High-Level Party-Government Meeting on the 7th... At a Crossroads Over Abolishing the Prosecutors' Office and Restructuring the Ministry of Economy and Finance

Final Coordination Underway for Government Organization Act Amendment
Ruling Party Aims to Pass Bill During This Month's Regular National Assembly Session

The outline of the amendment to the Government Organization Act, which centers on the abolition of the Prosecutors' Office and the restructuring of the Ministry of Economy and Finance, will be finalized on September 7. However, due to ongoing opposition not only from the People Power Party but also from the legal and financial sectors regarding the abolition of the supplementary investigative authority, which has become a hot-button issue in prosecution reform, as well as the restructuring of the Financial Services Commission, it is expected that it will take more time to complete the legislative process in detail.

According to the ruling party on September 5, the Democratic Party of Korea will hold a high-level party-government consultative meeting with the Presidential Office and the government on September 7 to finalize the amendment to the Government Organization Act, which includes reforms to the prosecution and the Ministry of Economy and Finance. The Democratic Party plans to consolidate the final opinions after the consultative meeting, formally propose the bill, and process it during the regular National Assembly session in September.

The prosecution reform, which separates the investigative authority and the right to indict currently held by the prosecution-transferring investigative authority to the Serious Crimes Investigation Agency and the right to indict to the Public Prosecution Office-is now in the final stages of coordination between the government and the party. During the Democratic Party’s general meeting held on September 3, consensus was reached to place the Serious Crimes Investigation Agency under the Ministry of the Interior and Safety, though the specific ministry had been under discussion.

The public debate on the abolition of the Prosecutors' Office also concluded on September 5 at the legislative hearing on prosecution reform held by the Legislative Bill Review Subcommittee 1 of the National Assembly's Legislation and Judiciary Committee. On this day, the Democratic Party called witnesses and references related to cases of abuse and misuse of prosecutorial investigative authority to advocate for the necessity of reform. The party requested the attendance of ten witnesses, including former prosecutor Ahn Dongwan, who investigated the Seoul city official espionage fabrication case; former Seoul Southern District Prosecutor Shin Eungseok, who investigated the Geonjinbeopsa Gwanbongkwon band loss case; Deputy Chief Prosecutor Park Geonuk; and two investigators, as well as thirteen references. However, only five witnesses and eleven references attended. Bae Sangyun, chairman of KH Group, and Jeon Seongbae, known as Geonjinbeopsa, who were selected as witnesses, submitted written excuses for their absence, but it is reported that former prosecutor Ahn and former district prosecutor Shin did not submit such documents. A Democratic Party member of the Legislation and Judiciary Committee explained, "We focused our questions on the abuse of investigative authority by the prosecution and the politically biased exercise of prosecutorial powers."

However, the abolition of the supplementary investigative authority, which is a follow-up legislative matter, is likely to be legislated after the regular National Assembly session in September, as there is still significant opposition and concern within the legal community. Lee Kiheon, secretary-general of the Democratic Party’s floor leader’s office, appeared on KBS Radio on this day and explained, "In fact, the supplementary investigative authority and the right to request supplementary investigations are matters for individual legislation," and added, "Once the Government Organization Act passes, the content will be included in the laws to abolish the Prosecutors' Office, establish the Public Prosecution Office, and establish the Serious Crimes Investigation Agency, which will be addressed during the regular National Assembly session in October."

On the 5th, a legislative hearing on prosecution reform was held at the Legislation and Judiciary Committee's Bill Review Subcommittee 1 in the National Assembly. 2025.9.5 Photo by Kim Hyunmin

The plan to restructure the Ministry of Economy and Finance, which has long been criticized for wielding excessive power, will also be discussed at the high-level party-government consultative meeting. The plan includes splitting the ministry into the Planning and Budget Office and the Ministry of Finance and Economy, as well as transferring the domestic financial policy division of the Financial Services Commission to the Ministry of Finance and Economy. In addition, the Financial Services Commission will be renamed the Financial Supervisory Commission, under which the Financial Supervisory Service and the Financial Consumer Protection Agency-an upgraded version of the Financial Consumer Protection Bureau within the Financial Supervisory Service-will be established to focus on financial supervision and consumer protection. However, the restructuring of the Financial Services Commission requires follow-up legislation, such as the law establishing the Financial Supervisory Commission and the Banking Act, and significant differences between the ruling and opposition parties are expected to make the process difficult.

In particular, the fact that Yoon Hanhong, a member of the People Power Party, serves as the chairman of the National Assembly's Political Affairs Committee, which will handle the bill, and that the People Power Party has expressed negative opinions, is a variable. During the confirmation hearing for Lee Eokwon, the nominee for chairman of the Financial Services Commission, held on September 2, members of the People Power Party protested, saying, "Why appoint a chairman for an organization that is set to be dismantled?"

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