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Korea Inc. welcomes gov't move to ease corporate criminal liability

Published: 30 Sep. 2025, 17:19 Updated: 30 Sep. 2025, 19:37

President Lee Jae Myung, right, speaks to SK Chairman Chey Tae-won, left, during the ″AI Global Cooperation Business Roundtable” held at the Ulsan Exhibition and Convention Center in Ulsan on June 20. [YONHAP]

The business community welcomed the government's announcement Tuesday of its first set of measures aimed at easing criminal liability for economic activities, including the proposed abolition of the criminal breach of trust charge under the Criminal Act.

“This initiative is expected to reduce uncertainty in corporate decision-making and improve predictability,” Kang Seok-gu, head of the research division at the Korea Chamber of Commerce and Industry (KCCI), said in a statement.

“The government’s decision to abolish aggravated punishment for breach of trust, prioritize administrative sanctions over criminal charges and shift toward economic penalties instead of imprisonment reflects long-standing requests from the business community and is a positive development.”

“This measure will reinvigorate corporate activity that has been subdued by excessive criminal sanctions,” said Lee Sang-ho, head of the Economic and Industrial Division at the Federation of Korean Industries. “It is especially timely to see the abolition of the breach of trust offense, which has been a major source of uncertainty in corporate management, and improvements to joint liability clauses related to the minimum wage, which better protect well-intentioned employers,” referring to a move to scale back liability in cases of wage violations.

Other economic organizations echoed this sentiment. The Korea Enterprises Federation said the move “could serve as a foundation for future regulatory reform.” The Korea International Trade Association welcomed it as “a step toward removing constraints on normal business activities such as investment and hiring.”

The Korea Federation of SMEs pledged to “maximize investment and job creation now that the threat of unnecessary criminal punishment has been lifted.” The Federation of Middle Market Enterprises of Korea added that it “expects the new policy to help ease the burden on businesses.”

Business leaders also called on the government to continue its efforts to reform criminal penalties in other areas such as fair trade and labor laws.

“We hope to see further improvements, such as revisions to the Fair Trade Act’s joint liability clause, which allows both individuals and corporations to be punished for the same offense, and to penal provisions for violations like failing to submit materials related to the designation of a [de facto group head],” Kang from the KCCI said.

The Korea Enterprises Federation also requested a review of whether criminal penalties under labor laws are appropriately balanced, particularly in cases where punishments for business owners have recently been toughened.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY NA SANG-HYEON [[email protected]]