At President Lee's Call to "Give Enough to Shock," Whistleblower Rewards Become a Real Lottery

High-Value Rewards Expected for Major Cartel Whistleblowers

30% Cap Adopted by Financial Services Commission and Ministry of Planning, Expanding Across All Government Agencies

The backdrop to Chairman Joo Byungki of the Fair Trade Commission bringing up the idea of removing the cap on whistleblower rewards was the strong determination and directive of President Jae-myung Lee to root out entrenched unfair business practices in the economy.

President Jae Myung Lee speaking at the Chief Presidential Secretary Meeting on the 14th. Photo by Yonhap News.

"Give enough rewards to change someone's life"… 10% of fines likely

At a Cabinet meeting in February, President Lee strongly emphasized the need for a high-reward system, stating, "If someone reports collusion, give them a reward so generous that it changes their life. Make it so shocking that people think it's better to expose collusion than to play the lottery." At the time, he also remarked, "If the fine is 400 billion won, it's fine to give out several tens of billions of won as a reward." Furthermore, in March, he said, "If damages are caused by collusion, unfair practices, or abuse of monopoly or oligopoly positions, and if a massive fine is imposed and 10% of the fine is paid as a reward, there will be no way to prevent whistleblowing." He thus presented detailed guidelines, including the specific incentive ratio.

Accordingly, the criteria for reward payments to be announced soon by the Fair Trade Commission are also highly likely to follow the "10% of related fines" guideline mentioned by the President. In cases of large-scale collusion, the fines imposed on companies can reach into the hundreds of billions of won, and this means that in the future, whistleblowers could receive "hundreds of billions of won" in rewards. Moreover, those who were previously excluded from receiving rewards, such as subcontractors, franchise owners, and suppliers—if they were the direct victims—are now being considered for inclusion in the eligible recipient list.

Spread across all government agencies, including the Financial Services Commission and Ministry of Planning… Supported by 'Public Interest Whistleblower Encouragement Fund'

This high-reward policy has also been swiftly adopted as part of price stabilization measures. According to the "Measures to Enhance the Effectiveness of Price Stabilization Policies" announced jointly by relevant ministries on May 21, the government has decided to introduce a new whistleblower reward system. Under this system, individuals who report violations such as exceeding price ceilings, emergency supply adjustment orders, or hoarding and price manipulation will receive rewards based on their contribution. Kang Giryong, Assistant Vice Minister of the Ministry of Economy and Finance, stated, "The government’s direction is clear—to provide incentives so substantial that they can eradicate violations at their root."

Policy changes are rapidly spreading across all government agencies. In February, the Financial Services Commission abolished the cap on rewards for reporting stock price manipulation or accounting fraud and announced amendments to the Enforcement Decrees and subordinate regulations of the Capital Markets Act and External Audit Act, allowing rewards of up to 30% of the amount of unfair gains identified and fines collected. Previously, there was a maximum reward limit of 3 billion won for unfair trading cases.

Other ministries are also enhancing policy effectiveness by implementing high-reward systems. In March, the Ministry of Planning and Budget announced the "Measures to Eradicate Illicit Subsidy Claims," which allows for up to 30% of recovered funds to be paid as whistleblower rewards for reporting fraudulent claims on government subsidies. There is no upper limit. This expands compensation from the previous "up to 30% of the amount ordered to be returned within the budget." The National Tax Service operates a reward system for tax evasion reports with a maximum limit of 4 billion won. The National Health Insurance Service also raised the whistleblower reward cap for false and unlawful claims from 2 billion won to 3 billion won in December last year, reflecting the growing participation of public agencies.

Some have expressed concern that if rewards of several tens or hundreds of billions of won are paid, ministry budgets may become depleted and the system could shrink. However, such concerns are likely to be alleviated as fiscal authorities loosen budget constraints. The Ministry of Planning and Budget recently decided to establish a 'Public Interest Whistleblower Encouragement Fund' to stably support whistleblower reports and reward payments across all government agencies. A special law is to be drafted within this month, with the goal of passage in the National Assembly by August. Once the fund is established, reward payments for whistleblower reports by the Financial Services Commission, Fair Trade Commission, and others will be executed through it.

Cho Yongbeom, Director General of the Budget Office at the Ministry of Planning and Budget, stated, "Public interest whistleblowing is an important institutional device that supplements the government's capacity to monitor anti-social behavior," and added, "With the establishment of the Public Interest Whistleblower Encouragement Fund, we will further support internal and public reporting of anti-social acts such as unfair trade, capital market misconduct, and fraudulent subsidy claims."

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