Democratic Party Launches Economic Criminal Penalties and Civil Liability Task Force... Full-Fledged Discussion on Abolishing Breach of Trust under the Commercial Act

Kim Byunggi: "Breach of Trust Charges Are Stifling Even Legitimate Business Decisions"
Democratic Party Launches Task Force to Shift from Criminal to Civil Liability for Economic Offenses

On September 2, the Democratic Party of Korea launched the "Task Force on Rationalizing Economic Criminal Penalties and Civil Liability" to discuss easing excessive criminal penalties related to corporate management, such as the relaxation of the crime of breach of trust, as requested by the business community.

At the task force's inaugural ceremony held at the National Assembly, floor leader Kim Byunggi emphasized the need to shift from criminal to civil liability for economic crimes, stating, "While many advanced countries typically address economic crimes through civil compensation or fines, we rely excessively on criminal liability."

The Democratic Party's policy is to transition from criminal penalties, which have accumulated since the era of military dictatorship and authoritarian governments and have made it difficult to do business, to civil liability. The task force will focus on issues such as the criminal liability risk for chief executive officers, including the crime of breach of trust, and alleviating management burdens for small business owners and small and medium-sized enterprises.

Kim Byunggi pointed out, "In the case of breach of trust, even business decisions made through normal procedures have been stifled by the prosecution’s abuse of investigation and indictment powers," adding, "This is an outdated practice inherited from the era of military dictatorship and is far from global standards. We need to update our laws and systems to fit the new era."

In a press briefing held prior to the task force's launch, Kim Byunggi also stated, "There is no doubt that there are problems with the crime of breach of trust," and added, "Fundamentally, I believe the crime of breach of trust should be abolished."

Kwon Chilsung, the task force leader, explained, "We will review cases where excessive penalties are imposed for minor violations of duty and work to protect well-intentioned business owners."

Kim Byunggi, the floor leader of the Democratic Party of Korea, is holding a press briefing for the 2025 regular session of the National Assembly on the 2nd. 2025.9.2 Photo by Kim Hyunmin

However, the plan is not simply to reduce criminal liability but also to introduce systems that strengthen civil liability. Task force member Kim Namgeun explained, "We will also promote measures such as discovery, punitive damages, and class actions to minimize economic criminal penalties while strengthening civil liability."

The task force plans to gather a wide range of opinions through meetings with stakeholders such as business circles, investors, and small business owners, and to identify legislative tasks. Once the legislative tasks are determined, they will be drafted into bills through consultations between the party and the government.

When asked by reporters after the launch ceremony about the possible abolition of the crime of breach of trust under the Commercial Act, Assemblyman Kwon stated, "The crime of breach of trust under the Commercial Act is, in fact, obsolete. Since it is essentially the same as occupational breach of trust, there is no disagreement about abolishing the crime of breach of trust under the Commercial Act."

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