Article 22(1) of the Subsidy Act prohibits a “indirect subsidy program operator” from using subsidies for any other purpose, while Article 22(2) prohibits a “indirect subsidy program operator” from using indirect subsidies for any other purpose. Article 41 of the Subsidy Act provides that a person who uses “subsidies” or “indirect subsidies” for any other purpose in violation of Article 22 shall be punished by imprisonment with labor for not more than three years or by a fine not exceeding 20 million won.

The main text of Article 23 of the Subsidy Act provides that a subsidy program operator shall obtain approval from the head of a central government agency to change the details of a subsidy program or to change the distribution of expenses incurred in “subsidized projects” due to a change in circumstances, and imposes an obligation to approve the change of the content of a subsidy program only for a “subsidized project operator”. Article 42 of the Subsidy Act provides that a person who changes the contents of a subsidy program without obtaining approval from the head of a central government agency shall be punished by a fine not exceeding 10 million won.

In light of the contents, structure, purport, etc. of the Subsidy Act, it is reasonable to view that the Subsidy Act imposes a duty not to use subsidies and indirect subsidies for a subsidy program operator and indirect subsidy program operator respectively, while punishing the subsidy program operator and indirect subsidy program operator in violation of Article 41 of the Subsidy Act as a violation of Article 41 of the Subsidy Act. On the other hand, it imposes a duty to obtain approval from the head of a central government agency only on a subsidy program operator and an indirect subsidy program operator, and only changes in the contents of a subsidy program other than an indirect subsidy program are subject to punishment for a violation of

1. As to Defendant 1’s ground of appeal

Examining the evidence duly adopted and examined by the lower court and the first instance court, it is justifiable to have determined that the lower court convicted Defendant 1 of the instant facts charged (excluding the part on acquittal in the grounds) on the grounds as indicated in its reasoning. In so doing, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the legal doctrine on the intent of unlawful acquisition and burden of proof in the occupational embezzlement crime.

2. As to the Prosecutor’s Grounds of Appeal

(1) Article 2 of the former Subsidy Management Act (amended by Act No. 13931, Jan. 28, 2016; hereinafter “Subsidy Act”) clearly classify the affairs or projects performed by a person other than the State as “subsidized projects” and the affairs or projects subject to the grant of subsidies, etc., which are paid by the State to create or provide financial assistance to such person, as “subsidized projects.” Meanwhile, a person other than the State defines a person who carries out a subsidized project as a “subsidized project.” Meanwhile, the affairs or projects subject to the grant of indirect subsidies, which are an indirect subsidy granted by a person other than the State, without receiving a considerable amount of consideration, for the purpose of the grant of the subsidy, by defining a person who carries out an indirect subsidy project as “indirect project” and “indirect subsidy project or indirect subsidy project operator.”

Article 22(1) of the Subsidy Act prohibits a “indirect subsidy program operator” from using subsidies for any other purpose, while Article 22(2) prohibits a “indirect subsidy program operator” from using indirect subsidies for any other purpose. Article 41 of the Subsidy Act provides that a person who uses “subsidies” or “indirect subsidies” for any other purpose in violation of Article 22 shall be punished by imprisonment with labor for not more than three years or by a fine not exceeding 20 million won.

The main text of Article 23 of the Subsidy Act provides that a subsidy program operator shall obtain approval from the head of a central government agency to change the details of a subsidy program or to change the distribution of expenses incurred in “subsidized projects” due to a change in circumstances, and imposes an obligation to approve the change of the content of a subsidy program only for a “subsidized project operator”. Article 42 of the Subsidy Act provides that a person who changes the contents of a subsidy program without obtaining approval from the head of a central government agency shall be punished by a fine not exceeding 10 million won.

In light of the contents, structure, purport, etc. of the Subsidy Act, it is reasonable to view that the Subsidy Act imposes a duty not to use subsidies and indirect subsidies for a subsidy program operator and indirect subsidy program operator respectively, while punishing the subsidy program operator and indirect subsidy program operator in violation of Article 41 of the Subsidy Act as a violation of Article 41 of the Subsidy Act. On the other hand, it imposes a duty to obtain approval from the head of a central government agency only on a subsidy program operator and an indirect subsidy program operator, and only changes in the contents of a subsidy program other than an indirect subsidy program are subject to punishment for a violation of

(2) The reasoning of the lower judgment and the evidence duly admitted reveals the following: (a) on February 28, 2013, the Samcheon-do filed an application for the State/Do subsidy for the “National River Disaster Prevention Project” including the project to prevent river disasters in 2013,00,000 Gangwon-do (hereinafter “instant project”); (b) the Governor of Gangwon-do delegated the administrative affairs concerning the grant and management of subsidies for local river maintenance projects by the Minister of Land, Transport and Maritime Affairs; (c) filed an application for the grant of subsidies for local river maintenance projects in 2013, including the instant project subject to the instant project; (d) the Gangwon-do Local Land Management Office decided to grant subsidies with the Governor of Gangwon-do as the subsidized project; and (e) on April 30, 2013, the Governor of Gangwon-do decided to grant the State-do subsidy of KRW 3 billion and Do subsidy of KRW 400,400,000,000,000.

(3) Examining these facts in accordance with the relevant statutes and legal principles as seen earlier, the Governor of Gangwon-do, which received the government subsidy for the local river maintenance project in 2013, including the instant project subject to the project by the State, is the “subsidized project operator” of the instant project. As to the portion of the 3 billion won subsidy granted by the Gangwon-do Governor again from the said government subsidy and the Do subsidy, the portion of the 3 billion won subsidy constitutes the “indirect project operator” of the instant project. Therefore, even if the Defendants, who are public officials of Sam-si, who are not the subsidized project operators, changed the contents of the “indirect project” subject to the above 3 billion won subsidy among the instant project subject to the project, such act does not constitute a violation of Article 42 of the Subsidy Act.

(4) Nevertheless, the lower court was erroneous to have determined that a third-scale market, which is not the Governor of Gangwon-do, was an assistant under the Subsidy Act. However, the lower court was justifiable in that there was no proof of crime regarding the violation of Article 42 of the Subsidy Act, and thus acquitted the Defendant. In so doing, the lower court did not err by misapprehending the legal doctrine on change in the contents of a subsidy program

3. Conclusion

Therefore, all appeals are dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Cho Jae-chul (Presiding Justice)