False claims for public funds

We, with an aim to prevent budget waste caused by illicit claims for public fund, commit to enact the Act on the Prevention of False Claims of Public Funds and improve other related laws and regulations, as well as strengthening monitoring and inspection on the possibility of public fund leakage from such as illicit receipt of government subsidies.

Completion Status:
Fulfilled

Commitment filtering:

Specific: ✔ yes

This commitment is specific, as it aims to reorganise laws and policies, such as legislating the Act on Prohibition of False Claims for Public Funds and Recovery of Illicit Profits, and to reinforce the inspection and monitoring of public fund leakages.

Measurable: ✔ yes

The reorganisation of these policies is measurable. The reinforcement of inspection and monitoring of public fund leakages is also measurable by inspecting related government policies and their implementation.

Last updated: 30 November 2020
Share: twitter email twitter twitter print
Evaluation:

As the standard for the fair use of public funds, the Enforcement Decree of Act on Prohibition of False Claims for Public Funds and Recovery of Illicit Profit went into effect on 1 January2020. 1 It provides for the recovery of the illegitimate profits derived from false claims for public subsidies and grants estimated at about 214 trillion South Korean won, and the imposition of additional monetary sanctions up to five times the amount illegitimately obtained.

Specific matters provided for under the decree are as follows:2

  • Besides government subsidies, compensation and contributions as specified in the Public Finance Recovery Act, the types of public funds subject to the act include compensatory grants, support funds, relief money, pension benefits, payments made for contracting-out government services, social security benefits and money or goods of a similar nature.
  • Those who falsely or excessively claim and improperly use public funds for other purposes than the indicated shall be charged with additional monetary sanctions.
  • After a deliberative committee’s consideration, details of the person making a false claim for a large amount of public subsidies and grants will be disclosed on the website of the responsible administrative authority for one year. The details include the name, age, address, company name, the value of illicit profits and specific statements of imposition of additional monetary sanctions.
  • Where a reporter of public subsidy fraud cases receives disadvantageous measures against their social position, and those discriminatory measures have a negative effect on the working conditions for the reporting of fraud, or where a reporter and their relatives are likely to suffer harm to their lives or bodies due to reporting, they may request the commission to take measures for a guarantee of their status and personal protection.

The ACRC is carrying out education and awareness raising for the recipients of public funds, public officials and the general public, and is developing a system for predicting signs of the receipt of illicit funds. In addition, the ACRC is working on discovering and improving related laws with lower punishment levels than this act. In March 2020, an advisory group was established composed of 17 experts from various fields, including seven lawyers, seven law professors, one financial expert and two ministry officials.3

Sources:
  1. ACRC, Enforcement Decree of Act on Prohibition of False Claims for Public Funds and Recovery of Illicit Profits, https://www.acrc.go.kr/en/board.do?command=searchDetail&method=searchDetailViewInc&menuId=020501&boardNum=80761
    2019
    ↩
  2. ACRC, Enforcement Decree of Act on Prohibition of False Claims for Public Funds and Recovery of Illicit Profits, https://www.acrc.go.kr/en/board.do?command=searchDetail&method=searchDetailViewInc&menuId=020501&boardNum=80761
    2019
    ↩
  3. ACRC, ‘공공재정환수법 해석 자문단’ 출범
    2020
    ↩