The Ministry of Trade, Industry and Energy demanded strong disciplinary action against the Korea Chamber of Commerce and Industry over a report at the center of a disinformation dispute early this year, even after outside law firms advised the ministry that criminal charges or damage claims for defamation or obstruction of business would be difficult to sustain. Although the KCCI acknowledged errors and issued a correction and a formal apology, the ministry pressed ahead with efforts to pursue criminal measures, prompting concern that the move could discourage business groups from carrying out their core functions of making policy recommendations and conveying industry views.
According to materials the ministry submitted on the 6th to Rep. Choi Soo-jin of the People Power Party, a member of the National Assembly's Trade, Industry, Energy, SMEs and Startups Committee, the ministry received responses from multiple law firms before notifying the KCCI of its audit findings, all saying it would be difficult to bring criminal charges for defamation or obstruction of business or to seek damages. The audit findings nonetheless called for strong disciplinary action against those involved. The KCCI ultimately dismissed its executive vice chairman and the head of the division responsible for the report.
The KCCI had released a report titled "Analysis of Inheritance Tax Revenue Projections and the Effects of Diversifying Payment Methods" on Feb. 4. The report drew criticism on several counts: it cited foreign data that had already been faulted as unreliable, and it attributed cases of renounced Korean nationality to the inheritance tax even though the underlying statistics did not specify the reasons. President Lee Jae-myung later referred to the report on social media, calling it deliberate disinformation. The ministry then convened an emergency review meeting with six business organizations and said it would hold those responsible strictly accountable.
As part of the follow-up, the ministry sought legal advice around Feb. 19 from the law firms Gangnam and Siwoo on whether the case could support punishment. It specifically cited Article 307 of the Criminal Act on defamation, Article 314 on obstruction of business, Article 70 of the Information and Communications Network Act on online defamation, and other civil law provisions, asking whether civil or criminal liability could be pursued beyond internal disciplinary measures. Choi said it was excessive for the supervising ministry to move toward criminal punishment of a statutory business organization even after the KCCI had corrected the facts and issued a formal apology.
All of the law firms retained by the government replied that legal action over the case would be difficult. They cited a Supreme Court ruling holding that the state and local governments cannot be victims of defamation, and said the statement that "an inheritance tax reaching 50% to 60% is a major factor accelerating the outflow of capital overseas" was not by itself enough to establish the intent to disparage required for defamation. On obstruction of official duties, the firms said the charge might not be recognized because it requires specific circumstances showing that the work in question was actually hindered. As for damages, the analysis found the KCCI was unlikely to be a proper target of a claim under the Press Arbitration Act.
The ministry notified the KCCI of its audit findings around March 20 despite that advice, and the KCCI dismissed the officials involved. An opposition party official said the government had pressed for details on what specific grounds might preclude liability and had even considered designating staff from the industry ministry or the Ministry of Economy and Finance to carry out litigation, adding that it went on to force out executives of a private business organization while knowing there was no legal basis.
Choi noted that Industry Minister Kim Jung-kwan himself had said he hoped business groups' core activities of making recommendations to the government and gathering members' views would not be discouraged. Even if there were problems, she said, an excessive government response would end up limiting the voice of business organizations.
