The Guardian has posted an interesting report entitled Operating Responsibly in Emerging Markets: South Korea. The report, rightfully, notes that corruption is still a major issue for companies doing business in Korea. The report, emphatically notes that its: “imperative for companies operating in South Korea – particularly for those with a presence in the UK – to ensure that there are strong anti-bribery and corruption policies and procedures in place.”
The report notes in part that:
Corruption continues to be a key challenge for a business seeking to operate responsibly in South Korea. Ranked by Transparency International in 2011 as the 43rd most corrupt country out of 182, recent reports have questioned the effectiveness of anti-corruption law in South Korea and its enforcement. According to a report from Herbert Smith on anti-corruption in Asia, South Korea’s Act on Preventing Bribery of Foreign Officials in International Business Transaction has only led to nine convictions in 13 years. Few Korean companies are revealing data on political ‘donations’ (comparable to facilitation payments in the West) in their CR reports.
However, there is evidence that combating corruption is moving up the South Korean agenda. Just this week, the country’s anti-corruption agency announced that it will seek to introduce a law that would mean government officials caught accepting more than 1 million won ($883) worth of bribes or entertainment could face punishment of up to three years in prison even without evidence of influence peddling. Disgraced officials would also need to pay back five times the amount they received. In addition, lobbyists and civil servants will incur significant fines if they are found to have sought illicit favours from public officials, whether or not any money was involved. It is therefore imperative for companies operating in South Korea – particularly for those with a presence in the UK – to ensure that there are strong anti-bribery and corruption policies and procedures in place.
Other articles that may be of interest:
- Sean Hayes in NY Times on Samsung Korea Slush Fund/Corruption Case
- CEO/Chairman of Korean Conglomerates Serving Time in Jail?
- Embezzlement, Tax Fraud, and Bribery Easier in Korea?
- You can Succeed in Korea without Resorting to Bribery?
- Korea Corporate Governance: One of the Worst in World According to Economist
- Who won with the New Korean Compliance Law?
The full report may be found at: Operating Responsibly in Emerging Markets: South Korea Corporate Compliance.
Sean Hayes, IPG’s Co-Chair of the Korea Practice Team, may be contacted at: SeanHayes@ipglegal.com
- Korea’s Anti-corruption/Anti-Graft Law: Kim Young-ran Law Implementation in Korea
- English-Speaking Business Lawyers in Seoul, Korea: Corporate Law & Compliance Team at IPG Legal
- Corruption in Korea: What is the Crux of the Problem? by Tom Coyner
- Senior Prosecutor Arrested for Bribery in Korea
- Korea’s Improper Solicitation and Graft Act: Kim Young-ran Act
- South Korea Investment in the Irish Horse Industry