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  • Writer's pictureMichael Amelio

South Korea to strengthen penalties for tech leaks in chip and display industries

South Korea has declared its intent to intensify penalties for the theft of industrial secrets, responding to concerns that the existing regulations lacked the necessary strength to discourage attempts at appropriating technologies from major companies like Samsung.

The country has been actively clamping down on technology leaks in recent times, striving to uphold its diminishing advantage in memory chips and displays against rival contenders. The Sentencing Commission of South Korea, under the oversight of the Supreme Court of Korea, has made the decision this month to enhance the severity of punishments and extend the durations of imprisonment for instances of leaking South Korean technology. The Ministry of Industry issued a statement on Monday confirming this move. Specifics regarding the updated sentencing criteria are anticipated to be unveiled early next year.

While the ministry did not explicitly identify the nation being targeted, analysts have indicated that China is likely the predominant destination for the bulk of South Korean technology leaks. While the penalties for technology leaks in South Korea mirror those in other countries, including prison terms of five years or more for leaking technology of "significant impact on national and economic security," the practical implementation of sentencing often falls short due to stringent requirements that are hard to fulfill, as noted by the industry ministry.

Former regulations demanded that prosecutors demonstrate a suspect's deliberate intent to disclose classified information in order for an action to be classified as a core technology leak. This criterion resulted in acquittals in 30% of cases and suspended sentences in 54% of cases within the South Korean court system, according to the ministry.

Additionally, revisions to the existing legal framework are set to be introduced, encompassing measures to prevent technology leaks in situations that were previously unregulated. For instance, leaks that occur subsequent to the acquisition of a South Korean company by a foreign private equity fund will now be included in the amended draft law, which is slated for submission to the parliament.

South Korean law enforcement reported in June that they had apprehended 77 individuals across 35 cases related to suspected industrial espionage in a nationwide investigation spanning the past four months.

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