"Unlawful Beneficiaries of Payment from Public Funds to be Punished by Either Imprisonment with Labor for up to Three Years or a Fine of 30 Million Won or Less“

- Revised Act on the Recovery of Public Funds passed at the National Assembly’s plenary session on Feb. 29th

- Punitive sanctions strengthened including by stipulating criminal punishment of an unlawful beneficiary of payments from public funds

- A system of ‘Non-Real Name Report by Proxy’ introduced to expand support for subsidy fraud reporters

(14, Mar. 2024, ACRC)

From now on, a person who fraudulently receives payments* from the public funds will be punished by a prison sentence of 3 years or less or a fine not exceeding 30 million won.

*The term "payment from public funds"means a subsidy, compensation, or contribution provided from public funds under statutes and regulations or municipal ordinances and rules, or other money, goods, etc. offered without any corresponding consideration

In addition, when a person files a report on fraudulent claims for public funds, he/she may use a ‘non-real name proxy report’system which allows reporting by an attorney-at-law without revealing his/her personal identity.

Anti-Corruption and Civil Rights Commission (ACRC, Chairperson Ryu Chul Whan) announced that the revision bill of the Act on Prohibition of False Claims for Public Funds and Recovery of Illicit Profits (the Public Fund Recovery Act) which prescribes the aforementioned passed at the National Assembly’s plenary session on Feb. 29.

According to the revision bill passed this time, sanctions against unlawful beneficiaries of payments from public funds have been strengthened while support for subsidy fraud reporters has been expanded.

The major revisions include: ▲introduction of a criminal punishment against unlawful beneficiaries (at most 3 years in prisonor a fine not exceeding 30 million won); ▲introduction of a provision in the Public Fund Recovery Act to calculate the amount to be recovered after adding interest upon retrieving illicit profits derived from payments from public funds; and ▲reducing the scale of culpability reduction or exemption for voluntary reporters, etc.

On the other hand, institutional improvements to boost support for subsidy fraud reporters, such as introducing a system of Non-Real Name Report by Proxy and inserting a new provision of relief fund payment for reporters’ relatives or cohabitants, have also been made through this revision.

ACRC Acting Director General of Inspection & Protection Bureau Kim Eung Tae said, "Punishments against unlawful beneficiaries of payments from public funds have been more reinforced while support for false claim reporters hasbeen expanded with the Public Fund Recovery Act revised this time.From now on, ACRC will strive to actively make institutional improvements in order for the public fund leakage not to take place."