South Korea: Can You Believe In Korea?: Some Issues Of White Collar Crime

Last Updated: 25 February 2007
Article by Kyung Jik Kwak


What happens when the lion roars? Yes, the movie starts. The movie I will discuss today, however, is not one from MGM but from Paramount, The Godfather. It begins with a statement by an undertaker that he believed in America. What exactly did he believe in? He believed that those two who beat his daughter like an animal, breaking her nose and shattering her jaw would be properly punished. When they got a suspended sentence, he felt betrayed. And now he was seeking justice from the Godfather.

That you, your person and property, should be protected from crimes is one important goal of criminal justice system. Do you believe in Korea in that sense? I know you do to a reasonable degree because otherwise you would not choose to be here let alone invest in Korea.

There is another goal or exigency of criminal justice system. Is there a crime behind every great fortune? No, you would strongly disagree. Nonetheless, you must wonder whether you would be given a fair chance to defend yourself once you are pointed out as a criminal.

In this sense, can you believe in Korea? Well, faith is to believe what you do not see, and even the devil you know you do not fear. But you fear what you do not know. And because you do not know, there might be some lingering doubts.

I will review some issues to help you understand how criminal justice regime works in Korea.

What conducts are criminal?

We do not know of common law crimes and there must be clear statutory provision for any act to be criminally punishable at the time of such act. In this regard, the constitution expressly prohibits ex post facto laws. You shall not be charged for any acts that are not criminally punishable under the then effective criminal statutes. In other words, you cannot make a certain act criminally punishable after the fact. I mention this principle because there sometimes are confusions coming from the press, particularly when a foreigner is involved.

Criminal Code and other criminal statutes do not contain anachronistic surprises. Like many other things modern, they are relatively new and imported. Their ancestry goes to German through Japan, but that does not mean they are significantly different from the current US criminal justice regime. My point is: there are some minor technical differences but similarities overwhelm. There would not be such conduct that is not punishable in the US but is criminally punishable in Korea, at least when it comes to white collar crimes. So to determine whether certain act is criminal, use your common sense. Can I do the same thing in the US? Can I do it with everybody knowing it?

In this regard, I want to emphasize not to expect any more leniencies because of cultural differences. It is particularly true with corruption issues. In old days like 1960s, 70s, even 80s, the level of corruption was relatively high. But now it is quite different. Korea and its society have transformed themselves in so short span of time that some outsiders hold on to bygone impressions and some insiders continue to live in those old days at their own risk.

Accountability for Crimes of Others

Encouraging as well as aiding and abetting others to commit a crime is punishable. Co-conspirator is also liable as a principal even though he does not physically participate in the crime.

There are some explicit statutory provisions that hold the employer criminally liable for the conduct of his/her employee. Employer can be either a corporation or an individual. Here employer is held criminally liable without his own fault. For example, Article 215 of Securities and Exchange Act, Article 70 of Monopoly Regulation and Fair Trade Act and Article 116 of Labor Standard Act all provide that: (1) employer is criminally liable for the conduct of employee done within the scope of office or employment, but (2) limit punishment to monetary fines.

Process of Criminal Investigation

Criminal investigation is conducted by the police and the prosecution as well as some administrative agencies authorized. The prosecution has the authorities to supervise over criminal investigation of the police and other administrative agencies, and to make a final decision on the case at the conclusion of the investigation: indict, drop or suspend the case.

There are certain occasions when the police or the prosecutor may arrest a suspect without a judicially-issued warrant, such as in hot pursuit, or in grave crimes like murder or arson. As we are talking about white-collar crimes, non-violent in nature, I will explain some normal investigatory procedure.

The police or the prosecution will launch their investigation with the suspicion of a crime. Suspicions may come formally from victim’s criminal complaint or reference from administrative authorities. They also come from rumors.

A prosecutor or a police officer may request a suspect to appear and question him. The request to appear is somewhat different from the US version of subpoena. It is a request not an order, which means you do not have to comply with it. However, if you refuse to appear, then it may work against you at a later stage when an investigator seeks an arrest warrant from the court.

At any time prior to or during the interrogation, you have the right to counsel. You also have the right to remain silent.

For an investigator, a police officer or a prosecutor, to arrest a suspect, he must request a judge to issue an arrest warrant. Requirements of arrest warrant are: (1) good reason to suspect that a suspect committed a crime, (2) he/she refuses or is likely to refuse the request of appearance without due cause. Whether to hold a hearing in issuing an arrest warrant is a judge’s discretion.

Within forty-eight hours of an arrest, an investigator must release a suspect or request the court for a detention order. Requirement of detention order are: (1) good reason to suspect that a suspect committed a crime, (2) either one of the following: (i) no fixed dwelling, (ii) reasonable ground to suspect that he may destroy evidence, (iii) he has escaped or there is reasonable ground to suspect that he would flee.

The suspect has the right to be heard before a judge in detention order process and would be assisted by his counsel.

Detention period: 10 days (for the police), 10 days (for the prosecution), and 10 more days (extension for the prosecutor).

Warrant-less search is not allowed except incident to an arrest. The requirement for a search and seizure warrant is not so strict as in case of arrest or detention order. If it is necessary for the investigation of a crime, a prosecutor may request a judge to issue a warrant for a search and seizure.

There is no US style attorney-client privilege or the concept of privileged communications. What is allowed under the law is: (1) an attorney may refuse to submit to a seizure articles which he holds on behalf of others, and (2) an attorney may refuse to testify about matters he dealt in the course of his profession. It means that when a suspect is in possession of attorney’s work product, such would not be exempted from lawful search and seizure.

Plea Bargaining and Double Jeopardy

Korean law does not formally recognize either guilty plea or plea-bargaining. It does not mean, however, a prosecutor and a suspect never "negotiate." After all, they talk each other during the whole course of investigation. A confession for a particular crime might be made in anticipation of either a reduced sentence or no-further digging into other crimes. That a confession might be interpreted to be a sign of remorse works here. Be reminded again, however, no plea-bargaining is formally recognized, and obviously prosecutors will abhor any hint of impropriety or favoritism.

The constitution protects a defendant from being independently prosecuted twice for the same crime. It is, however, quite different from the US version double jeopardy. Korean version does not prevent the state from appealing an acquittal. Thus, there is a real possibility, even though not high, that a defendant who has been found innocent at the district court would be found guilty at the higher court on prosecutor’s appeal. In essence, you have to fight three times, like Korean style wrestling.

Jurisdiction of Korean courts over non-residents

When a crime is committed within the territory of Korea as well as Korean ships and airplanes, Korean courts have and will exercise jurisdiction over non-resident foreigners. If a crime is committed against Korea or its nationals, even outside of its territory, Korean courts also have jurisdiction over non-residents.

Extradition Treaty

Extraditable Offenses: If the conduct on which the offense is based is punishable under the laws of in both counties by prison sentence for a period of one year or more or by a more severe penalty. Either country is not under the obligation to extradite its national but has discretion to do so.

The countries with which Korea has an extradition treaty are the US, Canada, Australia, New Zealand, Spain, Japan, China, etc.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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