Through enactment of the Act on the Prevention of Conflict of Interest, seeking illegitimate private gains by public officials to be prohibited

- Provisions that require public officials to report in advance their private interests and money or immovable property transactions involving duty-related parties, etc. and to submit specific statements of their private sector activities performed prior to their appointment will be introduced -

- Pre-announcement of legislation of the Act on the Prevention of Conflict of Interest in Public Office (draft bill) is scheduled to be proceeded for 40 days from July 19 to August 28 -

July 19, 2019

Anti-Corruption and Civil Rights Commission

The Republic of Korea

Measures to require public officials to report in advance their private interests and avoid conflicts-of-interest situations, which may affect their fair performance of duties, to the head of the agency to which they are affiliated will be taken in a bid to enhance the public confidence in the public sector.

In addition, measures to obligate public officials to report their money- or immovable property transactions involving duty-related parties preliminary to such transactions and submit statements of their private sector activities performed prior to their appointment as high-ranking officials will be introduced as well.

The Anti-Corruption and Civil Rights Commission (ACRC, Chairperson Pak Un Jong) plans to pre-announce the draft government bill of the Act on the Prevention of Conflict of Interest in Public Office (the “Act”) that contains the aforesaid measures for 40 days starting from July 19.

This draft bill is for the separate legislation of provisions governing the conflicts of interest in public office, which were initially included in the legislation draft of the Improper Solicitation and Graft Act, but were excluded in the course of discussions at the National Assembly upon the enactment of the Improper Solicitation and Graft Act.

The ACRC amended the Code of Conduct for Public Officials, a Presidential Decree, earlier in January last year, and proactively introduced and implemented provisions aimed at preventing conflicts of interest in the execution of official duties among public officials in the executive branch of the government. Public officials serving in the National Assembly, courts, central administrative agencies and local governments, etc. and executive officers/employees of public service-related organizations will be all subject to the Act.

This government bill includes eight specific standards of behavior for public officials to effectively prevent and manage conflict-of-interest situations that may be faced by public officials in the performance of their duties.

First, public officials, who carry out official duties, such as permission, license, approval, interrogation, inspection, budgeting, funding, investigation, trial, employment, promotion, hearings and audit, etc., should report the fact that he/she has private interests with a duty-related party to the head of his/her agency when he/she comes to know such fact and are required to request for the avoidance of performing such duties so that he/she can be excluded from the duties concerned.

Moreover, in order to prohibit illegitimate transactions between a public official and a duty-related party, where a public official himself/herself or his/her spouse, etc. intends to conduct transactions of money, marketable securities and immovable property, etc. with those who are or used to be related to his/her official duty, the public official should report it to the head of his/her agency.

On top of this, the government bill also includes a provision to prevent a public official from facing conflict-of-interest situations preemptively by prohibiting the public official from conducting outside activities that may impede fair performance of their duties, such as privately providing advice to a duty-related party for a quid pro quo.

If a public official does not report in advance his/her private interests or transactions of money, etc. with a duty-related party, or performs duty-related outside activities that are forbidden, a penalty of up to KRW 20 million will be imposed.

A public official will be also prohibited from using goods, vehicles, land and facilities, etc. of a public institution for private purposes.

If a public official uses or derives profits from goods, etc. that belong to a public institution for private purposes, or lets a third person use or derive profits from such goods, not only will a penalty of up to KRW 20 million be imposed but also the total amount of profits derived will be restituted.

Along with this, a public official will be strictly prohibited from divulging or misappropriating any secret, which may have come to his/her knowledge in the performance of his/her duty, for private gains, or banned from letting a third person use such secret.

This government bill also provides for the confiscation of, or the collection in addition to, the total amount of profits derived by a public official from using such secret and the punishment with imprisonment of not more than seven years or a fine not exceeding KRW 70 million. The punishment for divulgence or misappropriation of any secret which may have come to the public official’s knowledge has been more reinforced. For instance, imprisonment of not more than three years or a fine not exceeding KRW 30 million will be imposed even in the case where profits were not actually derived.

In the meantime, this bill stipulates that much stricter preventive rules shall apply to high-ranking public officials and officials in charge of duties that are especially vulnerable to corruption, such as personnel management and contract, etc.

High-ranking officials, including public officials of the vice-minister or higher level, members of the National Assembly, heads of the local governments, and heads of public service-related organizations and public institutions, will have to submit detailed statements of their private sector activities they performed within three years prior to their appointment or commencement of their office to the head of the agency to which they are affiliated.

The head of the agency to which such high-ranking officials are affiliated may disclose the statements to the extent that such disclosure does not breach other laws and regulations. Where high-ranking officials do not submit such statements, he/she will be charged a fine not exceeding KRW 10 million.

Furthermore, public institutions will be prohibited from employing family members of high-ranking public officials belonging to the institutions or of officials in charge of personnel affairs, except through open competitive employment or career competition recruitment system. High-ranking public officials or officials in charge of hiring, who ordered, induced, arranged or acquiesced in the employment of their family members in the institutions to which they are affiliated will be charged a fine not exceeding KRW 30 million.

On top of this, public institutions will be banned from making a private contract with high-ranking officials affiliated to the institutions or officials in charge of contracting affairs, or their family members. High-ranking officials or officials in charge of contracting matters, who ordered, induced, arranged or acquiesced in the private contract, will be also charged a fine of not more than KRW 30 million.

The Chairperson of the ACRC Pak Un Jong said, “I expect that through the enactment of the Act on the Prevention of Conflict of Interest in Public Office, transparent atmosphere in the public sector that lives up to the expectation of the public can be created and the public confidence in the public sector at large will be enhanced by prohibiting public officials from using their public offices and authorities to seek illegitimate private gains,” adding that “the ACRC plans to actively cooperate with the National Assembly as well as relevant ministries so that this draft bill can be swiftly enacted.”

The ACRC will supplement the draft bill of the Act on the Prevention of Conflict of Interest in Public Office after collecting various opinions from the public and civil society during the period of pre-announcement of legislation, which will continue for 40 days starting from July 19 to August 28, and will submit the supplemented government bill to the National Assembly within this year.