Even If Refusing Fair Trade Commission On-Site Investigation, Only Administrative Sanctions Instead of Imprisonment or Fines

Kim Woo-chan, Head of Economic Reform Solidarity: "'Increase in Penalties' Must Be Premised... Commercial Act Revision Needed to Remove Obstacles to Shareholder Derivative Suits"

[Asia Economy Sejong=Reporter Son Seon-hee] The government is pushing for a plan to ease penalties from imprisonment or fines to administrative sanctions if companies refuse on-site investigations by the Fair Trade Commission or violate document preparation obligations. However, since the current scale of fines has been criticized as a "slap on the wrist," concerns have been raised that without an increase in fines for serious violations, the foundation of market order could be shaken.

According to related ministries including the Ministry of Economy and Finance on the 18th, the government is conducting a comprehensive review of economic legal penalty provisions through the recently launched "Pan-Ministerial Economic Penal Provisions Improvement Task Force (TF)" and is reconsidering them from the ground up. It is known that a draft for improving penalty provisions will be prepared as early as this month.

The improvement plan is expected to include converting custodial punishments such as imprisonment into administrative sanctions like fines, which will also apply to refusals of various administrative investigations. Under the current Fair Trade Act, refusal, obstruction, or avoidance of investigations through verbal abuse, assault, or intentional obstruction or delay of on-site entry is punishable by imprisonment of up to three years or a fine of up to 200 million won. The TF plans to convert simple refusal acts without illegal acts such as coercion or assault into administrative sanctions like fines instead of imprisonment.

Some argue that the government's policy should not lead to leniency toward economic crimes. Professor Kim Woo-chan of Korea University, who serves as the head of the Economic Reform Solidarity, said, "It is worth discussing changing penalties for violations of administrative obligations to administrative sanctions," but emphasized, "However, it is necessary to have the precondition of increasing the amount of fines." He added, "If the Yoon Seok-yeol administration intends to ease economic penalties, the Ministry of Justice should also submit an amendment to the Commercial Act to remove obstacles to 'shareholder derivative lawsuits'."

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