South Korea to toughen punishments for technology leaks in chips, displays

SEOUL (Reuters): South Korea said on Monday it will toughen sentencing for stealing industrial secrets, after concerns that current regulation was not strong enough to deter attempts to funnel technologies from companies like Samsung (005930.KS).

South Korea has been cracking down on technology leaks in recent months, as the country seeks to maintain its dwindling lead in memory chips and displays against competitors.

South Korea’s Sentencing Commission, overseen by the Supreme Court of Korea, decided this month to toughen punishments and lengthen jail times for leaking South Korean technology, the industry ministry said in a statement on Monday. Details on the new sentencing guidelines are expected early next year.

The industry ministry did not say which country it is targeting, but analysts said China is the suspected destination of the bulk of South Korean technology leaks.

Although South Korea’s penalties for technology leaks are similar to those in other countries, including jail terms of five years or more for leaking technology with “significant impact on national and economic security”, in practice sentencing falls short due to hard-to-meet requirements, the industry ministry said.

Previous rules required prosecutors to prove a suspect’s intent to leak secrets for an action to be punished as a core technology leak. This led to acquittal in 30% and suspended sentences in 54% of such cases before South Korean courts, it said.

Rules to block technology leaks that had not been regulated, such as leaks after a foreign private equity fund buys out a South Korean company, will also be included in a revised draft law to be submitted to parliament, the ministry said.

South Korean police said in June they had arrested 77 people in 35 cases of suspected industrial espionage in a nationwide investigation over the past four months.