Ruling Party and Government to Abolish Breach of Trust Clause... Reforming 110 Economic Criminal Regulations

Five Key Principles: Easing Criminal Penalties and Strengthening Monetary Liability
Kwon Chilsung: "We Will Reform the System That Produces Criminal Records"

The ruling and opposition parties have reached a consensus to abolish the crime of breach of trust under the Criminal Act, which has been criticized for restricting corporate management activities, and to pursue alternative legislation. They also decided to introduce exemption clauses and promote the conversion of criminal penalties to fines or damages for 110 criminal provisions, including the Minimum Wage Act, the Labor Standards Act, and the Food Sanitation Act.

Kwon Chilsung, head of the Economic Punishment Civil Liability Rationalization Task Force, told reporters after the party-government consultation held at the National Assembly Members' Office Building on the morning of September 30, "Both the ruling and opposition parties share the awareness that excessive economic criminal regulations hinder corporate innovation, obstruct investment decisions, and excessively constrain the vitality of the real economy."

Instead of the current breach of trust provision in the Criminal Act, the parties plan to pursue alternative legislation that maximizes corporate autonomy and predictability, while clarifying the requirements and narrowing the scope of punishment to prevent any gaps in penalizing significant crimes. Minister of Justice Jeong Seongho stated during the meeting that the Ministry is currently analyzing 3,300 first-instance court cases related to breach of trust.

Deputy Prime Minister and Minister of Economy and Finance Koo Yoonchul is speaking at the Economic Punishment Civil Liability Rationalization Task Force Party-Government Meeting held at the National Assembly Members' Office Building on the 30th. 2025.9.30 Photo by Kim Hyunmin

Regarding the principle of revising 110 criminal provisions, including the abolition of breach of trust, the task force explained five key principles: protecting business operators who make normal management decisions or fulfill their duty of care, easing criminal penalties and strengthening financial accountability, converting penalties for minor violations to fines, imposing administrative measures before criminal sanctions, and ensuring consistency among different laws.

Kwon further stated, "Even when sanctions are necessary, if criminal punishment is not essential, we will reduce imprisonment and fines or convert them to damages that can provide effective relief for victims. We will also reform the system that creates criminal records for minor administrative violations."

He added, "If legislative objectives can be achieved through administrative measures alone, we will first issue corrective orders or restoration orders, and only impose criminal penalties if these are not followed. If the Constitution is excessively harsh compared to other laws, we will reduce or abolish such provisions."

The parties are also considering expanding the introduction of evidence disclosure systems, punitive damages, and class action lawsuits to ensure victims receive effective remedies. Kwon explained, "The aim is to shift from criminal-focused sanctions to strengthening civil liability, thereby providing substantial protection for victims."

When asked by a reporter about the possibility of passing the alternative legislation during the regular National Assembly session, Kwon replied, "No deadline has been set today. We have only discussed that the Ministry of Justice will take the lead in preparing the alternative legislation as quickly as possible."

Regarding the claim by the People Power Party that the relaxation of the breach of trust provision is intended to exonerate President Lee Jaemyung in relation to the Daejang-dong and Baekhyeon-dong cases, Kwon dismissed it as "political offensive."

Assemblyman Oh Gihyung pointed out, "Former Financial Supervisory Service Governor Lee Bokhyeon also argued for the abolition of breach of trust last year, and former Assemblyman Keum Taeseop raised the issue four to five years ago. Many companies have been calling for its abolition, and we are making this argument in the same context. The Yoon Sukyeol administration also discussed this extensively last year."

He further clarified, "I want to make it clear that we are not calling for unconditional, complete abolition of the breach of trust provision. Rather, we are moving forward by seeing how far we can prepare for the categorization of alternative legislation, not its total abolition."

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