Business Corruption in South Korea
The Republic of Korea is one of East Asia's most vibrant democracies and one of the world's largest economy. This profile's General Information chapter provides an overview of anti-corruption activities and corruption risks in relation South Korea's political, business and regulatory environments. Since Korea's transition to democracy in 1987, its economy has been dominated to a significant extent by large conglomerates or chaebols. A number of corporate corruption cases have come to light in recent years indicating that illicit business behaviour is still common in South Korea. Several sources indicate that large conglomerates have been involved in tax evasion and corruption. However, in contrast to some East Asian economies, Korea has performed well in combating corruption in business:
- In September 2011, the Act on the Protection of Public Interest Whistle-blowers came into force and is designed to protect whistleblowers in both the public and private sectors and equally extends to reports on foreign bribery.
- To improve the national integrity systems and eradicate corruption, the Korean government has pursued an extensive anti-corruption agenda, digitalising public services through a sophisticated e-governance and establishing one-stop shops to reduce opportunities for bribery.
- Many businessmen and officials, including former ministers and former presidents, have been found guilty of corruption in recent years, sometimes for offences committed years earlier.
Despite an overall strong performance, some cases reveal that corruption is still a problem in South Korea. Challenges include:
- Excessive bureaucracy, weaknesses in corporate governance, inconsistent application of laws and regulations and non-transparent regulatory processes are among the challenges encountered by companies in Korea.
- The merger of the Korean Independent Commission Against Corruption (KICAC) with two other government institutions to form the new Anti-Corruption and Civil Rights Commission (ACRC) has raised concerns about the ACRC’s ability to focus on corruption issues and its independence from the government.
Publication date: January 2014
Data verified by GAN Integrity Solutions