Anti-Graft Act · Sales Ethics
Improper Solicitation and Graft Act
What Is the Anti-Graft Act?
- 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.
Jaehyuk ParkA hands-on instructor teaching B2B technical sales and AI-powered sales strategy
Seungtae ParkA hands-on AX instructor who teaches AI business development and marketing automation by building it himselfIt 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.
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.
- 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.
- 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.
- 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.
- 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.
- 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.