"Thorough Recovery of LH Crime Proceeds"... Ministry of Justice Supports Introduction of 'Independent Forfeiture System'

Controversies Over Criminal Profits from N Room, LH Speculation, Cryptocurrency, etc... Confiscation Possible Separately from Joo Hyung's Punishment

[Asia Economy Reporter Baek Kyunghwan] The Ministry of Justice is set to support the introduction of an 'independent confiscation system' that allows the seizure of criminal proceeds even before a guilty verdict is rendered. This measure reflects concerns that criminal proceeds have not been properly confiscated following last year's Nth Room case and this year's LH (Korea Land and Housing Corporation) speculation scandal. The related bill has already been submitted to the National Assembly.

According to the legal community on the 28th, the Ministry of Justice recently established an internal policy to introduce the independent confiscation system, which allows confiscation and recovery orders to be requested and pronounced separately from the main punishment against the offender. The Ministry explained that this is to strengthen the fairness of law enforcement, including strict punishment of illicit gains, and plans to provide administrative support such as submitting review opinions if the matter is referred to committees in the future.

Under current law, confiscation of criminal proceeds is an ancillary penalty rather than an independent punishment, making it practically difficult to order confiscation alone without sentencing the offender to a main punishment. This has been criticized because criminal proceeds cannot be recovered in cases such as the offender fleeing, death, or expiration of the statute of limitations.

Concerns that it would be difficult to recover unjust gains from LH executives involved in this year's LH speculation scandal also influenced this move. For example, confiscation is impossible for a current LH employee who committed suicide, as prosecution cannot be initiated.

However, with the introduction of the independent confiscation system, courts can order confiscation and recovery separately from the prosecutor's indictment. It will also apply to cases already under investigation or trial, including illegal proceeds discovered after the offender's verdict is finalized and assets derived from them. Minister of Justice Park Beom-gye also stated immediately after the LH speculation scandal, "We will thoroughly recover unearned income to meet the public's outrage." He even issued guidelines to the prosecution to "actively respond to illegal acts and corruption crimes, including thorough recovery of criminal proceeds."

The Ministry of Justice also expressed strong support for the introduction of the independent confiscation system last year. Following the Nth Room case and the urgent social demand for recovering proceeds related to digital sex crimes, after the related bill was submitted to the National Assembly, then-Deputy Minister of Justice Ko Ki-young emphasized at the Legislation and Judiciary Committee's bill review subcommittee, "Implementing the independent confiscation system to effectively recover criminal proceeds aligns better with the justice of criminal law," and "I hope the amendment is passed as proposed."

The Ministry of Justice is expected to actively support the legal amendment this year with the same intent. A Ministry official who participated in the review of the independent confiscation system at the time said, "(The independent confiscation system) was internally discussed as not violating the principles of criminal law, and we are in the process of creating procedural laws accordingly," adding, "We will actively present opinions through official channels such as subcommittees."

The variable is the court. Although confiscation is defined as a punishment under criminal law, the court's position is that independent confiscation without a confirmed guilty verdict fundamentally contradicts the criminal law system. In other words, the court internally questions whether hearings sufficient to determine guilt or innocence will be conducted for confiscation, arguing that it is akin to sentencing imprisonment or punishment without a trial, thus casting doubt on the system's effectiveness.

A lawyer in Seocho-dong said, "Following last year's Nth Room case, this year the LH scandal and recently discussions on the disposition of criminal proceeds related to virtual currency crimes have been actively debated," adding, "While the independent confiscation system fundamentally aims to confiscate and recover proceeds derived from crimes to eliminate blind spots in law enforcement, considerable time is expected to be required to reconcile differences among related agencies such as the Ministry of Justice and the courts, given the anticipated controversies within the criminal law framework."

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