Financial Crime World

Title: OECD Report: Korea’s Progress in Combating Foreign Bribery – Two-Year Follow-Up

Korea’s Phase 4 – Two-Year Follow-Up Report on Fighting Foreign Bribery: Key Findings

The Organisation for Economic Co-operation and Development (OECD) has published a two-year follow-up report on South Korea’s progress in implementing recommendations to strengthen its legal framework and enforcement against foreign bribery.

1. Implementation Status of OECD’s Phase 4 Recommendations

Based on Korea’s progress report submitted in June 2021, the OECD Working Group on Bribery (WGB) found the following:

  • Fully implemented: 10 recommendations
  • Partially implemented: 12 recommendations
  • Not implemented: 14 recommendations

Key Improvements

a. Reinforcing the framework for investigating and prosecuting foreign bribery:

  • Clarifying the interpretation of elements of the foreign bribery offence
  • Addressing cooperation between The Supreme Prosecutor’s Office (SPO) and National Police Agency (NPA)
  • Allowing for interception of telecommunications and enhancing mutual legal assistance (MLA) in foreign bribery investigations

b. Training and guidance on foreign bribery:

  • Several Korean agencies provided guidance and training to staff

2. Ongoing Challenges

Concerns about Recommendations

Despite progress, the WGB remains concerned about the high number of partially or unimplemented recommendations:

  • Statutes of limitations for legal persons
  • Legislation on and enforcement of false accounting
  • Anti-money laundering reporting frameworks

Low Level of Foreign Bribery Enforcement

The WGB expressed concern about Korea’s low level of foreign bribery enforcement compared to other OECD countries. Though five new foreign bribery investigations have been opened since Phase 4 and one case (Ghana Tax Case) moved to trial, the resulting sanctions have been deemed insufficiently effective, proportionate, and dissuasive.

3. Recommendations and Actions Underway

Ongoing Efforts

Some ongoing efforts to address concerns include:

a. Amendments to the Criminal Procedure Act and Prosecution Service Act b. Training and awareness-raising activities c. Developing a draft bill to address the statute of limitations issue for legal persons

Conclusion

The OECD’s Phase 4 Two-Year Follow-Up Report on Korea highlights the progress made in strengthening the legal framework and enforcement against foreign bribery, while underscoring the ongoing challenges and the need for continued efforts to ensure effective action and dissuasive penalties.