Bahk Eun-ji has been with The Korea Times since 2012, building a career across multiple desks. She began at the Business Desk, where she conducted in-depth interviews with key figures in Korea's corporate world. Later, she moved to the Politics & City Desk, focusing on education policy and social affairs. She later served as team leader of the digital content team, leading curation efforts on the newspaper’s homepage and reshaping print stories for social media audiences to enhance digital reach. Now back on the Politics Desk, she covers the National Assembly and the Ministry of National Defense, with a renewed focus on political developments.
Gov't to abolish breach of trust charge in criminal law
Kim Byung-kee, left, floor leader of the ruling Democratic Party of Korea, speaks with Finance Minister Koo Yun-cheol during a party-government consultation on economic penalty reforms at the National Assembly in Seoul, Tuesday. Yonhap
By Bahk Eun-ji
PPP slams plan to drop breach of trust charge, accuses DPK of shielding president
The government has confirmed plans to abolish the breach of trust offense under the Criminal Act, a longstanding provision widely criticized for discouraging corporate decision-making, saying the move is intended to ease regulations and encourage bolder business initiatives.
In Korea, breach of trust is a widely applied criminal provision that targets executives and officials who use their positions to benefit themselves or associates, often resulting in financial losses for the company, organization or party whose funds were mismanaged.
Finance ministry officials said the measure is part of a broader overhaul of economic criminal penalties, but opposition lawmakers have condemned it as a political move intended to shield President Lee Jae Myung from his ongoing trials. Lee faced several criminal charges when he ran for president, most notably tied to a land development project while he was mayor of Seongnam in Gyeonggi Province.
The ruling Democratic Party of Korea (DPK) and the government on Tuesday presented their initial package of reform measures during a policy meeting at the National Assembly.
The plan includes eliminating the breach of trust charge and amending 110 provisions in laws such as the Minimum Wage Act and the Labor Standards Act. Minor offenses will incur administrative fines, while major economic crimes will face stronger financial penalties, including punitive damages.
Finance Minister Koo Yun-cheol said the government’s goal is to rein in the excessive criminal liability that has been discouraging corporate investment.
“For too long, overly broad and vague statues have forced business leaders to second-guess normal management decisions for fear of prosecution,” he said. “We will preserve strict penalties for serious offenses, but companies must be able to operate with predictability.”
The Ministry of Justice emphasized that the change is not simply a repeal. Instead, justice ministry officials plan to introduce narrower provisions that clarify who can be charged, what conduct is punishable and how penalties are applied.
Rep. Kim Do-eup, policy chief of the People Power Party, speaks at the National Assembly in Seoul, Tuesday, expressing his party’s stance on the government and the Democratic Party of Korea’s plan to abolish the breach of trust charge. Yonhap
A ministry official explained that in recent years the offense had been applied so broadly — ranging from misuse of corporate funds to unauthorized land sales by local associations — that even noncorporate actors found themselves facing charges.
“This has created an unpredictable environment, which is why we are pursuing clear replacement legislation,” the official said.
The government will introduce protections for responsible employers, shielding companies from automatic criminal liability if an employee violates wage or contract rules despite compliance measures.
Additionally, routine oversights, such as failing to report minor administrative changes, will result in fines rather than prison sentences. An official of the finance ministry stated, "No one should become a criminal simply for missing a reporting deadline or forgetting to file a document."
These reforms follow the president’s directive in July to reduce economic criminal provisions by 30 percent within a year. Business groups have long argued that Korea’s regulations, numbering more than 6,000, stifle entrepreneurship and place small firms at disproportionate risk of legal action.
Nevertheless, the main opposition People Power Party (PPP) rejected the government’s rationale, claiming that abolishing the breach of trust charge was a deliberate attempt to protect the president.
PPP floor leader Song Eon-seog argued that the reform would directly affect Lee’s ongoing trials relating to the Daejang-dong and Baekhyeon-dong development scandals. “The DPK can call this corporate reform, but everyone sees it for what it is: a law to save Lee Jae Myung from criminal liability,” he said.
Kim Do-eup, the PPP’s policy chief, echoed this criticism, describing the reform as “an amnesty for executives and politicians alike.” He warned that abolishing the offense would leave minority shareholders, employees and small investors more vulnerable to managerial abuse. “What they call a business-friendly Korea is in fact a haven for lawbreaking tycoons,” he said.
The DPK countered that the reform debate predates Lee’s presidency, pointing out that business associations and previous governments have repeatedly sought changes.