President Lee Orders Penalty System for "Price Gouging" to Prevent Major Losses (Comprehensive)

Price Gouging at Tourist Destinations
"Critical Damage for Trivial Profit... Self-Regulation Has Its Limits"
President Lee Calls for Tighter Oversight of Saemaeul Geumgo
"Must Be Operated to Truly Benefit Local Economies"
Commercial Act Amendment and Yellow Envelope Act Debated in Cabinet
Industry Minister Conveys Corporate Concerns
"President Lee's Principle: The Crime of Breach of Trust Must Be Addressed"

President Lee Jaemyung has identified "price gouging" as a major factor hindering the revitalization of local economies and has instructed officials to come up with legal and regulatory measures to crack down on the practice. President Lee also called for special attention to be paid to the issue of oversight and supervision of Saemaeul Geumgo, which has been criticized for being in a regulatory blind spot.

Yonhap News Agency

On September 2, during a Cabinet meeting held at the Yongsan presidential office, President Lee made these remarks while receiving reports on next year's budget execution strategies and key project implementation plans from each ministry. Referring to the issue as "the story of price gouging in Busan," President Lee said, "The biggest obstacle to revitalizing local tourism is that sometimes problems arise due to small business owners. Is there no way to crack down on price gouging?" He was apparently referencing a recent case where a customer reportedly paid 70,000 won for a plate of sea cucumber at the Busan hairtail market. President Lee added, "It seems Gangwon Province has also suffered significant damage for similar reasons," and warned, "Trying to make a profit from trivial things can lead to critical damage."

In response, Minister of the Interior and Safety Yoon Hojoong said, "We need to review whether it is legally feasible," and added, "We will try to encourage self-regulation by business districts and merchant associations." However, President Lee emphasized, "Leaving this as a matter of self-regulation causes too much harm to the public. This is an issue that needs to be studied," and instructed, "Since the tourism industry plays a significant role in revitalizing local economies, the Minister of Culture, Sports and Tourism should take special interest and conduct research on this matter."

Presidential Spokesperson Kang Yoojeong, in a briefing after the Cabinet meeting, explained, "President Lee is concerned that this issue (price gouging) is one of the reasons domestic tourism is not thriving and tourists are traveling abroad instead," and added, "He has instructed that, beyond administrative guidance, a system of fines or penalties should be established."

Yonhap News Agency

President Lee also called for thorough oversight and supervision of Saemaeul Geumgo to ensure it genuinely benefits local economies. He pointed out, "Saemaeul Geumgo seems to be in a regulatory blind spot," and questioned, "There are opinions that the responsibility for supervision should be transferred to the Financial Services Commission, but since the Ministry of the Interior and Safety is managing it, isn't it delegated to local governments?" President Lee further emphasized, "In addition to supervision, it must be operated in a way that truly helps the local economy; it cannot just be lip service."

Minister Yoon responded, "Since two years ago, with the emergence of bad loans, both the Financial Services Commission and the Ministry of the Interior and Safety have been jointly overseeing financial guidance." President Lee reiterated, "Please pay special attention to this issue." Saemaeul Geumgo experienced turmoil in 2023, including a bank run caused by insolvency in real estate project financing. Last year, it recorded a net loss of more than 1.7 trillion won, the largest since its establishment.

During a closed-door session to approve Cabinet agenda items, President Lee and ministers also discussed the second amendment to the Commercial Act, which centers on introducing a cumulative voting system for listed companies with assets of 2 trillion won or more, as well as the Yellow Envelope Act (amendments to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act).

Minister of Trade, Industry and Energy Kim Jungkwan stated, "For companies, resolving uncertainty is important," conveying corporate concerns about the proposed legislation and expressing hope that discussions on easing the crime of breach of trust would proceed quickly. In response, Minister of Employment and Labor Kim Younghoon said, "I fully understand the remarks of the Minister of Trade, Industry and Energy," and added, "We plan to listen to the opinions of companies, including holding a meeting with the Korea Employers Federation tomorrow morning."

Spokesperson Kang reported that, after hearing the remarks of both ministers, President Lee said this is an issue that the Minister of Trade, Industry and Energy and the Minister of Employment and Labor should debate passionately. Kang added, "President Lee explained that workers and companies must coexist, but if there are barriers between the ministries in charge, it will lead to conflict between workers and companies. He asked the ministers to engage in intense discussions without such barriers."

Kang further stated, "Since the Yellow Envelope Act has passed the National Assembly, President Lee believes it is now necessary to address the unreasonable aspects of the crime of breach of trust." When asked about Democratic Party leader Kim Byungki's suggestion to abolish the crime of breach of trust, Kang replied, "Whether it is abolition or mitigation, President Lee does not make a strict distinction. The level will likely be adjusted during the legislative process."