Administrative Notice on the Amendment of Reduction Regulations for Voluntary Reporters of Collusion
[Sejong=Asia Economy Reporter Joo Sang-don] In the future, the second whistleblower who reports their own collusion for the second time will be able to receive benefits such as at least a 50% reduction in fines, mitigation of corrective orders, and exemption from prosecution. This is because if the first whistleblower does not receive a reduction due to reasons such as failure to cease collusion, the second whistleblower succeeds to this status, but cases have occurred where neither the first nor second whistleblower received reductions due to failure to meet the first whistleblower requirements.
The Fair Trade Commission announced on the 16th that it will publicly notify the amendment to the "Operation Notice on Reduction System for Voluntary Reporters of Unfair Joint Acts, etc." until the 6th of next month, which contains these details.
The voluntary reporting reduction system is a system that reduces sanctions for businesses that voluntarily report their own collusion and actively cooperate with investigations. The first to voluntarily report (first priority reduction recipient) is exempt from 100% of fines, corrective orders, and prosecution. The second to voluntarily report (second priority reduction recipient) is exempt from prosecution like the first priority and receives mitigation of corrective orders and a 50% reduction in fines.
According to the current reduction notice, if there are two or more voluntary reporters, when the first priority reporter's reduction application is not recognized, the subsequent voluntary reporter automatically succeeds the earlier reporting order. If the first priority reporter does not fulfill the recognition requirements such as ▲providing sufficient materials ▲sincere cooperation with the investigation ▲cessation of the reported collusion, the second priority reporter automatically becomes the first priority, but must meet the first priority recognition requirements.
Because of this, cases have arisen where the second priority voluntary reporter who does not meet the first priority requirements fails to receive reduction benefits for both first and second priority voluntary reporters. This is because when the first priority voluntary reporter has submitted various materials diligently, by the time the second priority business voluntarily reports, the Fair Trade Commission has already secured sufficient evidence to prove collusion, making it difficult for the second priority voluntary reporter to meet the requirements.
Accordingly, the Fair Trade Commission decided that if the first priority voluntary reporter's reduction application is not recognized due to their own fault, the second priority voluntary reporter will receive at least the second priority reduction depending on whether they can meet the first priority requirements. If the first priority requirements cannot be met, the first priority will not be automatically succeeded, and the second priority reduction will be granted; if the first priority requirements can be met, the first priority will be succeeded as currently, and the first priority reduction will be granted.
A Fair Trade Commission official said, "With the amendment of the notice, some shortcomings of the leniency system will be improved and regulations will become clearer, enhancing predictability for businesses and increasing incentives for active cooperation in investigations, thereby expecting the leniency system to be more vitalized."
The Fair Trade Commission plans to finalize and implement the amendment after collecting opinions from stakeholders and related ministries through administrative notification and going through committee resolutions.
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