South Korea Strengthens Penalties to Combat Technology Theft

The Ministry of Industry conveyed this decision in an official statement on Monday.

South Korea has announced its intention to strengthen penalties for the theft of industrial secrets, citing concerns that the existing regulations are insufficient to discourage efforts aimed at siphoning off technological advancements from major companies such as Samsung (005930.KS).

In a bid to safeguard its eroding lead in memory chips and displays against rival contenders, South Korea has been intensifying efforts to curb technology leaks in recent times.

The nation’s Sentencing Commission, which operates under the jurisdiction of the Supreme Court of Korea, has resolved to enhance punishments and extend prison sentences for the illicit dissemination of South Korean technology.

The Ministry of Industry conveyed this decision in an official statement on Monday.

Detailed insights into the revised sentencing guidelines are anticipated to be unveiled in the early months of the coming year.

Although the ministry did not explicitly identify the specific country being targeted, analysts widely suspect that China serves as the primary destination for the majority of South Korean technology leaks.

While South Korea’s penalties for technology leaks are ostensibly comparable to those of other nations, encompassing imprisonment of five years or more for divulging technology with “significant impact on national and economic security,” the actual implementation of these penalties falls short due to demanding criteria, the ministry clarified.

Previously, legal provisions necessitated that prosecutors substantiate a suspect’s intent to disclose confidential information in order for punitive measures to be imposed for a core technology breach.

This approach led to a 30% acquittal rate and suspended sentences in 54% of such cases adjudicated within South Korean courts.

A revised draft legislation, set to be presented to the parliament, will encompass regulations to curb technology leaks that had hitherto remained unaddressed.

This includes instances of leaks occurring subsequent to the acquisition of a South Korean company by a foreign private equity fund.

Providing a context to the urgency of this matter, South Korean law enforcement disclosed in June that, over the past four months, they had apprehended 77 individuals across 35 cases of suspected industrial espionage in a nationwide investigative effort.

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