacuum and loosen internal controls. Rather, it is necessary to preemptively refine internal CP and legal risk diagnostics during this period. Particular caution is also needed in managing the security of internal corporate information."