SOUTH KOREA Law and Practice Contributed by: Jeena Kim, Sodam Kim and Bochan Kim, Bae, Kim & Lee LLC
product fell under control, they had exported the items without obtaining the required licence from the MOTIE. Defendant A and company B were sentenced to pay a fine of KRW20 million, respectively (Suwon District Court Judgment dated 15 July 2022 Case No 2021No5362). • Defendants A and B conspired to export source code classified as strategic items to Vietnam in violation of export controls. Although they obtained the requisite export licence from the Defence Acquisition Programme Administration for surveil - lance cameras and associated software under their contract with company E of Vietnam, they knowingly excluded the source code – which they understood would be difficult to licence – from their application for an export licence. Instead, they stored it on an external hard drive and exported it illegally to Vietnam. Defendant A was sentenced to a fine of KRW5 million, while defendant B was fined KRW4 million (Daejeon District Court Judgment dated 14 January 2021 Case No 2020GoDan2264). • The defendant exported a strategic item – namely, “Aircraft Parts (Temperature Cabin And S Selec - tor, Aircraft model S‑3A)”, used to measure inte - rior cabin temperature of US military aircraft – to an undisclosed individual residing in the United States. The sale was effected through the online store which the defendant operated on a US-based e‑commerce platform, and shipped via internation - al express mail. All of this was carried out without obtaining the required export licence from the Defence Acquisition Programme Administration. The defendant was fined KRW3 million, with the execution of the sentence suspended for one year (Daegu District Court Judgment dated 29 Novem - ber 2022 Case No 2022GoJeong605). 2.2.5 Mitigation Under Korean criminal law, compliance efforts may be considered as mitigating factors, depending on the circumstances surrounding the offence, including actions taken both before and after its occurrence, along with other sentencing considerations. In addition, the Korean criminal law generally permits leniency in sentencing where the offender co-operates with authorities during the investigation, such as by voluntarily self-reporting. This potential benefit of self-
reporting may be a relevant consideration for compa - nies when determining how to respond to possible
enforcement actions. 2.2.6 “Strict Liability”
Although Korea does not recognise strict liability with respect to its sanctions regime, the financial regu - latory authorities sometimes operate on a de facto strict‑liability basis during their regulatory review pro - cesses regarding financial sanctions.
2.3 Licensing 2.3.1 Derogation
Individuals subject to financial transaction restric - tions under the Anti-Terrorism Act may proceed with the transaction if approval is granted by the Financial Services Commission. Similarly, individuals subject to financial sanctions under the Foreign Exchange Transactions Act may engage in a foreign exchange transaction with the approval of the Chairperson of the Bank of Korea. However, neither the relevant laws nor their subordi - nate regulations specify the criteria or circumstances under which such approvals may be granted in detail. In practice, approvals are rarely issued. 2.3.2 Provision of Legal Services Korean law does not provide a general licence per - mitting the provision of legal services to designated persons. 2.4 Reporting The Anti-Terrorism Act requires financial companies to report to the local police if they identify that assets received from a financial transaction are being used to fund terrorist activity or the proliferation of weapons of mass destruction, or if the counterparty is conducting a transaction or making or receiving a payment with - out proper authorisation (Article 5 (2)). More broadly and generally, under Article 4 (1) of the Act on Reporting and Using Specified Financial Trans - action Information, which is the primary anti-money laundering legislation in Korea, financial institutions are required to promptly report to the Commissioner of the Korea Financial Intelligence Unit (KoFIU) when:
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