SOUTH KOREA Law and Practice Contributed by: Soo Bong Jung, Jinwook Song, Jinwon Choi and Jiyoung Sohn, Bae, Kim & Lee LLC
significant and reasonably foreseeable impact on the Korean market – such as cartel agreements that restrict competition in the Korean market – are subject to prosecution and sanctions. Additionally, the Foreign Bribery Prevention in Interna - tional Business Transactions Act (FBPA), enacted pur - suant to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, criminalises the bribery of foreign public officials. Korea has entered into bilateral treaties providing for mutual assistance in criminal matters (MLATs) with approximately 30 countries, including the USA, Australia, France, Canada, Russia, China, Hong Kong, Japan, Mexico, Brazil, India, Indonesia, Peru, Argentina and Spain. Beyond these MLATs, Korean investigative authorities also collaborate with foreign counterparts using memoranda of understanding or the principle of reciprocity. Such international collabo - ration, particularly in cartel activity investigations, has grown in recent years. However, in connection with international co-opera - tion, certain privacy laws and other laws that provide for the maintenance of secrecy and confidentiality in specific financial transactions can impede the provi - sion of information that foreign authorities request. Separately, Korea has entered into a number of extra - dition treaties with 33 countries, including the USA, Australia, France, Canada, China, Hong Kong, Japan, Mexico, Brazil, India, Indonesia, Peru, Argentina and Spain. In most extradition treaties, offences are “extra - ditable” if they are “punishable under the laws of both Contracting Parties” – including white-collar offences and those “relating to taxation of foreign exchange control” – as long as a specific imprisonment period is prescribed in the statutory provisions addressing these offences. 1.5 Corporate and Personal Liability Under Korean laws, only natural persons are subject to criminal prosecution and punishment. However, exceptions exist where specific statutory provisions (“joint penal provisions”) allow for the imposition of corporate criminal liability for certain offences. Nota -
ble among these provisions are those found in the MRFTA, the FBPA and the Act on the Prohibition of Improper Request and Provision/Receipt of Money and Valuables (the “Anti-Graft Act”). Furthermore, the Korean Supreme Court has ruled that a corporate entity, in the context of a merger or an acquisition, may not be held liable for offences com - mitted prior to the merger or acquisition. However, this stance has not been codified into law. 1.6 Sentencing and Penalties To determine penalties that align with the nature and extent of an offence, Korean courts use certain sen - tencing guidelines crafted by the Sentencing Commis - sion, an independent organisation affiliated with the Korean Supreme Court. Currently, the sentencing guidelines cover 20 major offences, including homicide, bribery, sexual assault, embezzlement and criminal breach of trust, larceny, fraud and election crimes. The Sentencing Commis - sion is actively developing further sentencing guide - lines for other offences, and is refining or supplement - ing existing sentencing guidelines. Although the sentencing guidelines are not legally binding, in practice they are effective because a judge must document the rationale for a sentence that devi - ates from these guidelines. As will be elaborated in 2.7 Deferred Prosecution and 4.3 Plea Agreements, Co-Operation, Self-Disclosure and Leniency , the Korean criminal justice system does not recognise deferred prosecution agreements, non- prosecution agreements or plea agreements. Conse - quently, no guidelines exist for such arrangements. 1.7 Damages and Compensation In Korea, victims of property crimes, such as fraud, embezzlement or criminal breach of fiduciary duty, generally seek recovery of losses through civil claims filed in Korean civil courts. While there are statutory provisions allowing criminal trials or appellate courts to assess monetary damages on the perpetrators, these criminal courts often refrain from awarding mon - etary damages when there is a dispute regarding the amount of loss. As this scenario is common in most
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