Public Service Ethics Program

The objective of the public service ethics program is to promote fairness in the execution of official duties and establish ethics guidelines for public officials as public servants by
creating an environment that prevents conflicts between public and private interests, such as unlawful property acquisition by public officials and
collusive ties between the government and businesses.

  • Composition of the Program and Role of Each Institution
  • History of the Program

Composition of the Program and Role of Each Institution

The public service ethics program is largely composed of the registration, disclosure, and review of property; blind stock trusts; restrictions on employment of retired public officials; and restrictions on activities by retired public officials. The Ministry of Personnel Management oversees the program while public service ethics committees
established in each institution are in charge of reviewing property registration, supervising and granting approval of employment and making decisions
on issues regarding violations of the Public Service Ethics Act.

History of the Program

Dec 1981

Establishment of the
PublicService Ethics Act

  • Property registration by ministers, members of the National Assembly, public officials of grade 3 or higher, and executive officers of public-service related organizations
  • Restrictions on employment of retired public officials in related private enterprises
  • Establishment of a public service ethics committee in the National Assembly, the Supreme Court, and the Government

June 1993

Amendment of the
Public Service Ethics Act

  • Expansion of the scope of public officials subject to property registration (grade 4 or higher, members of local councils)
  • Property disclosure by public officials of grade 1 or higher
  • Diversification of the public service ethics committee and delegation of property review authority
  • Statute allowing persons who are not dependents of those liable to report property to refuse to report matters concerning property

May 2005

Amendment of the
Public Service Ethics Act

  • Introduction of blind stock trusts for persons subject to property disclosure and public officials of grade 4 or higher performing finance-related work

Dec 2006

Amendment of the
Public Service Ethics Act

  • Statute allowing requests for explanation of property acquisition for persons liable for property disclosure
  • Permission to refuse explanation may be granted only with pre-approval

July 2011

Amendment of the
PublicService Ethics Act

  • First extension of property registration period (1 month → 2 months)
  • Prohibition on retired public officials from engaging in duties performed during active service
  • Prohibition on retired public officials requesting favors or assistance from the institution they were previously affiliated with

Dec 2014

Amendment of the
PublicService Ethics Act

  • Extension of employment restriction period for retired public officials (2 years → 3 years post retirement)
  • Increased scope of standard for evaluating relevance to duty for public officials of grade 2 or higher (affiliated department → affiliated institution)
  • Expansion of agencies subject to restricted employment

Dec 2015

Amendment of the
PublicService Ethics Act

  • Establishment of “obligation to avoid relevant duties” until stocks placed in blind trust have been completely disposed
  • Introduction of re-examination of public service ethics committees and the Examination Committee on Blind Stock Trusts

Property Registration, Disclosure and Review System

Public officials of a certain grade or higher as well as the their spouses and lineal ascendants and descendants are required to register their property holdings,
and high-level public officials are subject to disclosure of registered property. The public service ethics committee with
the jurisdiction over the public official concerned examines the propertyregistration and property acquisition process.

  • 1.Property Registration
  • 2.Property Disclosure
  • 3.Property Review
  • 4.Implications

Persons Liable for Property Registration

Public officials liable for property registration include state public officials in political service, such as the President,
the Prime Minister, members of the State Council, members of the National Assembly, and public officials in political service
for local governments, such as the heads of local governments and members of local councils, public officials of grade 4 or
higher, superintendents of education, judges and public prosecutors, military officers of at least the rank of colonel,
and executive officers of public service-related organizations. In addition, public officials of grade 7 or higher in fields
with a probable conflict of interest in consideration of the characteristics of their duties, such as police, fire fighting, auditing,
tax,construction, civil engineering, food sanitation and accounting, officials of grade 2 or higher of the Financial Supervisory
Service,executive officials of grade 2 or higher of the Bank of Korea, Korea Deposit Insurance Corporation,
Korea Hydro & Nuclear Power and public service-related organizations must also register their property.

Property to be Registered

The property to be registered encompasses all property, including real estate (ownership of land and buildings, superficies,
and right of lease on a deposit basis pertaining to real estate, etc.) and movables (cash and deposits, securities, gold
and platinum, and memberships, etc.) owned by a person liable for registration, their spouse and lineal ascendants
and descendants. Lineal ascendants and descendants who are not dependants of the person liable for registration can
refuse to provide details of their property. This is only permitted if approved by the public service ethics committee with
appropriate jurisdiction to prevent intentional reduction or concealment of property, and the decision must be re-reviewed
every 3 years.

Registration Agencies, Timing and Method for Registration, etc.

The registration agency is the agency to which the person liable for registration of property is affiliated. Public officials who
work for ministries and administrations must register with the pertinent ministries and administrations, public officials
of local governments with pertinent local governments, members of the National Assembly with
the National Assembly Secretariat, and judges with the National Court Administration. However,
persons liable for registration of property who work for the government shall register their property with the Ministry of
Personnel Management. The registration should be submitted no later than the end of the month two months after
the date the official becomes liable for registration as a result of employment, promotion, transference, reassignment
or retirement. For regular reporting of changes, registration should be completed before the end of February
the following year. For property registration, persons liable for registration should access the Public Ethics and
Transparency Initiative(PEIT) System and report their current personal and family details, as well as property, online.

Persons Liable for Property Disclosure

Public officials liable for property disclosure include the President, ministers and vice ministers, state public officials
of grade 1 or higher, members of the National Assembly, heads of local governments, members of local councils,
superintendents of education, judges of at least the rank of chief judge in high courts, public prosecutors of
at least the rank of chief public prosecutor in the Supreme Prosecutors’ Office, heads of relevant public service-related
organizations, and heads, deputy directors and standing auditors of public enterprises. Reports concerning property
must be released publicly at the time of candidacy registration for persons who wish to become candidates fo
President, members of the National Assembly, heads of local government or members of local councils;
at the time of submission of the proposal of approval for appointment for the Chief Justice of the Supreme Court,
President of the Constitutional Court, and Prime Minister whose appointment requires the approval of
the National Assembly; and at the time of submission of the proposal of election for public officials, such as
Judges of the Constitutional Court who are elected by the National Assembly.

Disclosure Agencies, Timing and Method of Disclosure, etc.

The public service ethics committee shall disclose to the public registered details and any changes
concerning the property of persons liable for registration under its jurisdiction, as well as the property of
their spouses, lineal ascendants and descendants within one month after the time limit for registration
in the official gazette or public bulletins.

Review Agencies and Review of Registered Details

A public service ethics committee reviews the registered details of persons liable for property registration.
The review includes a review of truthful registration, including false or erroneous reporting of property,
and a review of the process of property acquisition, such as the background and income sources for
property acquisition.A public service ethics committee must complete the review of all public
officials subject to disclosure of property within three months. Where deemed necessary,
the period of review may be extended by up to three months by a resolution of the public service ethics committee.

Necessary Measures and Procedures for Property Review

A public service ethics committee can order persons liable for registration to provide additional
documentation related to the property registration for the review if necessary. Furthermore,
it can request a report or material necessary for the review from relevant institutions or organizations.
In this case, heads of such institutions or organizations cannot refuse to submit the requested report
or material. A public service ethics committee can also demand attendance of any person liable for registration
and concerned persons in matters of property registration and ask those persons to make statements.
Meanwhile, a public service ethics committee must request the Minister of Justice or the Minister
National Defense (in case of military personnel or civilian employees of the military) to investigate persons
liable for registration who are suspected to have filed a false registration or to have acquired benefits with
confidential information acquired while performing an official duty. The review report is written based
on the results of this process and approved by the public service ethics committee. Notification of the result
is provided to the individual and relevant institutions, including the organization to which the person subject
to the inspection belongs and the court.

Implications

By requiring public officials who are likely to face a conflict of public and private interests given the nature of their position and duty to register their property and reviewing the reported details, unfair acquisition of property can be prevented. Furthermore, the process helps to improve the transparency of property holdings by public officials and the fairness of the policy-making process by enabling the supervision of the media and citizens over the property holdings of high-level public officials.

Blind Stock Trusts

When a high-level public official and the official’s interested parties own stocks, stocks that are related to the official’s duty must be sold due to a possibility of a conflict of
private and public interests in the process of performing official duties. Ownership of stocks that are not related to the performance of official duties may be maintained.

  • Overview
  • Avoidance of Duty
  • Implications

Persons Liable for Blind Stock Trusts and Related Stocks

Persons liable for property disclosure and public officials of grade 4 or higher of the Ministry of Strategy and Finance and the Financial Services Commission are
required to place their stock holdings in a blind stock trust. When the aggregate value of all stocks owned by the official and interested parties(spouse and
lineal ascendants and descendants) exceeds 30 million won, such stocks must be placed in a blind stock trust.
The date of excess holdings refers to the date when the aggregate value of such stock holdings exceeds 30 million won (including when the value of stocks exceeds
30 million won as a result of an increase in the price of the stocks), the date the person becomes subject to disclosure of property, the date the duty
(standing committee, assignment, etc.) of the person liable for disclosure changes or the date the person is notified that the stocks holdings are
related to his/her duties.

Measures to be Taken by those Liable for Registration

Persons liable for registration must report to the relevant registration agency after disposing of relevant stocks or placing their stocks holdings in
a blind trust within one month from the date of excess, and must make a request for a review of the relevance of such stocks to the official’s duties to
the Review Committee on Blind Stock Trusts established within the Ministry of Personnel Management. When persons subject to disclosure of property decide
that their stock holdings are related to their current duties, they may request a review of relevance after a change in their position.
After being notified by the Review Committee on Blind Stock Trusts that the stocks are related to the official’s duties, the stocks must be disposed of
or be placed in blind trust within one month from the date of notification

In response to comments that the effect of preventing a conflict of private and public interests is relatively small as stocks in blind trust often get
returned to the trustor once his/her duty ends as a result of retirement or termination of assignment due to challenges in the disposal of stocks,
an arrangement was introduced in 2015 to avoid conflicts of interest in the duties of public officials.
When the stocks placed in blind trust have not been fully disposed of, the officials concerned are prohibited from performing duties related to the relevant
stocks without having completed the assessment on relevance of duties after applying for a change in assignment. In accordance with relevant legislation,
when it is impossible to avoid duties, such engagement should be reported to the public service ethics committee, which will publicly announce the reported
details in the official gazette or public bulletins.

When high-level officials maintain stock holdings, it is likely that they will try to make policy decisions in a way that increases the value of such stocks.
Furthermore, they may obtain profits by trading stocks based on information gained while performing their official duties. It becomes possible to enhance fairness
in policy making with blind stock trusts by preventing in advance the conflict of public and private interests that can arise in public service.

Restrictions on Employment and Activities of
Retired Public Officials

Retired public officials are restricted from employment in any institution with relevance to their official duties performed prior to retirement or to engage in work that is handled by
the institution to which they were previously affiliated. Such retired public officials are also prohibited from requesting favors or assistance from the affiliated institution prior
to retirement. Moreover, retired public officials must not request employment favors or assistance from incumbent employees and affiliated institutions.

  • Overview of Restrictions on Employment
  • Restrictions on Activities
  • Implications

Persons Subject to Employment Screening, Employment-restricted Institutions, etc.

Among persons subject to registration of property, retired public officials and executive officers of public service-related organizations are restricted from being employed
at an employment-restricted institution closely related to the department or institution to which they were affiliated for 5 years prior to retirement for
3 years from the date of retirement. However, employment may be allowed with the approval of the relevant public service ethics committee.
The scope of relevance is assessed based on the duties of affiliated institutions for public officials of grade 2 or higher and executive officers of public servicerelated
organizations, and duties of affiliated departments for public officials of grade 4 or below and employees of public service-related organizations.
*Scope of “closely related”: Duties related to financial assistance, authorization and permission, inspection and audits, imposition and collection of taxes, contracts and
acceptance, direct supervision under Activities and subordinate statues, investigations, reviews and rulings on cases, etc.
At the end of each year, the Minister of Personnel Management makes public the employment-restricted institutions, including for-profit private enterprises
that exceed a specified scale; law firms; accounting firms; tax accounting firms; market-based public corporations; public service-related organizations performing
duties such as supervision of safety, regulation on authorization and permission, and procurement; private universities and the educational foundations of such
universities; general hospitals and corporations that established such hospitals; and social welfare foundations that exceed a specified scale.

Employment-restricted Institutions

TYPE CONDITIONS
For-profit private enterprise · Capital amounts to not less than 1 billion won and annual turnover amounts to not less than 10 billion won
Corporation · Corporations or associations in which a private enterprise is a member
Law firm, accounting firm,foreign legal consultant office · Annual turnover amounts to not less than 10 billion won
Tax accounting firm · Annual turnover amounts to not less than 5 billion won
Market-based public corporation · Public corporations prescribed by the Act on the Management of Public Institutions
Private university · Private schools and foundations prescribed by the Higher Education Act
General hospital · General hospitals and medical corporations prescribed by the Medical Service Act
Social welfare foundation, corporation that operates a social welfare facility · Fundamental assets amount to not less than 10 billion won

Type of Employment Screening

There are two types of employment screening: restrictions on employment and approval for employment. In the case of screening for restrictions on employment,
the close relevance between the duties of the department or the institution to which the person subject to employment screening was affiliated for 5 years prior
to retirement and the employment-restricted institution are reviewed to confirm whether employment must be restricted. In the case of screening to obtain
approval for employment, the relevant screening body determines if there is a special cause for employment even though the relevance between the duties of the
department or the institution to which the person subject to employment screening was affiliated for 5 years prior to retirement and the employment-restricted
institution restricts employment.

Restrictions on Duties Peformed

Restrictions on duties performed can be divided into restrictions on duties that the person concerned was engaged in directly during public service and restrictions
on duties of persons subject to employment screening based on the duties of an agency.
First, restrictions on duties that the person concerned was engaged in directly during service prohibit all retired public officials and executive officers of public
service-related organizations from engaging in work relevant to duties (financial assistance, authorization and permission, inspection and audits, imposition of
taxes, contracts, supervision, investigation of cases, etc.) that they were involved with prior to retirement unless there are special regulations in other relevant
legislation. There are no restrictions on the institution and time period.
Meanwhile, restrictions on duties of persons subject to employment screening based on duties of an agency are targeted at public officials of grade 2 or higher
and executive officers of public service-related organizations. They are prohibited from performing, within a period of two years following the date of their retirement,
certain duties (listed above) that an agency with which they were affiliated for the two years prior to their retirement handles, for an employment-restriction
institution to which they are employed.

CATEGORY RESTRICTIONS ON
DUTYPERFORMED DIRECTLY
RESTRICTIONS ON
EMPLOYMENT SCREENINGBASED ON DUTIES OF AGENCY
Subject All retired public officials, employees ofpublic service-related organizations Public officials of grade 2 or higher,executive officers of public service-related organizations, etc.
Duty Duty performed directly by the retiree before retirement Duties handled by the institution to which the retiree was affiliated for the two years prior to retirement related to the
employment-restrictednstitution where the retiree has been employed
Institution No restriction Employment-restricted institutions
Time Period Permanent For 2 years following retirement

Where it is determined necessary to engage in the concerned duty for reasons such as national security or the public interest with the knowledgement
there is no influence on the fairness in performing the duty, it is possible for the person
concerned to perform the duty with the approval of the relevant public service ethics committee.

Prohibition of Unlawful Favors and Assistance

All retired public officials and executive officers of public service-related organizations are prohibited from requesting favors or assistance that inhibit fair performance of
duties by employees of the affiliated institution for the benefit of themselves or a third party prior to retirement.
Public officials or employees of public service-related organizations who were asked to perform unlawful favors or assistance by a retired public official must
report the matter to the head of the affiliated institution. In this event, the identity of the person who reported the issue must not be revealed without consent and
he/she must not be subject to any unfair treatment including disciplinary measures or discriminatory working conditions from the affiliated institution due to the report.

Prohibition of Requests for Employment of Incumbent Persons, etc.

Incumbent persons liable for employment screening should not request employment by employment-restricted institutions related to certain duties
(financial assistance, authorization and permission, inspection and audits, imposition of taxes, contracts, supervision, investigation of cases, etc.) that they
performed in the five years prior to the date of retirement.
Furthermore, heads of any government agency, local government or publicserviced organization shall not assist a person subject to employment screening by
a relevant institution to secure employment at an employment-restricted institution related to any of the performed duties described above in the five years
prior to retirement.

Restrictions on employment and restrictions on activities of retired public officials prevent the formation of collusive ties that could result in the provision of
benefits to particular companies for the purpose of employment post-retirement. The restrictions also aim to prevent retired public officials from exerting unfair
influence over institutions to which they were previously affiliated after being employed by a company. Furthermore, the purpose of these restrictions is to
secure fairness in the performance of public services by eradicating the practice of granting privileges to predecessors and the resulting public-private collusive ties
and ultimately, to strengthen the trust of citizens in public services.

Reporting on Gifts

While public officials cannot receive any compensation or rewards with respect to their duties, it is difficult to refuse gifts from a foreign source in the
context of diplomatic and international practices. Therefore, in such cases, gifts may be received so long as they are reported without delay.

Overview

Persons Liable for Reporting of Gifts and Relevant Gifts

Persons liable for reporting of gifts are public officials including members of local councils and executive officers of publicservice-related
organizations. All gifts of a value exceeding one hundred thousand won from a foreign government or a foreign source
(including foreign organizations) with respect to an official’s duties must be reported to the agency or organization towhich the person
receiving the gift is affiliated. Gifts that are deemed to be of value below one hundred thousand won do nothave to be reported.

Measures Taken by Agencies

Agencies and organizations must report the management status of reported gifts to the head of the registration agency (Minister of Personnel Management for central administrative agencies and public servicerelated organizations supervised by such agencies) quarterly and deliver the registered gifts to the registration agency every half year. The head of the registration agency should transfer gifts with cultural or artistic value to the National Archives of Korea and gifts that need to be maintained by another organization to the concerned organization. Gifts without a need to be managed as a national asset can be delivered to the Public Procurement Service

Implications

This process helps to improve the ethics of public officials by requiring officials to report gifts that must be accepted in the context of diplomatic and international practices and managing the reported gifts strategically as national property.

Public Ethics and Transparency Initiative(PETI) System

The Public Ethics and Transparency Initiative (PETI) System is a public ethics portal that was established to electronically manage work related to public service ethics programs,
such as the registration and disclosure of property and review of reported property of public officials. The Ministry of Personnel Management oversees the planning and
management of the system and oversees the 265 public service ethics committees nationwide, including those within the government, National Assembly, local governments,
and the Constitutional Court of Korea. * PETI (Public Ethics and Transparency Initiative) System

Development of
the PETI System

Dec. 1999(C/S based)

First development of a public service ethics system (DOS) - Separate management of property registration and
examination systems

Dec. 2005(Web based)

First daEstablishment of a web-based property registration system - Reporting of property remotely from any location with
an internet connection - Log-in using ID/Passwordevelopment of a public service ethics system (DOS) - Separate management of property registration and examination systems

Dec. 2008(Integrated DB)

Establishment of the PETI System - Integrated property registration and examination system - Log-in using an electronic signature system - Development of a process for provision of financial and real estate information for regular reporting of changes in property

Main Functions

Persons liable for registration of property can access a series of functions, including registration of person and family details, submission of the consent form for
information collection, reporting of property, and submission of material for explanation, through the PETI system. Persons in charge of performing the relevant
tasks can manage persons liable for property registration, confirm consent forms for information collection, approve an application for refusal to report, and review
property through the PETI system.
Meanwhile, information provision agencies can provide information related to real estate and financial data (deposits and debt) to the property registration
agencies, and system managers can conduct tasks that include user registration, code management, statistics management, and operation of a bulletin board and
related resources. Citizens who have no direct involvement in property registration can also improve their understanding of the Public Service Ethics Act and
public service ethics program through the provided informational resources, which can be accessed without logging in.

User Status of the PETI System

About 230,000 persons liable for property registration, about 600 persons in charge of relevant duties, and about 240 financial, real estate, and membership related information
provision agencies currently utilize the PETI system.

Implications

Persons liable for property registration can report their property holdings online remotely from any location with an internet connection. The reporting process is
accurate and convenient as those liable for reporting receive financial and realestate related information related to themselves and their family members in
advance. By linking the system with the real-estate value notification system, the value of an official’s real estate holdings can be checked in real-time.
For those who are in charge of relevant tasks, it is possible to manage the information related to persons subject to registration systematically by managing changes
in personnel details, applications for refusal to report, persons who consented to information collection, and submission of registration forms. By clearly
providing a yearly flow of assets, size of assets by category, etc. based on the database of information on registered property, the history of registration data can be
managed systematically. Furthermore, transparency in property review can be secured by enabling tasks such as requests for material for explanation of
falsely reported matters and submission of such material to be processed online, and property values that have been overstated or understated can be
easily identified for each asset category by comparing the reported material from those liable for reporting and reviewed materialstogether at the same time