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Technology leak penalties upped

Industrial espionage is the target as fines and jail time are increased
Jan 04,2019
The government is increasing the protection of key technologies, such as those related to semiconductors and display panels, so they are not so easily leaked to foreign competitors, especially those in China.

In a cabinet meeting led by Prime Minister Lee Nak-yon on Thursday, the government decided to increase penalties against those who illegally transfer technology.

Under the currently law, the penalty for committing espionage involving core national technologies is a maximum of 15 years in jail. The government plans to change the duration to at least three years, with no limits.

People transferring business secrets will face prison sentences of less than 15 years or fines of less than 1.5 billion won ($1.3 million), up from 10 years or less in prison or a fine of less than 100 million won.

Regardless of whether the offense was intentional or the result of gross negligence, the guilty party will have to pay treble damages, while the government will seize all gains realized from the illegal transfer.

The government is also increasing the bounty paid to those reporting industrial espionage, from the current 100 million won to a maximum of 2 billion won, while the investigating agency will be allowed access to financial transaction information to improve efficiency.

Companies that received government support in developing major technologies will now need government approval when engaging in merger or acquisition transactions with foreign companies.

Until now, companies that received government support in the development of core technologies only needed to inform the government of such transactions.

Approvals were only needed when exporting technology.

The government said it will be stepping up protection of national defense-related technologies. Not only will companies guilty of leaking national defense technologies be criminally prosecuted, they will also be prohibited from participating in any future defense-related projects.

The government has decided to include artificial intelligence (AI) and new materials on the list of core technologies. The list includes 64 technologies in 12 categories, including those related to information telecommunications, automobiles, trains, semiconductors, shipbuilding, steel, machinery, nuclear power, aerospace, bioengineering, robotics, displays and electronics.

The government plans to consult on security with 200 companies this year, up from last year’s 170. According to the government, 67 percent of technology leaks are committed by smaller companies, which have relatively less security personnel when compared with large conglomerates.

“Our technologies are being targeted for hijacking,” Prime Minister Lee said. “In order to prevent technologies from being leaked, we need to tighten up internal security and secure technologies and equipment.”

The Ministry of Trade, Industry and Energy said protecting industrial technology along with technology development are vital to Korea’s industrial competitiveness.


BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]