Serious Crimes Investigation Agency: “Receiving leniency applications and assigning provisional rankings are the responsibility of investigative agencies” ... Disagreement with Prosecution Service

[Financial News] The Serious Crimes Investigation Agency (SCIA) and the Prosecution Service disagree over who has the authority to administer “leniency,” a system for reducing criminal penalties in corporate collusion cases. The SCIA maintains that investigative agencies should receive voluntary disclosures and assign provisional rankings, while the Prosecution Service should decide whether to indict and seek reduced sentences.
The Prosecution Service, meanwhile, maintains that it should also have the authority to receive applications, arguing that leniency is a system that takes into account not only investigations but also prosecution and trial proceedings.
In a press notice on the 27th, the SCIA said, “It is consistent with the principle of separating investigations and prosecutions, and with the effectiveness of cartel investigations, for the SCIA, as an investigative agency, to handle leniency applications and assign provisional rankings, while the Prosecution Service handles decisions on whether to indict and requests for reduced sentences.”
Leniency is a system under which companies involved in collusion can receive reduced criminal penalties if they voluntarily report the conduct and cooperate with the investigation. The SCIA characterized it as an investigative technique for securing key evidence early in an investigation.
The SCIA cited the fact that the revised Criminal Procedure Act excluded prosecutors from those authorized to receive reports of crimes such as voluntary surrender. It also said that the Act on the Protection of Public Interest Whistleblowers includes violations of the Fair Trade Act among reportable offenses and designates investigative agencies as the bodies responsible for receiving reports.
In particular, it argued that “submitting a leniency application provides a lead for an investigation,” and that “receiving supplementary materials, reviewing the facts, and assigning a provisional ranking are all investigative acts—areas that the Prosecution Service cannot handle.” Its position is that the SCIA’s authority to receive applications cannot be restricted on the grounds that it lacks the power to indict.
On overseas examples, the SCIA noted that the Antitrust Division of the United States Department of Justice (DOJ) handles both investigations and prosecutions, making its model difficult to apply in Korea as is. By contrast, it said, investigative agencies receive leniency applications in Canada and Australia, where investigations and prosecutions are separate.
In response to concerns that this could reduce predictability for businesses, the SCIA said, “It is important to objectively verify the initial receipt time and provisional ranking, and to ensure consistency in final criminal dispositions,” adding that it would work closely with the Prosecution Service. However, it ruled out having considered a plan to decide whether to refer cases for prosecution based on eligibility for penalty reductions.
The Prosecution Service maintains that receiving leniency applications and deciding on penalty reductions cannot be treated as simple investigative acts. An official from the Prosecution Service countered, “Leniency involves a determination that, separately from the investigation, also takes into account the sentence to be sought at trial,” adding, “We need to consider not only what statements and evidence were submitted during the investigation, but also whether cooperation continues during trial.”
The official added, “Ordinary voluntary surrender under criminal law is clearly different from leniency, which grants benefits according to ranking.”
 



[email protected] Choi Eun-sol Reporter