In the last several months, two key agencies involved in anti-corruption enforcement, the Prosecutor’s Office (“PO”) and the Anti-Corruption & Civil Rights Commission (“ACRC”), have published some interesting statistics as well as summaries of key cases concerning the Act on Prohibition of Improper Solicitation and Provision/Receipt of Money and Valuables (“Anti-Graft Act”). In the following we undertake a brief review of some key information in an effort to discern some noticeable trends in investigations and enforcement in this area.
 
On September 18, 2024, the PO published the “2023 Prosecutor’s Office Yearbook,” which contains various statistics concerning criminal investigations relating to the Anti-Graft Act undertaken by the PO since the adoption of the law in 2016. The table below shows that a total of 266 individuals were charged and faced criminal trials over the seven-year period since the Anti-Graft Act took effect (from September 28, 2016 to 2022). The PO has seen a growing number of cases each year with 911 cases filed in 2022. Out of those cases, 54 of them resulted in indictments by the PO.
 

Prosecutor’s Office Yearbook (2016 to 2022) – Statistics on the Anti-Graft Act Violations by Year

The Anti-Corruption & Civil Rights Commission evaluated how well public institutions have complied with the Anti-Graft Act and published their findings on June 29, 2023. The results showed a general decline in reports of Anti-Graft Act violations filed against public institutions over the years, with a minor uptick in 2022. Over the same seven-year span (from 2016 to 2022), 60.7% of the filed cases involved improper solicitations while 36.2% related to exchange of money and valuables. However, a significant proportion of the sanctioned public officials (1,767 out of 1,879 or 94.1%) were penalized for accepting money and valuables. Additionally, based on statistics for the period up to 2022, a total of 1,332 individuals (65.6%) received fines, and 256 individuals (13.6%) faced criminal penalties.

Eight years after the Anti-Graft Act was enacted in 2016, concerns about its effectiveness persist. However, the general consensus is that the Anti-Graft Act has moved beyond its initial phase, with a more consistent rate of newly filed cases and sanctions. It is also increasingly common for investigations into Anti-Graft Act violations to lead to other charges, such as bribery (including violations of the Act on the Aggravated Punishment of Specific Crimes), abuse of authority, and obstruction of official duties, depending on the facts of individual cases.

In the following, we have summarized some recent Anti-Graft Act enforcement cases.
 

• A, the ambassador to Vietnam, accepted airfare and accommodation expenses from a Vietnamese company to attend a golf course opening ceremony with A’s family. Consequently, A was dismissed by the Ministry of Foreign Affairs (“MOFA”) and charged under the Anti-Graft Act, receiving a criminal fine of KRW 3 million and forfeiture of KRW 3.79 million.
  
  A challenged the dismissal and filed a wrongful termination lawsuit against the MOFA. The trial court initially found that “the provision of accommodation was permitted under the Anti-Graft Act, as the event was deemed to be officially related to A’s duties with both a local company and a Korean company.” However, the Supreme Court disagreed, stating that “the event exceeded the typical scope of an official event due to the nature, cost, and duration of the provided accommodation.”
   

• The CEO, managing director, and manager of Company B provided meals ranging from KRW 31,333 to KRW 60,400 per person, to members of its management evaluation committee on four separate occasions from 2021 to 2023 for “business meeting purposes.” The Board of Audit & Inspection reported this misconduct to the MCST, recommending disciplinary action and fines.
   

• Journalist C from X Daily borrowed money at an interest rate below the standard rate for general credit loans from commercial banks from someone C was covering for a story. In a wrongful termination lawsuit filed by C, the court ruled that C violated the Anti-Graft Act by receiving money and valuables in the form of a loan, suggesting the benefit might have been intended to prevent unfavorable media coverage. Even if it was assumed to have been a bona fide financial transaction, the 0.51% interest rate difference on a KRW 100 million loan would amount to a benefit worth at least KRW 1.53 million, which exceeds the KRW 1 million threshold for one-time benefit provided under the Anti-Graft Act.
   

While issues related to the Anti-Graft Act represent only a fraction of the broader landscape of anti-corruption and anti-bribery laws, it is crucial for companies to have a comprehensive understanding of the relevant regulations and the scope of permitted conduct. Therefore, businesses should consistently focus on legal compliance and ethical management practices to effectively mitigate the risk of violating anti-corruption laws during their operations.

[Korean Version]