"Black Money, Recovered Even After Death"... Prosecution and Supreme Court Revamp Crime Proceeds Recovery System

Supreme Court Discusses 'Independent Forfeiture System' and Prosecution's 'Crime Proceeds Recovery Information Sharing' Realization... "We Will Find Even Hidden Assets"

[Asia Economy Reporter Baek Kyunghwan] The prosecution and the Supreme Court are undertaking a major overhaul of the system to properly track and confiscate criminal proceeds, commonly known as 'black money.' This comes from the judgment that it is difficult to forcibly recover large unpaid amounts, as in the cases of former Daewoo Group Chairman Kim Woo-jung and former President Chun Doo-hwan, and that cases where confiscation becomes impossible due to reasons such as the death of the offender are increasing.

According to the Ministry of Justice on the 24th, the prosecution recently began organizing a system that allows real-time monitoring of the entire process of recovering criminal proceeds. This is the so-called 'Criminal Proceeds Recovery Information System (ISF) Advancement Plan.' It is a measure to prevent in advance the problem of 'omission of preservation targets' that may occur between frontline offices during investigation, prosecution, trial, and execution processes.

The current prosecution system focuses only on functions for preservation measures or execution related to crimes subject to recovery. There were also limitations in confirming actual recovery details and amounts due to insufficient cooperation during administrative processes such as court preservation decisions after preservation measures.

Internal voices calling for improvement of the database construction and sharing system used for recovering criminal proceeds were also reflected. Although the system was created to allow investigative agencies to share investigation results, techniques, and amounts, it was established in 2010 and has become outdated.

Accordingly, discussions are underway to link with the property execution system that checks the execution of penalties and electronic seizures. The prosecution expects that through building such a shared system, it will be possible to monitor not only the possession of criminal proceeds but also the process by which criminal proceeds are concealed.

The detailed plan will be handled by the Criminal Proceeds Recovery Division under the Anti-Corruption and Strong Crime Department of the Supreme Prosecutors' Office. This is the only organization remaining under the Anti-Corruption and Strong Crime Department after the Ministry of Justice's reorganization of the Supreme Prosecutors' Office. Within the prosecution, it is interpreted that the Moon Jae-in administration's selection of 'strengthening criminal proceeds recovery capabilities' as the top priority among the 100 national tasks related to the prosecution and Ministry of Justice influenced this organizational reform.

Together with the prosecution, the Supreme Court will undertake a research project to establish a legal framework related to confiscation and recovery of criminal proceeds. The aim is to explore the feasibility of realizing an 'independent confiscation system' that allows confiscation of criminal proceeds through court decisions upon prosecution requests even without a guilty verdict, and includes legal grounds for post-facto recovery.

Regarding the independent confiscation system, the ruling Democratic Party and the government recently concluded discussions and proposed related legislation. However, since there are concerns about unconstitutionality and conflicts with the current legal framework, prior discussions are planned.

Above all, this reflects social demands to confiscate and recover criminal proceeds even in cases where the offender is unidentified or deceased, and prosecution is impossible. According to the prosecution, as of the first half of this year, unpaid high-value recovery amounts exceeding 20 million won total more than 29 trillion won. Even excluding former Daewoo Group Chairman Kim Woo-jung's recovery amount of about 18 trillion won, it exceeds 10 trillion won.

Moreover, of the 17.9253 trillion won in recovery amounts sentenced to former Chairman Kim, only 89.2 billion won has been executed so far, which is just 0.498%. Of the executed recovery amounts, 88.7 billion won was recovered from Kim himself, and only 500 million won was collected from executives jointly sentenced. Kim passed away without paying 17.8 trillion won in recovery amounts, 36.873 billion won in capital gains tax, and 3.515 billion won in local taxes.

The 100.5 billion won in recovery amounts unpaid by former President Chun is similar. Considering Chun's advanced age, a partial amendment to the Criminal Act allowing forced recovery of recovery amounts posthumously was proposed last year but did not pass.

The diversification of criminal proceeds structures, such as the Choi Soon-sil political scandal, Yang Jin-ho's illegal filming distribution, Telegram Nth Room, and Welcome to Video, has also had an impact. While interest in illegal profits earned by criminals is growing, the recovery rate has remained at 2-3% for several years, excluding former Chairman Kim's recovery amounts.

However, despite recent conflicts between Justice Minister Choo Mi-ae and Prosecutor General Yoon Seok-youl, they share a unified stance on criminal proceeds recovery. Prosecutor General Yoon stated during the establishment of the Criminal Proceeds Recovery Division within the Seoul Central District Prosecutors' Office, "Until now, we have focused on personal punishment of offenders, but from now on, we will focus more on material disposition where the state recovers profits from crimes in parallel." Minister Choo issued guidelines to actively crack down on not only general crimes but also real estate speculation as crimes and to properly recover criminal proceeds.

A legal professional commented, "Once the prosecution's recovery system reform and the Supreme Court's discussion on introducing the independent confiscation system are completed, cases of recovery delays due to omissions throughout the entire process from the moment criminal proceeds are generated to confiscation are expected to decrease."

This content was produced with the assistance of AI translation services.