Serious Crimes Investigation Agency Transfers Coupang False Tax Invoice Case to Police ... “Main Allegations Are Outside Our Jurisdiction”

[Financial News] The Seoul Regional Serious Crimes Investigation Agency transferred the case involving Coupang’s issuance and receipt of false tax invoices to the Seoul Metropolitan Police Agency. The reason was that the case’s main alleged offense was not within the Serious Crimes Investigation Agency’s jurisdiction.
According to legal circles on the 5th, the Economic Crime Investigation Bureau of the Seoul Serious Crimes Investigation Agency transferred to the Seoul Metropolitan Police Agency that day a case involving the issuance and receipt of false tax invoices by Coupang’s headquarters in Korea, logistics company Coupang Fulfillment Services (CFS), and their current and former CEOs, among six subjects in total. The six subjects include the two corporations.
The basis for the transfer was the offense classification. Tax invoice-related offenses fall into two categories: “fictitious” and “false.” Issuing a tax invoice when no goods were supplied or no transaction took place constitutes a fictitious tax invoice offense, which falls under the Serious Crimes Investigation Agency’s jurisdiction and is subject to the Act on the Aggravated Punishment, etc. of Specific Crimes. By contrast, if goods were supplied or a transaction took place but the amount or other details were falsely stated, the invoice is considered false; this constitutes a violation of the Punishment of Tax Evaders Act and is not within the agency’s jurisdiction. The law treats cases with no underlying transaction more seriously and provides for aggravated punishment under the Act on the Aggravated Punishment, etc. of Specific Crimes.
The Seoul Serious Crimes Investigation Agency determined that the main offense in the case was a violation of the Punishment of Tax Evaders Act related to false tax invoices. The portion involving fictitious tax invoices that the agency can investigate accounts for only part of the overall allegations.
The agency also considered that investigating separately only the offenses within its jurisdiction could lead to a duplicative investigation alongside the police. It said it transferred the entire case to the police to avoid both agencies investigating the same transactions.
The Serious Crimes Investigation Agency was launched alongside the Public Prosecution Office on the 2nd of last month, when the Prosecution Service was abolished as part of a restructuring of the criminal justice system. The agency can directly investigate only serious crimes specified by law, including corruption and economic crimes. As a result, a practical question remains over which agency should handle an entire case when it involves both crimes within and outside the agency’s jurisdiction.
Cases involving violations of the Punishment of Tax Evaders Act can be prosecuted only following a complaint by the Commissioner of the National Tax Service or the head of a Regional Tax Office, among others. This means that even after the police complete their investigation, the case cannot be brought to trial if the complaint requirement has not been met.
Following the transfer, the police will investigate both alleged violations of the Punishment of Tax Evaders Act and the Act on the Aggravated Punishment, etc. of Specific Crimes. Once the police investigation is complete, the Public Prosecution Office will decide whether to bring charges. The change in investigative authority is expected to make the case take longer to resolve.


[email protected] Kim Dong-gyu Reporter