South Korea: A Dispute Resolution: White-Collar Crime Overview
Overview of the 2025 Enforcement Landscape
The regulatory environment for white-collar crime in South Korea in 2025 has continued to evolve toward strengthening corporate transparency and the substantive accountability of management, even amid major structural changes such as the imposition of martial law in December 2024, the concentration of investigative resources on the “Three Special Counsel Investigations,” and the decision to abolish the Prosecutors’ Office. Practices that were previously tolerated or treated as customary under the banner of economic growth are no longer permissible. Prosecutors and regulatory authorities are maintaining a firm “zero-tolerance” stance toward corporate crime.
Expansion of Preliminary Examinations by Regulators
A notable trend in 2025 is the continued intensification of preliminary examinations conducted by regulatory bodies – such as the Financial Supervisory Service (FSS) and the Korea Fair Trade Commission (KFTC) – before prosecutors commence a full investigation. Referrals, complaints, or transfers of materials based on these preliminary reviews have increasingly become the decisive triggers for prosecutorial action. Prosecutors are actively relying on these findings to broaden compulsory investigative measures, including search and seizure. When the prosecution and regulatory agencies work in close co-ordination, raids tend to become broader in scope, longer in duration, and faster in execution.
Rising Exposure of In-House Legal Departments
In this process, corporate in-house legal teams are increasingly being included within the scope of search and seizure warrants. Special judicial police acting under prosecutorial direction frequently seize not only mobile phones but also internal legal documents containing communications with external law firms. Because South Korea has not yet codified an Attorney-Client Privilege (ACP) regime, in-house legal departments remain vulnerable to such investigative intrusions. Companies must therefore act swiftly during raids to secure professional legal assistance, minimise the scope of seizures, and – where necessary – immediately pursue quasi-appeal procedures to challenge unlawful confiscations.
Digital Forensics as a Core Investigative Tool
Digital forensics has now become a standard component of corporate search and seizure operations. Investigators routinely recover deleted data from cloud servers, internal messaging platforms, email systems, and even employees’ personal mobile phones. Companies must accordingly strengthen information security and data management policies in ordinary periods to prevent the creation or neglect of data that may cause unnecessary misunderstandings. Proactive participation in forensic procedures – including attending imaging sessions and insisting on filtering or “screening” measures to exclude irrelevant data – is essential to prevent leakage of sensitive corporate information. As Korean courts increasingly exclude unlawfully collected electronic evidence, rigorously examining the legality of investigative procedures with legal counsel has become a crucial defence strategy.
Structural Changes from Prosecutorial Reform
The direction of prosecutorial reform – centred on the abolition of the Prosecutors’ Office and the separation of investigative and indictment functions – will also significantly reshape the white-collar crime landscape. While specific legislative details remain forthcoming, it is expected that the current prosecution will be divided into an Indictment Office, responsible solely for indictment and trial maintenance, and a Serious Crimes Investigation Agency (SCIA), responsible for major investigations. Combined with ongoing adjustments in investigative authority between police and prosecutors, this structural shift creates substantial uncertainty in investigative practice. Questions about jurisdiction – whether a case falls under the police, the SCIA, or another newly created body – may cause delays or inconsistent treatment between agencies. For companies, the practical impact of these structural reforms is the increasing unpredictability and potential lengthening of investigative timelines. The prosecution previously served as a centralised control tower co-ordinating complex white-collar investigations. Its dissolution and the redistribution of authority may lead to jurisdictional disputes and overlapping investigations, placing companies in prolonged legal uncertainty. As agencies may seek to demonstrate their competence in high-profile corporate cases, there is a risk of parallel or competing investigations into the same matter. This may force companies to defend identical facts before multiple investigative bodies applying different legal theories. In highly technical financial and corporate crime matters, such fragmentation poses significant risks. Companies must therefore engage legal advisors early to navigate jurisdictional issues and respond flexibly to the rapidly changing investigative structure.
New Regulation of Virtual Asset and Crypto Markets
Turning to specific legislative developments, the enforcement of the Virtual Asset User Protection Act in July 2024 has opened a new chapter in digital asset regulation. The Joint Investigation Centre for Crypto Crimes at the Seoul Southern District Prosecutors’ Office is investigating unfair trading practices – such as price manipulation, use of material non-public information, and fraudulent transactions –with an intensity comparable to that applied to traditional capital markets crimes. This trend affects not only fintech and virtual-asset operators, but also traditional financial institutions and IT companies collaborating with them. Authorities are strengthening economic sanctions, including substantial criminal penalties and punitive fines proportional to unfair gains. Companies must therefore enhance internal control standards and establish systems that fundamentally prevent the misuse of non-public information by employees.
Continued Enforcement Under the Serious Accident Punishment Act (SAPA)
Now in its fourth year of enforcement, the SAPA continues to represent one of the most significant risks for corporate management in Korea. Investigators are moving beyond assessing the negligence of on-site managers and are instead scrutinising whether CEOs have established safety and health management systems and fulfilled their duty to conduct substantive site inspections. Recent court rulings and prosecutorial trends demonstrate that merely maintaining formal safety manuals is insufficient to shield executives from criminal liability. Companies must redesign safety governance frameworks and accumulate evidence showing that management personally monitors safety compliance and provides adequate support in terms of personnel and budget.
Shift Toward Preventive and System-Based Regulation
South Korea’s white-collar crime regulatory regime is shifting from ex post punishment to preventive, system-based monitoring. Investigative authorities are expanding their focus beyond individual misconduct to identifying structural deficiencies within corporate systems. In this environment, proactive risk management is essential. Companies should conduct regular compliance assessments and mock-audit drills to address vulnerabilities. Although heightened regulations may increase short-term burdens, companies with transparent management systems will ultimately gain market trust and strengthen their global competitiveness.