Private Detectives, Tattoo Artistists and Chiropractors in Korea Will Become Legal Professions?

It is illegal to be a private investigator, tattoo artist or chiropractor in Korea.  Of course, Korea has private investigators, tattoo artists and chiropractors.  Thus, those practicing these occupations in Korea face criminal prosecutions and fines. Additionally, the clients of those practicing these occupations are not safeguarded by the typical administrative agency regulations that serve to protect these individuals.  Some issues have occurred with regard to private investigators.  Some have utilized tactics that many consider less than ethical.  These criticisms may be lessened with the regulation of the profession.  I believe in the near future that tattoo artists and private investigators will become legal occupations, but I believe you will see a vigorous fight from massage therapists (anma- blind practitioners), pharmacists and doctors towards legislation of the chiropractic profession.   Some lawyers are against the private investigator profession, but in my own straw pole I found no Korean attorney that

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Apple Infringed Samsung Patents According to U.S. ITC: Standard Essential Patents

The United States’ International Trade Commission has overturned ITC Judge James Gildea’s September ruling that Apple did not violate Samsung’s patents alleged to be utilized in AT&T models of the iPhone 4, iPhone 3GS, iPad 3G and iPad 2 3G. President Obama has 60 days to review the order that has placed a partial ban on the imports of older versions of Apple IPhone and IPad products.   The ban relates to the use of Apple of “standard essential patents,” specifically the 3G wireless technology to transmit multiple services simultaneously that is owned by Korea’s Samsung.  Three related claims by Samsung were dismissed by the ITC. The majority of scholars and most U.S. government agencies believe that the damage for violation of these type “patents” should be low-cost licenses – not a ban on imports.  What do you think?  Other articles that may be of interest: Patent Bullies vs. Samsung

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Korean Corporate Governance Reported as One of the Worst by an Economist

What is the cause of the Korean discount? An economist article hits the nail right on the head. So what is the source of the “Korea discount”, which means that the KOSPI has a forward price-to-earnings ratio of under ten, below most other Asian stockmarkets (see chart)? There are a few possibilities. The national economic model is still built on exports, often in highly cyclical industries such as shipbuilding. The capital structure of South Korean firms has historically been debt-heavy.In this section But the prime cause of the discount is more likely to be poor corporate governance at the family-run chaebol conglomerates that dominate the economy. Nefarious schemes to pass on control to sons, avoid taxes and exploit company assets for the benefit of family members are widely discussed in private. They are also lambasted abroad: a 2010 survey by CLSA, a broker, placed the country third-from-bottom in Asia on

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Personal Data Protection in Korea under the Korean Information and Communications Network Act

Under the Korean Act on the Promotion of Information and Communications Network Utilization and Information Protection, Etc. (“ICNT”) a Government Notice, that entered into force last month, mandates all the major information services providers and data centers to become Information Security Management Systems certified. The Notice was a reaction to security breaches that may have revealed confidential information of users of various websites.  The Notice requires all press agencies, on-line shopping malls,  web portals and the like with revenue of over KRW 10 million or over 1 million users to become certified or face shutdown and a KRW 10 million fine. Those required to comply with the notify must be certified by the end of this year.   We predict that it may take up to four months for a site to be certified compliant according to a consultant we work with.  The new law may be welcomed by foreign and

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Pharmaceutical Companies in Korea: Criminal Sanctions and Vicarious Liability

Early this year, the Seoul Central District Prosecutors office charged a mega Korean pharmaceutical company and a dozen of its employees with providing rebates in the amount of approximately KRW 4.7billion to hospitals.  Dozens of doctors have, also, been subpoenaed for accepting rebates through agents.  Revisions in Korean Medical Services Act, Korean Pharmaceutical Act, and the the Medical Device Act provide criminal punishment for the provider and, also, receiver of rebates. Late last year, a similar scandal hit medical device companies. The most important issue for my foreign readers is that it is no longer true that Korea does not have vicarious liability.  The vast majority of scholars, in Korea, believe that a corporation may not be held criminally liable as a principle of a crime.  The Supreme Court and Constitutional Court of Korea have agreed with this notion.   However, today, many laws contain vicarious liability clauses.  The Constitutional Court

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Korean Legal News for the Week of January 27, 2013

This Week’s Legal News Reported by Media Korea tycoon sentenced for embezzling more than $40 million Korea becomes the red flag for Asia’s currency war Korea court rules Samsung chairman doesn’t have to share inheritance with older brother Korea to welcome back 5,000 Vietnamese workers Korea warns North against nuclear test Apple loses appeals bid in Samsung patent battle North Korea refuses to pay Polish builders Korea 4th-largest source for adoptees in US Sale of Korean relic taken in wartime leads to arrest Park, Harper agree to push Korea-Canada FTA Most Recent Posts from The Korean Law Blog Protecting Trade Secrets in Korea: Top 5 Things to Know Before Subjecting your Business Secrets to the Korean Market Korea’s President Lee to Pardon Cronies and “Too Big to Fail’ Companies Sad News for a Samsung Worker: Chemical Leak at Hwaseong Plant Inside Korea’s Two-Tiered Economy by Tom Coyner Sean Hayes in the

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Korea’s President Lee to Pardon Cronies and “Too Big to Fail” Companies

Once upon a time, end-of-tenure presidential pardons served a useful purpose as reformers tried to correct past wrongs, such human rights violations, which were too politically problematic at those times. And in some cases involving foreigners, pardons could be used to flush jails of non-Korean miscreants to planes heading for their home countries. But over the past decade, this presidential prerogative has been misused to rescue political cronies and executives of “too big to fail” enterprises, without risking ensuing political blowback. While South Korea is better than most Asian countries in being a nation of laws, there is an understandable cynicism about the law held my most Koreans. The big fish have a way of getting undeserved leniency while the more common Korean can expect a greater brunt of the law if convicted. This is another example of what I’ve been recently labeling as the “Two-Tier Korea” consisting of the

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Korean Contractual Holidays vs. Statutory Holidays: Korean Paid Leave/Holidays Explained

The, only, statutorily mandated holidays are the Weekly Holidays under Article 53 of the Korean Labor Standards Act; Labor Day under Article 55; Maternity/Paternity Leave under Article 74; and Annual Paid Leave under Article 60.  These statutorily mandated holidays are required to be paid holidays under law. Most companies recognize Sunday, Independence Movement Day, Foundation Day, Liberation Day, New Year’s Day, Thanksgiving, Lunar New Year, Hangul Day, Buddha’s Birthday, Christmas Day, Children’s Day, Election Day and Memorial Day as days off.  These Public Holidays and Sick Leave are not required to be paid days off.  However, most companies specify that these are paid leave days under the rules of employment of the company.    Thus, for example, a company may require an employee to take time off on a particular Public Holiday instead of taking annual paid leave.  Also, an employer may dock annual leave for a sick day.  These practices,

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Utilization of Accountants in Termination of Employees for Urgent Business Necessity (Urgent Managerial Need) in Korea

We have used, for all cases we were involved in regarding the layoff of Korean workers, accountants to argue that the layoff is for urgent managerial need.  We have, often, been questioned by clients if the extra expense is necessary.  Yes the expense is necessary and here is why.   A case last year shows the need to utilize accountants in all cases where an employer intends to layoff workers based on “urgent business necessity” under the Korean Labor Standards Act (LSA).  A case handed down by the Supreme Court in the first half of last year ruled that a layoff did not violate the LSA, since urgent managerial necessity existed because of “external factors,” including the lack of overseas demand for the employer’s products.  The Supreme Court confirmed the holding of the High Court that noted that the District Court was wrong in emphasizing the possibility that overall production

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Alternative Legal Fee Arrangements at Korean-based Law Firms: Limited Scope Representation

Many Korean law firms have been willing to work in relationships based on a non-time charge flat-fee or contingency basis for Korean clients.  However, many of these law firms in Seoul have been unwilling to work on alternative fee arrangements with non-Korean clients, because of, among other things, the requirement to represent the client in a far different manner than that of a Korean client and, also, reduced competition in the foreign-client market, because of the reality that only a few attorneys in Korea are capable of handling the needs of international clients in Korea. Korean and foreign clients, often, have different expectations of the role of attorneys.  A Korean client is, often, willing to be a passive participant, since the client knows the attorney is motivated, primarily, through a significant contingency fee.  Contingency fees are common in Korea in all matters, including criminal and family matters.  Thus, clients often

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12 New Items Prohibited from Export from Korea by Overflow of Core National Technology Law of Korea

The following is the list of the 12 new items that have been newly prohibited from export from Korea without an export license/acceptance of report of export from the Ministry of Knowledge Technology of Korea.  The export prohibition was implemented by the Overflow of Core National Technology Law of Korea.   The prohibition takes affect from the beginning of 2011. Electric /ElectronicProducts Foundry process & device technologies of less than 31 nms. Design/process/manufacturing technologies of AMOLED panels (except for module assembly process technology). Design technologies of lithium secondary batteries with high-energy density (200Wh/Kg or more)  & high-temperature safety for electric cars. Information Technology  Products          Design technologies of system for Advanced LTE/LTE. Design/process technologies of Mobile Application Processor SOC. User Interface (UI) technologies for Smart Phone Devices. Design technologies of Baseband Modems for Advanced LTE/LTE. Design technologies of RFIC and PAM for Advanced LTE Terminals. Design technologies of Base Station for Advanced

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Senior Prosecutor Arrested for Bribery in Korea

Kim Kwang-joon, according to local Korean vernaculars, was arrested on Monday for receiving bribes. The prosecutor is suspected of receiving close to USD 1,000,000 in bribes relating to a pyramid scheme and influence peddling for Eugene Group (Korean conglomerate). This type of case occurs throughout the world, but in Korea the punishment, rarely, fits the crime. Korea must realize that the most serious crimes to the nation are crimes concerning government corruption. These crimes go to the very fabric of the Korean system of government, a system that is increasingly not trusted by the population. Many of the young in society believe that the country is ruled (maybe rightfully) by a handful in society – this handful is believed to be above the law. When this risk from the youth is realized, the punishment will increase and more in the population will fear the wrath of law enforcement. To date,

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Limiting Director Liability in Korea under new KCC

We have advised all of our clients to promptly revise their articles of incorporation of their Korean companies to take advantage of changes to the Korean Commercial Code.  One revision that should be, immediately, done is limiting the liability of your Korean inside and outside directors.  Article 400(2) of the Korean Commercial Code allows a company to limit the liability of an inside director to six times the amount of compensation given to a inside director by the Korean company in the previous three years and three times the amount of compensation given to an outside director in the previous three years. Again, the company’s articles of incorporation must be revised to take advantage of this liability limitation.  A court may disallow the limitation if an action or inaction is deemed by the court to be perpetrated with intent or in a grossly negligent manner. Other articles that may be

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Nine Musts for a Succesful License Agreement in Korea

License Agreements in Korea are too often, simply, a spinning of license agreements used in the West.  Your foreign license agreement, in most cases, is not adequate for your needs in Korea.  Our 9 Musts before Engaging in a License Arrangement in Korea 1.  Due Diligence Say it three times and read my posts:  Doing Business in Korea:  Due Diligence, Agreements, Attorneys and Street Smarts 2.  Royalty Clause  Include in your license agreement a royalty clause.  The clause should detail, at a minimum:  Currency conversion rate or payment in the currency of your home nation  Payment terms  Accounting and audit particulars  Tax treatment 3.   Inspection  An inspection of the first batch of goods is a necessity and periodic inspections are recommended for most products.  Agents are available to conduct these inspections. 4.  Choice of LawIf the license is for a smaller value, often, it is best to simply utilize Korea as

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U.S. Foreign Corrupt Practice Act Basics for Korean-based Business Enterprises

If you are working for a U.S. Company with an office in Korea or you are working for a company from most other developed and developing economies you may be subject to punishment under the laws of your home country related to the interactions of you or your employees with foreign government employees.  If you want to say out of the clink and avoid embarrassment to your company by actions of your employees in Korea, please read and understand the following. Prior to engaging in any activity that may be construed as a “corrupt payment” under law, please consult with an attorney in order to decide whether the action may be construed as a “corrupt payment.”  The terminology “corrupt payment” is the term utilized under the U.S. Foreign Corrupt Practice Act.  Other like terminology is used by other nations.   Under the U.S. Foreign Corrupt Practice Act a Corrupt Payment is

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Korail vs.Lotte: Lesson for Investors in Korea

A promising development project may be scrapped because of a peculiar battle for control between a Korean conglomerate and a Korean government-controlled enterprise.  The feud is a lesson for investors who believe that investing in a project with the involvement of the Korean government will assist in guaranteeing success.  Often the involvement of Korean government enterprises overly complicates matters and leads to power struggles between the “experts” and the government.  Because of Korean government realities, however, often the involvement of a Korean government enterprise is required.  This project is an exciting project for many of our domestic clients struggling in this market and hopefully personality conflicts will not put in jeopardy a great project that will revitalize an area that is the geographic center of Seoul and could become a new downtown in a district that will loose a great deal when the U.S. military base is relocated. The following

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Top Ten Mistakes of Companies Doing Business in Korea

Our law firm has been dealing in Korea with foreign clients doing business in Korea of all shapes and sizes.  Surprisingly, we see many of the same issues from our multinational clients that we see from our SME clients, thus, we drafted this post.   TOP TEN ERRORS OF COMPANIES IN THE KOREA MARKET Lack of market research.  Selling in China, Japan, Malyasia, Singapore etc. is vastly different than selling in Korea.  Get a good local market research study concluded by a local market research company.  No Due Diligence or Poor Due Diligence.  Read my posts on this issue. Listen to my Mother: JVs in ASIA;  Doing Business in Asia: Due Diligence, Agreements, Attorneys and Street Smarts. Register your trademarks.  Your international filing is not adequate protection in Korea. Read my post on the issue at: Don’t Just Trust Us: Trademarks in Korea Draft Korea-tailored contracts.  Your international joint venture,

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Finding a Korean Distributor: Top 10 Things to Know Before you Jump into Bed with an Agent in Korea

Too often we deal with clients looking to collect on unpaid invoices to distributors/customers in Korea and resolve IP and other disputes between these distributors/customers because of clients rushing into relationships without vetting out the anticipated distributor or having a very poorly drafted distribution agreement.  Many distributors in Korea are fantastic, while, others are nothing more than order processors -they, simply can’t or don’t want to sell.   Additionally, in these tough economic times, too many companies, in Korea, are struggling to stay afloat.  If your distributor doesn’t know the market, you will find yourself with unpaid invoices from customers and issues with your distributor.   Do yourself a favor and consider the following before engaging a local company to distribute your products. 10 Ten Things to Consider Prior to Doing Business with a Distributor in Korea Has the Korean distributor worked with other foreign companies?  If not, you are dealing

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Constitutional Court of Korea Declares Internet Real-Name Online Identification System Unconstitutional

The Korean Constitutional Court, unanimously, declared Clause 5 of Article 44 of the Act on the Promotion of Information and Communication Network Utilization and Protection implemented in 2007 unconstitutional in late August of this year.  This Korean law was passed in reaction to suicides of Korean celebrities.  These celebrities were criticized online for various improprieties and alleged improprieties.  The law required, on certain websites, the logging into the website with one’s national identification number, thus, limiting the ability to speak anonymously. Numerous Constitutional Law scholars and free speech advocates emphatically argued that the law was nothing more than an attempt to stifle political speech.  Since, naturally, posters would fear the wrath of the government if criticism was levied against the government or heads of Korean corporations. The Constitutional Court, in striking down the law, noted that: “Restriction on freedom of expression can be justified only when it is clear that

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Top 10 Conglomerates in Korea equals 76% of GDP

Chaebol.com has reported that the Top 10 largest companies in Korea account for over 76% of the Gross Domestic Product of Korea, while the top 30 companies on the Korean Stock Exchange account for over 59% of the value of the market.  The statistic is alarming to outsiders, but not surprising to those on the ground in Korea. Samsung:         21.9 % of GDPHyundai/Kia:   12.6% of GDPSK:                 11.7%LG:                 9% The fear has always been that Korean conglomerates’ abuses in the local Korean market leaves few companies capable of competing, thus, weeding out potentially successful companies.  The largest conglomerates are doing the same abroad through dumping and other market manipulative tactics.    The Korean government has, facially, tried to protect consumers, subcontractors and competitors, however, the government and even the courts have been reluctant to do anything, but give these companies a light slap on the wrist.  A reality that may

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