Kijun Times

GrapNam Kyung-don/The Korea Herald)
Korea’s civil servants, elected officials, journalists and officials of private educational institutions must soon abide by this new discipline: They cannot receive free meals that cost more than 30,000 won ($27), presents worth over 50,000 won or monetary gifts valued 100,000 won or higher.

The Improper Solicitation and Graft Act -- or the Kim Young-ran law, named after its initiator and the former chief of the Anti-Corruption and Civil Rights Commission -- is poised to reshape the country’s culture in which generous hospitality and presents had been considered an inseparable part of business. 

Scheduled to take effect Sept. 28, the legislation rules that violators face a fine of up to 30 million won or imprisonment for a maximum of three years, whether or not there is a direct link between the gift and a favor.

The reformative act is expected to help address the lingering dark sides of breakneck economic development and democracy, advocates say.

Last year, Korea ranked 37th among 168 nations and 27th among Organization for Economic Cooperation and Development members in the annual corruption perceptions index released in January by Transparency International, a Berlin-headquartered antigraft group.

“If Korea’s transparency improves toward the OECD average level, however, its per capita gross domestic product may further rise by an annual average of $138.50, and the overall growth rate by 0.65 percentage points, based on the 2010 level,” Hyundai Research Institute wrote in a report commissioned by the ACRC.

Yet the law has kindled backlash, especially among cattle growers, fruit farmers and fishermen as well as small and mid-sized businesses. Their yearly heyday comes around the Chuseok and Lunar New Year’s holidays, during which many people give and receive expensive gift sets such as those consisting of high-quality beef, homegrown fruit and fish in a display of gratitude and respect.

Critics say the forthcoming law’s amount ceilings fail to reflect current consumer prices, raising concerns the upcoming change in longstanding customs might take a heavy toll on already sluggish domestic spending.

In a recent survey of 61 major companies by the HRI, nearly 58 percent of respondents said the legislation would have “some impact” on the economy, while around 34 percent predicted little or no effect.

Almost 32 percent expected to cut their entertainment and gift expenses by as much as 10 percent, and saw 50,000 won as a reasonable threshold for meal costs.

Efforts to amend the law have emerged as some lawmakers and officials, including President Park Geun-hye, have relayed worries about the law being too strict. But the atmosphere has shifted since the Constitutional Court’s ruling late last month in favor of the act, with supporters saying now is the time to enforce it as it is and any revisions, if necessary, should be explored later.

“Any floating of the need for an adjustment, especially on fears of a negative economic effect even before the act takes effect, would only undermine its cause,” Transparency International Korea said.

“The president and the government should stop their remarks and attempts to dent the legislation and work more for the implement of the related decree. If further discussions are needed, we can do that later and reach social consensus.”

Signs of change are already emerging across the sectors. The central and local governments and industry associations have been holding sessions to brief their employees and members on the legal boundaries and discuss countermeasures.

The Korea Automobile Importers & Distributors Association, for instance, is scheduled to have a similar seminar later this month, as the law would bring an inevitable change in the industry’s customary practices. In the past, they have picked top-class hotels for their new model releases and trial run ceremonies, which would often entail a two-day countryside tour with reporters.

Restaurants are also striving to adapt to the change, recrafting their menus by simplifying table settings or changing the type of cuisine.

The sentiment is apparent around Insa-dong and Gwanghwamun, which are dotted with traditional Korean restaurants frequented by government officials and lawyers. Some, including one that has long served top policymakers including former President Lee Myung-bak and U.N. Secretary-General Ban Ki-moon, have slightly lowered prices for their dinner packages, while others introduced new meal options at 29,000 won.

“We’re concerned our regulars will turn away on worries they may break the law,” said the owner of a Korean restaurant who has cut costs of dinner meals. “As many of our packages are a little above the limit, we will focus on selling single-dish menus and less drinks.”

Despite anticipated confusion and lingering controversy regarding the law’s interpretation, advocates argue its long-term benefits will outweigh the possible economic downside, which they say has to be tackled anyway for the economy to take a leap forward.

“There must be some struggle in the initial stages,” an official at the ACRC told The Korea Herald, acknowledging the need for elucidation.

“Those in public offices would do just fine given existing various regulations governing their behavior, while private schoolteachers are also subject to a code of conduct that could be even stricter than the latest law. But members of media, a wholly private domain, wouldn’t be familiar with such a rule.”