The Fair Trade Commission of Korea (“Korean FTC”) 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 FTC’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 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.
Known for his street-smart advice & proactive advocacy. Sean works with senior retired Korean judges and leading attorneys in contentious and transactional matters. First non-Korean lawyer (NY) to work at Korean Courts and one of the first non-Korean law professors. Rated a top lawyer in Korea by major rating agencies.
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