[Bills in Focus] Holding CEOs accountable for lack of internal financial control

Proposed bill: Partial Amendment to the Act on Corporate Governance of Financial Companies

Proposed by Rep. Yoon Han-hong (People Power Party)

● The frequent occurrence of financial accidents has raised the need for financial companies to strengthen the monitoring of their internal control system. To ensure financial companies operate an effective internal control system, this amendment establishes an internal control committee under the board of directors to strengthen the board's responsibility to monitor the internal control system. Not only does it require companies to create a responsibilities map system delineating the duties of each executive in managing internal control in their respective fields, but it also holds the CEO comprehensively liable for failure of internal control.

Proposed bill: Partial Amendment to the Serious Accidents Punishment Act

Proposed by Rep. Lim Lee-ja (People Power Party)

● Although the Serious Accidents Punishment Act is to become applicable to businesses with fewer than 50 employees from Jan. 27, 2024, the circumstances of small and medium enterprises make it difficult for them to comply with the SAPA. To enhance legal stability and protect SMEs from business closure, this amendment prolongs the postponement of the SAPA application to businesses with fewer than 50 employees by two years to Jan. 27, 2026.

Pending bill: Partial Amendment to the Act on Press Arbitration and Damage Remedies

Proposed by Rep. Yoon Doo-hyun (People Power Party)

● Internet news services are steadily gaining greater influence over public opinion as the number of online news readers continues to increase. Accordingly, this amendment aims to obligate internet news service providers to fulfill the social responsibilities of the press prescribed under the current legal system by including such services into the scope of the press.

Promulgated bill: Enforcement Decree of the Personal Information Protection Act

Competent Authority: Personal Information Protection Commission

● The amended Personal Information Protection Act now requires all personal information controllers to notify the usage history of personal information. Accordingly, this enforcement decree prescribes matters necessary for the act’s enforcement by stipulating matters concerning the processing of children’s personal information, operation of visual data processing devices, transfer of personal information, etc. It also modifies the calculation standard for the maximum penalty surcharges for violators of the act as the total sales revenue.

Administrative announcement: Partial Amendment to the Enforcement Rule of the Framework Act on the Construction Industry

Competent Authority: Ministry of Land, Infrastructure and Transport

● This amendment increases the importance of safety and quality in assessing a constructor's execution capacity by decreasing the appraisal value of management capacity and increasing the appraisal value of performance capacity. It also deducts points from constructors found associated with faulty work, fatal accidents on construction sites, delayed payment of construction costs, or illegal subcontracting.

The Korea Herald republishes a weekly legislative report by local law firm DR & AJU LLC to provide the latest information on bills approved, proposed, pending and set to be promulgated. -- Ed.

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For any queries about the bills, contact cr@draju.com.

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