Fair Trade Commission to Restrict Surprise Inspections of Corporate Legal Teams

by Lee Eunjoo

Published 14 Apr.2023 10:00(KST)

Fair Trade Commission to Implement Investigation Procedure Rules, Case Procedure Rules, and Objection Handling Guidelines from the 14th

The Fair Trade Commission (FTC) will enhance the predictability of law enforcement by specifying allegations in official investigation documents during on-site inspections. Additionally, to facilitate investigations, the practice of conducting investigations on companies' compliance support departments will be restricted. This is aimed at strengthening the procedural rights of the investigated parties.

The FTC will implement the "Rules on Investigation Procedures of the Fair Trade Commission (Notice)," the "Rules on the Operation of the Fair Trade Commission Meetings and Case Procedures (Notice)," and the "Guidelines on Objections to Materials Collected and Submitted during On-site Inspections (Regulation)" starting today, based on these principles.

According to the newly implemented rules, the official investigation documents for on-site inspections must specify not only the legal provisions related to the suspected violations but also the scope of the investigation period and the transaction areas in detail. This follows criticism that the lack of specificity regarding alleged violations had caused significant uncertainty about the investigation scope.

Investigations of compliance support departments such as corporate legal teams or compliance teams will be limited to necessary cases, such as when these departments are directly involved in legal violations or evidence destruction. When extending the on-site inspection period, the investigated party must be provided with a new official document specifying the extended investigation period along with the reasons for the extension.

The procedure for reviewing the relevance between materials collected or submitted during on-site inspections and the investigation purpose will also be strengthened. The investigated party can re-examine whether the submitted materials are related to the investigation purpose stated in the official document and formally request the return or destruction of materials deemed unrelated to the investigation purpose.

The FTC stated, "With this revision of the rules, the investigation scope can be clearly identified, and opportunities to express opinions during the investigation and deliberation process will be expanded, thereby strongly guaranteeing the procedural rights of the investigated parties under FTC investigations. We will continue efforts to establish transparent investigation practices, including conducting internal training to ensure that the newly established systems take root in the market."