"Punitive Administrative Regulations Lead to Increase in Ex-Convicts and Business Management Contraction... System Improvement Needed" (Comprehensive)

Trends in Criminal Case Processing and Prosecution by Type, 2015-2019.

[Asia Economy Reporter Ki-min Lee] It has been pointed out that punitive administrative regulations in South Korea not only produce a large number of ex-convicts but also stifle the business activities of domestic companies, making urgent reform of the system necessary.

The Korea Industrial Alliance Forum (KIAF) and the Korea Automobile Industry Association (KAIA) held a forum on the 29th at 9:30 a.m. at the Automobile Hall in Seocho-gu, Seoul, under the theme "Current Status, Issues, and Improvement Tasks of the Introduction of Punitive Systems."

Punitive administrative regulations refer to administrative regulations that impose penalties or business suspensions beyond the minimum scope on companies that violate regulations. According to the Automobile Management Act, even if a manufacturer voluntarily recalls a vehicle due to non-compliance with safety standards, a fine is imposed, which falls under administrative regulations.

Chairman Jeong emphasized, "From 2015 to 2019, prosecutions for violations of administrative regulations averaged about 520,000 cases annually, with a prosecution rate about twice that of general criminal law. As the number of administrative regulation violators increased, the proportion of ex-convicts in the total population doubled from about 13% in 1996 to about 26% in 2016."

He pointed out that since the introduction of the punitive damages system in the 2011 Act on the Fair Transactions in Subcontracting (Subcontracting Act), laws that excessively impose administrative and criminal liabilities beyond civil responsibility have rapidly increased.

Chairman Jeong added, "More than 20 laws, including the Act on the Protection of Dispatched Workers, the Act on Fair Transactions in Agency Deals, and the Personal Information Protection Act, already impose damages of three to five times the amount."

However, regarding the Fair Trade Act, he emphasized that among the 34 member countries of the Organisation for Economic Co-operation and Development (OECD), only 14 countries, including South Korea, impose criminal penalties for violations of the law, while the remaining 20 countries either have no criminal provisions or only criminalize bid-rigging under criminal law.

Kim Ki-jun, Vice Chairman of the Industrial Alliance Forum (also Vice Chairman of the Korea Textile Industry Federation), criticized that while foreign countries clearly distinguish between criminal, administrative, and civil liabilities, South Korea often overlaps punishments. Unlike Anglo-American countries, which do not apply criminal and administrative sanctions simultaneously, South Korea imposes administrative fines first and then files charges to impose additional fines, which he argued is unfair.

He stated, "Among 15 industry groups, more than 10 have raised issues with the Serious Accidents Punishment Act, which allows criminal punishment of management executives," adding, "It is a clear case of excessive legislation specifying quadruple punishments: imprisonment and fines for representatives, fines for corporations, administrative sanctions for companies, and punitive damages."

Kang Ho-gap, Chairman of the Korea Federation of Medium-sized Enterprises, appealed, "Every morning when I open my eyes, I feel like a businessperson walking precariously on the prison wall," and urged, "I sincerely ask this National Assembly to stop creating regulations and to thoroughly weed out those that do not benefit the nation, the people, or the economy among the many regulations."

Assemblyman Kwon said, "Appropriate levels of regulation and punishment have a positive function in protecting the public from malicious illegal acts and building a transparent society," but added, "Recently, the industry has expressed many concerns about cases where constitutional principles such as prohibition of excessive punishment, prohibition of broad delegation, and clarity are violated, such as with the Serious Accidents Punishment Act."

He also mentioned the global situation, including the spread of COVID-19, expressing concern that "excessive punitive regulations and punishments compared to foreign countries during such turbulent times may hinder corporate activities and negatively affect our industry’s preparation for the future."

Professor Kim Il-jung of Sungkyunkwan University’s Department of Economics criticized, "South Korea has already gone beyond 'overregulation' to the path of 'over-criminalization,'" and said, "At least one in four adults in South Korea has at least one criminal record, and it is predicted that by 2030, one-third of adults could be ex-convicts."

He analyzed that among various sanctions imposed for violations of administrative regulations, criminal penalties account for 44%, and the proportion of laws with criminal provisions expanded from 50% in the 1960s and 1970s to 65% in 2018. He also suggested, "Along with abolishing unnecessary administrative regulations, a government-wide approach to decriminalization and multifaceted policy exploration is needed."

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