1. Bribery in the home (private to public)
1.1 The Legal Environment
Articles 129 to 133 of the Criminal Act, which contain anti-bribery provisions, govern both giving and receiving bribes.
Furthermore, there are rules prohibiting public officials from accepting bribes. Articles 7 and 8 of the Act on the Prevention of Corruption and the Establishment and Management of the Anti-Corruption and Civil Rights Commission (the “Act on Prevention of Corruption”), as well as the Public Official Code. The Act on Contracts to Which the State is a Party prohibits an entity found guilty of giving a bribe to a bid committee member from participating in a government procurement contract for up to two years, in order to discourage the giving of bribes to public officials during bids for government contracts.
The Improper Solicitation and Graft Act, an extremely strict and far-reaching new anti-corruption law, went into force on September 28, 2016.
1.2 What does bribery mean?
The statutes that regulate bribery in Korea provide no precise definition of bribery. Bribery, on the other hand, has been extensively defined, and it can refer to any tangible or intangible gain. Bribes ranged from financial gifts to lavish meals, complementary products, travel, and entertainment in previous cases involving bribery charges.
To be considered a bribe, a benefit must be provided or received “in conjunction with” the official’s performance of duty. The condition of “in connection with” is interpreted extensively by courts. However, under the Improper Solicitation and Graft Act, a benefit does not have to be given or received “in connection with” the official’s performance of duty if the sum surpasses KRW 1 million at a time or KRW 3 million in a fiscal year.
Unlike private or commercial bribery, a public official does not need to receive an economic gain “in response to an improper request” about his or her duty to be found guilty of receiving a bribe.
1.3 What does it mean to be a public official?
Despite the fact that the State Public Officials Act and the Municipal Public Officials Act give basic definitions of public officials and individuals employed by state and local governments, the Criminal Act lacks such a term. As a result, the definition of a public official varies based on the laws that governs the individual act and can be defined by relevant precedents. Many statutes designate certain state-owned or state-controlled entities’ officers, directors, or representatives as public authorities.
The Act Concerning Aggravated Punishment of Specific Crimes (the “Specific Crimes Act”) is a good example. Officers of organizations defined by Presidential Decree are included in the definition of specific crimes under the Specific Crimes Act. Qualifying organizations are those in which government funds account for 50% or more of their capital investments, either directly or indirectly, and those over which any level of government has significant control, such as the appointment and dismissal of officers or the making of material decisions, due to the organization’s impact on the national economy. Furthermore, the Specific Crimes Act’s Enforcement Decree establishes a comprehensive list of state-controlled institutions that are considered public officials.
A list of state-owned, controlled, or financed entities is also published annually by the Ministry of Strategy and Finance. According to the Act on Administration of Public Entities, the corporate entities are public corporations and quasi-government entities (AAPE). Public officials include the directors and officers of public corporations and government-controlled institutions.
The Improper Solicitation and Graft Act extends the definition of “deemed public officials” even further. The definition of improper solicitation and graft in the Improper Solicitation and Graft Act applies not only to public officials and employees of state-owned enterprises, but also to employees of private media companies, teachers and employees of private schools, and private individuals performing certain public functions.
1.4 Bribery and its Consequences
Public officials can face penalties ranging from a ten-year suspension of their qualifications to a five-year prison sentence, depending on the techniques used to give or extract a bribe. Article 43 of the Criminal Act defines a suspension of qualifications as the denial of: I the qualifications to be a public official; (ii) voting rights and eligibility to run in public elections; (iii) qualifications to conduct necessary business as prescribed by the Public Act; and (iv) qualifications to be a director, auditor, or manager of a company or an inspector or custodian. Based on the amount of bribery, the prison sentence may be enhanced up to life imprisonment if the bribe is KRW 30 million or more. The prison sentence or fines might be raised by up to 150 percent if there are several counts of offences.
The bribes or the monetary equivalent must be confiscated or disgorged from the recipient, according to Article 134 of the Criminal Act.
A party found guilty of bribing a public official faces a maximum penalty of five years in prison or a fine of up to KRW 20 million if found guilty. Prison sentences and fines can be enhanced by up to 150 percent if there are several counts of offences.
According to the Improper Solicitation and Graft Act, if a public official (or deemed public official) receives, demands, or agrees to receive from the same person a benefit worth more than KRW 1 million on a single occasion or KRW 3 million in total during one fiscal year, that person may face up to three years in prison or a fine of up to KRW 30 million, irrespective of whether the benefit was received, demanded, or agreed to receive. If the benefit is less than the aforementioned cap amounts and is given in connection with the public official’s duties, the provision or receipt of the benefit is punishable by a surcharge (in the range of twice to five times the value of the received benefit), regardless of whether the benefit was given to obtain an improper advantage.
1.5 Contributions from politics
The Political Funds Act establishes particular procedures for political contributions as well as dollar restrictions. If somebody donates more than KRW 3 million to political parties in a year (or more than KRW 5 million to presidential candidates), the amount donated and the donor’s personal information must be disclosed to the National Election Commission and made public (Article 40, 41 of National Election Commission Rule on Management of Political Fund). Companies and foreign nationals are prohibited from making political contributions under Article 31 of the Political Funds Act.
1.6 Hospitality expenses are subject to a limit (gifts, travel, meals, entertainment, among others)
Hospitality expenses are generally unrestricted; nevertheless, this would be assessed on a case-by-case basis, depending on the circumstances and the benefits received in exchange for the bribes.
Certain exceptions to the Improper Solicitation and Graft Act exist for benefits supplied to ease social interactions between parties. The following are the main exceptions: 1) meals up to KRW 30,000, gifts up to KRW 50,000, and congratulatory or condolence money up to KRW 100,000, unless such benefits are provided in exchange for a favor or to influence the discharge of the public official’s duties; and 2) transportation, lodging, and food and beverages that are generally and uniformly provided by an organizer of an official event related to the public official’s duties (Article 8.3 of the Improper Solicitation and Graft Act, Article 17 of the Presidential Decree of the Act).
2. Bribery in the home (private to private)
2.1 The Legal Environment
The giving and accepting of bribes are both punishable by fines and imprisonment under Article 357 of the Criminal Act, which defines Baeim as a criminal breach of fiduciary duties. A person entrusted with the administration of another’s business who obtains an economic benefit from a third party in response to an improper request concerning his or her responsibility is punishable under Article 357(1). The third individual who offers the economic gain is also to be punished, according to Article 357(2).
There are industry-specific restrictions in place to target industries with a high rate of bribe-giving and bribe-taking. Article 23(2) of the Medical Service Act, Article 18 of the Medical Device Act, and Article 47 of the Pharmaceutical Affairs Act, for example, govern the medical and pharmaceutical industries. Article 38(2) of the Framework Act on the Construction Sector regulates the construction industry.
2.2 What is bribery in the private sector?
Private bribery is defined under the Criminal Act as the receiving of pecuniary benefits by an agent or fiduciary in connection with an improper request about the recipient of the bribe’s duty.
The requirement of an unreasonable request with regard to the duty of the bribe recipient is a critical element of private bribery under the Korean Criminal Act. The Korean courts have been lenient in requiring prosecutors to establish that an inappropriate request was made. To assess whether an improper request for a bribe was made, the courts will consider issues such as the circumstances around a prospective bribe request, as well as the type and amount of the payment sought.