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Newsletter | July 2016, Issue 2
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ANTITRUST & COMPETITION
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KFTC Adopts Investigation Procedure Rules
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On February 4, 2016, the Korea Fair Trade Commission (“KFTC”) implemented its “Rules on Investigation Procedure (the “Rules”).
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The Rules are designed to: (1) assure fairness and transparency of the KFTC investigation procedure; (2) strengthen supervision of the KFTC investigation procedure; (3) ensure that due process is being met during investigations; and (4) improve reliability of law enforcement
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The Rules set forth standards for investigatory due process, including on-site investigations and methods of digital data collection.
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The major items within the Rules are as follows:
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1. Investigation Plan and Subject Selection
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Article 5 of the Rules requires a KFTC examiner to create an investigation plan for the investigation. The investigation plan must include items, such as a list of potential subjects, objective, and reasonable criteria for subject selection, grounds of the selection criteria, and an ultimate list of selected subjects.
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2. Notice of Investigation
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Article 6 of the Rules requires that the KFTC examiner provide a formal notice to the subject (including its employees and/or officers) before an onsite investigation commences. The formal notice must include items such as the investigation period, an investigation objective, the identity of the investigation subject, and how the investigation will proceed. In particular, the investigation objective must be filled in together with relevant legal provisions and alleged violations. Also, the subject’s information, such as his/her name and address, should be specified. One exception is that for an investigation of unfair collaborative acts (i.e. cartels), the listing of alleged violations need not be listed.
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3. Subject’s Right to Counsel
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Article 13 entitles a subject to be represented by an attorney throughout the entire process of the investigation if he/she requests so, subject to certain exceptions. The exceptions include where urgent investigation is necessary to uncover unfair collaborative acts, or where the attorney makes it “significantly difficult” to achieve the objective of the investigation.
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Further monitoring will be required to determine how these exceptions will be implemented in practice.
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4. Investigator’s Obligations
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Article 14 sets forth additional obligations of the examiner, such as filling in and delivering a confirmation statement regarding investigation procedure to the subject, as well as listing the materials collected and submitted after the investigation is complete.
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5. Follow-up Scheme (Report and Supervision)
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Article 16 obligates the chief examiner to solicit feedback from subjects, including their concerns during the investigation procedure. Upon completion of the investigation, the examiner must report the results of the investigation and next steps to take to the chief examiner, with the subject’s materials that are collected and submitted attached (as provided under Article 17). The Rules also provide for obligations of the chief examiner to monitor the relevant procedures.
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