Supreme Court: "Profits from Exaggerated Advertising Are Not Subject to Criminal Forfeiture"

[Asia Economy Reporter Baek Kyunghwan] The Supreme Court has ruled that a business operator's deposit claims from selling health functional foods through exaggerated advertising are not subject to confiscation of criminal proceeds. This means that even if the profits are from illegal activities, they do not qualify as "objects" subject to confiscation or recovery under the Criminal Act.

According to the legal community on the 14th, the Supreme Court's 2nd Division (Presiding Justice Ahn Cheolsang) overturned the lower court's ruling that imposed a recovery order of 120 million won on Mr. A, who was indicted for violating the Food Sanitation Act, and remanded the case to the Jeonju District Court.

Mr. A was on trial for advertising a liquid beverage made from freshwater eel and other ingredients from April 2013 to April 2014, claiming it was beneficial for hypertension and diabetes, which could cause confusion with pharmaceuticals.

The first trial recognized Mr. A's charges and sentenced him to a fine of 10 million won, while also ordering the recovery of 120 million won in sales proceeds based on the Act on the Regulation and Punishment of Criminal Proceeds Concealment.

However, Mr. A's side appealed, arguing that sales proceeds from offenses committed until January 30, 2014, could not be recovered. They claimed that the amended Food Sanitation Act, which included provisions for recovering criminal proceeds from "advertisements that could be mistaken for pharmaceuticals," only came into effect on January 31, 2014, so proceeds before the law's enforcement could not be recovered.

The appellate court ruled that proceeds earned before the amended Food Sanitation Act took effect could be recovered under Article 48 of the Criminal Act and imposed the same recovery amount as the first trial. Article 48 of the Criminal Act allows for confiscation of objects obtained through criminal acts and, if confiscation is impossible, recovery of their value.

The Supreme Court's judgment differed. It accepted Mr. A's argument and ruled that the recovery of sales proceeds until January 30, 2014, was incorrect. The Supreme Court stated, "Confiscation applies to specific objects, and recovery presupposes that confiscation was possible. Therefore, if the objects obtained through criminal acts are not specified, they cannot be confiscated, nor can their value be recovered."

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