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Criminal Sanction on Corporate Activity (Ⅱ) -The Current Practices of Sanctions against Corporate Crime-
December 01, 2010


1. Corporate Crimes and Sanction Systems Various kind of sanctions system that control ever-increasing corporate crimes have developed in Korea: criminal sanction, administrative sanction and civil sanction. And, corporations’ self regulation such as compliance program has been also noted as one of major sanction systems. In particular, in relation to criminal sanction, as the necessity of criminal sanction against corporate crime has been emphasized, the perception that fine centered criminal sanction based on bilateral regulation is not quite sufficient has been expanded, which has continuously prompted much research on methods of criminal sanctions against corporate crime since 1990. Also, in relation to administrative sanction, due to its close proximity of effectiveness with criminal sanction, the necessity of integrating either criminal sanction into administrative one or administrative one into criminal one has been widely discussed. When it comes to civil sanction, a variety of special procedures for efficient reparation has been debated and partially introduced. On the other hand, as far as self regulation is concerned, self regulation program such as compliance one has been formally introduced and expanded in recent years. 2. Outlines and Directions In this study, the current practices of criminal sanction, administrative sanction, civil sanction, and self regulation program have been thoroughly examined for exploring ways of improving a whole array of sanction system. In order to suggest effective and efficient policy alternatives, survey research was conducted to find out corporation’s perception about current sanction system and newly suggested sanction programs. In this survey, questionnaires were made on 1) actual conditions and states of Corporate Social Responsibility (CSR), Corporate Ethics, and Compliance, 2) corporations’ victimization cases due to violation of the laws and regulations by other corporations, 3) cases of corporations’ violation of law and the outcomes of the punishment, and 4) perception of the corporations about punishment due to their violations of law. 3. Suggestions A) New Criminal Sanctions The bilateral punishment regulations on corporation were supplemented and they were less effective because of limitation of the punishment regulations. The new criminal sanctions need to be actively introduced: for instance, criminal confiscation and supplementary charge on corporation, publicizing convicted sentencing outcomes, payment of fine by stocks, imposition of community service order and restoration order, dissolution of the corporation, and etc. B) Build up of System between Sanctions Duplicated imposition of criminal sanction and administrative sanction on the same violation of the corporations should be integrated into single imposition, especially administrative sanction. This is because problems may be produced, for instance, weak effect of criminal sanction (because of preference of administration sanction to apply it easily and conveniently), violation of ultima ratio of the criminal punishment, and Duplicated imposition of criminal sanction and administrative sanction. C) Promotion of Self-regulations Many types of incentives given by government should be introduced and strengthened to activate self regulation systems of corporations. The official regulation of corporate crimes such as criminal sanction and administrative sanction has difficulties at detection because of characteristics of the crimes. So, self-regulation can prevent corporate crimes effectively. This is because self-regulation with less compulsory force does not weaken corporate activity and instead helps solve problems of the bases that may commit crimes. To promote self-regulations, the government shall give corporation kinds of support and official incentives by supplementing systems. For instance, the government may give enterprises having monitoring system of observance of laws administrative benefits such as less penalty and money penalty, and paying of incentives that reduces criminal responsibility. The interviewees preferred ‘exemption from tax investigation and other tax benefits’ of the administrative incentive the most (44.5%), followed by less fine and money penalty (24.6%), and exemption from initiated investigations. More than half of the interviewees skeptically thought that criminal incentive could not be better than others (53.6%), and they thought that preference of bilateral punishment (17.4%) would be almost same as that of alleviation of the punishment (18.6%). And, the monitoring system of observance of laws should be gradually expanded up to not only finance areas but also fair trade, labor, environment and health and medicines and other economic activity areas that have not only plenty of regulations but also complicated trade relations. D) Clarification of the Sanction Detailed contents of many regulations should be further clarified to have corporations more aware of prohibited behaviors. The interviewees said that they experienced criminal sanction because they did not know regulations exactly. And, the interviewees said that ‘uncertain and complicated regulation’ would be the most important problem of administrative sanction (43.2%), civil lawsuit (52.4%) and criminal sanction (40.1%)

Cheonhyun Lee

Criminal Law&Policy, Criminal Justice Reform

Senior Research Fellow

Cheonhyun Lee's picture

Research Interest (Major)

Economic Crime, Corrupt act, Administrative sanctions

Report List

Strengthening the Forensic Science in Korean Criminal Justice System(Ⅳ)

Criminal Investigation of Administrative Agencies: Analysis of the Current Status and Improvement Measures

Criminal Policy on Large-Scale Accidents with Multiple Casualties and Injuries

Criminal Sanction on Corporate Activity (Ⅱ) -The Current Practices of Sanctions against Corporate Crime-

Circumstances and Countermeasures of Unlawful Practices of Law (Ⅱ) - Focusing on the Reality of Corruption Committed by 'Attorney-At-Law Retired From Public Office' and Its Countermeasures

Improving the Prevention System of Corruption in the Private Sector

Crowdfunding: The Actual Conditions of Crime Using Crowdfunding and Its Countermeasures Status Report and Countermeasures against Crimes Using Crowdfunding

Status Report on Transnational Tax-Crime and Its Criminal Justice Manuevers

Criminal Policy for Intectious Disease Control and Prevention

A Study on the Criminal Liability of Companies Profiting from Illegal Activities

Strenghtening the Korean Criminal Justice System Applying Forensic Science (V)

Hyojong Song

Hyojong  Song's picture

Report List

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Korean Institute of Criminology Official Video

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