SOUTH KOREA Law and Practice Contributed by: John H. Choi, Changhun Lee, Hyunah Kim and Jae-Hyuk Choi, Shin & Kim
duty to maintain confidentiality), and the duty to cease cartel activities. However, there are several differences. Unlike the KFTC leniency programme that applies to cartels including soft-core cartels, the criminal leniency programme applies only to hard-core cartels (those engaged in price fixing, output restrictions, market allocation, etc) under the MRFTA, together with certain bid-rigging con - duct. Also, under the criminal leniency programme, the first leniency applicant is eligible for exemption from an indictment, whereas the second-ranked leniency applicant is not guaranteed exemption or reduction of criminal penalty. For the sec - ond-ranked leniency applicant, the prosecu - tors’ office will recommend a 50% less severe penalty, but the court has discretion as to the actual penalty imposed on the second-ranked leniency applicant. Furthermore, the Criminal Leniency Guidelines provide that in principle, the first-ranked leniency applicant will not be subject to search and seizure, arrest, detention, or other compulsory investigation, except in special cir - cumstances. Moreover, an individual executive/employee (including those who are no longer with the company) can independently file for criminal leniency, in which case, the individual will com - pete with companies in terms of leniency rank - ing. The prosecutors’ office will determine the leniency ranking independently of the KFTC leni - ency ranking. 3.2 Amnesty/Immunity If a party that is subject to sanctions due to car - tel conduct (Conduct A) obtains first-priority leni - ency status for their conduct in another cartel (Conduct B), the KFTC may reduce or exempt
the surcharge and reduce the remedial orders for Conduct A. The party must file the leniency application for Conduct B after the investigation commencement date or leniency application date for Conduct A – whichever is earlier – and before the KFTC deliberation date for Conduct A. 3.3 Whistle-Blowers Under the MRFTA, a reward system is in place for informants who report violations of the law, including cartel conduct. A third party not involved in the cartel may receive a reward of up to KRW3 billion if they report the cartel conduct and are the first to submit evidence essential for proving the conduct to the KFTC, with the amount determined based on the significance of their contribution. By 2024, the total reward paid in relation to 178 cartel reports amounted to approximately KRW13.4 billion, with around KRW500 million paid in 2024 for 14 cartel reports. This system applies across all cartel types, not only bid rigging in public procurement. 4. Procedural Framework for Cartel Enforcement 4.1 Obtaining Evidence From Employees The KFTC can directly acquire information by investigating the officers and employees of the investigated company. See 2.5 Obtaining Evi- dence/Testimony . 4.2 Obtaining Documentary Evidence From Subject/Target Companies The KFTC can seek documentary information directly from the investigated company. See 2.5 Obtaining Evidence/Testimony .
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