More than 1 year and 3 months have passed since the Korea Fair Trade Commission sent a review report to major securities firms and banks over the so-called "treasury bond bid-rigging case," pushing the timing of a criminal complaint to the forefront as a variable that could determine which body handles the case. With the abolition of the Prosecution Service set for Oct., uncertainty has grown over whether the case will remain with the existing prosecution or be transferred to the new Serious Crime Investigation Agency, depending on when the Korea Fair Trade Commission (FTC) files the complaint.
In legal circles, some noted that because prosecutors have directly supplemented Korea Fair Trade Commission (FTC) complaint cases to check whether "higher-ups" were involved, the Serious Crime Investigation Agency should also be staffed with investigators specialized in fair trade cases. Considering that the statute of limitations for Fair Trade Act violations is relatively short, there are growing calls to improve predictability in scheduling full commission meetings at the Korea Fair Trade Commission (FTC) and in making complaint decisions.
◇ Final showdown over penalty surcharge for treasury bond collusion… complaint timing unclear
According to legal sources on the 29th, the Korea Fair Trade Commission (FTC) is locked in a final dispute with 15 banks and securities firms over the size of the penalty surcharge in the treasury bond bid-rigging case.
The Korea Fair Trade Commission (FTC) maintains that up to a 15% assessment rate should be applied to the 76.2 trillion won in treasury bond awards at the 15 entities during the collusion period. In that case, the penalty surcharge could reach as high as 11.4 trillion won. Banks and securities firms, on the other hand, argue that because it is difficult to calculate operating income, a fixed-amount penalty surcharge should apply. The fixed amount they claim is up to 4 billion won per company, totaling about 60 billion won.
At the core of the treasury bond bid-rigging case is the allegation that primary dealers (PDs) shared bid information in advance during the bidding process to maximize profits. The Korea Fair Trade Commission (FTC) has investigated major securities firms and banks since 2023, and is said to have sent review reports last Mar. to 10 securities firms and five banks.
However, with the schedule for the full commission meeting that will determine the level of sanctions still unsettled, it is difficult to predict the timing of a complaint. Typically, in Fair Trade Act violation cases, whether to file a complaint with prosecutors is decided after a resolution by the Korea Fair Trade Commission (FTC) full commission meeting.
◇ Variable over who will handle the case ahead of the Prosecution Service's abolition
The problem is that the handling structure could change depending on when the complaint is filed. Until now, Fair Trade Act violations such as collusion have been handled by filing a complaint with prosecutors after a Korea Fair Trade Commission (FTC) full commission resolution, followed by additional investigation and indictment by prosecutors before the case goes to trial.
If the Korea Fair Trade Commission (FTC) files a complaint in the treasury bond collusion case before the Prosecution Service is abolished in Oct., the existing prosecution could take charge of the investigation and indictment. If the complaint comes after the abolition, additional investigation by prosecutors will be virtually difficult. Although the Fair Trade Act designates the prosecutor general as the recipient of complaints, after Oct. the Public Prosecution Office will handle indictments and the Serious Crime Investigation Agency will take economic crime investigations, raising concerns that confusion over case-handling procedures will be unavoidable.
There are also concerns in legal circles about whether the Serious Crime Investigation Agency can investigate fair trade cases as professionally as the existing prosecution. In large collusion cases, raids and seizures, digital forensics, staff interviews, and checks of internal reporting lines can uncover additional participants not revealed during the Korea Fair Trade Commission (FTC) investigation stage.
A representative example is the flour and sugar collusion case. At the time, the Korea Fair Trade Commission (FTC) filed complaints mainly against working-level managers at sugar and flour companies, but prosecutors, through further investigation, found indications of involvement by executive-level officials and arrested and indicted two people. On Apr., the court of first instance also found the so-called "higher-ups" additionally indicted by prosecutors guilty.
An attorney who formerly served as a senior prosecutor said, "Unless the existing prosecution personnel move over intact, it will not be easy for investigators at the Serious Crime Investigation Agency, who lack or have little experience conducting raids on large corporations, to properly investigate Fair Trade Act violations," adding, "If the Serious Crime Investigation Agency is to take on economic crime investigations, how it secures dedicated personnel and investigative experience for fair trade cases will be crucial."
◇ The later the complaint, the less time to investigate… need predictability for full commission meetings
In legal circles, some say the Korea Fair Trade Commission (FTC) should also refine how it runs full commission meetings in step with the transition to the Public Prosecution Office and the launch of the Serious Crime Investigation Agency. The Korea Fair Trade Commission (FTC) has often filed complaints with prosecutors close to the statute of limitations, but after the Prosecution Service is abolished, the process will require investigation by the Serious Crime Investigation Agency and an indictment decision by the Public Prosecution Office, which could require more time to handle cases.
Fair Trade Act violation cases have a relatively short five-year statute of limitations. The longer the Korea Fair Trade Commission (FTC) delays its complaint decision, the less time investigative authorities have to conduct supplementary probes. In particular, because collusion cases must be proven through related-party statements, internal documents, and analysis of bidding data, legal sources say sufficient investigation time must be secured.
From the corporations' standpoint, if submission to the full commission is delayed for a long time, they bear prolonged legal risk without clarity on whether they will be sanctioned. If no conclusion is reached for an extended period after review reports are sent, not only the size of the penalty surcharge but also the likelihood of criminal complaints remains uncertain.
A legal source said, "Some cases quickly reach the full commission, while others are delayed for a long time," adding, "Given the short statute of limitations for Fair Trade Act violations, it is necessary to improve predictability in the process of submitting cases to the full commission and deciding whether to file complaints."