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Breakthrough Enforcement Action In Korea

The Incheon (Korea) district prosecutor’s office in May indicted two representatives from a Korean logistics company and a travel agency under the Korean anti-bribery statute.

They're accused of bribing the executive of a Chinese airline, considered a public official because the airline is owned by the Chinese government.

The enforcement action is the first one under OECD-member Korea's overseas anti-corruption law, called the Act on Combating Bribery of Foreign Public Officials in International Business Transactions (the Foreign Bribery Act). An official English translation is available from the Korea Legislation Research Institute (registration is required, there's no charge).

The researcher for this post, John Chung, confirmed that the case is a first one enforcing the Foreign Bribery Act involving a foreign public official in Korean jurisdiction, and the first time the Act's enforcement involved a Chinese official. "It seems that this recent case is different from previous ones," Chung said, "because the Chinese foreign public official was in Korean jurisdiction during the breach whereas previous cases all involved U.S. military personnel on U.S. military base."

The representative of the Korean logistics company allegedly bribed the Chinese airline official in order to lower the transport fare and increase the transport quantity. The logistics firm is alleged to have handled up to 80% of logistics to China from Korea as a result of the bribe. 

According to reports, the representative of the Korean travel agency allegedly obtained a monopoly right to sell China-bound airline tickets in Korea because of the corrupt payments.

The alleged bribe amounts were $5.3 million from the logistics company and $1.4 million from the travel agent.  

Korea is one of China's biggest trading partners, behind only the U.S., Japan, and Hong Kong.


Our thanks to Chun Woong (John) Chung, a member of the Massachusetts bar and a global compliance & ethics officer for Diageo in Korea, and to Professor Elizabeth Spahn at New England Law | Boston, for the research and most of the writing for this post.

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