2018Gohap836 A. Violation of the Foreign Trade Act

(b) Property in breach of trust;

(c) Property in breach of trust;

1.(a) A

2.(c) B

Maximum cases, records (public trial)

Attorney Kim Chang-hoon (for defendant A)

Attorney Shin Jae-soo (for the defendant B)

January 10, 2019

[Defendant A]

A defendant shall be punished by imprisonment for one year.

However, the execution of the above punishment shall be suspended for two years from the date this judgment became final and conclusive.

[Defendant B]

A defendant shall be punished by imprisonment for one year.

However, the execution of the above punishment shall be suspended for two years from the date this judgment became final and conclusive.

64,000,000 won shall be additionally collected from the defendant.

The amount equivalent to the above additional collection charge shall be ordered to be paid provisionally.

Criminal Facts1)

【Basic Facts】

1. Status of the Defendants

Defendant A established C on September 1, 2003 for the purpose of the wholesale and retail business of electronic parts, trade business, etc. and purchased ICT chips from the distribution agency of ICT chips and engaged in domestic sales and export business. Defendant B was a person who was in charge of business of D(hereinafter referred to as “D”).

2. The definition of strategic items and export control of strategic items refers to weapons of mass destruction, such as nuclear history, conventional weapons, US, goods usable for the manufacture and development thereof, software, technology, etc., and are divided into items of military supplies and items of double-use (MuniT unit items). In addition, double-use items can be a threat to world peace and international security when they are transferred to an aptitude country, and Korea, with other countries such as the United States and the United Kingdom, has entered into the export control of strategic items and information sharing among countries, including the United States and the United Kingdom, and designated and announced ‘c items that require restrictions on export permission, etc. according to the Foreign Trade Act, etc.', and control international distribution such as export permission by classifying various items as strategic items.

A person who intends to export " Strategic items designated and publicly notified as above shall obtain permission from the Minister of Trade, Industry and Energy or the head of the relevant administrative agency, as prescribed by Presidential Decree, and in particular, in order to export to China and Hong Kong and other countries, including China, which have not joined an international export control system, such as "baar system," it shall be examined in advance as to whether strategic items are exclusively used for manufacture, development, and use of weapons of mass destruction or are likely to be distributed to non-member countries, aptitude countries, or terrorist organizations, by specifying the technical characteristics, end users, final

3. Countries affiliated with the international export control system, such as the Republic of Korea and the United States, regarding strategic items of each chip listed in the annexed table 1 are commonly using export control classification numbers (ECCN and the Information Report Nos. 1) by classifying strategic items according to the location, type, performance, and specifications of each product.

Each ICT chip listed in attached Table 1 (hereinafter referred to as the "IC chip of this case") is a product produced in U.S. E (hereinafter referred to as the "E") and F (hereinafter referred to as the "F") which has the function of converting the Arabic signal into digital signal, and is designated and publicly notified as a strategic item subject to export permission because it falls under the export control classification number (ECCN) of the list of double-use items listed in attached Table 2 of the Korea's strategic items and falls under the export control classification number (ECCN) of 3A01.

4. The strict management structureE and F with respect to the distribution of the instant chips, which are the strategic items, are manufacturers of chips located in the United States, and have G and H, each domestic branch, and only distribution agencies such as D, are controlling the distribution of strategic items by supplying E and F's strategic items. The buyers could purchase strategic items only through the above distribution agencies.

Specifically, in order to purchase strategic items manufactured by E and F in Korea, ① after the actual inspection of whether the purchasing entity actually uses the goods in Korea, the final use confirmation (EUC, Ein-Uscificaon) shall be submitted to the distribution agency and registered as the trading entity; ② via the above distribution agency, G or H shall submit an order stating the price and quantity of the goods for which the application was filed, the due date, the payment period, and the use of the goods; and ② if the domestic branch offices G or H, which received the order, transfer the order to the head office, E and F shall export strategic items to the purchasing entity under the permission of the Government of the United States of America.

Criminal facts

1. Defendant A

A. Violation of the Foreign Trade Act

The Defendant, using the fact that the instant chips are traded in a non-sured manner in other countries, such as Hong Kong, rather than Korea. On September 2003, the Defendant, after establishing C around September 2003, supplied the IC chips, which are strategic items, from the manufacturer of the IC chips, exported them to Hong Kong, etc. without permission, and thought

The Defendant purchased 147 IC chips from E and F, which are export control components, as if C were used in Korea at the office located within the territory of the Gu building J during Ansan-si. On April 5, 2012, the Defendant exported IC chips equivalent to US$ 16,935 (Korean US$ 19,064,576), which was the sum of the 147 market prices at the Incheon, Jung-gu, Incheon, which was located within the territory of the Ministry of Trade, Industry and Energy, to L in the U.S., without permission from the Minister of Trade, Industry and Energy. From that time to May 24, 2016, the Defendant exported IC chips at least 27 times in total without obtaining export permission from the Minister of Trade, Industry and Energy.

Accordingly, the defendant exported chips, which are strategic items, without export permission from the Minister of Trade, Industry and Energy.

(b) Property in breach of trust;

B as a person in charge of D's business, who is an ICT chip circulation agency, exercised influence on the purchasing company on the volume, price, margin, payment date, etc. of the order product when receiving purchase orders from the exporters of electronic parts.

On November 2012, the Defendant made an illegal solicitation against B to the effect that B would offer part of its profits instead of offering transaction convenience, such as saving ICT chips more than the ordinary supply price and assisting B to purchase goods as soon as possible than the ordinary payment date.

On November 26, 2012, the Defendant provided KRW 2 million to B in total over 26 times from around that time to February 29, 2016, as indicated in B’s list 2, as well as remitting KRW 2 million via a bank account (Account Number N) in B’s name.

As a result, the defendant made an illegal solicitation and provided property to the person who administers another's business.

2. Defendant B’s breach of trust

Since the Defendant has been in charge of selling an order of an Ichip from the purchasing company in D, the Defendant shall conduct the transaction after ascertaining whether the purchase-related documents are appropriately prepared and submitted, and shall not conduct the transaction, such as regulating the selling price in return for the benefit received from the purchaser, etc., or for personal interests.

Nevertheless, as described in the above 1-B(b), the Defendant received illegal solicitation from A, and received KRW 2 million from A around November 26, 2012 in return, as indicated in the Defendant’s above account, and received KRW 2 million from around that time to February 29, 2016, totaling KRW 64 million from around 26 times to around February 29, 2016.

As a result, the defendant acquired property in return for an illegal solicitation as to his duties as a person who administers another's business.

Summary of Evidence

【Criminal facts No. 1-A of the crime at the time of sale】

1. The defendant A's partial statement

1. Each protocol of examination of the suspect against Defendant A by the prosecution;

1. Investigation reports, investigation reports, filing of criminal reports, etc. on exports to 0, investigation reports, investigation reports, investigation reports, investigation reports, investigation reports, filing of data on response to the ECCN, investigation reports, etc., investigation reports, investigation reports (Notification of Results of Examination as to whether they fall under strategic items), investigation reports (Publication of Export and Import of Strategic Items and the file of products for double-purpose purposes in attached Table 2), investigation reports (BISD and EUS files);

1. An official letter of reply by the Minister of Trade, Industry and Energy (the Director of Trade and Security Department), each export declaration completion certificate, and each notice of the results of examination as to whether it is strategic items of the

【Criminal facts No. 1-b, paragraphs 2 and 3】

1. Defendants’ respective legal statements

1. Partial statement of the witness A (limited to the defendant B);

1. Partial statement of the witness B in the court (limited to the defendant A);

1. Each prosecutor's interrogation protocol against the Defendants

1. Investigation reports (Binding of account transactions details, etc.);

1. Details of account transactions in C;

Application of Statutes

1. Article relevant to the facts constituting an offense and the selection of punishment;

A. Defendant A: Articles 53(2)2 and 19(2) of the respective Foreign Trade Act (unauthorized export of strategic items, choice of imprisonment for each type of punishment), Article 357(2) and 357(1) of the former Criminal Act (amended by Act No. 14178, May 29, 2016; hereinafter “former Criminal Act”).

B. Defendant B: Article 357(1) of the former Criminal Act (generally, the choice of imprisonment)

1. Aggravation for concurrent crimes;

Defendant A: former part of Article 37, Article 38(1)2, and Article 50 of the Criminal Act (limited to concurrent crimes with punishment prescribed in a crime of violation of the Foreign Trade Act on July 6, 2015, with the largest penalty)

1. Suspension of execution;

Defendants: each of the Defendants: Article 62(1) of the Criminal Code (General Considerations favorable to the reasons for sentencing below)

1. Additional collection:

Defendant B: the latter part of Article 357(3) of the former Criminal Act

1. Order of provisional payment;

Defendant B: Article 334(1) of the Criminal Procedure Act

Judgment on the defendants' and defense counsel's arguments

1. Determination on Defendant A’s violation of the Foreign Trade Act

A. Summary of the assertion

① Considering the extent of the movement temperature, etc., the instant chip is not likely to be used for weapons of mass destruction, etc., and it is difficult to deem that it constitutes a strategic item, and even if it falls under a strategic item, it is difficult to deem that it is likely to be used for military purposes. Moreover, the instant chip is unnecessary to obtain export permission in the case of exporting the instant chip to the United States and Japan, which is a member of the Baar system. Accordingly, even if the Defendant exported the instant chip without obtaining permission from the Minister of Trade, Industry and Energy, it cannot be said that the instant

② Even if the instant chips are subject to export permission under the Foreign Trade Act, the Defendant did not intend to violate the Foreign Trade Act, on the ground that the instant chips were not subject to conversion for military use because they were not subject to sensitive items or primary sensitive items, and thus, they did not obtain export permission from the Minister of Trade, Industry and Energy by mistake that individual export permission is not required for re-export.

B. Determination

1) Whether the instant chip is subject to export permission under the Foreign Trade Act

In full view of the following facts acknowledged by the evidence duly adopted and examined by the court, the instant IC chips constitute a strategic item for double-use purposes and are subject to export permission regardless of whether they are admitted to the State subject to export in accordance with the relevant provisions of the Foreign Trade Act. The Defendant and the defense counsel’s assertion are not acceptable.

(1) On July 12, 2018, the Korea Strategic Trade Institute established to determine strategic items pursuant to Article 29 of the Foreign Trade Act (Evidence No. 697, 700 pages) determined that all of the instant IC chips constituted strategic items (Evidence No. 697, 700 pages).

② The defense counsel asserts that the instant IC chip has a radiation function in order to constitute strategic items, - - - 5°125°125°C temperature. However, according to the attached Table 2 of the export notification of strategic items, the scope of internal radiation function and movement temperature is required as an export control classification number 3A01.a. 1 and 3A01.2, and the export control classification number 3A01.5.3, 3A01. 1.4, 3A01.5, 3A01.5, the export control classification number of the instant IC chip is required as a requirement for certain decomposition and output speed and does not need to meet the above radiation function and movement range.

③ The export and import notification of strategic items is also defined as strategic items not only for the military supplies but also for the double-use items that can be used for both private and military purposes (Evidence No. 735, 738 of the evidence record). Even if the IC chip of this case is somewhat under the direct risk of being used for military purposes due to aptitude and state compared to the military supplies, there is no doubt that it is subject to export permission as long as the need for restrictions, such as export permission, is recognized in accordance with the relevant provisions of the Foreign Trade Act and is publicly notified as strategic items.

(2) The export and import notification of strategic items under the Foreign Trade Act and strategic items is limited to cases where an exporting country of strategic items is subject to permission from the Minister of Trade, Industry and Energy (Evidence No. 734), and Article 26(3)1 of the Export and Import Notification of strategic items clearly states that export permission is exempted if an exporting country of strategic items is an exporting country of strategic items (Evidence No. 734 of the Evidence No. 734 of the Record). Thus, it is difficult to find any particular ground to apply by analogy even in cases of exporting "goods, which are strategic items," as argued by a defense counsel (Evidence No. 748 of the Record).

2) Whether the defendant was guilty

In full view of the following facts acknowledged by the evidence duly adopted and examined by this Court, the Defendant exported the instant IC chips, which are strategic items, without obtaining permission from the Minister of Trade, Industry and Energy, in violation of the Foreign Trade Act. The Defendant and the defense counsel’s assertion are not acceptable.

① Around 200, the Defendant entered P, a domestic distribution agent of an ICT chip, and was in charge of technical business for about two years. Around 2003 and September 200, the Defendant established and operated C and has been engaged in the distribution business of IC chips for a period exceeding ten years (Evidence Records No. 458 pages).

② In trading with Q chips distribution agencies, the Defendant submitted a final statement on the final use of the chips, which C directly uses, on several occasions (Evidence No. 891 of the Evidence No. 891 of the Record), and on July 4, 2014, submitted to the distribution agency of other chips, a letter of confirmation that C would not export strategic items to other countries without permission, while registering D as a trading agency (Evidence No. 177 of the Evidence No. 177 of the Record).

③ Considering the above Defendant’s experience in the distribution business of chips and the details of the documents submitted by the Defendant to the distribution agency, the Defendant was well aware that the export of chips is a strategic item assigned to the export control classification number, and if it falls under strategic items, it was necessary to obtain permission from the Minister of Trade, Industry and Energy in accordance with the relevant provisions of the Foreign Trade Act.

④ Meanwhile, the Defendant stated that “IC chips are controlled by the ECCN (export control classification number)” was known to the prosecution, but the type of ECCN is too large, so it cannot be confirmed daily because the number of parts controlled by the ECCN is too large,” and that “IC chips are exported without permission in practice in the industry,” and “Although there was a knowledge of put put in place, it would be difficult to solve this problem” (Evidence No. 182, 461, 464, 466 of the evidence record).

⑤ The purport of the Defendant’s statement is that although it was sufficiently aware that the instant chips may constitute strategic items to which the export control classification number was assigned, it is difficult to confirm it daily, and it did not undergo export permission since it did not have any specific problem in practice. Ultimately, the Defendant, without obtaining permission from the Minister of Trade, Industry and Energy, recognized that the export of the instant chips violates the Foreign Trade Act, at least did it violate the Foreign Trade Act.

2. Determination as to the Defendants’ crime of giving or taking advantage of breach of trust

A. Summary of the assertion

The Defendants received KRW 64 million as indicated in the facts charged. However, there was no illegal solicitation to the effect that: (a) the Defendants exchange money on the simple name of personnel or height that was paid for a smooth transaction relationship; and (b) Defendant A made an illegal solicitation to the effect that “the Defendants would provide part of the profits instead of offering the transaction convenience, such as aiding and abetting Defendant B to purchase goods at a higher price than the ordinary supply price; and (c) helping Defendant B purchase goods at a higher price than the ordinary payment date.” Even if there was such solicitation among the Defendants, this is merely a request for the convenience of Defendant A within the discretionary scope of Defendant B in the course of the transaction of ICT chips, and thus, it cannot be deemed an illegal solicitation.

B. Relevant legal principles

The crime of taking property in breach of trust under Article 357(1) of the Criminal Act is established when a person who administers another person's business obtains property or pecuniary benefits in exchange for an unlawful solicitation in connection with his/her duties. The term "illegal solicitation" in this context does not necessarily require it to the extent that it constitutes the substance of occupational breach of trust, and it is sufficient if it is against social rules or the principle of good faith. In determining this, the contents of the solicitation and the amount of the consideration related thereto, forms, and the integrity of transactions, which are protected by the law, should be comprehensively considered, and such solicitation does not necessarily require explicit (see, e.g., Supreme Court Decision 2008Do6987, Dec. 11, 2008).

C. Determination

In full view of the following facts acknowledged by the evidence duly adopted and examined by this court and the circumstances that can be inferred therefrom, Defendant A may recognize that Defendant B made a solicitation to provide part of its profits in return for the offering of transaction convenience in relation to the unit price and payment date of the ICT chips, and this is an illegal solicitation contrary to social rules and the principles of good faith. The Defendants and defense counsels’ assertion is rejected.

1) Defendant A made a clear statement at the prosecutor’s office stating, “I will give money to B” as follows: “I will receive good unit price in relation to the transaction of Ichips and receive goods in accordance with the payment period, so I would like to do so.” (Evidence No. 482, 483% of the evidence record).

2) Defendant B made a statement at the prosecution that “A had PM operations in D. PM. PM negotiations at the request of a customer company, such as A, and made and sent a set of sets to the manufacturer for the purpose of receiving a good price for the manufacture.” From a customer’s perspective, Defendant B made a statement to the effect that “A would pay money to the auditor as the special unit price is high for purchasing the general unit price or special unit price.” (Evidence No. 505,506,507 of the evidence record) that “A would pay money from the manufacturer for the purpose of receiving money from the Defendant A was paid for the more chip unit price from the manufacturer.” (Evidence No. 505,506,507 of the evidence record)

3) Defendant A paid money in excess of the number of million won to R R R’s S and Q’s business employees, who are business employees of other distribution agencies. Defendant A stated to the prosecutor that “The reason for Defendant A paid the said money is only that the distribution agency does not interfere with the middle by failing to deal with it despite a request for estimate.” “T sold sample chips at prices to B, and provided various convenience in transaction relations. A small-scale companies, such as C, etc., sold samples to B, and provided various convenience in transaction relations. A, a small-scale company, such as C, made a statement to the effect that “A business entity intended to purchase ICT chips at a low price and at a low price” (Evidence No. 470, 479, 480).

As such, Defendant A requested that Defendant A provide convenience in the overall transaction of ICT chips, such as dealing with goods and services relatively rapidly, and if possible, providing convenience in the overall transaction of chips, such as providing favorable treatment in the unit price. The same applies to Defendant B’s payment of money.

4) Defendant A also paid approximately KRW 23 million to 15 times from July 15, 201 to January 10, 2013 to G employees of an chip manufacturer G. Defendant A proposed that “U give a certain percentage of the unit price to the U” at the Marina, 200, and consented by U.S. prosecutor’s office. (the payment of money to the U) U made an offer for an estimate, and did not proceed with the procedure despite the request for an estimate,” “U would normally purchase a low unit price, and the estimated procedure or delivery was proceeding rapidly” (Evidence No. 467, 468, 477 of the evidence record). Meanwhile, Defendant B introduced Defendant B’s profits to the prosecution and made a statement to B1 of U.D’s estimate that “I would have known of U.D.’s profits.”

As such, if Defendant A paid money to U for the smooth receipt of a good unit price, and Defendant B, a distribution agent introduced by U, also paid money on the extension line to Defendant B, it is natural to view that Defendant A paid money to Defendant B as well as the money paid to U for the same purpose as the money paid to Defendant B was accepted in relation to the solicitation that delivery would be handled rapidly.

5) The Defendants stated to the effect that “B is not in the position to provide convenience for the unit price or payment period to A. It is not in the position to provide convenience for the unit price or payment period.” Defendant A stated to the effect that “a person in charge of business, such as B, takes charge of communication with the manufacturing company” and Defendant B also made a statement to the effect that “a person in charge of business, such as B, takes charge of communication with the manufacturing company.”

In light of the above Defendants’ legal statement, Defendant B seems to have been in the position of having a considerable influence on bilateral trade relations while taking charge of the communication channel between IC chip manufacturing chain G and C, a customer company, as a business manager of the distribution agency.

6) Defendant A stated in this court that “C’s average monthly sales amounting to approximately KRW 200 million, whichever is about 10-15%,” and considering the degree of monthly profit of Defendant A and the influence that Defendant B could have on the transaction of Defendant A’s chips as seen earlier, it is difficult to deem that Defendant A paid money of KRW 100,000 to KRW 64,000,000 from KRW 1 million per month to KRW 600,000,000 in total, under the mere name of personnel or garment.

(7) Defendant B made a statement at the prosecutor’s office that “if he was aware of the provision of convenience related to the transaction by receiving money from A, who is the trading partner of the company, it would be a problem, such as dismissal from the company, etc.” (Evidence No. 509 of the Record). As such, Defendant B also received a solicitation that Defendant B, who is the business partner of the distribution agency, will continuously deliver part of the profits from the trading from Defendant A, who is the trading partner of the company, to the other party to the transaction, it would prejudice the transaction between the company and the customer and the integrity of the business affairs of the business officer, and such solicitation shall be deemed an illegal solicitation in light of the social norms and

Reasons for sentencing

1. Defendant A

(a) Scope of punishment by law: Imprisonment with prison labor for not more than seven years and six months;

(b) Scope of recommendations based on the sentencing criteria;

1) A violation of the Foreign Trade Act: No sentencing guidelines are set;

2) Crimes of giving property in breach of trust

[Determination of Punishment] Type 2 (not less than 50 million won, less than 100 million won) evidence in breach of trust

【Special Convicted Person】

[Scope of Recommendation] Six months to one year (Basic Area) of imprisonment

3) The scope of final sentence according to the standards for handling multiple crimes: Imprisonment for not less than six months;

【Inasmuch as the crime of giving rise to breach of trust and the crime of violation of the Foreign Trade Act for which the sentencing guidelines have not been set are concurrent crimes under the former part of Article 37 of the Criminal Act, only the lowest limit of the crime of giving rise to

(c) Determination of sentence;

According to the international export control system, the Defendant exported strategic items that require export permission for the sake of international peace, security, and national security without obtaining permission for a long period of time, and thereby obtaining significant economic benefits therefrom. The amount granted by the Defendant to B in return for illegal solicitation is large to KRW 64,00,000. Nevertheless, the Defendant has continued to assert that: (a) the instant IC chips were unaware of having known that the instant IC chips constituted a strategic item that requires export permission; or (b) the amount paid to B was not the price for illegal solicitation, not the price for illegal solicitation. Considering these points, the Defendant requires a strict punishment corresponding to the criminal liability.

However, according to the publication of export and import of strategic items, strategic items are classified into double-use items and military supplies. Therefore, it is difficult to evaluate the crimes of violation of the Foreign Trade Act to the same extent as the case of export of military supplies. There is no circumstance to deem that the instant IC chips exported by the Defendant were actually used for military purposes. There is no criminal record. The Defendant is an initial offender who has no criminal record. These points are considered in favor of the Defendant.

In addition, the defendant's age, character and conduct, environment, family relationship, motive and circumstances of the crime of this case, and various conditions of sentencing as shown in the pleadings of this case shall be comprehensively considered.

2. Defendant B

(a) Scope of applicable sentences under the Acts: Imprisonment with prison labor for not more than five years or the scope of recommended sentences according to the sentencing guidelines;

[Determination of Punishment] Type 3 (at least 50 million won, less than 100 million won)

【Special Convicted Person】

[Scope of Recommendation] Imprisonment from one year to two years (Basic Area)

(c) Determination of sentence;

It is a large amount of money that the Defendant received in exchange for an illegal solicitation from A, a trading partner of the company, by taking advantage of the business authority and status as a distribution agency employee, to KRW 64,00,000. Nevertheless, there is a question as to whether the Defendant alleged that the money received from A cannot be regarded as an illegal solicitation even if the Defendant received a request for delivery of convenience in trading, or that it cannot be seen as an illegal solicitation. Considering these circumstances, it is necessary to punish the Defendant with strict penalty corresponding to the criminal liability.

However, there is no circumstance that the defendant was the first offender who had no criminal record, and that the defendant actively demanded the payment of money to A, etc. shall be considered in light of the circumstances favorable to the defendant.

In addition, the defendant's age, character and conduct, environment, family relationship, motive and circumstances of the crime of this case, and various conditions of sentencing as shown in the pleadings of this case shall be comprehensively considered.

The presiding judge, judge Kim Jong-tae

Judges Park Jae-ran

Judges Chief Democratic

1) Based on factual basis acknowledged by the instant pleadings and records, the facts charged were partially revised to the extent that the Defendants’ defense rights are not infringed.

A person shall be appointed.

A person shall be appointed.