Regulator to differentiate between pre- and post-probe disclosures; repeat offenders to face reduced benefits

The Korea Fair Trade Commission is moving to revamp its leniency program for cartel self-reporters, capping the maximum surcharge reduction at 75% for companies that come forward after an investigation has already begun — down from the current full exemption.

The Fair Trade Commission said Monday it is reviewing an amendment to the enforcement decree of the Monopoly Regulation and Fair Trade Act to reflect the change.

The Korea Fair Trade Commission at the Government Complex Sejong in Eojin-dong, Sejong [Newsis]
The Korea Fair Trade Commission at the Government Complex Sejong in Eojin-dong, Sejong [Newsis]

Under the current enforcement decree, the first company to independently submit evidence proving a cartel before an investigation begins is fully exempt from both surcharges and corrective orders.

In addition, even after an investigation has started, a company can still receive a full surcharge exemption if it is the first to provide decisive evidence at a point when the commission has not yet secured sufficient proof to establish the cartel.

Under the proposed amendment, however, the maximum surcharge reduction for companies that self-report after an investigation has begun would be cut from 100 percent to 75 percent. Companies that report before an investigation starts would continue to receive the full exemption under the existing regime.

The commission said treating companies that cooperated before an investigation the same as those that came forward only after one had started was not appropriate, and decided to apply differentiated benefits accordingly.

The move is part of a broader effort by the commission to overhaul its leniency program. In an anti-repeat-cartel package announced in April, the commission proposed halving the surcharge reduction available to companies that participate in a new cartel between five and 10 years after receiving sanctions for a previous one.

Currently, reduced leniency benefits apply only when a company reoffends within five years of being caught. The planned reform would extend that restriction to repeat violations occurring more than five years but less than 10 years after a prior cartel sanction.


y2k@heraldcorp.com