South Korea’s Anti-Corruption and Bribery Prohibition Act (the “Act”) will take effect on 28 September 2016. The law is widely called the Kim Young-ran Act after the official who first proposed it five years ago. Lawmakers subsequently rushed the introduction of this Act in March 2015 in the face of intense public outrage over evidence that corruption played a role in a maritime disaster that claimed 304 lives, most of whom were high school students.

National Assembly members, controversially, exempted themselves from the public officials originally targeted in the Act and added private as well as public school teachers, journalists, medical professionals employed in public-affiliated institutions, and all spouses thereof; bringing the estimated relevant population to four million people.

Organizations representing the nation’s lawyers, teachers, doctors and journalists filed petitions challenging the Act’s constitutionality shortly after passage, and only a little over a third of the public backs the law in its present state. Among those voicing strong opposition are farmers who raise relatively expensive domestic livestock and produce and the restauranteurs to whom they sell. For example, the Act sets the maximum amount one can spend on a meal provided to an official at KRW 30,000 (equivalent to GBP 20, EUR 24 or USD 26). There is concern that setting the level at such a low amount could deter business people from taking officials to up-market restaurants.

Other criticisms include the fact that the Act’s definition of public media employees is quite vague and so could possibly include those working on company newsletters.

Businesses operating in South Korea should note that under the Act any of the following requests (made directly or through a third party) will constitute a corrupt request:

  • Request for illegal handling of a Public Official’s duties relating to permissions, patents, approvals, examinations, certifications, confirmations, etc.;
  • Request for reduction or exemption of decertification, fines, penalties, disciplinary action, etc.;
  • Actions impacting public officials’ personnel decisions, such as hiring, promotions, transfers, etc.;
  • Request for unauthorized disclosure of confidential information related to bids, auctions, developments, examinations, taxes, etc.;
  • Request for selection of a particular individual, organization or corporation to (or removal from) the list of parties to a contract against relevant laws;
  • Request for the sale, exchange or transfer of goods or services produced, supplied or managed by a public institution to a specific individual, organization or corporation at prices outside of legal limits or market norms;
  • Actions impacting the results or assessments related to decisions or assessments made by public institutions.

The penalties for contravention of the Act as currently drafted range from a fine of up to 30 million KRW (equivalent to EUR 24, 030) and/or up to three years’ imprisonment.

The Constitutional Court is expected to rule on the validity of the petitions against the Act on 28 July 2016.

LEE Kyu-Chul & CHOI Woon-sik