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Kim & Chang Legal Newsletter (2026 Issue 3) This is a quaterly update of legal developments in Korea from Kim & Chang. This issue includes: KFTC Strengthens Whistleblowers’ Procedural Rights and Rewards Amendment to Korean Commercial Code’s Enforcement Decree Regarding Virtual Shareholders’ Meetings and Other Matters Supreme Court Clarifies Legal Nature of and Statute of Limitations for Employee-Invention Compensation Claims KFTC’s AI Service Market Fact-Finding Survey and Clarification of Substantiation Obligation for AI Labeling and Advertising FSC Approves Measures to Adjust Scope of In-Person Activities by Internet-Only Banks Response Strategies for Listed Companies Following Implementation of Dual-Listing Guidelines Key Changes to Waste Import and Export System: Amendments to Act on Transboundary Movement of Hazardous Wastes and Their Disposal and Related Notifications Landmark Supreme Court Decision on In-Kind Division of Unlisted Shares in Divorce Proceedings FSS Issues Guidelines for Financial Companies’ Third-Party IT Risk Management Amended Public Notice on Export and Import of Strategic Items Strengthens Semiconductor Controls and Exporter Obligations Revised Insurance Sales Commission Regime Implemented Pursuant to Amended Insurance Business Supervisory Regulations Key Contents and Implications of the Amended Laws on the Establishment of the Maritime and International Commercial Court Trump Administration Announces Section 301 Tariffs Related to Forced Labor Key Employment and Labor Law Amendments for Second Half of 2026 Enactment and Implementation of Forest Disaster Prevention Act and Detailed Review Guidelines Therefor Regulatory Improvements for Protection of Investors in Derivatives-Linked Products 2026 Proposed Tax Law Amendments ? Notable Items Major AI-Related Legal Framework Revisions and Legislative Amendments on Disinformation To view the newsletter, please click on the link below. Kim & Chang Legal Newsletter (2026 Issue 3) .content_view .view_area a { color: #2c3e50; text-decoration: none; }
2026.10.19

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KFTC Releases Draft Guidelines on AI-Related Labeling and Advertising for Public Comment 1. Key Takeaways With the proliferation of products and services marketed as using artificial intelligence, there is a growing need to regulate so-called “AI washing” and false or exaggerated advertising that uses AI-generated virtual personas or deepfakes. To address these concerns, the Korea Fair Trade Commission released draft guidelines covering criteria for four types of unfair advertising, 16 case examples, and an eight-item self-assessment checklist, with public comments open through November 11, 2026. Businesses that feature AI functionality in their advertising should review how they disclose the scope, operating conditions, and limitations of their AI, confirm their substantiation, and consider submitting comments. The Korea Fair Trade Commission (“KFTC”) announced that it will collect comments from stakeholders from October 22 to November 11, 2026 on the draft Guidelines on Labeling and Advertising Related to Artificial Intelligence (“AI”) (the “Draft Guidelines”). The Draft Guidelines set out the basic principles for businesses when labeling or advertising goods or services that use AI technology and the criteria for unfair labeling and advertising under the Act on Fair Labeling and Advertising (the “Labeling and Advertising Act”). Businesses that use AI functionality as a key marketing element, including in electrical appliances and household goods, food, cosmetics, and household chemical products; and education, legal, and financial services, should review the Draft Guidelines closely. 2. Background Attaching the term “AI” tends to evoke sophistication, accuracy, and objectivity, and may lead consumers to perceive AI-enabled products as offering relatively superior performance and reliability. According to a consumer perception survey by the Korea Consumer Agency (November 2025), 57.9% of respondents said they would be willing to buy an AI-enabled product even if it cost more than a conventional product, paying on average about 21% more. However, “AI washing” advertising, which claims the use of AI where none is actually used or fails to adequately disclose the scope, operating conditions, or performance limitations of the AI that is used, risks misleading consumers. Against this backdrop and with the rapid spread of false and exaggerated advertisements using AI-generated virtual personas and reviews, deepfakes, and similar content via social media, particularly in the food and pharmaceutical sectors, the government announced its Measures to Respond to False and Exaggerated Advertising Disrupting Market Order Using AI at the 7th National Policy Coordination Meeting on December 10, 2025. 3. Nature and Scope of the Draft Guidelines The Draft Guidelines are not legally binding and are intended to support voluntary compliance. The KFTC also clarified that the Draft Guidelines do "not impose new separate obligations on AI-related labeling and advertising that are more stringent than those for general products," but rather use case examples to explain how the general principles of the Labeling and Advertising Act, namely truthfulness, completeness, fairness, and substantiality, apply to AI. Because the labeling and advertising laws do not define AI-related terms, the Draft Guidelines adopt the definitions in Article 2 of the AI Framework Act. Whether a product uses AI is determined based on the substance of its learning, inference, and judgment functions, not on how the technology is embedded or when it was trained. Products that merely respond according to preset rules, such as simple sensor or threshold-based controls, are unlikely to be regarded as AI. In addition, the Draft Guidelines are distinct from the transparency obligations under Article 31 of the AI Framework Act (such as labeling of AI-generated output). Therefore, even if a business has complied with its transparency obligations, there may still be a violation of the Labeling and Advertising Act if the content of an advertisement is untrue or material information is omitted. 4. Criteria by Type and Points for Improvement For each of the four types of unfair advertising prohibited under Article 3(1) of the Labeling and Advertising Act, the Draft Guidelines present criteria for determining unfair AI-related labeling and advertising, together with 16 product-specific cases and before-and-after advertising examples. The key points are summarized below. Type (Article 3(1) of the Labeling and Advertising Act) Representative Practices and Cases False or exaggerated (Item 1) Claiming “AI” where there is no AI technology or its use is merely simple or auxiliary, or claiming expert-level capabilities without substantiation (7 cases, including an AI electric heating mat and an AI lawyer) Deceptive (Item 2) Concealing or omitting material information, such as which features use AI, operating conditions, or performance limitations, or endorsements that do not disclose AI virtual personas or reviews (5 cases, including a robot vacuum and a deepfake quasi-investment advisory service) Unfair comparison (Item 3) Claiming superiority, such as “[X] times better than competitors,” without disclosing the basis of comparison or while concealing laboratory test conditions (2 cases: an air purifier and an AI learning program for elementary school students) Disparaging (Item 4) Disparaging existing technologies as “outdated” or “fake” while contrasting one's own AI as “perfect” (2 cases: a home AI CCTV and an AI meeting minutes service) The Draft Guidelines also provide four points for improvement: (1) application; (2) performance; (3) conditions of use; and (4) disclosure of responsibility. In particular, the Draft Guidelines make clear that where AI is actually used, the term “AI” itself is not prohibited; rather, businesses are required to ensure that their representations match the actual functionality and to disclose limitations, such as operating conditions and performance limits, in close proximity to the main claim. 5. Key Implications Although not legally binding, the Draft Guidelines are expected to serve as a benchmark indicating the KFTC's enforcement direction under the Labeling and Advertising Act for AI-related labeling and advertising. As such, businesses should take the following points into consideration: (1) Preparing substantiation in advance: Under Article 5 of the Labeling and Advertising Act, businesses bear the burden of substantiating factual claims. Failing to submit substantiating materials within 15 days of a request under the Public Notice on the Operation of Substantiation of Labeling and Advertising may result in a cease order, administrative fines, or other measures. Even the fact of AI use should be substantiated through development, training, and operation records or license agreements. Obtaining confirmation under the AI Product and Service Confirmation Scheme (effective July 21, 2026) or "AI+" certification does not provide immunity under the Labeling and Advertising Act, nor does it substitute for substantiation of performance claims. (2) Use of third-party AI technology and professional services: Representing third-party AI technology, such as public APIs, as if it were developed in-house may give rise to deceptive labeling and advertising concerns. Businesses should review their promotional and labeling statements on the source of their technology. For professional services claiming “expert-level” capabilities, objective substantiation is expected to be a key issue. (3) AI virtual personas in food, cosmetics, pharmaceutical, and financial advertising: Under amended sector-specific laws (effective November 27, 2026), endorsements by AI-generated virtual experts in advertising for food, cosmetics, and pharmaceuticals are prohibited. Businesses in these sectors should review the methods for disclosing virtual personas under the Guidelines for Review of Labeling and Advertising Involving Endorsements and Testimonials (amended June 1, 2026), such as the phrase “[Includes virtual persona]” and a constantly displayed “Virtual persona” caption in videos, as well as the possible concurrent application of sector-specific laws. (4) Reviewing existing advertisements and submitting comments: The use of “AI” in a product name will be assessed based on whether the AI-enabled function is linked to the product's main function. In addition, the Draft Guidelines encourage businesses to voluntarily review and improve advertisements posted even before the guidelines are finalized. Stakeholders with comments on the draft may submit them to the KFTC by mail or email by November 11, 2026. [Korean Version]
2026.10.22

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Changes to the Investigation Framework for Technology Leakage Cases Following the Launch of the Serious Crimes Investigation Agency, and How Companies Should Respond On October 2, 2026, the Prosecutors’ Office (the “PO”) was divided into the Public Prosecution Service (the “PPS”), under the Ministry of Justice, and the Serious Crimes Investigation Agency (the “SCIA”), under the Ministry of the Interior and Safety (the “MOIS”), inaugurating a new criminal justice framework in which investigation and prosecution are entrusted to separate institutions (Amendment to the Government Organization Act, Act No. 21491). On the same day, the Public Prosecution Service Act (Act No. 21991) and the Act on the Organization and Operation of the Serious Crimes Investigation Agency (Act No. 22016; the “SCIA Act”) took effect, as did the amended Criminal Procedure Act (Act No. 22009), which abolished prosecutors’ direct investigative authority and vested investigative authority solely in judicial police officers. Immediately before the SCIA’s launch, the SCIA Act was amended (Act No. 22016) on September 29, 2026, to amend the statutory language that had confined technology leakage offenses to “cybercrimes constituting an attack on national core infrastructure,” thereby making clear that trade secret infringement and industrial technology leakage offenses, as a general matter, fall within the SCIA’s investigative jurisdiction. That said, the investigative authority of the National Police and of the Special Judicial Police of the Ministry of Intellectual Property (the “MOIP”) remains intact. As a result, technology leakage cases are now handled under a multi-agency structure in which three investigative agencies coexist. For technology leakage cases, which involve technically complex facts and depend heavily on digital evidence, this restructuring also calls for substantial changes in how victim companies respond. We summarize below the principal changes and the practical considerations they raise. [Summary of Key Changes] Item Prior Framework On and After October 2, 2026 Investigative authority PO; National Police; MOIP Special Judicial Police SCIA; National Police; MOIP Special Judicial Police Charging authority PO PPS Prosecutors’ investigative powers Direct investigation; supplemental investigation; investigation of additional offenses discovered in the course of review Requests for supplemental investigation Offenses within the SCIA’s investigative jurisdiction - Violations of the Industrial Technology Protection Act, the Unfair Competition Prevention Act (trade secrets), and the Defense Industry Technology Protection Act; and occupational breach of trust, among others Inter-agency relations - Duty of other investigative agencies to notify the Commissioner of the SCIA upon recognizing a serious crime; and the SCIA’s authority to request transfer of a case and to transfer cases to other agencies 1. The New Structure for Technology Leakage Investigations (1) Technology Leakage Offenses Are Now Expressly Within the SCIA’s Jurisdiction Article 2, Subparagraph 1, Item (e) of the current SCIA Act designates as “serious crimes” the offenses under Articles 36, 36-2, 37, and 38 of the Act on Prevention of Divulgence and Protection of Industrial Technology (the “Industrial Technology Protection Act”), and the offenses under Articles 18, 18-2, 18-3, and 18-4 of the Unfair Competition Prevention and Trade Secret Protection Act (the “Unfair Competition Prevention Act”). Moreover, violations of the Defense Industry Technology Protection Act and the Military Secret Protection Act (Item (d) of the same subparagraph), as well as offenses under Chapter XL of the Criminal Act (embezzlement and breach of trust) (Item (a) of the same subparagraph), are likewise “serious crimes.” Accordingly, offenses such as occupational breach of trust, which are commonly charged together with technology leakage offenses, also fall within the SCIA’s investigative scope. Criminal proceeds concealment offenses connected to such “serious crimes” (Item (f) of the same subparagraph) and offenses directly related to a “serious crime” (Subparagraph 2, Item (d)) are within the SCIA’s jurisdiction as well. As originally enacted, Item (e) qualified technology leakage offenses with the phrase “cybercrimes constituting an attack on national core infrastructure.” That language gave rise to the interpretation that typical technology leakage scenarios involving no network intrusion—such as the recruitment of inside employees or a departing employee’s taking of storage media—fell outside the SCIA’s jurisdiction, creating uncertainty as to which agency was competent. The September 29, 2026 amendment to the SCIA Act revised the statutory wording so that the national core infrastructure requirement applies only to violations of the Act on Promotion of Information and Communications Network Utilization and Information Protection, Etc., thereby resolving this uncertainty legislatively. Under the Organizational Decree of the Serious Crimes Investigation Agency and Its Affiliated Agencies (MOIS Ordinance No. 643), the Cyber Technology Investigation Division of the Scientific Investigation Bureau at SCIA headquarters directs and supervises the regional offices and provides investigative support on industrial technology and trade secret offenses, while the Digital Investigation Division supports electronic evidence and digital forensics. At the regional level, technology leakage cases are handled by the Defense Procurement and Industrial Technology Investigation Division of the Advanced Technology Investigation Bureau of the Seoul Regional SCIA (large-scale industrial technology and defense industry cases in the Seoul metropolitan area), the Defense Procurement and Industrial Technology Investigation Division of the Suwon Regional SCIA (cases arising in the advanced-industry cluster of southern Gyeonggi Province), and the Industrial Technology Investigation Division of the Daejeon Regional SCIA (industrial technology cases in the central region). (2) A Multi-Agency Structure in Which the SCIA, the National Police, and the MOIP Special Judicial Police Coexist The fact that a case falls within the SCIA’s investigative jurisdiction does not mean that the SCIA investigates it exclusively; the existing authority of the National Police and the MOIP Special Judicial Police is preserved. The offenses each agency may currently investigate are as follows: Agency Offenses Subject to Investigation SCIA Violations of the Industrial Technology Protection Act, the Unfair Competition Prevention Act (trade secrets), and the Defense Industry Technology Protection Act; and occupational breach of trust, among others National Police The full range of technology leakage offenses, including violations of the Industrial Technology Protection Act, the Unfair Competition Prevention Act, and the Criminal Act MOIP Special Judicial Police Among technology leakage offenses, limited to trade secret infringement offenses under the Unfair Competition Prevention Act (an amendment is being pursued to allow investigation of industrial technology infringement offenses under the Industrial Technology Protection Act as well) Separately, recent press reports indicate that the Ministry of Trade, Industry and Energy is considering operating its own special judicial police unit. No specific details have been announced, and the matter bears watching. (3) The National Police and the MOIP Have Expanded Their Technology Leakage Investigative Organizations and Staffing On August 20, 2026, the National Security Investigation Bureau of the National Office of Investigation within the Korean National Police Agency announced a plan to add 79 personnel dedicated to technology leakage matters. Under the plan, the dedicated investigation squads at the Seoul Metropolitan Police Agency and the Gyeonggi Nambu Provincial Police Agency—where cases are concentrated—will each increase from one to two, and dedicated teams will be designated by technology field in order to strengthen the response to large-scale and complex cases. Pursuant to its “Plan to Expand and Reorganize the Response System for Technology Leakage and Misappropriation,” the MOIP established a new Technology Leakage Special Judicial Police Division effective June 30, 2026, staffing it with 21 dedicated investigators in fields such as electrical engineering, chemistry, and mechanical engineering and tasking it specifically with investigating the leakage of advanced technologies, such as companies’ trade secrets. The MOIP’s technology leakage enforcement organization has grown from one division to four, and its staffing from 27 to 61. (4) Notification and Transfer Mechanisms May Result in a Change of the Investigating Agency Other investigative agencies must notify the Commissioner of the SCIA immediately upon recognizing a serious crime (Article 43(2) of the SCIA Act), and if the SCIA determines that direct investigation by the SCIA is appropriate and requests a transfer, the other agency must comply absent justifiable grounds (Article 43(3) of the SCIA Act). Conversely, the SCIA may transfer a case to another investigative agency where, in light of the suspect, the victim, and the nature and scale of the case, investigation by that agency is appropriate (Article 43(4) of the SCIA Act). The appropriateness of a transfer is assessed by reference to (i) the gravity of the case, (ii) the progress and duration of the investigation, (iii) whether there is controversy over fairness, and (iv) whether the statute of limitations is close to expiring (Article 20 of the Enforcement Decree of the SCIA Act). The amended Criminal Procedure Act also permits the establishment of an Investigative Jurisdiction Coordination Council among investigative agencies for consultation on and coordination of investigative jurisdiction. It is expected that standards and methods for coordinating investigative authority among the SCIA, the National Police, and the MOIP Special Judicial Police may be established going forward. (5) The PPS Is Expected to Focus on Charging Decisions and on Maintaining the Charges, with Adversarial Argument Expected in the Course of Fact Verification The PPS’s role is, in principle, limited to deciding whether to bring charges and to maintaining the charges. To that end, however, Article 245-13 of the Criminal Procedure Act permits it to verify the facts by hearing from the suspect, case-related parties, experts, or judicial police officers, or by receiving written opinions and related materials. Patent technology hearings and industrial technology hearings are expected to be used actively in that process. In the past, the PO played a substantive role in building the case through supplemental investigations and additional investigations initiated upon discovering further offenses; going forward, however, adversarial argument resembling a preliminary phase of the criminal trial is expected to unfold before the PPS. 2. Practical Considerations for Businesses Under the new framework, direct and supplemental investigation by prosecutors has been eliminated, multiple investigative agencies coexist, and cases may be transferred among them. The outcome of a technology leakage case will therefore depend heavily on how a company responds at each stage—from pre-complaint preparation through investigation, transfer, and the charging decision. The following are key considerations to keep in mind. First, the Investigative Record Will Drive the Outcome, So Evidence Must Be Prepared Systematically Under the new framework, the technical facts and investigative record developed at the investigative agency stage will form the core basis for the PPS’s charging decision. In other words, the focus and quality of the materials submitted to the investigative agency will largely shape the course of the investigation and whether charges are brought. Second, the Investigative Agency Suited to the Nature of the Matter Should Be Strategically Selected Because the agencies differ in their characteristics and areas of expertise, the choice of where to file a criminal complaint can materially affect the outcome. Cases may also be transferred among agencies after a complaint is filed for various reasons. It is therefore important to establish a strategy that takes jurisdictional issues into account from the outset. Third, Stage-by-Stage Advocacy Directed at Both the Investigative Agency and the PPS Is Necessary With multiple investigative agencies now involved and the PPS concentrating on the charging decision, both the audience and the method of advocacy have changed. At the investigative stage, the company must explain to the assigned investigator, in terms that are persuasive both legally and technically, why the information qualifies as a trade secret and how it was misappropriated. Once the case is referred, final charging authority rests with the prosecutor at the PPS, it is necessary to respond appropriately to requests for supplemental investigation and the like, and organize the issues revealed in the record to persuade the prosecutor that an indictment is warranted. Ultimately, a single, coherent line of advocacy that carries through from the investigative stage to the PPS stage will determine the outcome of the case. Fourth, the Handling Agency and Procedural Stage of Currently Pending Matters Should Be Checked Immediately For cases that were pending with the PO before the reform, the handling agency may change. As a rule, the PPS may continue investigating only those cases in which the statute of limitations is imminent or continued investigation is unavoidable given the nature of the case, and then only for up to 90 days from October 2, 2026. Other cases may be transferred to the competent investigative agency: as a rule, to the police for cases referred by the police, and to the SCIA or another competent investigative agency for cases in which the PO initiated the investigation. Accordingly, companies should promptly confirm which agency is handling their case and at what stage it stands. Where the handling agency changes, it is necessary to re-explain the issues and the evidence to the new investigative agency and manage the handoff so that the investigation is neither delayed nor interrupted. The new investigation framework heightens the importance of victim companies’ initial response strategy and evidentiary preparation. Selecting the investigative agency best suited to the matter, and advocating in stages before both the investigative agency and the prosecutor at the PPS, will likewise bear directly on the outcome. The new framework remains in its early days: the allocation of roles among agencies, the practice surrounding transfers, and the PPS’s role will take shape as practice develops. It will be important to continue refining response strategies while monitoring these operational developments. [Korean Version]
2026.10.21

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Changes to the Labor Investigation Framework under the Amended Criminal Procedure Act and Implications for Employers The amended Criminal Procedure Act took effect on October 2, 2026. Prosecutors’ direct investigative authority has been abolished, and labor inspectors now conduct investigations independently, without direction from prosecutors. On the same date, the Regulation on Mutual Cooperation between Prosecutors and Special Judicial Police Officers (the “Special Judicial Police Cooperation Regulation”) and the Labor Inspector Investigation Rules (the “Investigation Rules”) also took effect, establishing the framework for the new labor investigation system. Because these reforms directly affect how violations of labor laws are handled—including cases involving wages, working hours, illegal worker dispatch, unfair labor practices, and occupational safety and serious accidents—we outline the key changes and practical points to note below. 1. Key Changes Category Previous From October 2, 2026 Relationship between prosecutors and labor inspectors Prosecutors direct labor inspectors Mutual cooperation, with guidance and advice Authority directing investigations Prosecutor Heads of Regional Employment and Labor Offices, heads of branch offices, and division directors Internal controls within labor offices Internal approval within the office, etc. Investigation direction and review; Investigation Review Committee Prosecutorial powers Directing investigations; conducting supplementary investigations directly Requests for supplementary investigation, requests for corrective measures, fact verification, etc. Referral to prosecutors Referral of all cases Referral of all cases continues (no authority to decide non-referral) Number of labor inspectors Approx. 3,800 To increase to approx. 8,000 by 2028 2. New Structure of Labor Case Investigations (1) Investigations will be led by labor inspectors and Regional Employment and Labor Offices. Labor inspectors may initiate and conduct investigations independently, without direction from prosecutors. Heads of Regional Employment and Labor Offices (heads of regional offices and branch offices) and division directors direct and supervise investigations within their jurisdiction and may issue specific directions on matters such as recognition of offenses, compulsory investigative measures, and referral opinions; significant cases may be investigated directly by the Regional Employment and Labor Office (Articles 10 through 12 of the Investigation Rules). In cases of public concern, the Minister of Employment and Labor may also present opinions on the interpretation of laws and regulations (Article 24(2) of the Act on the Performance of Duties by Labor Inspectors, scheduled to take effect on December 8, 2026). (2) Cooperation through guidance and advice will replace prosecutorial direction of investigations. The relationship between prosecutors and labor inspectors changes from one of “direction” to one of “mutual cooperation” (Article 245-10(2) of the Criminal Procedure Act), and labor inspectors may request guidance and advice from prosecutors regarding investigations (Article 245-10(3) of the Criminal Procedure Act). Although a prosecutor’s guidance and advice are not legally binding, labor inspectors must respect and reflect them, and failure to follow them without justifiable grounds may result in a request for supplementary investigation (Article 25(1) and (3) of the Special Judicial Police Cooperation Regulation). (3) All cases will still be referred to prosecutors, and prosecutors may request supplementary investigation after referral. Unlike general judicial police officers, labor inspectors have no authority to decide not to refer a case; even where they conclude there is no offense, they must refer the case with a recommendation of non-indictment (Article 245-10(5) of the Criminal Procedure Act), and the prosecutor decides whether to indict. After a case is referred, prosecutors may not conduct supplementary investigations themselves; they may only request them, and labor inspectors must comply with such requests within one month (Article 197-2(4) of the Criminal Procedure Act). Prosecutors may verify facts—for example, by hearing the views of the suspect—to decide whether to indict, but statements and materials obtained in this process may not be used as evidence at trial (Article 245-13(1) and (3) of the Criminal Procedure Act). (4) An Investigation Review Committee system will be introduced at the labor office investigation stage. Investigation Review Committees with external members will be established at the headquarters of the Ministry of Employment and Labor and at each Regional Employment and Labor Office, and persons involved in a case may request a review of the appropriateness and legality of the investigation before referral (Articles 48 and 49 of the Investigation Rules). 3. Key Considerations for Employers (1) First, the center of gravity in investigations of labor-related cases shifts to the labor office. With the elimination of direct supplementary investigations by prosecutors, the investigation record and referral opinion developed at the labor office will form the core basis for indictment decisions, so determinations made at the labor office will set the direction of the case. In particular, many cases—such as illegal worker dispatch and unpaid wages—are filed as “petitions,” and labor inspectors will decide whether to open a formal case on a petition without prosecutorial oversight. This decision is expected to determine whether criminal proceedings follow (if no formal case is opened, the matter is closed at the preliminary inquiry stage without referral to prosecutors). An early response will therefore be more important. (2) Second, the target and method of advocacy should be carefully considered in light of the internal investigation structure of labor offices. Because investigative direction is vested in heads of Regional Employment and Labor Offices and division directors, and significant cases may be investigated directly by the Regional Employment and Labor Office or be subject to interpretive opinions from Ministry headquarters, advocacy strategy should be designed according to the issues and scale of each case. Labor inspectors also bear the burden of determining criminal law issues such as intent on their own, without prosecutorial direction. Given that the newly enacted crime of distortion of law (Article 123-2 of the Criminal Act) also applies to labor inspectors, legal advocacy directed at labor inspectors may become even more important. (3) Third, advocacy before prosecutors at the Public Prosecution Office remains important. Unlike cases handled by general judicial police officers, all cases investigated by labor inspectors are referred to the Public Prosecution Office, so the final decision on indictment remains with the prosecutor. Employers need to respond appropriately to prosecutors’ guidance and advice, fact verification, and requests for supplementary investigation, and comprehensive advocacy that links the labor office and Public Prosecution Office stages will be necessary. (4) Fourth, employers should prepare for the summoning of representative directors for questioning. Because labor laws impose obligations on the employer, in cases initiated by complaint or accusation, the representative director may be summoned as a suspect regardless of the seriousness of the matter. As labor inspectors will now independently decide whether and how to question representative directors, a more comprehensive response strategy should be considered. In the early period following implementation of the amended Criminal Procedure Act, investigative practice is likely to vary among regional offices and individual labor inspectors, and appropriate responses will also depend on how prosecutors’ guidance and advice and requests for supplementary investigation operate in practice. Employers should review their stage-by-stage response framework for labor cases—from the initial response through post-referral—in light of the new investigation system and emerging practice, while assessing in advance the legal risks of key HR and labor issues that could lead to petitions or criminal complaints. [Korean Version]
2026.10.08

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State Council Approves Amendment to the Enforcement Decree of the Network Act that Strengthens Anti-Spam Regulations (Effective October 1, 2026) The amendment to the Act on Promotion of Information and Communications Network Utilization and Information Protection (the “Network Act”) was passed on March 31, 2026 (Link). We would like to provide an update that the amendment to the Enforcement Decree of the Network Act was approved by the State Council (the Executive branch of the Korean government) on September 29, 2026, taking effect on October 1, 2026, together with the corresponding amendment to the Network Act itself. Notably, this amendment shifts the enforcement framework against illegal spam from minor fines to high-impact, revenue-based penalties. Under the new regime, administrative surcharges range from 1% to 6% of relevant revenue depending on the nature and severity of the violation, or between KRW 100 million and KRW 2 billion if revenue cannot be calculated. The key takeaways and compliance priorities are outlined below. 1. Amendment Applies Beyond Information and Communications Service Providers Businesses should note that the anti-spam regulations target not only information and communications service providers and text-message service providers, but also general commercial entities conducting marketing activities. General Businesses are Liable. Article 50 of the Network Act provides that “no person” may transmit commercial advertising via electronic media without prior express consent. General businesses promoting their products or services through electronic channels ? including text messages, email, app push notifications, and fax ? fall directly within the scope of this amendment. Outsourcing Does Not Shield Advertisers. Businesses cannot avoid liability simply by outsourcing marketing or messaging to external agencies or messaging service providers. Both the business initiating the campaign and the agency executing it face regulatory exposure based on their respective roles in planning, directing, and executing the transmission, as well as their degree of involvement in the violation. Obligations of Information and Communications Service Providers. Entities offering communications or messaging services (such as texting, email, or digital platforms) maintain distinct legal duties to ensure their services are not used to transmit illegal spam. 2. Key Violations Subject to Administrative Surcharges The amended Network Act imposes administrative surcharges for violations of Article 50, Article 50-4, Article 50-5, Article 50-7, or Article 50-8. (1) Restrictions on Commercial Advertising (Article 50) The primary risk areas under Article 50 ? the core provision governing standard business marketing via text, emails, and app push notifications ? include: Transmitting commercial ads without prior express consent; Continuing to send ads after a recipient opts out or withdraws consent; Sending ads between 9:00 p.m. and 8:00 a.m. without separate nighttime consent; Omitting required disclosures, such as the name of the sender, the contact information of the sender, and opt-out/consent-withdrawal mechanisms; Evading or obstructing opt-outs or withdrawal requests; Automatically generating or registering telephone numbers/email addresses for use in transmitting ads; Concealing the sender’s identity or the source of the transmission; Deceiving recipients in order to induce a response; Shifting costs incurred in the opt-out process to recipients; Failing to properly notify recipients of the outcome of processing consent, opt-out requests, or withdrawals of consent; and Failing to periodically re-verify consent in accordance with statutory requirements. Businesses should note that statutory obligations cover not only the actual transmission of the ads, but the broader processes for managing consent regarding ads, including obtaining and managing consent, implementing opt-out and withdrawal requests, and notifying recipients of processing results. (2) Information and Communications Service Provider’s Obligations to Prevent Illegal Spam (Article 50-4) Information and communications service providers are required to implement statutory measures to prevent their platforms from being used to transmit illegal spam. Accordingly, both telecommunications operators and digital transmission providers (such as social networking, messaging, and email) must implement preventive measures, including: Immediately suspending the transmission of advertising information; Refusing service or terminating the relevant service agreement; Inspecting and remediating vulnerabilities in security systems related to security incidents; Updating terms of user and service agreements; and Establishing and reviewing plans to prevent the recurrence of violations. (3) Other Prohibited Practices Regarding Advertising Programs, Posting of Ads, and Advertisements of Prohibited Goods and Services (Articles 50-5, 50-7, and 50-8) In addition to the above, the following conduct may be subject to administrative surcharges: Installing programs that show ads, or collect personal information, without user consent; Posting ads on websites without the prior consent of the website operator or administrator; and Transmitting ads for goods, services, or activities prohibited by law. 3. Recommended Next Steps: This amendment significantly strengthens the enforcement regime against illegal spam. Both general businesses conducting marketing campaigns and service providers offering communications infrastructure should conduct reviews of their systems and processes to ensure compliance. In particular, because outsourcing marketing activities does not insulate advertisers from liability ? and advertisers remain exposed based on their degree of role and oversight ? businesses should conduct a comprehensive audit of their existing advertising and marketing compliance frameworks. [Korean Version]
2026.10.07

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“Outstanding” in All 24 Categories and 68 “Leading Lawyers”

Kim & Chang was named “Outstanding” in all 24 categories in the 2026 edition of asialaw, receiving the highest recognition across all surveyed categories for ten consecutive years. Moreover, 68 of our attorneys and patent attorneys were selected as Korea’s “Leading Lawyers.”
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Ranked Among the World’s Top 100 Law Firms for the 13th Year

For the 13th consecutive year, Kim & Chang was ranked among the world’s top 100 law firms in “The Global 200” rankings published by The American Lawyer and Law.com International. Once again, our firm was the only Korean law firm to be featured among the top 100.
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Ranked 25th Among the Asia Top 50 Law Firms

This year, Kim & Chang was ranked 25th in The Asia 50 and was the only Korean law firm to be featured among the top 50.
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불편사항은 lawkim@kimchang.com으로 연락주시면 친절하게 안내해드리겠습니다

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The material on the Kim & Chang website is for general informational purposes only and should not be regarded as legal advice. The transmission or receipt of any information from this site is not intended to create nor constitute an attorney-client relationship. The content on this website is current only as of the date of its respective publication and may not reflect the most current status of the relevant laws, decisions and legal trends. Kim & Chang does not assume and disclaims any liability to any person for any loss or damage caused by said person’s use of or reliance upon the materials on this website, regardless of whether said loss or damage was directly or indirectly caused by inaccurate statements therein. Online viewers should consult with competent and professional legal counsel before acting upon any information provided by this website. All of the contents on this site are copyrighted by Kim & Chang. Any reproduction, distribution or retransmission of any materials posted on this website without prior written permission from Kim & Chang is strictly prohibited. Although we provide several links to other websites, please be advised that we have no control over the content of those sites.

Recently, there has been an increase in cases where the names of the firm, its attorneys, and other personnel have been used in connection with scams and other fraudulent activity. These include proposals regarding legal services, contracts, or investments; requests for payments or personal data; or employment offers or requests for payments in exchange for employment opportunities. Kim & Chang bears no responsibility or liability for any such unauthorized activity/communications, or issues arising therefrom.

We communicate with clients only through the authorized email and phone contact information found on our firm’s official website (www.kimchang.com). We do not utilize other communication channels for official business, including through non-Kim & Chang email addresses or phone numbers, text messages, or social networking services. Moreover, under no circumstances do we make individual requests for personal data or payment (apart from requests made pursuant to a duly executed engagement contract).

If you are the recipient of suspicious communications related to Kim & Chang or any individuals affiliated with the firm, please contact us at 02-3703-1114 or lawkim@kimchang.com

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