[1] Whether an act of providing a fund, land, or building upon knowing the fact that the act of arranging sexual traffic is provided for sexual traffic under Article 2(1)2(c) of the Act on the Punishment of Arrangement of Commercial Sex Acts, Etc. includes a case where an actor mediates, solicits, induces, or compels sexual traffic by himself/herself or provides a place for sexual traffic (affirmative)

[2] In a case where the requirements for confiscation or collection are related to the facts charged charged, whether only confiscation or collection may be imposed pursuant to the proviso of Article 49 of the Criminal Act (affirmative), and whether the same applies to cases where criminal proceeds are confiscated pursuant to Article 8(1) of the Act on Regulation and Punishment of Criminal Proceeds Concealment (affirmative)

[3] Whether an act of an actor of the arrangement of commercial sex acts to rent a room, which is a place necessary for his/her arrangement of commercial sex acts, constitutes "the act of offering funds, knowing that it is provided for commercial sex acts," under Article 2 (1) 2 (c) of the Act on the Punishment of Acts of Arranging Commercial Sex Acts, Etc. (affirmative)

[4] Whether confiscation under Article 8(1) of the Act on Regulation and Punishment of Criminal Proceeds Concealment belongs to the court's discretion (affirmative)

[1] Articles 2 subparag. 2(b)1 and 8(1) of the Act on the Regulation and Punishment of Criminal Proceeds Concealment; Articles 2(1)2 and 19(2)1 of the Act on the Punishment of Acts of Arranging Sexual Traffic / [2] Article 49 of the Criminal Act; Article 8(1)2 of the Act on the Regulation and Punishment of Criminal Proceeds Concealment / [3] Article 2(1)2 of the Act on the Punishment of Acts of Arranging Sexual Traffic / [4] Article 8(1) of the Act on the Regulation and Punishment of Criminal Proceeds Concealment

[1] Supreme Court Decision 2012Do11586 Decided May 23, 2013 (Gong2013Ha, 1172) / [2] Supreme Court Decision 92Do700 Decided July 28, 1992 (Gong1992, 2615) Supreme Court Decision 2009Do11732 Decided May 13, 2010 / [4] Supreme Court Decision 2000Do515 Decided September 4, 2002 (Gong2002Ha, 2372)

Defendant 1 and three others

Prosecutor

Attorney Lee Jong-hoon

Ulsan District Court Decision 2019No1053 decided December 20, 2019

All appeals are dismissed.

The grounds of appeal are examined.

1. Article 8(1) of the Act on the Regulation and Punishment of Criminal Proceeds Concealment (hereinafter “the Regulation of Criminal Proceeds Concealment”) provides that “criminal proceeds” may be forfeited. Article 2 subparag. 2(b)1 of the Regulation of Criminal Proceeds Concealment provides that “funds or property related to a crime under Article 19(2)1 of the Act on the Punishment of Acts of Arranging Sexual Traffic (hereinafter “the Punishment of Commercial Sex Acts”) (limited to the act of providing funds, land, or buildings despite being aware of the fact that they are provided for commercial sex acts among acts of arranging commercial sex acts, etc.)” as one of “criminal proceeds” under the above Act. Article 2(1)2 of the Act on the Punishment of Commercial Sex Acts, Etc., which provides for acts of arranging commercial sex acts, including acts of offering funds, land, or buildings with knowledge of the fact that they are provided for commercial sex acts, acts of offering such money, land, or buildings [see Article 2(1)2(b)2(c) of the Punishment of Commercial Sex Acts, etc. Act or acts of offering land to another person [2(3) or 20(a)15) of the Punishment of Commercial Act]

Meanwhile, in a case where the requirements for confiscation and collection are related to the facts charged in which a public prosecution has been instituted without filing a public prosecution under our legal system, confiscation and collection can be conducted pursuant to the proviso of Article 49 of the Criminal Act (see Supreme Court Decision 92Do700, Jul. 28, 1992, etc.). The same applies to cases where criminal proceeds are confiscated pursuant to Article 8(1) of the Regulation on Regulation of Criminal Proceeds Concealment.

2. The record reveals the following circumstances.

A. The Defendants, who shared their roles, agreed to arrange commercial sex acts and divide profits from the entire businesses, were indicted on the charges that: (a) leased several types of rooms from around December 2, 2018 to July 25, 2019; and (b) arranged commercial sex acts by employing female employees.

B. The first instance court, upon finding the Defendants guilty of all the charges charged, confiscated a lease deposit claim for each heading of an office in the attached Tables 2 through 6 in the judgment of the first instance court on the grounds of Article 25 of the Commercial Sex Acts and Article 48(1)1 of the Criminal Act, based on Article 25 of the Commercial Sex Act and Article 48(1)1 of the Criminal Act (hereinafter “lease deposit refund claim”).

C. The lower court reversed the judgment of the first instance that declared confiscation of the claim to return the lease deposit of this case on the following grounds, and did not sentence confiscation.

(1) The claim for the refund of the lease deposit of this case is not the “goods provided or intended to be provided for an act of crime” under Article 48(1)1 of the Criminal Act, not the “money and valuables, etc. acquired by a person who commits a crime under Articles 18 through 20” under Article 25 of the Commercial Sex Act.

(2) The facts charged in the instant case do not state that “a person provided funds, land, or buildings with knowledge of the fact that a person provided for sexual traffic,” corresponding to the mode of conduct under Article 2(1)2(c) of the Act on the Punishment of Commercial Sex Acts, and the applicable provisions of Acts do not state Article 8(1) of the Act on the Regulation of Criminal Proceeds Concealment, and thus, the claim for the refund of the lease deposit in the instant case cannot be confiscated in accordance with Article 8 of the Act on the Regulation of

(3) Even if an actor of the arrangement of sexual traffic engages in the business of arranging sexual traffic by leasing a place for sexual traffic at that place, barring special circumstances where he/she can recognize that he/she leased or provided land, buildings, etc. for sexual traffic, it is difficult to view that he/she provided funds, land, or buildings by being aware of the fact that it is offered for sexual traffic under Article 2(1)2(c) of the Act on the Punishment of Commercial Sex Acts.

3. The lower court’s determination is difficult to accept for the following reasons.

A. Article 2(1)2(c) of the Punishment of Commercial Sex Acts includes an act of providing funds, land, or buildings despite being aware of the fact that they are provided for sexual traffic. Moreover, Article 2(1)2(a) or (b) of the Commercial Sex Act also provides not only the act of a person arranging commercial sex acts to provide his/her “land or building” but also the act of providing “funds.” Therefore, the act of paying security money to a lessor to rent each room of officetels, which is a place necessary for his/her business of arranging commercial sex acts, constitutes “the act of providing funds with knowledge of the fact that they are provided for sexual traffic” under Article 2(1)2(c) of the Commercial Sex Act.

B. Although the prosecutor prosecuted the Defendants’ act as an act falling under Article 2(1)2 Item (a) of the Act on the Punishment of Commercial Sex Acts, as long as the Defendants’ act was acknowledged as an act under Article 2(1)2 Item (c) of the Act on the Punishment of Commercial Sex Acts, this part of the facts charged is recognized as related to the act under Article 2(1)2 Item (c) of the Act on the Punishment of Commercial Sex Acts, which is the object of confiscation under the Act on the Regulation of Punishment of Criminal Proceeds Concealment, and thus, it does not violate the principle of no accusation even if the Defendant

C. Therefore, the claim for the return of the lease deposit of this case is a fund or property related to the act of providing funds knowing the fact that it is offered for sexual traffic, which is stipulated as criminal proceeds under Article 2 subparagraph 2 (b) (i) of the Regulation on Regulation of Criminal Proceeds Concealment, and may be confiscated as criminal proceeds pursuant to Article 8 (1) 1 of the Criminal Proceeds Concealment Act.

D. On the ground that the Defendants’ act does not constitute “an act of providing funds with knowledge of the fact that it is offered for sexual traffic,” and that this part of the facts charged is not related to “an act of providing funds with knowledge of the fact that it is offered for sexual traffic,” the lower court erred by misapprehending the legal doctrine that the claim for return of the lease deposit in this case does not constitute confiscation stipulated in the Regulation

4. However, since the confiscation under Article 8(1) of the Regulation on Regulation of Criminal Proceeds Concealment Act is discretionary, the issue of whether to confiscate even an article that meets the requirements for confiscation is left at the discretion of the court (see Supreme Court Decision 2000Do515, Sept. 4, 2002). The court below's failure to confiscate the claim for return of the lease deposit of this case can be deemed to have exercised discretionary power in consideration of various circumstances, considering that the claim is the object of voluntary confiscation. Thus, the above error of the court below's determination does not affect the conclusion of the judgment. Therefore, the ground of appeal is without merit.

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

Justices Noh Tae-tae (Presiding Justice)