[Lee Jae-min] No more gifts and no more lunches

Come Sept. 28, Korea will see a drastic change (for the first time) in how people socialize and interact with government officials. Having survived the most recent challenge at the Constitutional Court, the controversial Kim Young-ran Law is set to enter into force on that day. This anti-corruption law is an ambitious legislation, ready to impose criminal punishment on government officials who respond to outside requests for favors or receive gifts or monetary equivalents from others.

Unlike the previous bribery punishment provision, now the new law does not require any quid pro quo pledge. Mere provision of a certain amount of financial resources to officials will be punishable. The threshold is set at one million won per occasion, and three million won from the same person annually. Furthermore, government officials are not supposed to take invitations for lunch or dinner exceeding 30,000 won. Nor is an official allowed to accept a gift whose price exceeds 50,000 won.

Importantly and interestingly, this law is not merely confined to penalizing government officials taking money or gifts. It in fact aims to cover a wider group of people. Here are four unique elements of the law.

The term used in the law is “public official” and is defined to cover not only those working for government agencies per se but also those employed in other government-related entities -- such as state-run corporations. The number of these government-related entities reaches almost 100. In other words, people who are not conventionally considered government officials are treated as such for the purpose of this law.

And then, the law applies to two specific groups of the private sector -- journalists and educators. Noting the two occupations’ public function, those employed in the two private sectors are treated as the same as government officials.

And now, the spouses. This law applies to “spouses” of the above-mentioned groups. In other words, wives and husbands of public officials, journalists and educators also fall under the scope of the law. If the spouse receives a gift but the official fails to return it or report the incident, the official (not the spouse) will be punished.

Finally, the law also punishes “anyone” who solicits favors from or offer gifts to above three groups of people. Any private citizen initiating regulated contacts or providing monetary equivalents is to face the same criminal sanction. As the number of people falling under the three designated categories reaches roughly 3 million, anyone who contacts or interacts with any of these 3 million people are potentially implicated by the new law.

As there is no nationality requirement attached, the final category of “anyone” also includes foreigners and foreign corporations operating in Korea. So, they all fall under the ambit of the new legislation. As a matter of fact, the law does not stipulate any territorial confinement -- it will apply activity that has taken place both within and outside the Korean territory. Thus, it may also apply to business dinners in Paris and personal presents and a golf invitation in Dubai. This law is expected to significantly impact foreign corporations and businessmen dealing with a wide group of Korean counterparts either in Korea or abroad.

Despite the good intention of the law to wipe out corruption in Korea, there still remain ambiguities for key operating terms of Kim Young-ran Law. These ambiguities were the main reason for the recent constitutional challenge. Now that the law is ready to enter into force just one month later, individuals and corporations are bracing for the drastic changes to stem from the new legislation. Some business entities consider ceasing to issue periodic publications such as newsletters as doing so might lead them to fall under the category of media publishers. Not surprisingly, some restaurants are preparing set menus of 29,000 won. Gift sets are being priced at 49,000 won. As it currently stands, at least in the initial stage of implementation, confusion and controversy seems inevitable. Some provisions are just still unclear.

By Lee Jae-min



Lee Jae-min is a professor of law at Seoul National University. -- Ed