1.

The Supreme Court of Korea recently held that criminal jurisdiction under Korean law can also extend to foreign entities that hire individuals who have previously violated criminal laws of Korea within the territory of Korea pursuant to vicarious liability provisions.

In a case where employees formerly employed by a domestic company accessed and acquired files containing industrial technologies and trade secrets, subsequently exported such files without authorization, and then shared them with an overseas entity that they became employed with, the Supreme Court ruled that Korean criminal jurisdiction is established not only over the employees but also over the foreign entity that employed them (Supreme Court Decision 2022Do8664, August 14, 2025).

The Supreme Court found that, as long as the conspiracy among employees regarding the disclosure or acquisition of trade secrets, the viewing and photographing of industrial technologies and trade secrets, and the unauthorized export of such secrets took place within the territory of Korea, the crime will still be deemed as having been committed within Korea even if the actual outflow, disclosure, use, or acquisition of industrial technologies and trade secrets later took place outside Korea. Furthermore, the Supreme Court held that these violations by the employees form a part of the criminal act attributable to the foreign entity under the vicarious liability provisions under the Act on Prevention of Divulgence and Protection of Industrial Technology and the Unfair Competition Prevention Act. Therefore, the foreign entity can also be deemed to have committed the crime within the territory of Korea for purposes of criminal liability.
 

2.

It should be noted that even when a foreign entity does not have a separate legal entity in Korea but operates through a branch, liaison office, etc., the foreign entity may still be subject to criminal liability under vicarious liability provisions if employees in Korea violate Korean criminal laws.

This Supreme Court decision establishes the criteria for determining Korea’s criminal jurisdiction over companies and individuals subject to vicarious liability provisions. Notably, this decision suggests that even if a foreign entity operates in Korea through branch or liaison offices instead of a separate legal entity, in the event employees at these offices commit a crime in Korea, Korean criminal jurisdiction may apply to the foreign entity, which may face criminal punishment in accordance with applicable laws.

In light of the above, even when conducting business in Korea without any local presence (i.e., where a foreign company does not even have a branch, liaison office, etc.), foreign companies must thoroughly manage and supervise their employees to prevent violations of Korean criminal laws and to mitigate risks to such foreign companies.