U.S. Foreign Corrupt Practice Act Basics For Companies Doing Business In Korea

If you are working for a U.S. company with operations in Korea or for a company headquartered in most other developed economies, you may be subject to anti-corruption laws in both your home jurisdiction and Korea. Violations often occur unintentionally through routine interactions with Korean government officials or quasi-government entities, or even by actions by your agents.

To avoid potential criminal liability, civil fines, reputational harm, or harm to your employer doing business in Korea, it is essential to understand what constitutes a “corrupt payment” under the U.S. Foreign Corrupt Practices Act (“FCPA”) and similar global anti-bribery regimes.

Before engaging in any conduct that could be interpreted as providing an improper benefit to a Korean government official or permitting an employee, consultant, or agent to do so, you should consult legal counsel in Korea that retains international attorneys with global trade law experience.

What Is a “Corrupt Payment” Under the U.S. FCPA?

The term “corrupt payment” under the U.S. FCPA includes giving, offering, or promising anything of value to a foreign government official with the intent to:

1. Influence an act or decision of the official in their official capacity;
2. Induce an official to act or refrain from acting in violation of their lawful duty;
3. Secure improper influence over an official’s discretionary authority or the functioning of their office; or
4. Obtain any improper business advantage, including permits, approvals, non-enforcement, tax benefits, or regulatory leniency.

Importantly, liability may be triggered even if no payment is made if the offer, promise, or agreement itself is deemed corrupt.

Common Activities in Korea That May Trigger U.S. FCPA or Korean Anti-Corruption Law Concerns

The following activities often lead to investigations or violations for foreign companies doing business in Korea:

1. Paying for Travel, Lodging, or Related Hospitality

A violation may exist where:

• Travel or accommodation is paid without strict compliance with internal protocols and law;
• Family members of the official are included in travel benefits;
• The trip’s primary purpose is entertainment or leisure rather than business; or
• The itinerary or documentation is insufficient to prove legitimate business justification.

2. Giving Gifts Over Minimal Value Limits

Under many corporate compliance policies and U.S. enforcement guidelines, problematic gifts include:

• Gifts exceeding certain defined thresholds;
• Repeated small gifts to the same individual; and
• Items that could appear to influence discretionary acts (luxury items, electronics, etc.).

Korea’s local statute, the Improper Solicitation and Graft Act (Kim Young‑ran Act), also restricts gift values for domestic officials and public-sector employees.

3. Meals and Entertainment

Risky scenarios include:

• Meals exceeding certain defined thresholds;
• Recurring meals with the same official; and
• Entertainment that cannot be justified as directly related to business discussions.

4. Hiring or Compensating Relatives of Government Officials

Employment, internships, or consulting arrangements with family members of Korean government officials, even if qualified, can be deemed an improper attempt to influence the official.

5. Actions Taken by Agents, Intermediaries, or Third Parties

The U.S. FCPA holds companies liable for indirect corrupt payments made by:

• Consultants, brokers, attorneys, customs agents, fixers, or subcontractors;
• Joint-venture partners; and
• Distributors or resellers.

A company cannot simply “hide behind” a local partner; knowledge, willful blindness, or ignoring red flags may still result in liability.

Final Takeaway

Foreign companies operating in Korea face a complex mix of U.S. anti-corruption laws, Korean statutes, and internal compliance obligations. Because many Korean institutions are considered governmental or quasi-governmental, even routine interactions can trigger scrutiny. When in doubt, consult counsel before offering anything of value to a Korean official or allowing employees, agents, or partners to do so.
 

by Sean Hayes

Sean Hayes is a leading international lawyer and the founding partner of IPG Legal, one of Korea’s most recognized law firms for international business and dispute resolution. A former professor of law and the first non-Korean to serve the Korean court system, Hayes has built a distinguished career advising multinational corporations, governments, and entrepreneurs on complex legal and regulatory matters in Korea and abroad. His practice focuses on cross-border litigation, corporate law, antitrust, and international arbitration, with particular expertise in navigating Korea’s legal and business environment. Known for his pragmatic, strategic approach, and deep understanding of both Western and Korean legal cultures, Sean Hayes is frequently cited by major international media and legal publications.