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

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.

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.

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 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.

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.