SMEs and Venture Businesses Raise Their Voices for the Rationalization of Economic Criminal Penalties

Venture Sector Calls for Abolition of Breach of Trust Charges to Rationalize Economic Criminal Penalties
Small Business Sector Also Proposes Improvement Measures

The small and venture business sector is raising its voice regarding the "rationalization of economic criminal penalties." This comes as the new government is moving to address criticism that excessive penalties for violations of economic laws have been stifling business and economic activities. The plan is to use this opportunity to reflect industry opinions and eliminate regulations that have previously hindered business management activities.

On September 17, the Innovation Venture Organizations Council held a meeting with the Democratic Party's "Task Force for Rationalization of Economic Criminal and Civil Liability" at the National Assembly Members' Office Building, where they proposed key tasks for improving economic criminal penalties. The council, which includes the Venture Business Association, the Early Investment Accelerator Association, the Korea Startup Forum, the Korea Venture Capital Association, the Korea Angel Investment Association, and the Korea Women Venture Association, delivered a range of opinions from the perspective of venture businesses and startups, focusing on the abolition and relaxation of the crime of breach of trust.

On the 17th, attendees are taking a commemorative photo after the meeting between the Democratic Party's "Economic Criminal Civil Liability Rationalization Task Force" and the Innovation Venture Organizations Council in Meeting Room 6 of the National Assembly Members' Office Building. Venture Business Association

In particular, the council emphasized that the crime of breach of trust must be improved so that venture businesspeople can engage in active management activities without the burden of criminal punishment. As a solution, they proposed that the "business judgment rule" be broadly applied and clearly stipulated, so that decisions made through legitimate business judgment are not subject to punishment for breach of trust. They also pointed out that the crime of breach of trust currently covers an excessively wide range of punishable acts and has broad standards, which raises concerns about indiscriminate lawsuits and accusations. Therefore, they argued that the law should be improved by strengthening civil liability for damages instead.

Song Byungjun, president of the Venture Business Association, stated, "A regulatory approach that relies excessively on criminal penalties is a major obstacle to innovation and growth for venture companies, and excessive economic criminal penalties act as a factor that shrinks business activities such as investment and employment. The regulations on criminal penalties, such as the crime of breach of trust, which have been applied excessively, should be improved so that venture companies can continue their innovative challenges." Kwon Chilseung, head of the Democratic Party's Task Force for Rationalization of Economic Criminal and Civil Liability, also said, "The anxiety that normal business judgments could be punished as breach of trust is an even greater constraint for ventures and startups, where free and swift decision-making is vital. We will listen closely to the difficulties faced by the venture and startup sector and actively reflect them in future legislation and policy processes."

On the 4th, Kwon Chilseung, head of the Task Force for Rationalizing Economic Criminal and Civil Liability (fourth from the left), Oh Kiwoong, executive vice president of the Korea Federation of Small and Medium Business, and other participants of the "Communication Meeting for Rationalizing Economic Criminal and Civil Liability for Small and Medium Enterprises" are taking a commemorative photo. Korea Federation of Small and Medium Business

Previously, on the 4th, the Korea Federation of Small and Medium Business, which had already held a meeting with the Democratic Party's Task Force for Rationalization of Economic Criminal and Civil Liability to gather opinions from the field, also submitted improvement tasks to the government and the National Assembly on this day. The federation emphasized that not only should the crime of breach of trust be abolished, but also that there are frequent unreasonable cases in fields closely related to people's livelihoods, where even simple administrative mistakes or minor violations are subject to criminal punishment, highlighting the need for improvement.

For example, small business owners such as those running cafes or convenience stores need to install outdoor advertisements like signs or banners, but even a simple omission in notification can result in a fine, which is a significant burden on their livelihoods. There have also been concerns that simple administrative errors, such as failing to measure pollutants or keep records as required by the Clean Air Conservation Act, can be subject to criminal punishment, causing anxiety. Some have reported that failing to attach a waste collection and transportation certificate to a vehicle resulted in a "warning" but also led to a fine under the penalty provisions, effectively making them criminals.

Kim Ki-moon, president of the Korea Federation of Small and Medium Business, stated, "Small and medium-sized enterprises have fewer legal support personnel compared to large corporations, so the same regulations are felt much more heavily. A structure where even simple mistakes lead to criminal punishment shrinks business management activities and negatively affects new investment and job creation." He added, "The government and the National Assembly should rationally revise unreasonable economic criminal penalty regulations so that small and medium-sized enterprises can confidently pursue challenges and innovation."

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