What Is Occupational Breach of Trust?
Occupational breach of trust is a crime defined in Article 356 of the Korean Criminal Act. It refers to conduct in which a person who handles another's affairs violates their duty, causing harm to the other party while obtaining a benefit for themselves or a third party.
This crime typically arises in trust-based relationships, and applies in particular when a manager within a company or organization abuses their position to gain a benefit.
Punishment for Occupational Breach of Trust
Occupational breach of trust is punished under Article 356 of the Korean Criminal Act, and the sentence may be imprisonment of up to 10 years or a criminal fine of up to KRW 30 million.
If the loss caused by the breach of trust is substantial, under the Act on the Aggravated Punishment of Specific Economic Crimes, an amount of at least KRW 500 million but less than KRW 5 billion may result in aggravated punishment of fixed-term imprisonment of at least 3 years, while an amount of KRW 5 billion or more may result in life imprisonment or imprisonment of at least 5 years..
Elements of Occupational Breach of Trust
The elements of occupational breach of trust are: that the matter concerns another's affairs, that an act of breach of trust occurred, that the victim suffered a loss, that there was a violation of an occupational duty, and that there was intent.
In occupational breach of trust, a financial loss means a reduction, viewed as a whole, in the value of the principal's property.
Intent in Occupational Breach of Trust
Intent in occupational breach of trust refers to the awareness or will held by a person who handles another's affairs in the course of their work, regarding the fact that they are performing an act in violation of their duty and that, as a result, they or a third party obtain a benefit and cause harm to the principal.
When determining whether a manager had the intent to commit breach of trust and the intent to obtain an unlawful gain in connection with a business judgment, the intent for the crime of breach of trust should be recognized only where, taking into account various circumstances such as the background and motive that led to the business judgment, the nature of the business at issue, the economic situation facing the company, and the probability of incurring losses or obtaining gains, the manager acted deliberately while aware that they or a third party would obtain a financial benefit and cause harm to the principal; and liability must not be imposed merely on the basis of the outcome that harm was caused to the principal where such awareness was absent, nor merely on the ground that there was negligence in failing to exercise the duty of care. However, an act in violation of duty as referred to in the crime of breach of trust means any act that betrays the relationship of trust formed with the principal—by failing to do what one is naturally expected to do, or by doing what one is naturally expected not to do, under the provisions of law, the terms of a contract, or the principle of good faith—in light of the specific circumstances such as the content and nature of the affairs being handled. Therefore, even taking into account all of the above circumstances regarding a manager's business judgment, if the manager, by failing to do what they are naturally expected to do or by doing what they are naturally expected not to do under the provisions of law, the terms of a contract, or the principle of good faith—given the specific situation and their own role and position—obtains a financial benefit or causes a third party to obtain it and thereby causes harm to the principal, then the intent and the intent to obtain an unlawful gain are recognized.
(Supreme Court Decision 2015Do602, rendered on September 12, 2017)
Occupational Breach of Trust and Embezzlement
Occupational breach of trust shares many similarities with embezzlement, but the two crimes are fundamentally different. Embezzlement is the act in which a person holding another's property unlawfully appropriates it, and it mainly arises in a trust relationship. By contrast, occupational breach of trust is the act of causing harm to another while pursuing one's own benefit in the course of performing one's duties, where the destruction of the relationship of trust is an important characteristic. Thus, while both crimes are based on trust, they differ in the form of the conduct and its consequences.
The Impact of Occupational Breach of Trust
Occupational breach of trust has a negative impact not only on individual losses but also on a company's credibility and on society as a whole. Such crimes weaken a company's internal controls, and can erode the trust of investors and customers, resulting in economic loss. It is therefore important to prevent occupational breach of trust and to ensure transparent management.
Legal Measures to Prevent Occupational Breach of Trust
Preventing occupational breach of trust requires strong internal control systems and ethical management. Through regular audits and training within the company, employees should be made aware of their legal responsibilities, and a system capable of detecting acts of breach of trust must be put in place. It is also important to establish a framework that allows for an immediate response through legal sanctions when a crime occurs.
Criminal Defense Attorney
Occupational breach of trust is a significant crime under criminal law, and as an act that betrays trust, it has a major impact on individuals and society. Accordingly, by examining the elements and punishment of occupational breach of trust and the relevant case law, one can understand the seriousness of this crime. Above all, when facing a complex criminal law issue, it is important to seek the advice of a criminal defense attorney. A criminal defense attorney has a clear understanding of legal procedures, and the knowledge to achieve the best possible outcome.
