Donga Ilbo Feb. 23, 2007 There are reports of widespread discontent over the way credit card issuers charge merchants commission fees. South Korea’s financial regulatory body has begun to investigate the issue. “We commissioned the Korea Institute of Finance to find out what costs credit card issuers face. We are going to assess whether each card issuer charges fair commissions to merchants. Then we will propose a standard for card issuers to levy a commission,” said an official from the Financial Supervisory Service (FSS) on February 22. The Ministry of Finance and Economy will use the standard to persuade card issuers to lower excessive commission fees. It remains to be seen if card issuers cut their commission charges in line with the FSS, however. Merchants pay an average of 2.2 percent of total card transactions as commission to non-bank card issuers. That figure rises to 2.37 percent when they pay
Continue readingAuthor: Sean Hayes
Sean Hayes is the first non-Korean employed as a foreign attorney by the Korean Court System (Constitutional Court of Korea) and one of the first non-Koreans to be a full-time regular member of a Korean law faculty. He is rated a Top Attorney by numerous legal rating agencies and is known for his street-smart advice, candor and aggressive & non-conflicted advocacy. Sean has been quoted by The New York Times, The Wall Street Journal, Bloomberg, CNN, Money Today, US Today, The Korea Times, The Korea Herald, France 24, Asia Legal Business and other leading news sources.
Four oil companies fined for price rigging
Korea Herald Feb. 23, 2007 The Fair Trade Commission yesterday slapped fines of 52.6 billion won ($54.5 million) on four major oil refineries for illegal price-fixing. The antitrust watchdog said SK Corp., Hyundai Oilbank Corp., GS Caltex Corp. and S-Oil Corp. were found to have conspired to raise prices of petroleum products such as gasoline, diesel and kerosene in 2004. The FTC also decided to file a complaint against the four companies to the prosecution. “The oil cartel, between April 1 and June 10, is estimated to have caused customer damage amounting to 240 billion won, or 15 percent of the companies’ total sales,” the FTC said. The four refiners’ combined sales from April to June were 1.6 trillion won, it said. “The refiners are suspected of fixing prices for longer periods but as of yet, we only have evidence of illegal practices during those two months.” The oil companies
Continue reading153 indicted in gaming scandal
Korea Herald Feb. 23, 2007 ‘Sea Story’ scandal nabs 153 Prosecutors said today they have arrested 45 people and indicted 108 without detention in connection with an illegal arcade gaming scandal that erupted last year. The Seoul Central District Prosecutors’ Office today announced the results of its six-month probe into the “Sea Story” scandal, involving lawmakers, high-ranking government officials, gang members, arcade businesspeople and gift certificate issuers. A popular video slot game, “The Sea Story” was outlawed last year because arcades were found to be rigging the machines to raise betting stakes above the legal limit. Prosecutors then launched extraordinary investigations after realizing many other gaming machines were also operated illegally across the nation. Rep. Kim Jae-hong of the governing Uri Party was recently indicted without detention on charges of receiving 30 million won ($31,000) between last May and June from an arcade businessman in favor of influencing legislation to
Continue readingLobbying to Be Legalized
Korea Times Feb. 23, 2007 By Kim RahnStaff Reporter In an effort to root out bribery, the government is considering revising the law on lobbying. Lobbying is currently illegal in Korea because it is associated with bribes. According to the plan proposed in a report submitted by Justice Minister Kim Sung-ho to President Roh Moo-hyun, lobbyists will be asked to register and to report their activities to the government. “Legalizing lobbyists is a part of efforts to boost trust and transparency in the policymaking process, as lobbying has been done under-the-table so far and usually involved bribery. The law is expected to prevent corruption,’’ Kim said. The ministry has organized a committee of 12 legal professionals to study the lobbying systems of other countries. In other developments, the government said it would take a firm attitude toward unlawful collective action. It has sent a proposal to the Ministry of Government
Continue readingSailing into the winds of change
My Yacht Club was featured in the Joongang Daily. Sailing into the winds of change Joong ang Ilbo February 23, 2007 Harold Shim, right, aboard a 21-foot trimaran on the Han River in Seoul with members and guests of the 700 Yacht Club. In 1965, as an 11-year-old immigrant to the United States, Harold Shim found himself with his brother and sister living with an adoptive family on Wrangell Island in southeastern Alaska. His adoptive parents were teachers, who did a little fishing on the side, and Shim learned to fish and earn candy money by harvesting cheek meat from halibut heads at the local fish processing plant. Because he and his siblings were the only Koreans on the island and his adopted family spoke English, Shim’s native language became rusty with disuse, but that wouldn’t stop him from returning to work in Korea as an adult.When he reached high
Continue readingFTC expands price-fixing probe in education market
Korea Herald Feb. 22, 2007 The Fair Trade Commission is expanding an investigation into the education sector amidst speculation over possible cartels and abuses of market dominance to raise prices of textbooks, school uniforms and tuition fees. In addition to its examination of high-priced textbooks sold by the state-funded Educational Broadcasting System last year, the antitrust watchdog is probing a suspected cartel of school uniform suppliers. The FTC is currently discussing whether the alleged textbook overpricing is a case of misusing market dominance. “We cannot say whether EBS violated the Fair Trade Law yet because some of its textbooks are cheaper than those of other publishers,” said a high-ranking official of the FTC. The antitrust panel recently said that it is closely looking into whether the tuition increase at universities involves cartels. There have been suspicions that authorities of different universities met to discuss the tuition issue. “Universities can be
Continue readingFormer Aide Accuses Ex-Mayor of Bribery
Korea Times Feb. 22, 2007 By Kim Sue-young Staff Reporter Kim Yoo-chan A former secretary of Lee Myung-bak, a strong presidential hopeful of the main opposition Grand National Party (GNP) and a former Seoul mayor, Wednesday detailed a case of bribery. In a press conference, Kim Yoo-chan said Lee is not entitled to become president and that made him come forward to present evidence of illegal actions. “Lee Kwang-chol, a former secretary to Lee, gave me a total amount of 125 million won for perjury,” Kim said. “Lee (Myung-bak) concentrates on making himself a national hero, and people are cheated by his fabrication.” Kim said he testified falsely in court that he was given 300 million won from the former mayor’s rival in the general elections in 1996. Lee Myung-bak’s aides made him tell this lie, he said. The former secretary said Lee Myung-bak would have been arrested if he
Continue readingSexual Violence on Children Rises 33%
Korea Times Feb. 22, 2007 By Bae Ji-sook Staff Reporter Child molestation is becoming a serious social problem with the number of cases of sexual violence on children under 13 increasing every year. In 2006, the number of victims under 13 was 980 or 6.4 percent of the total of 15,326 reported cases of sexual violence, according to the National Police Agency. This represents a significant rise from 738 or 5.5 percent of 13,446 cases in 2005 and 721 or 5.1 percent of 14,089 cases in 2004. However, the figure does not show the actual situation well according to some specialists as the victims are young and cannot express what happened to them. Also not everybody takes legal steps against the assaulters. According to the Sunflower Children’s Center, a state-funded clinic dealing with child sex abuse cases, only 25.9 percent of parents of the 1,088 child victims take legal action
Continue readingBill Sought to Limit FDI in Key Sectors
Korea Times Feb. 22, 2007 By Kim Yon-seStaff ReporterA group of lawmakers and policymakers are moving to legislate a law aimed at placing restrictions on foreign investment in some key industries. The move is aimed at blocking takeover attempts in the weapons, energy and steel sectors and other high technology areas that have some comparative advantages.The Ministry of Commerce, Industry and Energy (MOCIE) is reviewing the bill in consideration of national security concerns. Last year, Rep. Lee Sang-kyeong of the governing Uri Party came up with the bill, representing a group of lawmakers from the ruling and opposition parties. Lee stressed the need for legislation modeled after versions in other countries including the U.S. Exon-Florio Act in which foreign direct investment must undergo prior screening by the Committee on Foreign Investment. The purpose of the scrutiny is intended to determine whether a foreign firm’s acquisition of a U.S. firm threatens
Continue readingFTC plans a monopoly investigation of 3 portals
JoongAng Ilbo Feb. 21, 2007 As early as next month, the Fair Trade Commission will begin investigating whether three major Internet portals, Daum, Naver and Nate, are a monopoly.“We will form a task force team and begin a direct-authority investigation on the Internet portal companies,” said Lee Dong-gyu, secretary general of the Fair Trade Commission. The watchdog agency said it feels the influence of the top portals is growing rapidly in the market.The concern is that they are using their dominant position to overcharge content providers, such as a company that writes horoscopes.On a radio talk show yesterday on the Buddhist Broadcasting System, Mr. Lee said the Fair Trade Commission hurried up its plans to start researching the Internet portals because it considered the issue to be timely. In the case of Naver, Daum and Nate, the three portals took more than 80 percent of all sales, mostly from advertising,
Continue readingJudge Urges Chief Justice to Resign
Donga Ilbo Feb. 21, 2007 A presiding judge called for an explanation from Supreme Court chief justice Lee Yong-hoon, questioning his morality. He blames the chief justice for distrust in legal community, most recently proven in crossbow attack on a senior high-court judge. Jung Young-jin, presiding judge at the Seoul Central District Court, posted a paper on the court’s local area network (LAN) titled, “Urge the Chief Justice to Explain His Course of Action with respect to the Crossbow Attack.” In the paper, he said, “His unscrupulous behavior including tax evasion while he was a lawyer led to the current distrust of the legal circle.” He in effect called for his voluntary resignation, saying that, “Unless the allegation is cleared, he should make a decision on his position. Even though he may be cleared, his position will seriously burden people in legal community and general public alike unless the charges
Continue readingRules to Change for Entertainment Spending
Chosun Ilbo Feb. 21, 2007The existing government regulation that requires a receipt for corporate entertainment spending exceeding 50,000 won will be tightened. Entertainment spending which will require a receipt will be lowered to 30,000 won in 2008 and 10,000 won in 2009. In response, businesses are expressing their anger against the government’s measure, saying it will increase the tax burden and add more work for them. They also argued that the government’s excessive intervention may lead to contraction of business activities. The government which held a Cabinet meeting on Tuesday at the Central Government Complex passed the revised corporate tax laws to tighten existing regulations on entertainment spending. At the moment, companies only have to submit receipts for entertainment expenses exceeding 50,000 won to the tax authorities to make them recognized as business expenses. Tax authorities treat entertainment expenses of 50,000 won or less as business expenses without requiring a
Continue readingTen Petrochemical Companies Fined For Price Fixing
Chosun Ilbo Editorial Feb 21, 2007 Price Fixing Is a Serious Crime. The Fair Trade Commission has fined 10 petrochemical companies W105.1 billion (US$1=W939) for price rigging between 1994 and 2005. The firms including SK Corp., LG Chemicals and Samsung Petrochemicals were found to have held monthly executive meetings to set standard sales prices and “monitored” each other to make sure nobody undercut them. The FTC estimates the price-fixing cost consumers an estimated W1.56 trillion due to steady increases in prices of vinyl and plastic products. Price fixing is a serious offense that shakes the very foundations of a free market economy. Companies no longer strive to make better yet more affordable products and consumers end up with the short end of the stick. That’s why the United States, Europe and other advanced countries treat price-fixing as a serious crime. In 1999, an international price-fixing scheme involving vitamins was discovered.
Continue readingCourt rules against ‘Lolita’ defense in pedophilia case
Korea Herald Feb. 20, 2007 Court rules against ‘Lolita’ defense in pedophilia case The Supreme Court ruled yesterday that a mental illness involving sexual obsession with children cannot be an excuse for lessened punishment for sexual violence against children.The top court returned a molestation case to an appellant court for a retrial. The appellant court had reduced a life sentence imprisonment penalty to 15 years after recognizing the offender had so-called Lolita syndrome, or sexual attraction to prepubescent children. The 39-year-old defendant, identified as Lee, was accused of raping 12 elementary school girls and stealing their money and other articles between February 2005 and January of last year.A lower court handed down a life imprisonment to Lee, but a High Court excused him for having the syndrome, more commonly known as pedophilia. “But a disease itself is not a mental and physical disorder that could be an excuse to lessen
Continue readingFirst foreign listing likely delayed to June
Korea Herald Feb. 21, 2007 First foreign listing likely delayed to June The listing of the local stock exchange’s first foreign company will likely be in June at the earliest, the Korea Exchange said yesterday. Huafeng Textile International Group, which is already listed in Hong Kong, filed an application in December for a secondary floatation on Korea’s main bourse. Lee Young-tak, chairman and CEO of Korea Exchange, said in January that he expected the firm to be listed as early as March.“The application is still under review. Any decision will likely be made late next month,” said an official at the KRX. Given that the listing process usually takes two to three months, the much-anticipated debut of a foreign firm on the local stock market is likely in June at the earliest, KRX officials said.Huafeng Textile is a middle-sized fabric processor based in Shishi city in China’s Fujian province, with
Continue readingJU Group chief gets 12 years in jail
Korea Herald Feb. 21, 2007 JU Group chief gets 12 years in jail A Seoul lower court yesterday sentenced the chairman of JU Group, the nation’s biggest multilevel marketing firm, to 12 years in prison for fraud and embezzlement.Joo Soo-do, 51, was arrested last July on charges of deceiving over 110,000 people in a fraud case of 1.8 trillion won ($1.9 billion), instructing them to illegally pay a total of 130 billion won to JU Group’s affiliates and misappropriating 28.4 billion won of company funds.Between 2003 and 2005, he also allegedly ordered his staffers to manipulate the computer transaction system to provide higher returns for certain influential people or their families, who joined the firm as sale agents. Joo pleaded not guilty on all accusations. “It was inevitable to impose a severe punishment against the defendant as he exerted an evil influence on society,” Judge Choi Gyu-hong ruled. “Not only
Continue readingNorth Korea Enacts Law Against Money Laundering;Intelligence Agency Says Pyongyang Has Highly Enriched Uranium Program
Korea Times Feb 21, 2007 North Korea Enacts Law Against Money LaunderingIntelligence Agency Says Pyongyang Has Highly Enriched Uranium Program By Park Song-wuStaff Reporter The National Intelligence Service (NIS) on Tuesday confirmed that North Korea recently enacted a law that prohibits money laundering. The standing committee of the North’s Supreme People’s Assembly adopted the legislation last October to ban financial transactions involving illegal earnings, the agency said in a press release. The enactment apparently aimed at settling the U.S. financial sanctions on a bank in Macau that was blacklisted by Washington in September 2005 for its suspicious role in helping the North conduct illicit financial activities, it said. Under the latest six-party agreement, reached on Feb. 13, the United States is to resolve financial sanctions within 30 days on North Korean assets worth $24 million that have been frozen in the Macau bank. The NIS also confirmed that the North
Continue readingGo for 2-Term Presidency
Appeared in Korea Times on 01-31-2007 Dear Prof. Sean Hayes: An issue that has suddenly been proposed by President Roh Moohyun is the amendment of the Constitution to give the future president a four-year one-time renewable term and also to align the presidential election with the National Assembly elections. Currently, the president has a five-year non-renewable term and the presidential election is not held on the same date as the National Assembly elections, since Assemblypersons have four-year terms. Is Roh’s proposal worth trying? Proud Korean citizen Dear Proud: The system of two four-year renewable terms was proposed to lessen the cost of elections by aligning the dates of elections; to keep government policy consistent by allowing presidents the possibility of an eight-year term; to help eliminate the present system’s lameduck year; and for a variety of other reasons. Whether it is a good idea or not may depend on your
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