Business Group Calls for Reform as Many Minor Administrative Breaches Carry Criminal Penalties
Creatrip Team
4 months ago
The Korea Economic Organization (KEO) reviewed 346 laws across 21 ministries and found 8,403 business-related offenses subject to criminal punishment, with 91.6% exposing both individuals and corporations to liability via 'dual penalty' rules (holding companies liable for representatives' illegal acts). Over one-third of offenses can trigger multiple sanctions—criminal sentences or fines plus administrative fines (gawajunggeum) and civil damages—sometimes layering up to five penalties for a single breach. The group warns that even trivial administrative errors or omissions—such as mentioning price moves in a supplier meeting (raising cartel suspicions), erecting a temporary terrace (seen as unauthorized extension), or missing data in group designation filings due to personal reasons—can lead to prosecution. KEO argues that, unlike most OECD countries that reserve criminal penalties for serious economic crimes like collusion or abuse of market power, Korea often criminalizes routine administrative duties. They recommend shifting minor breaches (e.g., non‑submission of corporate group data) to administrative fines ('administrative order penalties') and pursuing sweeping reforms to reduce excessive legal risk for small firms and startups.
