Immunity, Sanctions & Settlements

Last verified on Wednesday 6th June 2018

Korea

Hoil Yoon, Jae Young Kim and Jason Sangoh Jeon
Yoon & Yang

    Immunity or a 100 per cent reduction in sanctions

  1. 1.

    What benefits are available to the first applicant to qualify?

  2. Under the Monopoly Regulation and Fair Trade Act (MRFTA), a corporate violator is subject to an administrative fine of up to an amount equal to 10 per cent of its relevant (or affected) sales revenue and corrective measures, as well as a criminal fine of up to 200 million won. Under the MRFTA, however, the first applicant is exempt from the administrative fine and corrective measures. As for criminal prosecution, under the MRFTA and the Notification on Implementation of the Leniency Programme for Corrective Measures Etc. for Leniency Applicants for Unfair Collaborative Acts (Notification) issued thereunder, the first applicant is exempt from criminal referral. As for criminal prosecution, upon receipt of a criminal referral from the Korea Fair Trade Commission (KFTC), the Prosecutors’ Office has the authority to investigate and prosecute cartels for criminal punishment. The language of the Notification seems to state that where the violation is objectively so obvious and serious as to greatly restrain competition or where the Prosecutor General makes a request for referral for that reason, the KFTC should issue a criminal referral to the Prosecutors’ Office even for the first applicant. As a matter of practice, however, for the first applicant the KFTC does not issue a criminal referral and the Prosecutor General does not make a referral request even for such a serious hardcore cartel.

  3. 2.

    Do the protections extend to current and former officers, directors and employees?

  4. Under the MRFTA, an individual violator is subject to a criminal fine of up to 200 million won or imprisonment of up to three years, or both. Although there is no explicit provision for the availability of the protections for an individual violator, as a matter of practice, the KFTC does not issue a criminal referral for current or former officers, director or employees of the first applicant under the same conditions as for the company.

  5. 3.

    Is immunity available after an investigation begins?

  6. Yes, immunity is available after an investigation begins, under the same conditions as before an investigation begins.

  7. 4.

    What are the eligibility requirements before an investigation begins?

  8. The eligibility requirements are as follows:

    • the applicant must be the first one to provide the KFTC with evidence necessary to prove a cartel;
    • the application must be submitted at a time when the KFTC did not obtain information on the cartel or did not obtain sufficient evidence to prove the cartel;
    • the applicant must cooperate continuously and faithfully until the conclusion of the investigation by the KFTC by, for example, providing all the facts relating to the cartel and submitting related information;
    • the applicant must terminate its involvement in the conduct;
    • the applicant must not have coerced the other companies to participate in the conduct or prevented them from terminating their involvement in the conduct; and
    • the applicant must not have received immunity or leniency benefits for another cartel at any time during the five years from the date of the corrective measures.
  9. 5.

    What are the eligibility requirements after an investigation begins?

  10. The eligibility requirements are the same as those in answer 4 before an investigation begins.

  11. 6.

    Will the applicant have to admit to a violation of law?

  12. There is no express provision in the MRFTA or the Notification on whether the applicant must admit to a violation of law, and the KFTC’s practice is not settled on this point. On the one hand, there are cases in which the applicant that argued that it did not violate the law received immunity or leniency benefits. For example, in the Air Cargo Fuel Surcharge case, the foreign company that filed for immunity or leniency argued that it was not subject to the MRFTA on the ground that its conduct took place outside Korea and did not have an effect on the Korean market. On the other hand, there are cases in which the applicant lost its immunity or leniency status because it refused to admit to a violation of law. Accordingly, there is a risk that a refusal to admit to a violation of law may result in the loss of the immunity or leniency status, especially if the KFTC examiner or commissioners expressly raise the issue during their investigation or deliberation.

  13. 7.

    Are ringleaders or initiators of the conduct eligible?

  14. Yes, they are.

  15. 8.

    When must the applicant terminate its involvement in the conduct?

  16. The applicant must terminate its involvement in the conduct immediately after filing for immunity or leniency, except that the involvement may continue at the request or with the approval of the KFTC to the extent of such request or approval.

  17. 9.

    What constitutes termination of the conduct?

  18. The Notification provides that the question whether the conduct has terminated is determined based on whether ‘the agreement’ between or among the participants to engage in the conduct no longer exists. In practice, the applicant’s notification to the other participants of its intention not to participate (or its refusal to participate) in the conduct any longer constitutes termination of the conduct.

  19. 10.

    Will the applicant be required to make restitution to victims?

  20. No, it will not. The victims would have to bring civil damage actions in court for restitution or compensation, separately from the KFTC proceedings. Most civil damage actions are filed after the KFTC issues a final decision upon completion of its investigation and deliberation.

  21. 11.

    Can more than one applicant qualify for immunity?

  22. No. Only one applicant can qualify for immunity, except that more than one company can qualify for immunity by filing jointly provided that they are affiliated companies and actual control exists between or among them, or they were parties to a split-off or business transfer and did not participate in the conduct together at the same time.

  23. 12.

    Can an applicant qualify if one of its employees reports the conduct to the authority first?

  24. No, it cannot if the KFTC obtains from the employee sufficient evidence to prove the cartel. But if not, it can qualify.

  25. 13.

    Does the afforded protection extend to any non-antitrust infringements?

  26. No. It extends only to cartels.

  27. 14.

    What confidentiality assurances are given to the first applicant to report?

  28. The KFTC is prohibited from disclosing to any person the identity of the applicant or any reported contents such as the information or evidentiary materials submitted, except with consent from the applicant or where necessary to file or carry on a lawsuit relating to the case. In order to protect the applicant’s identity or the fact that an application has been made, the applicant is identified with a pseudonym or the applicant’s identity and the fact that an application has been made are redacted or shaded from or in the examiner’s report or exhibits thereto. Further, the examiner’s reports and the KFTC’s decisions are issued separately, and hearings are held separately for the applicant, as well as together with the other companies.

  29. 15.

    Does the authority publish guidance regarding the application of the programme?

  30. Yes. The MRFTA and the Presidential Enforcement Decree thereunder provide basic guidance, and the Notification provides detailed guidance. All these materials are published.

  31. 16.

    Do the rules for obtaining immunity in your jurisdiction conflict with the immunity rules in other jurisdictions?

  32. Generally speaking, they do not. But please note that in Korea the second applicant to qualify (ie, the first applicant coming forward after the immunity applicant) obtains a 50 per cent reduction in the administrative fine, may obtain a reduction in the corrective measures and is exempt from criminal referral to the Prosecutors’ Office.

    Immunity application and marker process

  33. 17.

    What is the initial process for making an application?

  34. An application is made either orally in person by visiting the KFTC or by fax or email to the KFTC, and then a marker can be obtained either orally or in writing from the KFTC.

  35. 18.

    What information is required to secure a marker?

  36. Only a limited amount of information is required, consisting of the identity of the applicant and a brief summary of the conduct including the product involved, the kind of conduct, and the time or duration of the conduct.


  37. 19.

    How much time will an applicant have to perfect its marker?

  38. It will have 15 days to perfect its marker, except that it can obtain on a need basis one or more extensions of the supplementing period for up to an additional 60 days. Furthermore, it can obtain one or more extensions on a need basis as long as it makes good faith efforts to provide necessary information to perfect the marker for international cartel matters or the like that would require more extensions in order to obtain related evidentiary materials and statements.

  39. 20.

    Can the deadline for perfecting the marker be extended?

  40. Yes, it can be extended as discussed in answer 19.

  41. 21.

    What is required to perfect the marker?

  42. All of the eligibility requirements discussed in answer 4 must be satisfied, including submission of evidence necessary to prove the cartel and providing continuous and faithful cooperation as follows:

    (i) Evidence necessary to prove the cartel means:

    • a written agreement, meeting minutes, internal reports or the like made by the companies that participated in the conduct which can directly prove the contents of the cartel agreement, the process of forming the cartel or the implementation of the cartel;
    • confirmation letters, statements or other materials by directors, officers or employees who participated in the conduct showing in detail (ie, who, what, where, why, when and how) the discussions regarding engaging in the conduct or the implementation thereof; or
    • statements and other materials that can sufficiently acknowledge the relevant facts in case where there are no detailed evidentiary materials to prove such facts.

    (ii) Whether the applicant has provided continuous and faithful cooperation is determined by taking into account from their entirety all of the following six factors:

    • whether the applicant provided without delay all the facts it is aware of related to the conduct;
    • whether the applicant provided promptly all the materials it held or can obtain or collect related to the conduct;
    • whether the applicant responded or otherwise cooperated promptly to the KFTC’s requests necessary for confirmation of facts;
    • whether the applicant made its best efforts so that its current (and, if possible, former) directors, officers, and employees can cooperate with the KFTC continuously and truthfully in interviews or other investigative measures of the KFTC;
    • whether the applicant destroyed, manipulated, damaged or concealed evidence and information related to the cartel; and
    • whether the applicant disclosed the facts related to the conduct or the fact that an application has been made to any third parties prior to the notification of the Examiner’s Report without consent of the KFTC.
  43. 22.

    Can the scope of the marker be expanded if additional information is discovered by the applicant?

  44. No, it cannot be expanded beyond the scope of the application even if additional information is discovered by the applicant. If additional information suggesting or indicating another problematic (or potentially problematic) conduct beyond the scope of the initial application is discovered by the applicant, a new application should be made and a new marker can be obtained. In practice, in order to avoid making such a new application upon discovery of additional information after making an application, in its initial application the applicant often claims to the extent possible a broad scope of conduct, for example, in terms of the product involved so that the initial application can cover the conduct suggested or indicated by such additional information without making a new application.

  45. 23.

    Can an applicant lose its marker if a second applicant comes forward with better information?

  46. As long as it satisfies all of the eligibility requirements discussed in answers 4 and 21, it does not lose its marker even if a second applicant comes forward with better information. If, however, the applicant does not satisfy all of the eligibility requirements by, for example, failing to submit evidence necessary to prove the cartel and the KFTC does not confirm the applicant’s marker, then a second applicant with better information can obtain a first-ranked marker if the second applicant satisfies all of the eligibility requirements. In this connection, please note that the Supreme Court recently held that the level of evidence submitted by the immunity or leniency applicant to prove a cartel shall not be examined strictly. In a case (Supreme Court, Case No. 2012Du26449, rendered 13 June 2013) in which the KFTC refused to confirm the marker where the applicant submitted only written statements of its officers and directors who participated in the cartel without also submitting any indirect evidence supporting such statements and the applicant also submitted written statements by the other participants, the Supreme Court held that:

    • the evidence necessary to prove a cartel means direct or indirect evidence that can prove the cartel;
    • the documents or written statements submitted by the applicant in that case shall be considered as included in such evidence; and thus
    • the KFTC’s refusal to confirm the marker was invalid.

    The stance of the Supreme Court in the ruling of the abovementioned case is reflected in the amendments in answer 21 (i).

  47. 24.

    What if the applicant’s investigation reveals that no violation exists?

  48. In such a case, the KFTC would not issue a marker or, if it has already issued one, it would not confirm the marker, and the KFTC could continue its investigation or close the file.

  49. 25.

    What if the authority decides not to investigate?

  50. If an applicant makes an application, the KFTC must proceed to determine whether it will issue a marker. Once the KFTC issues a marker, it must proceed to determine whether it will issue the marker. If the KFTC decides not to investigate after issuing a marker, the KFTC could suspend its investigation or close the file. Upon receipt of any new application, the KFTC would reopen the file, but any previously issued marker would remain valid and take precedence over any new marker that could result from such a new application.

    Immunity cooperation obligations

  51. 26.

    What is the applicant required to produce?

  52. It is required to produce evidence necessary to prove a cartel as discussed in answers 4 and 21(i).

  53. 27.

    Will the applicant be required to make a written confession?

  54. No, it will not be required to make a written confession. Although submission of evidence following making an application as discussed in answer 4 and answer 21(i) would include an admission of certain facts and a possible admission to a violation of law as discussed in answer 6 may constitute a confession, they need not be in writing.

  55. 28.

    Can third parties obtain access to the materials provided by the applicant?

  56. No, third parties cannot obtain access to the materials provided by the applicant, except with consent from the applicant or where necessary to file or carry on a lawsuit related to the case. For example, counsel for the other participants may be permitted to view such materials (if they are attached the Examiner’s Report) excluding the portions of the materials that may reveal the identity of the applicant, in order to protect the other participants’ right to defend. Further, a second or subsequent applicant challenging the status of a higher-ranked applicant in court can obtain access to such materials. In addition, parties to civil damage actions in court can obtain access to such materials by, for example, obtaining a court order for the KFTC to provide such documents.

  57. 29.

    Will the applicant lose its protection if one or more of its employees refuses to cooperate?

  58. No, as long as it satisfies all of the eligibility requirements as discussed in answer 4 and answer 21, it will not lose its protection even if one or more of its employees refuse to cooperate. If, however, such a refusal by one or more employees results in the employer’s inability to satisfy any of the eligibility requirements such as submission of evidence necessary to prove the cartel or provision of continuous and faithful cooperation, then the applicant will lose its protection. As a factual matter, however, in general, it would be uncommon that an applicant becomes unable to submit such evidence or provide such cooperation solely because of such a refusal to cooperate by one or more of its employees.

  59. 30.

    Will the applicant lose its protection if one of its employees engages in obstructive conduct before or after the application?

  60. No, as long as it satisfies all of the eligibility requirements as discussed in answer 4 and answer 21, it will not lose its protection even if one of its employees engages in obstructive conduct before or after the application. If, however, such obstructive conduct by an employee results in the applicant’s inability to satisfy any of the eligibility requirements such as submission of evidence to prove the cartel or provision of continuous and faithful cooperation, then the applicant will lose its protection. As a factual matter, however, in general, it would be uncommon that an applicant becomes unable to submit such evidence or provide such cooperation solely because of such obstructive conduct by an employee.

  61. 31.

    Will the applicant be required to provide materials protected by attorney-client privileges or work-product doctrine?

  62. No, as long as it satisfies all of the eligibility requirements as discussed in answer 4 and answer 21, it will not be required to provide any particular or any particular kind of materials such as those that are or would be protected by such privilege or doctrine under US law. In any event, under a generally held view in Korea, no attorney-client privilege or work-product doctrine is recognised in Korea. In a recent criminal case (Seoul High Court, Case No. 2008No2778, rendered 26 June 2009), the Seoul High Court recognised the attorney–client privilege, holding that a guilty finding by a lower court based on materials protected by attorney–client privilege was invalid. However, on appeal (Supreme Court, Case No. 2008Do6788, rendered 17 May 2012), the Supreme Court reversed the decision of the Seoul High Court.

    Granting immunity

  63. 32.

    How does the authority announce its promise not to charge or sanction?

  64. In the past (before 2015), when a marker is perfected, the KFTC issued a notice of confirmation of the marker to the applicant. However, an amendment on January 2, 2015 repealed the procedure for such provisional confirmation of a marker for an applicant. The purpose of such amendment is to prevent the insufficient provision of cooperation for investigation after confirmation of a marker.

    Accordingly, the examiner issues its report on the case called the examiner’s Report, which consists of two different types of reports: one that includes opinions on the conduct itself and the other that includes the opinions of the examiner regarding whether to confirm the marker of the applicant. Upon conclusion of the KFTC’s investigation, deliberation and adjudication of the case (taking precaution to protect confidentiality as discussed in answer 4), the KFTC issues a written decision signed by the commissioners. The written decision confirms the immunity status of the applicant and reflects in it all the applicable benefits of immunity for the applicant discussed in answer 1.

  65. 33.

    Does the authority put its commitment in writing?

  66. Yes. See answer 32.

  67. 34.

    Who is given access to the document?

  68. Only the applicant is given access to the notice of confirmation of the marker referred to in answer 32 and the separate Examiner’s Report and the KFTC’s separate decision referred to in answer 14 and answer 32. Please note, however, that third parties can have access to these materials in certain exceptional cases as discussed in answer 28.

  69. 35.

    Does the authority publish a model letter for conferring immunity?

  70. Yes. The Notification provides a form of notice of confirmation of a marker.

    Individual immunity or leniency

  71. 36.

    Is there an individual immunity programme?

  72. Although there is no formal individual immunity programme, in practice, as discussed in answer 2, the KFTC does not issue a criminal referral for current or former officers, director or employees of the applicant under the same conditions as for the company.

  73. 37.

    What is the process for applying?

  74. There is no formal individual application process. The exemption from criminal referral of individuals referred to in answer 36 can only result through or in the course of the corporate immunity or leniency application process.

  75. 38.

    What are the criteria for qualifying?

  76. There are no formal criteria for exemption from criminal referral of individuals. In practice, the exemption from criminal referral of individuals is available under the same conditions as immunity or leniency benefits for the corporate applicant.

    Revocation of immunity

  77. 39.

    On what basis can corporate immunity be revoked?

  78. Corporate immunity status or confirmation of the marker referred to in answer 32 can be revoked:

    • if the applicant did not provide continuous and faithful cooperation as discussed in answer 4 and answer 21(ii);
    • if any of the materials submitted by the applicant is false;
    • if the applicant did not terminate its involvement in the conduct as discussed in answer 4 and answer 9 or resumed involvement in the conduct; or
    • if it was discovered that the applicant coerced the other participants to participate in the conduct against their will or prevented them from terminating their involvement in the conduct.
  79. 40.

    When can it be revoked?

  80. It can be revoked at any time after a notice of confirmation of the marker referred to in answer 32 has been issued by the KFTC.

  81. 41.

    What notice is required to revoke?

  82. A written notice providing specific reasons for the revocation is required to be given to the applicant.

  83. 42.

    Can the applicant file a judicial challenge to a decision to revoke?

  84. Yes. It can do so by filing a lawsuit.

    Reduction in sanctions

  85. 43.

    Does the leniency programme allow for reductions in sanctions?

  86. Yes, it does. Under the leniency programme, the second applicant (ie, the first applicant coming forward after the immunity applicant) is exempt from the corrective measures and criminal referral referred to in answer 1 under the same conditions as for the immunity applicant. In addition, it obtains a 50 per cent reduction of the administrative fine referred to in answer 1, while the immunity applicant is exempt from the administrative fine. The immunity or leniency programme does not cover any subsequent applicants, and they are not (necessarily) exempt from the corrective measures or criminal referral even if they provide cooperation. However, separately from the immunity or leniency programme, they can obtain reductions in sanctions, in particular in the administrative fine up to 20 per cent for their cooperation with the investigation and deliberation of by the KFTC under the guidelines provided in the Notice Concerning the Imposition of the Administrative Fine and Detailed Guidelines (Administrative Fine Guidelines Notice).

  87. 44.

    What is the process for seeking a reduction in sanctions?

  88. The process for seeking benefits is the same for both the immunity applicant and the second applicant (ie, the first applicant coming forward after the immunity applicant). The process for seeking a reduction in the administrative fine for any subsequent applicants is similar, to a certain extent, but is not the same as that for the immunity applicant or the second applicant. There is no set method or form for such subsequent applicants to follow to seek a reduction in sanctions for their cooperation. Under the Administrative Fine Guidelines Notice referred to in answer 43, at any time during the investigation or deliberation of the KFTC they can provide the KFTC with any information, statements or any other documents or materials that can be helpful in determining the legality of the conduct by the KFTC, while consistently or newly admitting facts regarding the conduct. In practice, however, in the initial stage of the investigation, because it is unknown or uncertain whether an immunity or leniency application has been made or whether any such application will be perfected, the subsequent applicants often go through the same process as the immunity or leniency application process.

  89. 45.

    Is there a marker process similar to immunity applications?

  90. Under the immunity or leniency programme, the same marker process is used for both the immunity applicant and the second applicant (ie, the first applicant coming forward after the immunity applicant). For any subsequent applicants, there is no marker or other formal process seeking a reduction in the administrative fine; as discussed in answer 43 and answer 44, they can simply provide cooperation with the investigation by the KFTC in various ways by providing information or materials to the KFTC that can be used as evidence to prove a cartel or would otherwise be helpful for the KFTC in obtaining such information or materials.

  91. 46.

    Are the reductions in sanctions fixed or discretionary?

  92. For the second applicant (ie, the first applicant coming forward after the immunity applicant), the reduction in the administrative fine is fixed at 50 per cent. For any subsequent applicants, the reductions in the administrative fine are discretionary, depending on the degree or usefulness of their cooperation, up to 20 per cent for cooperation provided prior to the conclusion of the investigation by the KFTC examiner.

  93. 47.

    How are the reductions in sanctions calculated?

  94. The reductions in the administrative fine are calculated according to the guidelines provided in the Administrative Fine Guidelines Notice. Under the guidelines, the fine amounts are calculated in three steps. First, a basic amount is determined based on an applicant’s relevant (or affected) sales revenue by a gravity factor of up to 10 per cent. Second, the basic amount is adjusted for aggravating or mitigating factors specific to the applicant (such as duration, record of past violations, amount of profit gained, whether a leader or follower, whether coerced others, obstruction of investigation, involvement of a director, whether implemented, cooperation for investigation, voluntary termination or correction, and implementation of a compliance programme). Third, such adjusted amount is further adjusted based on other factors (such as ability to pay, industry-wide economic hardship, overall economic conditions, and effects on the market), subject to the legal maximum cap of 10 per cent of total affected sales revenue.

    The 50 per cent reduction in the administrative fine for the second applicant (ie, the first applicant coming forward after the immunity applicant) is calculated only after the third step above. The reductions of up to 20 per cent for any subsequent applicants for their cooperation take place as part of the second step above.

  95. 48.

    Are there sentencing guidelines?

  96. Yes. For the availability and extent of benefits for the immunity applicant and the second applicant (ie, the first applicant coming forward after the immunity applicant), article 35 of the presidential enforcement decree of the MRFTA and the Notification provide sentencing guidelines. For the calculation of the administrative fine, the Administrative Fine Guidelines Notice discussed in answer 43 provide detailed sentencing guidelines, including those applicable to the second and subsequent applicants for the reductions in the administrative fine for their cooperation.

  97. 49.

    If an applicant's cooperation reveals self-incriminating information that expands the scope of the conduct known to the authority, will that conduct be factored into the fine calculation?

  98. That conduct may be factored into the fine calculation by the KFTC on a discretionary basis under the Administrative Fine Guidelines Notice discussed in answer 43.

    However, if an applicant who cooperates the KFTC reveals self-incriminating information on a separate cartel that expands the scope of conduct known to the authority, the applicant may be exempt from or receive reduction of fines on the original conduct with Amnesty Plus.

  99. 50.

    Are there fixed or discretionary discounts for the first applicant to cooperate after the immunity applicant (assuming there is an immunity applicant)?

  100. For the second applicant (ie, the first applicant coming forward after the immunity applicant), as discussed in answer 43 the reduction in the administrative fine is fixed at 50 per cent for their cooperation. In addition, under the Administrative Fine Guidelines Notice referred to in answer 43, there are discretionary discounts for other mitigating factors (as well as increases for certain aggravating factors) that can apply to the second applicant as well as any subsequent applicants.

  101. 51.

    Other than fine reductions, are there additional incentives offered to an applicant that is the first non-immunity applicant?

  102. Under the leniency programme, as discussed in answer 43, the first non-immunity applicant or the second applicant (ie, the first applicant coming forward after the immunity applicant) is exempt from the corrective measures and criminal referral referred to in answer 1.

  103. 52.

    Does the competition authority publish guidance regarding sentencing reductions?

  104. Yes, it does. Please refer to the discussion of sentencing reductions under the Administrative Fine Guidelines Notice in answer 43.

  105. 53.

    Does the authority provide for "Amnesty Plus" benefits?

  106. Yes, it does.

  107. 54.

    How is the Amnesty Plus discount calculated?

  108. The Amnesty Plus discount is calculated by granting a reduction in the administrative fine of up to 100 per cent, depending on the relative scale of the second cartel over the first cartel based on the product’s sales revenue, as follows:

    • if the size of the second cartel is not greater than that of the first cartel, a reduction of up to 20 per cent;
    • if the size of the second cartel is greater than that of the first cartel but less than twice the size of the first cartel, a reduction of 30 per cent;
    • if the size of the second cartel is not less than twice the size of the first cartel but less than four times the size of the first cartel, a reduction of 50 per cent; and
    • if the size of the second cartel is not less than four times the size of the first cartel, a reduction of 100 per cent (ie, an exemption of the administrative fine).

    For a multiple number of the second cartels, the size of the second cartels should be aggregated.

    Cooperation obligations for sentencing reductions

  109. 55.

    Are the cooperation obligations similar to those for immunity applicants?

  110. Under the immunity or leniency programme, the cooperation obligations for both the immunity applicant and the second applicant (ie, the first applicant coming forward after the immunity applicant) are the same. That is, they have to satisfy all of the eligibility requirements discussed in answer 4 and answer 21. Under the Administrative Fine Guidelines Notice, as discussed in answer 43 through answer 46, the cooperation obligations for any subsequent applicants are not the same as, but similar to, those for the immunity applicant or the second applicant.

  111. 56.

    Will the applicant be required to make a written confession?

  112. No, it will not be required to make a written confession. Although submission of evidence following making an application would include an admission of facts and a possible admission to a violation of law may constitute a confession, they need not be in writing.

  113. 57.

    Can third parties obtain access to the materials provided by the applicant?

  114. For the materials provided by the second applicant (ie, the first applicant coming forward after the immunity applicant), under the immunity or leniency programme, the ability of third parties to obtain access to such materials is limited in the same manner and to the same extent as for the materials provided by the immunity applicant that was discussed in answer 28. For the materials provided by any subsequent applicants, the confidentiality protection applicable to the materials provided by the immunity applicant or the second applicant is not available. However, the ability of third parties to obtain access to the materials provided by such subsequent materials is subject to general confidentiality obligations of the KFTC and its personnel in that they shall not use or disclose any such materials for any purpose other than enforcing the MRFTA.

  115. 58.

    Will an applicant qualify for sentencing reductions if one or more of its employees refuse to cooperate?

  116. Yes, under the immunity or leniency programme, as long as the second applicant (ie, the first applicant coming forward after the immunity applicant) satisfies all of the eligibility requirements discussed in answer 4 and answer 21, in the same manner as the immunity applicant qualifies as discussed in answer 29, the second applicant will qualify for sentencing reductions discussed in answer 43 even if one or more employees of the applicant refuse to cooperate. The permissibility or ability of any subsequent applicants to qualify for sentencing reductions discussed in answer 43 if one or more employees of the applicants refuse to cooperate is not the same as, but similar to, that of the immunity applicant or the second applicant. As long as such subsequent applicants fulfil the cooperation obligations discussed in answers 43-46, they will qualify for sentencing reductions as discussed in answer 43 through answer 46. However, if such a refusal by one or more employees results in the employer’s inability to satisfy any of the eligibility requirements or fulfil the cooperation obligations, as the case may be, then the applicant (whether the second applicant or a subsequent applicant) will not qualify for the respective sentencing reductions discussed in answer 43. As a factual matter, however, in general, it would be uncommon that an applicant becomes unable to satisfy the eligibility requirements or fulfil the cooperation obligations solely because of such a refusal to cooperate by one or more of its employees.

  117. 59.

    Will the applicant lose its protections if one of its employees engages in obstructive conduct before or after the application?

  118. No, under the immunity or leniency programme, as long as the second applicant (ie, the first applicant coming forward after the immunity applicant) satisfies all of the eligibility requirements discussed in answer 4 and answer 21, it will not lose its protections discussed in answer 43 even if one of its employees engages in obstructive conduct before or after the application. The permissibility or ability of any subsequent applicants to obtain or retain their protections if one of its employees engages in such obstructive conduct is not the same as, but similar to, that of the immunity applicant or the second applicant. As long as such subsequent applicants fulfil the cooperation obligations discussed in answer 43 through to 46, they will obtain or retain their protections as discussed in answer 43 through to 46. However, if such obstructive conduct by an employee results in the applicant’s inability to satisfy any of the eligibility requirements or fulfil the cooperation obligations, as the case may be, then the applicant (whether the second applicant or a subsequent applicant) will lose its protections. As a factual matter, however, in general, it would be uncommon that an applicant becomes unable to satisfy the eligibility requirements or fulfil the cooperation obligations solely because of such obstructive conduct by one of its employees.

  119. 60.

    Will the applicant be required to provide materials protected by attorney-client privilege or work-product doctrine?

  120. No, as long as it satisfies all of the eligibility requirements as discussed in answer 4 and answer 21 or the cooperation obligations in answer 43 through answer 48, as the case may be, it will not be required to provide any particular materials or any particular kind of materials such as those that are or would be protected by such privilege or doctrine under US law. In any event, as discussed in answer 31, under a generally held view in Korea, no attorney–client privilege or work–product doctrine is recognised in Korea.

  121. 61.

    Can an applicant challenge the amount of the reduction of sanctions?

  122. No, the second applicant (ie, the first applicant coming forward after the immunity applicant) cannot challenge the amount of the reduction of sanctions for its cooperation if the KFTC provided the reductions discussed in answer 43. Also, the applicant (whether the second applicant or any subsequent applicant) cannot challenge the amount of the reduction of sanctions for its cooperation under the Administrative Fine Guidelines Notice if the KFTC provided the amount of the reduction of sanctions reasonably and lawfully under this notice. If not, the applicant can challenge the decision of the KFTC either by filing a motion for reconsideration with the KFTC or filing a lawsuit with the Seoul High Court.

    Settlements

  123. 62.

    How is the settlement process initiated?

  124. In Korea, there is no settlement process for cartels. Although Korea recently adopted a consent order mechanism for certain violations of the MRFTA, this mechanism does not apply to Cartels.

  125. 63.

    Is the amount of the sanction always fixed in the settlement agreement?

  126. Not applicable.

  127. 64.

    What role, if any, do the courts play in the settlement process?

  128. Not applicable.

  129. 65.

    Are the settlement documents, including any factual admissions, made public?

  130. Not applicable.

  131. 66.

    Is an admission of wrongdoing required?

  132. Not applicable.

  133. 67.

    Do companies that enter into settlement agreements receive an automatic sentencing discount?

  134. Not applicable.

  135. 68.

    Do all of the subjects of an investigation have to agree to the settlement procedure before it is initiated by the authority?

  136. Not applicable.

  137. 69.

    Will the authority settle with subjects who refuse to cooperate?

  138. Not applicable.

  139. 70.

    If the settlement discussions terminate without an agreement, may any information provided or statements made during the negotiations be used against the parties?

  140. Not applicable.

  141. 71.

    May a party to the settlement agreement void the agreement after it is entered?

  142. Not applicable.

  143. 72.

    Does the competition authority publish guidance regarding settlements?

  144. Not applicable.

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Questions

    Immunity or a 100 per cent reduction in sanctions

  1. 1.

    What benefits are available to the first applicant to qualify?


  2. 2.

    Do the protections extend to current and former officers, directors and employees?


  3. 3.

    Is immunity available after an investigation begins?


  4. 4.

    What are the eligibility requirements before an investigation begins?


  5. 5.

    What are the eligibility requirements after an investigation begins?


  6. 6.

    Will the applicant have to admit to a violation of law?


  7. 7.

    Are ringleaders or initiators of the conduct eligible?


  8. 8.

    When must the applicant terminate its involvement in the conduct?


  9. 9.

    What constitutes termination of the conduct?


  10. 10.

    Will the applicant be required to make restitution to victims?


  11. 11.

    Can more than one applicant qualify for immunity?


  12. 12.

    Can an applicant qualify if one of its employees reports the conduct to the authority first?


  13. 13.

    Does the afforded protection extend to any non-antitrust infringements?


  14. 14.

    What confidentiality assurances are given to the first applicant to report?


  15. 15.

    Does the authority publish guidance regarding the application of the programme?


  16. 16.

    Do the rules for obtaining immunity in your jurisdiction conflict with the immunity rules in other jurisdictions?


  17. Immunity application and marker process

  18. 17.

    What is the initial process for making an application?


  19. 18.

    What information is required to secure a marker?


  20. 19.

    How much time will an applicant have to perfect its marker?


  21. 20.

    Can the deadline for perfecting the marker be extended?


  22. 21.

    What is required to perfect the marker?


  23. 22.

    Can the scope of the marker be expanded if additional information is discovered by the applicant?


  24. 23.

    Can an applicant lose its marker if a second applicant comes forward with better information?


  25. 24.

    What if the applicant’s investigation reveals that no violation exists?


  26. 25.

    What if the authority decides not to investigate?


  27. Immunity cooperation obligations

  28. 26.

    What is the applicant required to produce?


  29. 27.

    Will the applicant be required to make a written confession?


  30. 28.

    Can third parties obtain access to the materials provided by the applicant?


  31. 29.

    Will the applicant lose its protection if one or more of its employees refuses to cooperate?


  32. 30.

    Will the applicant lose its protection if one of its employees engages in obstructive conduct before or after the application?


  33. 31.

    Will the applicant be required to provide materials protected by attorney-client privileges or work-product doctrine?


  34. Granting immunity

  35. 32.

    How does the authority announce its promise not to charge or sanction?


  36. 33.

    Does the authority put its commitment in writing?


  37. 34.

    Who is given access to the document?


  38. 35.

    Does the authority publish a model letter for conferring immunity?


  39. Individual immunity or leniency

  40. 36.

    Is there an individual immunity programme?


  41. 37.

    What is the process for applying?


  42. 38.

    What are the criteria for qualifying?


  43. Revocation of immunity

  44. 39.

    On what basis can corporate immunity be revoked?


  45. 40.

    When can it be revoked?


  46. 41.

    What notice is required to revoke?


  47. 42.

    Can the applicant file a judicial challenge to a decision to revoke?


  48. Reduction in sanctions

  49. 43.

    Does the leniency programme allow for reductions in sanctions?


  50. 44.

    What is the process for seeking a reduction in sanctions?


  51. 45.

    Is there a marker process similar to immunity applications?


  52. 46.

    Are the reductions in sanctions fixed or discretionary?


  53. 47.

    How are the reductions in sanctions calculated?


  54. 48.

    Are there sentencing guidelines?


  55. 49.

    If an applicant's cooperation reveals self-incriminating information that expands the scope of the conduct known to the authority, will that conduct be factored into the fine calculation?


  56. 50.

    Are there fixed or discretionary discounts for the first applicant to cooperate after the immunity applicant (assuming there is an immunity applicant)?


  57. 51.

    Other than fine reductions, are there additional incentives offered to an applicant that is the first non-immunity applicant?


  58. 52.

    Does the competition authority publish guidance regarding sentencing reductions?


  59. 53.

    Does the authority provide for "Amnesty Plus" benefits?


  60. 54.

    How is the Amnesty Plus discount calculated?


  61. Cooperation obligations for sentencing reductions

  62. 55.

    Are the cooperation obligations similar to those for immunity applicants?


  63. 56.

    Will the applicant be required to make a written confession?


  64. 57.

    Can third parties obtain access to the materials provided by the applicant?


  65. 58.

    Will an applicant qualify for sentencing reductions if one or more of its employees refuse to cooperate?


  66. 59.

    Will the applicant lose its protections if one of its employees engages in obstructive conduct before or after the application?


  67. 60.

    Will the applicant be required to provide materials protected by attorney-client privilege or work-product doctrine?


  68. 61.

    Can an applicant challenge the amount of the reduction of sanctions?


  69. Settlements

  70. 62.

    How is the settlement process initiated?


  71. 63.

    Is the amount of the sanction always fixed in the settlement agreement?


  72. 64.

    What role, if any, do the courts play in the settlement process?


  73. 65.

    Are the settlement documents, including any factual admissions, made public?


  74. 66.

    Is an admission of wrongdoing required?


  75. 67.

    Do companies that enter into settlement agreements receive an automatic sentencing discount?


  76. 68.

    Do all of the subjects of an investigation have to agree to the settlement procedure before it is initiated by the authority?


  77. 69.

    Will the authority settle with subjects who refuse to cooperate?


  78. 70.

    If the settlement discussions terminate without an agreement, may any information provided or statements made during the negotiations be used against the parties?


  79. 71.

    May a party to the settlement agreement void the agreement after it is entered?


  80. 72.

    Does the competition authority publish guidance regarding settlements?