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Press Release
ACRC works on enactment of Public Funds False Claims Act
- Date2015-01-08
- Hit1,490
September 30, 2014
The ACRC is seeking to enact a law to eliminate false claims for public funds including the budget of public institutions, aiming at preventing the leakage of public funds and enhancing the level of transparency across society.
The law, tentatively called "the Public Funds False Claims Act," would prohibit the act of doing damage to public funds or gaining illicit benefits by making false claims against public institutions. The law would also stipulate the recovery of undue benefits derived from such an act.
So far, a public perception of public funds including subsidies and grants as easy money has led to many cases where people made false or overstated claims in such various areas as welfare benefits and business support subsidies. If the bill is passed, the illicit gains from those false claims shall be fully recovered regardless of whether the fraud was committed intentionally or by negligence. Moreover, those who repeatedly make such false claims can be subject to an additional penalty of as much as up to five times the amount of illegally gained money.
Meanwhile, as for the cases of a contract, an agreement or any other relationship between a public institution and a private person which has been struck on an equal footing, the public institution should file a law suit to the court to claim damages ranging from two to five times the amount of money lost from a fraudulent or false claim.
In the case that the legal arrangements regarding the additional penalty for a false claim have been established, the claimant is prohibited from engaging in business projects or programs contracted out from the public institution for up to two years. And the public institution should notify such cases to other public institutions. In addition, to improve the effectiveness of sanctions, the ACRC can publicly disclose the list of repeated violators.
Any person can make a report of a case where a false claim has been filed or is likely to be filed to the public institution concerned, its supervisory institution, the Board of Audit and Inspection, investigative agencies or the ACRC. And a public official would be under a reporting obligation when he or she happened to know that there is a false claim made in the course of his or her performance of duty.
A variety of protective measures for the reporting person will be in place such as prohibition and cancellation of disadvantageous action against the reporter, confidentiality, physical protection and mitigation of culpability. The reporter can be given financial reward of up to KRW 2 billion (USD 2 million). The law would also impose punishment on those who revealed the identity or personal information of the reporter or took disadvantageous measures against the reporter.
The ACRC is planning to develop and submit the final draft of the bill to the National Assembly by the end of this year after gathering opinions through public discussion forums and consultation with related government agencies.
The ACRC is seeking to enact a law to eliminate false claims for public funds including the budget of public institutions, aiming at preventing the leakage of public funds and enhancing the level of transparency across society.
The law, tentatively called "the Public Funds False Claims Act," would prohibit the act of doing damage to public funds or gaining illicit benefits by making false claims against public institutions. The law would also stipulate the recovery of undue benefits derived from such an act.
So far, a public perception of public funds including subsidies and grants as easy money has led to many cases where people made false or overstated claims in such various areas as welfare benefits and business support subsidies. If the bill is passed, the illicit gains from those false claims shall be fully recovered regardless of whether the fraud was committed intentionally or by negligence. Moreover, those who repeatedly make such false claims can be subject to an additional penalty of as much as up to five times the amount of illegally gained money.
Meanwhile, as for the cases of a contract, an agreement or any other relationship between a public institution and a private person which has been struck on an equal footing, the public institution should file a law suit to the court to claim damages ranging from two to five times the amount of money lost from a fraudulent or false claim.
In the case that the legal arrangements regarding the additional penalty for a false claim have been established, the claimant is prohibited from engaging in business projects or programs contracted out from the public institution for up to two years. And the public institution should notify such cases to other public institutions. In addition, to improve the effectiveness of sanctions, the ACRC can publicly disclose the list of repeated violators.
Any person can make a report of a case where a false claim has been filed or is likely to be filed to the public institution concerned, its supervisory institution, the Board of Audit and Inspection, investigative agencies or the ACRC. And a public official would be under a reporting obligation when he or she happened to know that there is a false claim made in the course of his or her performance of duty.
A variety of protective measures for the reporting person will be in place such as prohibition and cancellation of disadvantageous action against the reporter, confidentiality, physical protection and mitigation of culpability. The reporter can be given financial reward of up to KRW 2 billion (USD 2 million). The law would also impose punishment on those who revealed the identity or personal information of the reporter or took disadvantageous measures against the reporter.
The ACRC is planning to develop and submit the final draft of the bill to the National Assembly by the end of this year after gathering opinions through public discussion forums and consultation with related government agencies.
