South Korea Plans to Abolish Breach of Trust Crime, Ease Corporate Penalties

South Korea is set to abolish the crime of breach of trust, a move aimed at easing excessive legal risks that hinder normal business decisions and corporate activities. The breach of trust offense, criticized for its vague requirements and broad scope, carries some of the toughest penalties including up to 10 years in prison or heavy fines, making South Korea one of the few countries to treat such breaches as criminal offenses. The government and the ruling Democratic Party, led by President Lee Jae Myung's directive, plan to replace certain criminal punishments with administrative fines and punitive damages where criminal sanctions are deemed excessive or ineffective, particularly to support small- and medium-sized enterprises and the self-employed. While easing criminal penalties, authorities will first impose administrative punitive actions against minor misconduct to maintain regulatory oversight. This reform is part of a broader initiative to revise 30 percent of economic criminal penalties this year, aiming to protect entrepreneurs and stimulate investment by creating a more business-friendly environment. The government will also clarify and narrow the scope of breach of trust offenses through expert consultations to prevent legislative gaps.