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Russell A. Stamets
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Bill Steinman
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South Korea: An anti-corruption tiger

Traditionally known as an economic “Asian tiger,” South Korea may now be an anti-corruption tiger. It’s landmark Kim Young Ran Act, and the aggressive enforcement actions of the last year, distinguish the country as a leader in the global anti-corruption movement.

South Korea’s corruption challenge was the product of two converging historical forces. Both did good, but both came at a cost. The first was a Confucian social philosophy that emphasized social cohesion and the deliberate preservation of relationships through giving gifts. Koreans I interviewed said that quite often, these gifts were at the same time the genuine expression of affection or respect, and the purchasing of favorable treatment. That is, they were both a gift, and a bribe.

The second force was the devastation of the Korean War. To aid in the recovery, South Korea’s strong-armed political leadership worked closely with large-scale, family-owned corporate conglomerates known as “chaebol.” By economic terms, the formula was famously successful. Unsurprisingly, corruption followed.

But the catalyst to change came in 2014 when 300 people died in a ferry accident that investigators attributed to the corrupt enforcement of safety regulations.  South Korea’s highly respected former Supreme Court Justice, Kim Young Ran, had already drafted an anti-corruption bill. Public outcry from the accident created the necessary political will and, in 2015, the landmark Kim Young Ran Act was passed.

Of the many changes the Kim Young Ran Act made to Korean law and society, two are most noteworthy. First, the act prohibited gift-giving to public officials beyond a very low amount. Moving substantially beyond mainstream anti-corruption law, South Korea defined public officials to include journalists, and even teachers. So much for purchasing favorable media coverage. And that glistening report card will have to be earned.

In the corporate realm, the law created corporate liability, both administrative and criminal, for bribery violations their employees commit. But unlike the U.S. respondeat superior model, the Act does not simply impute vicarious liability to the employer. Interestingly, in 2009 the South Korean Supreme Court held that holding both the employer and employee liable, “without confirming what kind of fault the juridical person is responsible for,” is actually unconstitutional. (Think of it!  Respondeat superior as the deprivation of a constitutional right to due process!). Rather, following the U.K. Bribery Act model, the Kim Young Ran Act establishes corporate liability for negligence in supervising its employees. A showing of “due care” in the prevention of bribery is thus an affirmative defense, though its contours have yet to be worked out.

Next week, the University of Richmond’s Olympic Corruption Research Team will travel to South Korea. We’ll present our research at the bi-annual Olympic studies academic conference, and at the prestigious Yonsei University Law School where former Justice Kim Young Ran will join us.

We’ll provide updates along the way, and in the meantime see our webpage here.

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Andy Spalding is a lecturer at the International Anti-Corruption Academy, Professor at the University of Richmond School of Law, and Senior Editor of the FCPA Blog.

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