SOUTH KOREA Law and Practice Contributed by: Soo Bong Jung, Jinwook Song, Jinwon Choi and Jiyoung Sohn, Bae, Kim & Lee LLC
the KoFIU and comply with AML obligations such as customer due diligence and suspicious transaction reporting. Non-compliance may result in fines, sus - pension of business, or criminal sanctions. The Act also prohibits insider trading, market manipulation, and unfair trading practices. Violations are punishable by imprisonment of at least one year or fines of three to five times unlawful gains, creating a clear enforce - ment framework.
In connection with a cartel investigation, the first party to come forward to the KFTC to co-operate, either before or after the commencement of a formal KFTC investigation, can receive a full 100% reduction in the applicable administrative fine. The second party to come forward might be granted a 50% reduction of the administrative fine. In addition, a company that has its leniency application approved by the KFTC will be shielded from criminal prosecution; if the KFTC decides against forwarding the case to the prosecu - tor, then the prosecutor is barred from launching an investigation or bringing charges against that party. While individuals can pursue immunity or reduced penalties through self-disclosure to investigative authorities, Korean laws do not provide for a general voluntary self-disclosure programme for corporate entities. There is no legal guarantee that co-operation with investigative authorities will in fact result in a light - er penalty. However, co-operation or self-disclosure should be seriously considered, as such actions might decrease the possibility of aggressive investigations (like multiple dawn raids), lead the prosecutor to ask for milder sanctions, and prompt the court to exercise more discretion to impose less severe penalties. 4.4 Whistle-Blower Protection In Korea, whistle-blower protection measures are mainly stipulated under two statutes. For the public sector, the Act on the Prevention of Corruption and the Establishment and Management of Anti-Corruption and Civil Rights Commission (the “Corruption Preven - tion Act”) protects whistle-blowers who report corrupt practices by public institutions and officials. In the pri - vate sector, the Protection of Public Interest Report - ers Act (the “Whistle-Blower Protection Act”) protects whistle-blowers who report actions and conduct that are detrimental to the public health and safety, envi - ronment, consumers or fair trade practices. Both the Corruption Prevention Act and the Whistle-Blower Protection Act provide for monetary incentives for whistle-blowing and mechanisms to ensure protec -
4. Pleas and Defences 4.1 White-Collar Defences
For certain white-collar crimes, defences can be based on a lack of intention, a justifiable act, or the consent of the victim. In order to avoid corporate criminal liability under a joint penal provision, a company might show that it exercised due care and supervision to prevent crimi - nal misconduct by its executives or employees. The establishment and implementation of an effective compliance programme is a key component of such compliance defence. 4.2 De Minimis While the Korean criminal justice system does not rec - ognise a de minimis exception for white-collar crimes in general, in practice, the severity of the damage caused by the alleged offence is considered by the prosecutor when deciding on an indictment. If the harm is deemed minimal, the offence may not be pri - oritised for investigation. For certain violations, specifically those relating to tax, customs or fair trade law, a criminal referral from the relevant government agency – such as NTS, NCS or KFTC – is required before the PO can decide on filing a criminal indictment in relation to the offence. 4.3 Plea Agreements, Co-Operation, Self- Disclosure and Leniency While Korean laws do not explicitly permit plea bar - gaining or plea agreements, in practice, a suspect’s voluntary acknowledgement of charges can influ - ence both the punishment sought by the investigative authorities and the court’s final sentence.
tion of the whistle-blowers. Corruption Prevention Act
In Korea, an individual who reports corrupt practic - es can receive compensation up to KRW3 billion if the reporting directly results in recovery, an income
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