Ministry of Justice Plans Unified Regulation of Surcharges and Fines... Effectiveness to Be Ensured Through Disclosure of Defaulters' Names

Follow-up Measures for the "Rationalization of Economic Criminal Penalties"

Introduction of Surcharges as Alternatives to Business Suspensions

Ensuring Continuity of Business Operations

Consideration of Public Disclosure of Large Arrears Lists

Ministry of Justice Building [Provided by the Ministry of Justice. Resale and DB prohibited]

The Ministry of Justice has begun overhauling the system for uniformly managing monetary administrative sanctions such as surcharges and fines. This is a follow-up measure to enhance the effectiveness of the government's ongoing "rationalization of economic criminal penalties" policy, which seeks to reduce imprisonment and criminal fines, replacing them with monetary sanctions such as surcharges and fines.

According to the legal community on April 21, the Ministry of Justice’s Office of Legal Counsel recently commissioned a research project titled "Study on Amendments to the Act on Regulation of Order Violations (hereinafter referred to as the Order Act) for Integrated Regulation of Fines and Surcharges."

Currently, fines are governed by the Order Act, which serves as a general law, but surcharges are scattered across hundreds of individual laws, such as the Monopoly Regulation and Fair Trade Act and the Personal Information Protection Act. As a result, there have been criticisms that the standards and procedures for imposing surcharges vary widely. Through this research, the Ministry of Justice plans to regulate surcharges within the framework of the general Order Act in a unified manner, similar to fines.

This move is a follow-up to the "First Plan for Rationalizing Economic Criminal Penalties" announced at the party-government consultative meeting in September last year. At that time, the government and the ruling party agreed to shift administrative sanctions for minor economic crimes from criminal penalties, which create a large number of ex-convicts, to surcharges or fines instead.

If the surcharge system is integrated into the Order Act as planned, it is expected that the government will be able to respond swiftly to the anticipated surge in demand for administrative sanctions following decriminalization, while also significantly strengthening the uniformity and efficiency of national law enforcement.

In particular, measures to address the issue of double sanctions involving both surcharges and fines are under review. A typical example of dual penalties is the authoritative interpretation issued by the Ministry of Government Legislation in September 2017 regarding the Railroad Safety Act. At that time, the ministry concluded that even if a surcharge (up to 3 billion won) replacing a business suspension is imposed on a railroad operator who failed to comply with a corrective order, a fine (up to 10 million won) specified for the same violation must also be imposed simultaneously.

The Ministry of Justice also plans to establish new standards for imposing surcharges as substitutes for business suspensions, thereby ensuring continuity of business activities. Introducing a mitigation system for small and medium-sized enterprises and small business owners is also one of the core research tasks.

To prevent enforcement gaps resulting from the easing of criminal penalties, the ministry is also considering enshrining in the general Order Act a system for publicly disclosing the names of individuals with large or habitual arrears. By applying administrative pressure such as public disclosure of personal information on those who refuse to pay surcharges, the ministry aims to ensure the effectiveness of monetary sanctions.

A Ministry of Justice official stated, "This project was launched as part of the rationalization of economic criminal penalties, based on the need for integrated regulation of surcharges, and is currently in the initial research stage."

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