Businesses seek tougher punishments for industrial espionage

The Korea Times

The Korea Times

Business

Tue, October 3, 2023 | 15:26

Companies

Korean businesses seek tougher punishments for industrial espionage

Posted : 2023-06-08 15:12

Updated : 2023-06-09 08:21

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By Park Jae-hyuk

Frequent leaks of Korea's trade secrets to companies overseas have prompted domestic businesses to seek tougher punishments for industrial espionage, according to industry officials, Thursday.

The big business lobby group, Federation of Korean Industries (FKI), recently sent a letter to the Supreme Court's Sentencing Commission, asking for revisions to existing sentencing guidelines.

"Although continuous leaks of semiconductor, battery and autonomous car technologies to other countries have threatened the survival of Korean companies and the nation's competitiveness, people who steal trade secrets have received only light punishments," the FKI said in the letter.

Earlier this year, a former Samsung Electronics engineer was sentenced to 18 months in jail with the term suspended for two years for allegedly leaking the company's semiconductor technology to Intel.

A former researcher at Semes, a subsidiary of Samsung Electronics, was given a four-year prison sentence in February for manufacturing and selling 71 billion won ($54 million) worth of equipment to Chinese firms by illegally using Samsung's trade secrets. Six accomplices to the crime were sentenced to two years and six months in jail, while two other collaborators were fined.

The Act on Prevention of Divulgence and Protection of Industrial Technology stipulates that people who leak core technology, designated by the government, to companies in other countries are subject to at least three years in jail or a fine of up to 1.5 billion won ($1.1 million). Those who leak other types of industrial technologies are subject to up to 15 years in jail or a maximum fine of 1.5 billion won.

However, only two among 33 violators of the law in 2021 received jail terms and penalties, according to data compiled by the Supreme Court, because the current sentencing guidelines grant eased punishments to first-time offenders and those who say they regret their crimes.

In contrast, Taiwan, home to TSMC, Samsung's chief rival in the chip industry, regards the leakage of industrial technology as espionage. As a result, people caught leaking Taiwan's core technology to China, Hong Kong, Macao and other foreign territories are sentenced to at least five years in jail and fined up to 100 million Taiwan dollars ($3.2 million).

U.S. federal courts can impose prison terms of up to 33 years and nine months on people who leak industrial technology amounting to more than $550 million.

"Amid the intensifying global competition to hold dominant positions in cutting-edge technologies, leaking industrial technologies to foreign countries should be treated as a serious crime, as it not only damages individual companies but also harms national competitiveness," said Choo Kwang-ho, head of the FKI's economic research division.

National Intelligence Service data showed that the spy agency discovered 93 leaks of industrial technology to foreign companies from 2018 to 2022.

In response to growing calls for stricter measures, lawmakers of both the ruling and opposition parties have proposed bills recently to impose harsher punishments on people who leak industrial technology to foreign countries.

pjh@koreatimes.co.kr