Happy New Year of the Rooster! Last week marked the beginning of Seollal, or the Lunar New Year, which is one of the most significant holidays in Korea and the greater Asia region. During this celebratory season, multinational companies operating in Korea must be mindful of the regulatory risks involved with exchanging gifts, no matter how well-meaning, particularly as Korea tightens its regulatory grip under the newly enacted Kim Young-Ran Act.
This season is traditionally a time for families and friends to gather, celebrate and offer gifts, and this practice often extends to business partners, government officials, teachers and co-workers. To avoid any appearance of impropriety, companies and their executives should carefully review and reinforce their gift-giving policies and ensure that their employees avoid misconduct under the new Korean law and current U.S. regulatory rules.
Below are a few considerations that companies doing business in Korea should be mindful of:
As demonstrated in recent cases in which an investigation by Korean authorities triggered an investigation by U. S. counterparts, the Korean government continues to maintain close ties with U.S. regulators; likewise, U.S. regulators closely observe the enforcement actions that Korean authorities take. Consulting counsel who is well-versed in cross-border regulatory issues can help minimize risk, flag potential issues and avoid letting graft taint this time of joyous celebration.
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Michael S. Kim, co-founder of Kobre & Kim, serves as lead counsel in high-stakes disputes and investigations.