A new anti-corruption regulator in Korea will start work imminently, targeting high-ranking government officials and potentially impacting private companies and their employees.
Last month, Korea enacted a revised bill expediting the establishment of the Corruption Investigation Office for High-Ranking Officials (the CIO), an independent investigative agency authorized to investigate and prosecute corruption cases involving high-ranking public officials.
Establishing the CIO has been near the top of President Moon Jae-in’s agenda since he came into office in 2017, with the stated purpose of “uprooting crimes committed by high-ranking public officials and their families, and rebuilding the country’s transparency and trust in public officials.”
The underlying new act that established the CIO empowers the CIO to investigate certain crimes related to the duties of current and retired high-ranking public officials (e.g., the President, prosecutors, judges, members of the National Assembly) and their respective families, including bribery, embezzlement, breach of trust, and concealment of criminal proceeds, among others. The CIO’s investigative authority supersedes those of other investigative agencies: other agencies must immediately notify the CIO when they learn of crimes that fall under the CIO’s investigative scope. Upon review, the CIO may compel the other agency to transfer the case to the CIO.
One notable aspect about the CIO’s reach is that the CIO can investigate not only the crimes committed by high-ranking officials and their families but also any “related crimes,” such as those in which private parties paid bribes to high-ranking officials or acted as accomplices to the crimes committed by high-ranking officials.
This means that individuals other than high-ranking officials and their family members–such as private companies and their employees–fall within the scope of the CIO’s investigative powers.
The agency also has the authority to prosecute the crimes committed by prosecutors, judges, and high-ranking police officers (and their respective families) and any related crimes in connection with its investigations. This function was previously reserved only for the Prosecutor’s Office.
Under the revised bill, the process of selecting and approving the Chief of the CIO is well underway, and the confirmation hearing of the current Chief of CIO nominee was held this week.
As the CIO will likely launch in the next few months, companies with operations in Korea should carefully review their risk profiles with respect to interactions with Korea’s senior officials within the definition of the new act to mitigate the risk of investigation by the CIO.
For future interactions with senior officials in Korea, companies will want to exercise extra caution.