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Newsletter | December 2014, Issue 4
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ANTITRUST & COMPETITION
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Amendments to Criminal Referral Guidelines to Strengthen Enforcement against Individual Perpetrators of FTL Violations
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On August 20, 2014, the Korea Fair Trade Commission (“KFTC”) promulgated amendments to its Guidelines on Criminal Referral for Violation of the Monopoly Regulation and Fair Trade Law (“FTL”) (“Amended Guidelines”). The Amended Guidelines establish new standards for requesting the criminal prosecution of individuals involved in cartel activities and other violations of the FTL. The Amended Guidelines went into effect on August 22, 2014.
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The establishment of these new standards is consistent with the KFTC’s recent focus on eradicating cartel practices engrained and recurring in certain industries. The establishment of these new standards for individual criminal referral is widely viewed as foreshadowing a shift in the KFTC’s practice to refer more individuals for criminal prosecution. This stands in contrast to the KFTC practice in place during the past three years where of the administrative fines levied in 117 instances of cartel activities, individuals in only 13 cases were subjected to the KFTC’s criminal referral.
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Under the Amended Guidelines, individuals directly responsible for violating the FTL or who used physical force to impede the KFTC’s investigation will, in principle, be subjected to criminal referral. Specifically, referrals are required to be made regarding persons who ordered or approved (either prior to or after the fact) the prohibited conduct, as well as those who carried out the prohibited conduct. Criminal referrals also required to be made for persons who impeded the KFTC’s investigation by physical violence, verbal abuse, or intentional physical obstruction or delay in the KFTC examiners’ entry to the site. Individuals who later actively cooperate with the KFTC’s investigation may, however, be exempt from criminal referral.
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The KFTC’s adoption of the Amended Guidelines may be understood as part of a larger trend among government authorities to hold more individuals responsible for engaging in cartel activities, and companies are advised to continue to pay close attention to relevant developments.
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