32 Lightened Economic Penalties... Legal Community Says "Must Not Be Abused"

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyung-min] As the government is pushing for legal amendments to change light legal violations by businesspeople from criminal punishment to administrative sanctions or to not punish them at all, voices from the legal community are calling for "no cases of abuse."

According to the legal community on the 28th, the Ministry of Economy and Finance and the Ministry of Justice reported the "Economic Criminal Penalty Improvement Promotion Plan and the First Improvement Tasks" to President Yoon Seok-yeol at the "1st Regulatory Innovation Strategy Meeting" held at Daegu Seongseo Industrial Complex on the 26th.

This involves decriminalizing and rationalizing 32 criminal penalty provisions within 17 laws under the jurisdiction of 10 ministries, including the Fair Trade Commission and the Ministry of Trade, Industry and Energy. The punishment levels deemed excessive among the existing criminal penalties were lowered. Fines were replaced with administrative fines, and some provisions were abolished altogether.

The government plans to swiftly pursue legal amendments this year for the first set of tasks and prepare a second set of improvement tasks through additional public opinion gathering. Meanwhile, public opinion is expected to be divided for the time being. While some understand the intention to make economic activities of businesspeople more flexible and to facilitate attracting foreign investors, there are also many criticisms that the relaxed criminal punishment standards are ambiguous and unfair. Some in the legal community warn that cases of abuse of the relaxed punishment levels must not occur.

Looking at the details, first, the punishment provision of "imprisonment for up to one year or a fine of up to 10 million won" imposed when constructing logistics terminals without approval under the Logistics Facilities Act will be deleted.

The provision under the Food Sanitation Act that punishes food service operators for soliciting customers with "imprisonment for up to three years or a fine of up to 30 million won" will also be abolished. Instead, cancellation of permits/registrations or business suspension will be imposed.

Under the Fair Trade Act, violations of obligations such as reporting the establishment or conversion of holding companies, reporting business contents of holding companies, and reporting stock ownership and debt guarantees can be fined up to 100 million won, but this will be changed to administrative fines (up to 100 million won for the head of the group and up to 10 million won for executives and employees).

If a member of the Tobacco Leaf Production Cooperative refuses or obstructs inspection by relevant officials, neglects registration, or makes false reports, the criminal penalty of imprisonment for up to three years or a fine of up to 30 million won will be converted to an administrative fine of up to 2 million won.

However, the current task does not include easing criminal penalties for refusal or obstruction of other administrative investigations such as on-site investigations by the Fair Trade Commission.

To induce recovery of damages caused by law-violating companies, rationalization is also being promoted where administrative sanctions are imposed first, and if not complied with, criminal penalties are imposed.

Under the Subcontracting Act, if the prime contractor does not issue a purchase confirmation to the subcontractor, a fine of up to twice the subcontract payment can be imposed, but a surcharge and corrective order will be imposed first.

The Large-scale Distribution Business Act imposes imprisonment for up to two years or a fine of up to 150 million won on large corporations that obstruct suppliers from trading with other businesses, but a surcharge and corrective order will also be imposed first.

The Unfair Trade Investigation Act punishes even attempted violations related to export/import of goods subject to country of origin labeling with imprisonment for up to five years or a fine of up to 100 million won, but this will be deleted and the penalty reduced.

Under the Environmental Crime Punishment Act, discharging pollutants causing harm to others is punishable by life imprisonment or imprisonment for five years or more. Regarding this, the existing penalty will be maintained only in cases of death, and for injury, the punishment level will be lowered to life imprisonment or imprisonment for three years or more.

The Chemical Substance Control Act will be similarly revised. In cases where a chemical accident caused by occupational negligence results in death or injury, the existing statutory penalty of imprisonment for up to 10 years or a fine of up to 200 million won will be maintained for death accidents, but the statutory penalty for injury accidents will be eased to imprisonment for up to seven years or a fine of up to 100 million won.

In the economic field, a transitional period seems inevitable for the time being. In some industrial sectors subject to revision this time, unexpected variables may arise, so the government has the task of continuously gauging public opinion and revising the tasks.

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