South Korea Removes Cap on Rewards for Reporting Corruption
A revised anti-corruption rule will eliminate South Korea’s 3 billion won ceiling on whistleblower rewards and use 30 percent of recovered public revenue as the basis for calculating payments.
South Korea will remove the ceiling on financial rewards for people whose corruption or public-interest reports help the government recover revenue, in a policy change intended to strengthen incentives for whistleblowers.
The Cabinet approved a revision to the enforcement decree of the Act on the Prevention of Corruption on Tuesday. Under the current system, a reward may range from 4 percent to 30 percent of the revenue recovered as a result of a report, while the maximum payment is capped at 3 billion won, or about $2.2 million.
The revised rule eliminates that fixed upper limit. It will instead use 30 percent of recovered revenue as the basis for calculating a reward, regardless of the amount recovered. The final payment will not necessarily equal the full 30 percent in every case, however. Officials may reduce it after considering how much the report contributed to the recovery and how accurate the information proved to be.
The government said the change is designed to make compensation more closely reflect the value of a report. Critics of the existing formula have argued that its effective rate falls for larger recoveries and that the 3 billion won ceiling can limit the incentive to disclose especially costly wrongdoing.
Removing the cap could produce substantially larger rewards when information leads to major recoveries. At the same time, the contribution and accuracy review gives authorities discretion to distinguish decisive, well-supported disclosures from reports that play only a limited role in a case.
The change covers reports involving corruption as well as violations of the public interest that result in revenue being recovered. It alters the reward calculation rather than the underlying process for determining whether a report qualifies.
The revised decree is due to take effect next Tuesday, one week after its Cabinet approval. Its practical impact will depend on the size and quality of future cases, but the new formula marks a clear shift in South Korea’s approach: compensation will be tied more directly to recovered funds instead of being constrained by a single nationwide ceiling.
For public agencies, the policy raises the potential cost of reward payments while linking that cost to money returned to the state. For prospective whistleblowers, it offers the possibility of compensation proportionate to the financial significance of information they provide, subject to the government’s final assessment of their contribution and accuracy.