"Eliminating the Possibility of Imprisonment for Business Mistakes" ...Revising Economic Criminal Penalties Such as Breach of Trust

[Financial News] In the future, if a business owner commits a minor legal violation without intent or gross negligence, the risk of criminal punishment will be reduced. Penalty provisions that were excessively applied to the general public, including small business owners and SMEs, will also be significantly revised to focus on fines or penalties.
 Under the direction of President Lee Jae-myung, the 'Economic Criminal Penalty Rationalization TF', co-chaired by the Vice Ministers of the Ministry of Strategy and Finance and the Ministry of Justice, held its first meeting on the 1st to begin revising economic criminal penalty regulations across all ministries. This TF includes participation from 15 ministries and research institutions, including the Ministry of Strategy and Finance, Ministry of Justice, Fair Trade Commission, and Ministry of Trade, Industry and Energy.
 The launch of the TF follows President Lee's direct order for 'economic criminal penalty rationalization' at the Emergency Economic Inspection TF meeting on July 30.
 During that meeting, President Lee pointed out, "In Korea, there are cases where investment is avoided due to the fear that a business mistake could lead to imprisonment," and emphasized, "Institutional improvements are urgently needed as business activities are being stifled by the abuse of breach of trust charges."
 He further instructed, "To prevent business management from being stifled by excessive economic criminal penalties, activate the TF and set clear goals such as revising 30% of economic criminal penalty regulations within a year."
 The government plans to ease criminal responsibility for violations without intent or gross negligence by business owners and to discuss institutional improvements for breach of trust.
 Lee Hyung-il, the First Vice Minister of the Ministry of Strategy and Finance, stated, "Rather than simply reducing numbers, it is important to have substantial improvement tasks that businesses and victims can feel on the ground," and added, "We will revise the system so that substantial compensation can be provided to victims when damage occurs due to corporate violations."
 Additionally, penalty provisions that were excessively applied to small business owners, SMEs, and the general public will be converted to administrative sanctions such as fines and penalties, and the focus will be on strengthening financial responsibility through punitive fines rather than criminal punishment to enhance the preventive effect on illegal activities.
 On the other hand, the government has set a principle of responding immediately and decisively to malicious unfair trade such as stock manipulation and serious crimes that threaten life and safety.
 The government plans to gather field opinions centered on the TF and prepare and announce economic criminal penalty rationalization improvement tasks within the year.
Priority tasks that need to be promoted will be submitted to the regular National Assembly in September, and additional tasks will be prepared by the end of the year with the goal of passing the National Assembly in the first half of next year.
 Vice Minister Lee emphasized, "It is important that improvement tasks are quickly legislated and actually applied on the ground," and requested close cooperation with the National Assembly.
 Lee Jin-soo, Vice Minister of the Ministry of Justice, also emphasized, "Punishment should be the last resort of regulation," and stated, "We will create an environment where corporate creativity and a spirit of challenge can thrive."


spring@fnnews.com Reporter Lee Bo-mi