The regulatory landscape for businesses is undergoing significant changes. As regulations become more extensive and intricate, companies must strengthen their own capabilities to effectively navigate these challenges and ensure compliance with industry regulations. Notably, administrative agencies with specialized areas of enforcement expertise are emerging as the primary enforcement bodies in their respective fields. Many special laws governing business activities now specifically provide these agencies with investigative authority, allowing for on-site inspections and sometimes granting them primary investigative powers traditionally reserved for the criminal enforcement authorities. This shift makes it crucial for businesses to stay attuned to the actions and investigations of these agencies.

Many such enforcement agencies can significantly impact business operations, including the Korea Fair Trade Commission (“KFTC”), National Tax Service (“NTS”), Korea Customs Service (“KCS”), Labor Office, and Financial Services Commission (“FSC”). Each of these agencies is expected to ramp up enforcement efforts through 2025, reshaping the compliance environment for businesses.
 

• KFTC: Having enforcement authority over anti-competitive practices and unfair trade regulations, the KFTC recently restructured its organization, creating distinct investigative and policy divisions. This reorganization, including the creation of a new “investigation management officer” position, suggests a likely uptick in corporate scrutiny.
   

• NTS and KCS: Under pressure to bolster tax revenue amidst economic challenges, it is anticipated that both agencies will intensify their investigative efforts. The NTS will likely target tax evasion among domestic and foreign companies, with a particular emphasis on virtual asset taxation. Simultaneously, the KCS is likely to focus on preemptive inspections to mitigate customs risks, expand their foreign exchange oversight, and tackle illegal exchange transactions.
   

• Labor Office: Economic challenges, political unrest, and increased labor group advocacy are setting the stage for more intensive labor investigations. Companies may face increased scrutiny, especially during restructuring efforts, as demands for worker-friendly policies grow louder.
   

• FSC: To address economic challenges, the FSC has announced plans to proactively audit of struggling companies to uphold market confidence and implement the delisting when needed. This initiative could also lead to broader audits and investigations into regulatory non-compliance.
   

The increase in direct regulatory enforcement by these administrative agencies can be expected to have a significant and direct impact on business operations. It is crucial for companies to adjust their compliance strategies to align with these evolving regulatory developments.