The Fair Trade Commission of Korea (“Korean FTC” or “KFTC”) amended the Korean FTC’s Criminal Referral Guidelines (“Amended Guidelines”) to motivate more active and aggressive enforcement of Korea’s Franchise, Monopoly and other related laws. We have seen a much more active enforcement of Korean law by the Korean FTC and expect more criminal referrals.
The Amended KFTC’s Criminal Referral Guidelines places a very low threshold for referring a case for a criminal prosecution of employees and companies. The Amended Guidelines are effective since April 9, 2018.
Prior to the present amendment, the prior Guidelines emphasized on, mainly, making criminal referral against key management and company representatives that were alleged to have taken in part in “high level” violations. The Amended Guidelines places a bulls eye also non-management employees and lowers the threshold for referring a case for prosecution.
The Guidelines notes that adjudicating officers shall look, mainly, to: (a) the role of the specific individual in the alleged violation; (b) the degree of involvement of the individual in the alleged violation; (c) the knowledge of the individual of the illegality of the alleged violation; and (d) the length of the involvement in the alleged violation, thus, placing the emphasis more on the specific role in the alleged violation,than, on a mere title.
Additionally, the Amended KFTC Guidelines places a low threshold for referral based on a revised “penalty point” system that no longer strictly differentiates between criminal referrals and administrative fines.
We, highly, recommend a complete compliance audit with a proactive, Korean street-smart and business experienced compliance specialist with significant experience with Korean FTC matters.
- Guidelines on Rules of Employment & Guidelines on Fair Personnel Management Withdrawn by Korean Ministry of Employment
- Termination of a Franchise Agreement in Korea: Korean Franchise Law Basics
- Changes to Korea’s Franchise Law May Lead to an Increased Potential for Criminal Sanctions: Franchise Law Basics
- Abuse of Market Dominance in Korea: Competition Law in Korea
- Digital Forensic Reviews at the Korean Fair Trade Commission
- Privity of Contract in Franchise Agreements in Korea: Korean Franchise Law Updates
- Damages for Material Omissions in Franchise Disclosure Documents in South Korea
- Voluntary Resignation of an Employee in Korea: Employment Law Updates
- Korean Patent Court’s Intellectual Property Infringement Guidelines
- Korea’s Occupational Safety and Health Act Amendments for 2018 (OSHA Korea Updates)