Improper Solicitation and Graft Act | Supreme Court Recognizes Objection Regarding the Method of Valuing Hospitality

Under the Improper Solicitation and Graft Act, it is provided that 'a public official or the like shall not, regardless of whether it is related to his or her duties and regardless of any pretext such as a donation, sponsorship, or gift, receive, demand, or promise money, goods, or other valuables exceeding one million won on a single occasion or three million won in each fiscal year from the same person.'

In addition, such 'money, goods, or other valuables' include the provision of food, alcoholic beverages, golf, and other entertainment or hospitality, and a public official who receives money, goods, or other valuables in or above a certain amount that is prohibited as described above, as well as the person who provides them, is subject to criminal punishment.

In this case, the defendants allegedly provided a public official, namely a prosecutor, with alcoholic beverages and food worth approximately 1.45 million won at an entertainment establishment, thereby providing hospitality exceeding one million won on a single occasion.

The Supreme Court held that, where hospitality is consumed together with the provider, who pays the money required for it, the value of the hospitality received by the defendant should be assessed by first distinguishing the cost expended on entertaining the defendant from the cost consumed by the provider, treating the former amount as the value of the hospitality received by the defendant, and that, if the cost attributable to each person is unclear, the amount obtained by dividing it equally should, absent special circumstances, be recognized as the value of the hospitality received by the defendant.

In this case, besides the provider and the defendants, there were other attendees, who joined the gathering later, so that the value of the hospitality cannot be assessed identically as between the defendants and the other attendees.

The Supreme Court ruled that the lower court's method of valuation, which simply divided the total cost of the gathering in this case into two segments based on the time at which the other attendees, the non-indicted persons, left and equally apportioned the cost of each segment among the attendees, was not appropriate, because it produced a result that did not properly reflect the value of the hospitality enjoyed by each attendee.

The position is that, where attendees changed during the provision of hospitality so that there were considerable differences in the attendees' arrival times and the duration of their stay, and where there are circumstances under which the value of the hospitality they received cannot be assessed identically in light of the relationships among them, the purpose and circumstances of providing or attending the hospitality, and the details and nature of the hospitality provided, the cost must not simply be divided equally.

The Supreme Court took the view that the lower court should have separated out the value of the hospitality received by the other attendees, which cannot be assessed identically, and then divided the remaining value after deducting it from the total cost, and that, if the value of the hospitality were calculated in this manner, there was a substantial possibility that it would exceed one million won on a single occasion, and accordingly reversed and remanded the lower judgment.

Because the Improper Solicitation and Graft Act may apply in complex and varied situations, the assistance of an attorney experienced in such matters is often needed.

Where a person is suspected of violating the Improper Solicitation and Graft Act, an attorney experienced in such matters can assist in reviewing the alleged facts and the applicable legal principles together with the client, with a view to obtaining a favorable judgment at trial.

Legal advice may also be obtained regarding duty-related conduct, contractual terms, and similar matters.

At Daeryun Law Firm LLP, 🔗attorneys with substantial understanding and experience in corporate, civil, and criminal law provide legal assistance tailored to each client's circumstances.

If you need legal assistance in connection with the Improper Solicitation and Graft Act, you are welcome to contact Daeryun Law Firm LLP.