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“South Korea Intensifies Penalties for Tech Leaks in Semiconductor and Display Industries”

“South Korea Intensifies Penalties for Tech Leaks in Semiconductor and Display Industries”

Seoul, August 28th, 2023 (Reuters) – Responding to growing concerns that the existing regulations were insufficient to discourage attempts to siphon valuable technologies from prominent companies like Samsung (005930. KS), South Korea announced on Monday its intentions to reinforce the penalties for industrial espionage. This move comes as the nation intensifies its efforts to safeguard its diminishing lead in memory chips and display technologies in the face of relentless competition.

Over the past few months, South Korea has been diligently ramping up its efforts to combat technology leaks. With an eye on preserving its competitive edge, particularly in the realms of memory chips and displays, the country is taking proactive measures to address this challenge head-on. To this end, South Korea’s Sentencing Commission, under the supervision of the Supreme Court of Korea, has made the pivotal decision to enhance the severity of punishments and extend the duration of prison sentences for individuals found guilty of leaking South Korean technological secrets. This announcement was conveyed by the industry ministry in an official statement on Monday, marking a significant step forward in the nation’s pursuit of technological security. While specific details regarding the revised sentencing guidelines are anticipated to be unveiled early the following year, this proactive stance signifies South Korea’s resolute commitment to safeguarding its technological advancements.

Although the industry ministry refrained from explicitly naming the country that has been suspected of benefiting from these technology leaks, industry analysts point toward China as a likely destination for a considerable portion of South Korean technological leaks. While the current penalties for technology leaks in South Korea may seem comparable to those in other countries, encompassing prison terms of five years or more for breaches that bear a “significant impact on national and economic security,” the practical implementation of these penalties has often fallen short. The industry ministry highlights the challenge posed by stringent requirements that must be met before sentencing can be effectively executed.

Previously, legal proceedings necessitated prosecutors to establish the perpetrator’s intent to leak classified information, resulting in a scenario where a substantial proportion of cases involving technology leaks led to acquittals in 30% of instances and suspended sentences in 54% of cases that reached South Korean courts. This discrepancy in outcomes further underscores the necessity for a comprehensive overhaul of the regulatory framework.

Addressing gaps in the existing regulations, South Korea is set to incorporate new provisions in a revised draft law, which is slated for submission to the parliament. These amendments will encompass areas that have hitherto not been explicitly regulated, such as instances of technology leaks that occur subsequent to a foreign private equity fund acquiring a South Korean company. By adopting a holistic approach to encompass various potential avenues of technology leakage, South Korea aims to establish a more robust foundation for preventing and addressing this pressing issue.

Furthermore, the South Korean law enforcement authorities, specifically the police, have taken proactive steps in combating industrial espionage. In June, they reported the arrest of 77 individuals across 35 cases that were suspected instances of industrial espionage. This nationwide crackdown over the span of four months demonstrates the country’s unwavering commitment to curbing unauthorized access to its proprietary technological advancements.

South Korea’s decision to tighten the reins on technology leaks reflects its determination to safeguard its technological prowess in memory chips and display technologies. By enhancing penalties and amending existing regulations to address evolving threats, the nation is taking a significant stride toward maintaining its competitive edge in the global technological landscape.


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