Knowledge · B2B Sales

Anti-Graft Act · Sales Ethics

Improper Solicitation and Graft Act

📂B2B Sales⏱2 min read📊Beginner🔗7 related

What Is the Anti-Graft Act?

In one line
A law that prohibits improper solicitation and the provision of money or valuables to public officials, journalists, private school staff, and others, setting the standard for what is allowed in sales entertainment and gift-giving.
⚡ Summary in 3 lines
  • Covers public officials, journalists, private school teachers, and their spouses
  • Two pillars: a ban on improper solicitation and a ban on accepting money or valuables
  • The Giver Is Punished Too — When in Doubt, Don't

What the Anti-Graft Act really changed is the order in which sales reps decide. Entertainment and gifts used to be a matter of budget and relationship, but since the law, the order is to confirm the recipient’s status and job relevance first, and only then discuss cost. For sales teams serving public-sector, school, and hospital customers, the first thing checked, even before the proposal, is whether you can explain whom you met and what you gave them. Doors once opened by relationships now have to be opened with materials and records.

Three boundaries often cause confusion in practice. First, the monetary limits are an exception that applies only for the purposes of 'smooth performance of duties, social courtesy, and ceremonial custom'; staying under the cap is not a blanket permit. The current enforcement decree sets caps of KRW 50,000 (≈ US$37) for meals, KRW 50,000 (≈ US$37) for gifts (KRW 150,000 (≈ US$110) for agricultural and fishery products and processed goods, and KRW 300,000 (≈ US$225) during the Lunar New Year and Chuseok periods), and KRW 50,000 (≈ US$37) for congratulatory and condolence money. It is amended often, so check again right before you act. Second, even with no job relevance, exceeding KRW 1 million (≈ US$750) at one time or KRW 3 million (≈ US$2,240) per year is subject to criminal penalties. Third, a training company must separately handle the honorarium standards and the prior report to the employing agency when inviting public officials as instructors or review panelists. The key difference from bribery: the offense is established even without proving a quid pro quo.

The incidents that actually blow up in the field are not secret entertainment but bulk holiday gift mailings. A client list sitting in the CRM gets used as is, contacts at public institutions, public universities, and public hospitals slip into the batch, and the recipient returns the gift, which triggers a report to the audit department. Excuses such as “it was under KRW 50,000, (≈ US$37)” “it was my own money, not a corporate card,” or “our dealer sent it, not us” don't work. The giver can also face fines or criminal penalties, and under the dual-liability provision the company itself becomes subject to investigation. The basic rule in practice is to send nothing to anyone involved in a bid that is still open, even below the limit, and when in doubt, asking in writing before you send is always cheaper than explaining after the fact.

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💡 In plain English
Think of it like a speed limit sign. “It was common practice” won't get you out of a speeding ticket.
Why it matters in practice
For sales teams working the public-sector, school, and hospital markets, a single unwitting habit can put both the company and the individual at risk. This is where compliant sales training starts.
Origin and sources

It is the Act on the Prohibition of Improper Solicitation and Provision of Money and Valuables, enacted in 2015 and effective September 2016. It is also known as the Kim Young-ran Act, after the former chair of the Anti-Corruption and Civil Rights Commission who proposed it.

Source · Act on the Prohibition of Improper Solicitation and Provision of Money and Valuables (effective 2016)
An example

Consider a hypothetical case. Company A is a corporate training firm with 52 employees and KRW 8 billion (≈ US$5,985,300) in annual revenue. Every Chuseok, it sent gift sets worth about KRW 30,000 (≈ US$22) to 1,200 clients. This year, however, bids for leadership training at three public institutions under a local government were all clustered in September, and the contacts at those institutions were still on the mailing list.

  1. Deputy Manager Kim of sales planning re-sorted the 1,200-entry mailing list by affiliated organization and separated out 87 people at public institutions, national and public universities, and public hospitals.
  2. Legal manager Lee applied a full halt on sending, even below the limit, to the 21 people at the 3 institutions with bids in progress, and decided to send the other 66 a greeting card only instead of a gift.
  3. The head of sales told team leaders, "If we can’t send gifts, create a reason to meet," so they prepared a 40-page case study of public-sector training wins and a free organizational diagnostic session as alternative ways to stay in touch.
  4. When inviting the head of a public institution’s training team to speak at an internal seminar, we first asked that institution’s audit team about the honorarium cap and the advance-reporting procedure for the speaker’s home organization, and proceeded only after receiving a written reply.
  5. After canceling all 87 gifts and replacing them with a case study book and a webinar, 41 of the 87 invitees attended the webinar, the team won 2 of 3 bids in September, and there were no returned items or audit reports.
Related terms
B2G · Public Bidding · KONEPSBusiness to Government: selling to central and local governments and public institutions. Most opportunities are posted as open bids on the Public Procurement Service’s KONEPS system, a rules-based market with set procedures and evaluation criteria.ComplianceThe activities and systems that keep a company in line with laws, regulations, and internal rules. A core pillar of corporate compliance programs and internal control.RFP · Request for ProposalA formal document in which a buying organization asks multiple suppliers to submit proposals under stated conditions (Request for Proposal).GatekeeperIn B2B sales, a person (such as an assistant, administrative staffer, or purchasing officer) who guards the path to the decision maker and controls access to information and contact.Bidding Methods · Private Contracts vs. Competitive BiddingWays of choosing a contract counterparty in public and corporate purchasing: competitive bidding, which is open to wide participation, and private (negotiated) contracts made directly with a specific party.Season’s Greetings · Year-End Customer AppreciationA B2B marketing activity in which you send thanks and a small gift to customers, prospects, and partners at year-end or New Year, reaffirming this year’s relationships and opening the door to next year’s conversations.Sales Entertainment Expense Management · Limits and DocumentationA control system for approving and recording entertainment spending in the sales process (meals, gifts, condolence and congratulatory payments) within internal policy, tax-law limits and documentation requirements, and the Anti-Graft Act.
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Last updated 13 Sep 2026 · Reviewed by John Kim

FAQ

The Anti-Graft Act applies directly to public officials and similar persons. Even in the private sector, however, such conduct can amount to breach of trust or violate internal ethics rules, so separate standards are needed.
Exceptions are allowed only within the limits set by the Enforcement Decree, and the amounts can be revised. It is safer not to hard-code figures into training materials and instead point people to the latest text of the law.
Yes. Both the giver and the recipient are covered, and under the dual-liability provision the company can be held responsible too.
Check three things: whether the recipient is covered, whether there is a job-related connection, and whether it can be documented. If in doubt, don't do it. We recommend setting up an in-house legal review step.