[1] When an officer or employee of a rearrangement project management contractor is deemed a public official for bribery under the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents

[2] The standard for determining whether an employee or employee of a management entity specialized in improvement projects who is deemed a public official constitutes a bribe

[3] The elements for assessing that an officer or employee of a management entity specialized in improvement projects, who is deemed a public official, gives a bribe to the management entity specialized in improvement projects to which he/she belongs, as receiving a bribe

[4] In a case where money and valuables are gratuitously used in the crime of bribery and an illegal pecuniary profit is acquired, the subject of collection (=amount equivalent to the financial profit) and the method of calculation thereof

[5] The meaning of "interested person" under Article 38-2 of the Framework Act on the Construction Industry and the scope of its application

[1] In light of the language and purport of Article 84 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents, after executives and employees of a rearrangement project management contractor have completed registration with the Mayor/Do Governor (the Minister of Construction and Transportation before being amended by Act No. 8125 of Dec. 28, 2006) by satisfying the standards for certain capital, technical human resources, etc., they shall be subject to Articles 129 through 132 of the Criminal Act when accepting bribes in relation to their duties even before they are selected as a rearrangement project management contractor, and the management contractor of rearrangement projects shall not be subject to the said Act only after being delegated by an association establishment promotion committee with the authority to act

[2] Determination as to which profit a public official gains constitutes a bribe as an unfair profit with a quid pro quo relationship shall be made by taking into account all the circumstances such as the contents of the relevant public official’s duties, the relationship between a job and a beneficiary of benefits, whether there exists a special relationship between both parties, the degree of profit and the circumstances and timing of giving and receiving benefits, etc. This also applies to an officer or employee of a rearrangement project management contractor who is deemed a public official under Article 84 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents. In this case, if considering that a certain profit a public official gains is an unfair profit with a quid pro quo relationship, which constitutes a bribe, it does not necessarily require a rearrangement project management contractor to obtain profit with regard to its duties by concluding a specific entrustment contract with

[3] Where an executive or employee of a rearrangement project management contractor who is deemed a public official offers a bribe to a management entity specialized in rearrangement projects other than his/her duties, the crime of acceptance of bribe under Article 129(1) of the Criminal Act is established only in cases where the executive or employee of the management entity specialized in rearrangement projects, who is a corporation, is deemed to have been actually one of the management entity specialized in rearrangement projects that is a corporation, and is deemed to have operated it together with an individual enterprise, or to have been given a bribe to the management entity specialized in rearrangement projects to the extent that

[4] In a case where an illegal pecuniary profit is acquired through a gratuitous loan of money and valuables, the illegal profit received by the offender is equivalent to the financial profit accrued therefrom, and thus, the subject of additional collection is the amount equivalent to the above financial profit. The amount equivalent to the financial profit subject to additional collection here should be objectively calculated. The amount equivalent to the financial profit subject to additional collection should be based on the loan interest rate to be borne when the offender borrowed money through an ordinary method, such as receiving a loan from a financial institution. If the loan interest rate cannot be determined, or if the loan interest rate cannot be determined, based on the statutory interest rate stipulated in the Civil Act or the Commercial Act according to the status of the offender being provided with money and valuables, unless there are circumstances to deem it invalid as the agreement on due date or delay payment is the most most agreed upon, the amount shall

[5] The term "interested party" in relation to the conclusion of a contract for construction works under Article 38-2 of the Framework Act on the Construction Industry is a person who has a direct and legal interest in the conclusion of a contract for construction works as a person who engages in competition to enter into a contract for construction works for the purpose of receiving a contract for construction works or a subcontract, and thus, the residents in the redevelopment and reconstruction zone prior to the conclusion of a contract for construction works related to a rearrangement project entrusted or supported by the reconstruction and redevelopment cooperative, or a specialized management business entity specialized in rearrangement projects or a residents in the redevelopment and reconstruction zone who provide advice on the delegation or support of the works necessary for the implementation of a rearrangement project by an association establishment promotion committee, does not constitute an interested party under the above Act. In addition, the above provision merely prohibits an ordering person, contractor, subcontractor, or interested party from giving or receiving property or property gains by illegal

[1] Article 129(1) of the Criminal Act, Article 84 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents / [2] Article 129(1) of the Criminal Act, Article 84 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents / [3] Article 129(1) and Article 130 of the Criminal Act, Article 84 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents

[2] Supreme Court Decision 2005Do4737 Decided February 24, 2006 (Gong2006Sang, 554), Supreme Court Decision 2004Do7356 Decided December 22, 2006, Supreme Court Decision 2005Do4204 Decided April 27, 2007 (Gong2007Sang, 820) / [3] Supreme Court Decision 98Do1234 Decided September 22, 1998 (Gong198Ha, 2628), Supreme Court Decision 201Do7056 Decided April 9, 2002 (Gong202Sang, 1176), Supreme Court Decision 2003Do8274 Decided March 26, 2004 / [207Do30764 decided March 27, 2007]

Defendant 1 and 14 others

Defendants and Prosecutor

Attorneys Seo-chul et al., Counsel for the defendant

Daegu High Court Decision 2007No491 Decided March 13, 2008

The guilty part of the judgment of the court below is reversed, and that part of the case is remanded to the Daegu High Court. The prosecutor's appeal on the acquittal part is dismissed.

The grounds of appeal are examined.

1. A. Article 84 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents provides that "the executives (referring to the executives in the case of a corporation) and the representatives and employees of the rearrangement project management contractors (referring to the executives in the case of a corporation) shall be deemed public officials in the application of Articles 129 through 132 of the Criminal Act." This is not only a project having a public nature to improve the quality of residential life by systematically improving and improving areas where residential environment is inferior because reconstruction and redevelopment improvement projects are concentrated on old and inferior buildings, but also a project having a public nature to improve the quality of residential life by systematically improving and improving the areas where residential environment is inferior due to the concentration of worn-out and inferior buildings, but also a project to implement rearrangement projects by ensuring the fairness and integrity of the performance of duties by the executives and employees of the rearrangement project management contractors who vicariously perform

Considering the language and purport of Article 84 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents, only the executives and employees of a rearrangement project management contractor are deemed public officials in the application of Articles 129 through 132 of the Criminal Act only when the management contractor for rearrangement projects concludes a specific business contract with an association establishment promotion committee or a maintenance and improvement project partnership with regard to a specific reconstruction and redevelopment project or is delegated with the authority to vicariously execute the business

In such a legal doctrine, the judgment of the court below that the executives and employees of the rearrangement project management contractor are not deemed public officials in the application of Articles 129 through 132 of the Criminal Act only when they receive any bribe in connection with their duties even before they are selected as the rearrangement project management contractor by establishing an association, after meeting the standards for certain capital, technical human resources, etc., and registered with the Mayor/Do Governor (the Minister of Construction and Transportation before being amended by Act No. 8125 of Dec. 28, 2006). The judgment of the court below that the rearrangement project management contractor is not deemed public officials in the application of the provisions of Articles 129 through 132 of the Criminal Act, and there is no error in the misapprehension of legal principles as alleged in the grounds for appeal.

B. Determination as to which profit a public official gains as a bribe is an unfair profit with a quid pro quo relationship shall be made by taking into account all the circumstances such as the contents of the public official’s duties, the relationship between a job and a benefit provider, whether there exists a special relationship between both parties, the degree of profit and the circumstance and timing of receiving the profit (see Supreme Court Decision 2005Do4204, Apr. 27, 2007). The same applies to the case of an officer or employee of a rearrangement project management contractor who is deemed a public official under Article 84 of the Act on the Maintenance and Improvement of Urban Areas and Dwelling Conditions for Residents (see Supreme Court Decision 2005Do4204, Apr. 27, 2007). In this case, if it appears that a certain profit a public official gains as a quid pro quo relationship with an officer or employee falls under a bribe, the rearrangement project management contractor does not necessarily have to enter into

In the same purport, the "support for the business of selecting a contractor" belongs to the general duties and authority of the executives and employees of a rearrangement business entity, and the judgment of the court below which held that the acceptance of money and valuables pertaining thereto constitutes a crime of bribery is acceptable even if it depends on the future conditions or is uncertain whether or not the management business entity is specifically responsible for such duties or is performing specific duties. There is no violation of law such as misunderstanding of legal principles as

C. The crime of acceptance of bribe under Article 129(1) of the Criminal Act is applicable to the case where a public official receives a bribe in connection with his/her duties. In light of the fact that Article 130 of the Criminal Act provides that the crime of acceptance of bribe shall be punished for the crime of offering a bribe to a third party when a public official gives a bribe to a third party in exchange for an unlawful solicitation in connection with his/her duties. In a case where a public official allows a third party to give a bribe without receiving a bribe directly, such as where a public official receives a bribe as a private person or representative of a public official, and where a public official directly receives a bribe, the crime of acceptance of bribe under Article 129(1) of the Criminal Act is established (see Supreme Court Decision 98Do1234 delivered on September 22, 1998).

This legal doctrine also states that the same applies to cases where executives and employees of a management entity specialized in improvement projects, who are deemed public officials, give a bribe to a management entity specialized in improvement projects, other than the management entity specialized in improvement projects, and thus, such a legal doctrine also applies to cases where executives and employees are actually one corporate management entity specialized in improvement projects, which is a corporation, and are operated together with an individual enterprise, or even if not, it is deemed that the offering of a bribe to a management entity specialized in improvement projects is of economic and substantial interest to the extent that it can be seen as the same as the offering to such executives and employees.

In light of the above legal principles, first of all, the judgment of the court below that recognized the establishment of the crime of offering of bribe under Articles 133(1) and 129(1) of the Criminal Act against Defendant 1 and Defendant 2 by evaluating that Defendant 1 and Defendant 2 provided money to each of the above companies or provided money directly to Nonindicted 1 by social norms, in the case of YVV Co., Ltd., a corporation in which Nonindicted 1 owned most of the shares and actually managed on the ground of a third party as the representative director in the name of the representative director, and the code window of the corporation and the ricon City Co., Ltd., in which he independently operated his business under his own name, was the representative director.

However, according to the judgment of the court below, each officer column of 1. (The current status of giving enterprises) in the annexed list of crimes in the judgment of the court below is recognized as a representative director or an officer of the rearrangement project management contractor belonging to the rearrangement project management contractor, and lending money and valuables to the rearrangement project management contractor without interest does not seem to have any circumstances that can be evaluated as lending money and valuables to the executives of the rearrangement project management contractor with interest-free interest. Nevertheless, without due consideration as to the circumstances that can be evaluated as lending money and valuables to the executives of the rearrangement project management contractor under the social norms as lending the money and valuables to the management contractor for rearrangement projects without interest-free interest in interest-free interest-free interest-free interest-free interest-free interest-free interest-free interest-free interest-free interest-free interest-free interest-free interest-free interest-free interest-free interest-free interest-free interest-free interest-free interest-free interest-free interest-free interest-free interest-free interest-free investment management contractor for rearrangement project management contractor for rearrangement project management, the court below acknowledged the legal principles of acceptance of acceptance of bribe.

The grounds of appeal on this part by Defendant 1, Defendant 2, 4, 5, 9, and 10 pointing this out are with merit, and in the case of Defendant 3, 6, 7, and 8, the same grounds of appeal are common. Thus, the part of the judgment below on acceptance of bribe against Defendant 3, 6, 7, and 8 cannot be maintained as they are.

2. In order to not be punished under Article 16 of the Criminal Code even if his act satisfies the constituent requirements of the crime, it should be recognized that the act is not a crime under the law, and that there is a legitimate reason for such mistake.

In the same purport, the court below is just in holding that Defendant 1 and Defendant 2 did not have any justifiable reason to believe that Defendant 1 and Defendant 2 did not constitute a crime, solely on the ground that Defendant 1 and Defendant 2 were consulted with the purport that, in the course of lending money or goods to a specialized management businessman of rearrangement projects, Defendant 1 and Defendant 2 requested the internal legal team of the Coran Construction Corporation and an attorney-at-law from outside to provide legal advice to the management businessman of rearrangement projects, and that “a lending money or goods to a specialized management businessman without interest may not be legally problematic as long as it satisfies certain requirements.” In so doing

Defendant 1 and Defendant 2’s ground of appeal on this point is rejected.

3. The necessary confiscation or collection pursuant to the provisions of Article 134 of the Criminal Act aims to deprive the violator of the provisions of Articles 129 through 133 of the same Act of money, valuables, and other economic benefits which are provided or to be provided to the person who violated the provisions of the same Act, and prevent him from holding unlawful profits. In the event that he obtains illegal pecuniary benefits through free lending of money and other valuables, the illegal profits which the criminal has received shall be equivalent to the financial profits that he received, and thus, it shall be deemed that the amount equivalent to the above financial profits is not the money and other valuables that he received without compensation. Meanwhile, in this context, the amount equivalent to the financial profits subject to the collection should be calculated objectively, but the amount equivalent to the above financial profits should be calculated objectively. If the criminal borrowed the money by ordinary means such as receiving the money from the financial institution, or if the loan interest rate cannot be determined, it shall be calculated based on the legal interest rate stipulated in the Civil Act or the Commercial Act depending on the status of the offender who received the money and other valuables.

Nevertheless, since it is impossible for Defendant 3, 4, 5, 6, 9, and 10 to calculate the objective value of financial gains acquired by borrowing money from Defendant 1 and Defendant 2 as interest without interest, the lower court did not err by misapprehending the legal doctrine on necessary additional collection stipulated in Article 134 of the Criminal Act, which affected the conclusion of the judgment.

Therefore, the prosecutor's ground of appeal pointing this out is with merit.

4. Article 38-2 of the Framework Act on the Construction Industry provides that “No ordering person, contractor, subcontractor or interested person shall acquire or provide property or property gains by illegal solicitation in connection with the conclusion of a contract or the execution of a construction work,” and Article 95-2 of the same Act provides that “any person who has acquired or provided property or property gains by illegal solicitation in violation of Article 38-2 shall be punished by imprisonment for not more than five years or by a fine not exceeding 50 million won” is prohibited by ordering person, contractor, subcontractor or interested person from receiving money and valuables in connection with the receipt and order of the construction work and the execution of the construction work, and by punishing such violations, the purpose is to prevent problems such as fraudulent construction from occurring in the number of orders and execution of the construction work and to promote the sound development of the construction industry.”

In full view of the purport and language of these regulations, interested parties related to the conclusion of a contract for construction works under Article 38-2 of the Act are persons who compete to enter into a contract for construction works or for the purpose of receiving a subcontract for construction works, and have a direct and legal interest in whether to enter into a contract for construction works. Therefore, residents in redevelopment and reconstruction zone before a contract for construction works related to a rearrangement project is entered into by a reconstruction and rearrangement cooperative or a cooperative for reconstruction or a cooperative for the implementation of a rearrangement project or a cooperative for the implementation of a rearrangement project is entrusted with, or provide advice on, the affairs necessary for the implementation of a rearrangement project or a construction contract for a rearrangement project does not constitute interested parties under the above Act. Furthermore, Article 38-2 of the Act prohibits between the ordering person, contractor, subcontractor, or interested parties from receiving or receiving property or property gains by illegal solicitation in connection with the receipt and execution of contracts for construction works, and cannot be said to prevent giving money

Therefore, the court below erred in the misapprehension of legal principles as to the scope of application of Article 38-2 of the Framework Act on the Construction Industry, which affected the conclusion of the judgment by misapprehending the legal principles as to the act of offering financial benefits or paying service fees to the residents of the redevelopment area as stated in the attached Table 2. (Presentation Status of Goods) of the attached Table 2. (The current status of provision of goods) by Defendant 1 and Defendant 2, who are officers and employees of the company specialized in improvement projects, who do not fall under an interested party under the above Act, and the representative director of the company specialized in improvement projects as indicated in the annexed Table 1. (The current status of provision of goods) of the judgment below, by lending money and goods to the officers of the company specialized in improvement projects and the representative director of the company specialized in improvement projects, and by misapprehending the legal principles as to the act of offering goods recorded in the gift type to the residents of the redevelopment area as indicated in the attached Table 2. (The current status of provision of goods), Defendant 8, the representative director of the company specialized in improvement project.

Therefore, the argument of Defendant 1, Defendant 2, Defendant 6, Defendant 8, Defendant 9, Co., Ltd., Urban and Madul Construction Co., Ltd., chip Development Co., Ltd., and Dald Co., Ltd., as well as Defendant 10 and Camamb Development Co., Ltd., which points out this part, is with merit. As such, among the judgment below, the part of violation of the Framework Act on the Construction Industry as to Defendant 10 and Camamb Rearrangement Co., Ltd. cannot

5. The grounds of appeal by Defendant 1, Defendant 2, 7, 10, and 9 and Defendant 4, 6, and the prosecutor’s remainder of the grounds of appeal are merely an error in the selection of evidence and fact-finding, which belong to the lower court’s exclusive jurisdiction, and thus, are not legitimate grounds of appeal.

6. Conclusion

Therefore, among the guilty parts of the judgment below, the guilty part of the judgment below is reversed and remanded to the court below for a new trial and determination, and the prosecutor's appeal on the non-guilty part of the judgment below (excluding the non-guilty part as to the primary facts charged) is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Yang Chang-soo (Presiding Justice)