□ On September 25, Tuesday, the President Moon Jae-in presided over the 1st Anti-Corruption Policy Consultation Council participated in by the heads of anti-corruption related agencies, including the Chairperson of the Anti-Corruption and Civil Rights Commission, the Chairperson of the Korea Fair Trade Commission, the Chairperson of the Financial Services Commission, the Minister of Justice, the Minister of National Defense, the Minister of the Interior and Safety, the Minister of Personnel Management, the Minister of the Office for Government Policy Coordination, the Prosecutor General of the Supreme Prosecutors’ Office, the Commissioner of National Tax Service, the Commissioner of Korea Customs Service, the Commissioner General of the Korean National Police Agency, etc., in order to discuss future direction of anti-corruption policy at the national level and countermeasures to tackle current corruption-related problems.

 The council was convened for the first time in line with the Moon administration’s government project for ‘making Korea a nation of integrity through anti-corruption reforms.’ Tapping into this council, The government is planning to establish and pursue more systematic anti-corruption policies at the national level*, while effectively managing the task implementation process carried out by each agency.
 * The purpose of the anti-corruption policy consultation council is to seek solutions by identifying institutional problems, rather than to deal with each individual anti-corruption related case.

□ During discussions at the council, the President Moon Jae-in said that the Moon Administration was made possible by the sentiment of the public who took to the street to hold candlelight vigils with aspirations for the Republic of Korea free from corruption and irregularities and therefore fighting against corruption is our historic mission entrusted by the people.
 Pointing out the fact that ‘the Corruption Perceptions Index (CPI) dropped 15 notches last year due to privileges and irregularities prevalent across the society,’ the President Moon called for ‘the establishment of comprehensive policy measures based on cooperation encompassing a wide range of corruption not only in the public sector but also in the private sector.’
Furthermore, the President Moon also requested that the social perception that “those who commit corruption are bound to count the costs of corruption committed by them” must take root in our society in order to fundamentally eliminate corruption, and that more keen attention be paid to doing away with old practices based on which corruption arises, such as nepotism and collectivism, etc., thereby laying a solid foundation for transparency and integrity in our society.

□ The major contents of such reports made by each agency are as follows:

 ▲ The Chairperson of the ACRC, Pak Un-jong

 ○ briefed the President on the anti-corruption strategies for the new Administration to make Korea a nation of integrity free from corruption and said as follows:

 - due to lack of measures to tackle power-related corruption and the private sector corruption, aggravated distrust of the public as to the national anti-corruption system, etc., the CPI has been stagnant or even dropping since 2008, and in terms of business ethics, Korea’s ranking was also dropped from 27th to 98th last year.

 - with a view to overcoming this, the ACRC will pursue government-wide anti-corruption policies covering corruption in the private sector as well as corruption in the public sector through cooperation between the government and the civil society while going beyond the existing government-led anti-corruption policies limited to corruption in the public sector that had been pursued at the individual agency level.

 - more specifically, the ACRC will facilitate people’s participation in the overall policy-making process through online and offline communication platforms such as Gwanghwamoon 1st street and the People’s Idea Box, etc., and identifying those subject to intense reporting such as collusion and rebating, etc. to actively address corruption in the private/corporate sector,

 - in the meantime, government-wide preventive anti-corruption system will be set up through effective operation of the anti-corruption policy consultation council in order to reach an OECD’s top 20 countries’ average CPI score of not less than 60 by 2022.

 ▲ The Minister of Justice, Park Sang-ki said as follows:

 ○ stern enforcement actions will be taken against five serious corruption offenses (i.e. bribery, influence peddling, acceptance of properties through good offices, embezzlement, dereliction of duty) and regional indigenous corruption and irregularities.

 - for this, with special anti-corruption investigation squads under Prosecutors’ Offices nationwide at the center, a far-reaching and regular crackdown will be launched, while conducting investigations with actual circumstances of each region being taken into account by analysing chronic harmful consequences by region.

 - also, ceaseless efforts will be made to ensure that the prosecution’s standard for handling cases of five serious corruption crimes and regional indigenous corruption will be levelled up so that a sentence commensurate with the severity of the crime can be imposed.

 ○ on top of that, in a bid to instill the perception in people that “Nobody can earn money by committing crimes,” proceeds of crime will be tracked down and confiscated to prevent people from being motivated to commit corruption.

 - in terms of corruption-causing factors identified during the course of investigations, active efforts will be made to develop measures to eliminate those factors in cooperation with relevant agencies.

 ▲ The Chairperson of the Korea Fair Trade Commission, Kim Sang-jo

 ○ briefed the President on “measures aimed at rooting out the conduct of unfair practices in areas linked with the public livelihood,” including power abuse and collusion, etc. that are chronic irregularities in the private sector and said as follows:

 ○ as for 4 areas of subcontract, distribution, franchise, and agency where there is a serious unbalanced relationship between market-dominant entities and the counter-party to a transaction who is in a financially weaker position, the KFTC will try to come up with comprehensive measures adapted to each area.

 - above all, in the case of subcontracting, the KFTC will institutionalize a system to prohibit large corporations from coercing small- and medium-sized subcontractors into signing exclusive contracts and will also set up a task force to more intensively monitor large corporations to deter their extorting technologies from SMEs, which hinders the core competitiveness of SMEs.

 - in the case of franchise, strict sanctions will be imposed on power abuse by franchise headquarters and more efforts will be put into fostering a sound franchise market environment by more specifically disclosing information of items, etc. that franchisees need to buy mandatorily.

 - with regard to the areas of distribution and agency, the system of punitive indemnification will be introduced and expanded to reinforce the civil remedy, and at the same time, measures will be taken to strengthen the bargaining power of small businesses by stipulating the rights for agencies to form an organization, etc.

 ○ in the meantime, cases of collusion distorting the market order will be further exposed while sanctions against them will be strengthened.

 - to this end, the KFTC will improve the efficiency of the system for analysing the symptoms of bid-rigging*, beef up the capacity to expose those involved in collusion in stronger partnership with overseas rival authorities, etc., and take measures to improve a system, including facilitation of reporting** and an increase in the ceiling on the penalty charges***.
 * Since 2006, the KFTC has been operating a system to automatically analyze allegations of collusion by receiving electronic information related to public tenders from the institution placing an order
 ** Reporting guideline to be amended so as to facilitate reporting by individuals other than corporations
 *** The ceiling on the ratio of the penalty charges imposed on the conduct of collusion (% of relevant turnover): Korea 10%, US 20%, UK·EU 30%

 ▲ the Minister of National Defense, Song Young-moo said as follows:

 ○ “wide-ranging and various types of corruption take place across all phases of defense acquisition programs, so we will try to push ahead with fundamental policy measures to eliminate corruption-causing factors and prevent corruption.”

- above all, as for the countermeasures to deal with defense industry brokers, we will reinforce reviewing of the implementation process of ‘brokerage commission reporting system’ which started to be implemented in July this year so that the system can be established at an early stage and also will convert the current system for voluntary reporting of defense acquisition program consultant into a system for mandatory reporting stipulated by law.

 - in addition, in order to prevent colluding with retired soldiers, the scope of those subject to the limitation of employment of retiree will be expanded to cover ‘small-scale defense businesses and defense trade agents,’ and the code of conduct will be amended in a way that where a meeting is held with persons involved in the defense industry (including retired public officials), the contents of the meeting will have to be reported.

 ○ in the meantime, as for companies committing malignant and intentional corruption, to establish the perception that “loss greater than expected profits can be incurred by corruption,” penalty provisions will be further strengthened and much stronger sentence will be handed down on corrupt public officials.

 - last but not least, in order to improve ‘closed process of defense acquisition’ centered on confidentiality, measures* will be taken to greatly increase the participation of companies and civilian experts.
 * such measures include ‘expanding participation of civilian experts in defense industry promotion committee,’ ‘further utilizing private research institutions prior to requirement decision,’ ‘guaranteeing opportunities for participation in an advanced study by defense industry companies,’ ‘providing opportunities for supplementing performance and quality of defense system after test and evaluation,’ etc.