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

Last Updated: 25 February 2007
Article by Kyung Jik Kwak

Introduction

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions