SOUTH KOREA Law and Practice Contributed by: Soo Bong Jung, Jinwook Song, Jinwon Choi and Jiyoung Sohn, Bae, Kim & Lee LLC
repair or replace the defective product, or refrain from manufacturing, importing and/or selling the defective product. Non-compliance can result in the relevant executive or employee facing up to three years of imprisonment or a criminal fine of up to KRW50 mil - lion. A company may also be subject to a criminal fine of up to KRW50 million if it fails to demonstrate that it exercised due care and supervision to prevent such misconduct. Deceptive sales activities, such as failure to provide adequate notice as legally required, contractually or under the principle of good faith, constitute fraud and may be punishable by up to ten years of imprison - ment or a fine of up to KRW20 million. The sale of a defective product that results in death or injury to a consumer constitutes criminal manslaughter or negli - gence, and is punishable by up to five years of impris - onment or a fine of up to KRW20 million. An individual who uses misleading labelling or adver - tising may face up to two years of imprisonment or a criminal fine of up to KRW150 million, and the com - pany employing such individual may also be subject to a criminal fine of up to KRW150 million if it fails to demonstrate that it exercised due care and supervi - sion to prevent such misconduct. 3.9 Cybercrimes, Computer Fraud and Protection of Company Secrets The KCC, the Act on the Promotion of IT Network Use and Information Protection (the “Network Act”) and the Personal Information Protection Act (PIPA) offer general safeguards against cybercrimes. The KCC provides that any individual interfering with another person’s business by damaging data or entering false or improper orders into data processing equipment (like computers) may face up to five years of imprisonment or a criminal fine of up to KRW15 mil - lion. In addition, a person who causes property loss by inputting false information or improper orders or by altering the input data without proper authority may face up to ten years of imprisonment or a criminal fine of up to KRW20 million. The Network Act bans the dissemination or transfer of malicious code or programs, and any person violating
such provision may face up to seven years of impris - onment or a criminal fine of up to KRW70 million. Under the Network Act, any unauthorised access into information and communications systems, or causing disruption to information and communications sys - tems, may be punishable by imprisonment of up to five years or a criminal fine of up to KRW50 million. In addition, defamation through the use of information and communications systems using false information may be punishable by imprisonment for up to seven years or a criminal fine of up to KRW50 million. Under the PIPA, an individual may face up to ten years of imprisonment or a criminal fine of up to KRW100 million for causing severe disruption to the business of a public institution by changing or deleting the per - sonal information handled by the public institution, or by acquiring personal information handled by a third party through illegal means and providing such infor - mation to a third party for profit or illegal purposes. 3.10 Financial/Trade/Customs Sanctions Under the Foreign Exchange Transaction Act, the import or export of goods using improper currency exchange rates is prohibited, as are transactions in contravention of a suspension in foreign currency activities or other measures set by the Ministry of Economy and Finance. Violations are punishable by imprisonment up to five years or a fine of up to KRW500 million. In addition, foreign exchange trans - actions that are not authorised or reported, or that are authorised or reported using falsified information or other improper means, are punishable by imprison - ment for up to three years or a fine of up to KRW300 million. The Korean Customs Act (KCA) regulates the import and export of goods to and from Korea, and provides for the collection of customs duties and customs clearance procedures, in addition to providing penal - ties for violations thereof. The most common customs restrictions under the KCA are as follows. Smuggling Smuggling is an act of importing or exporting prohib - ited items, such as counterfeit currency or pornog - raphy, the failure to make a requisite customs dec - laration in relation to imported or exported goods, or
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