DP's tougher testimony rules alarm U.S. businesses, Amcham says

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DP's tougher testimony rules alarm U.S. businesses, Amcham says

Published: 17 Dec. 2024, 17:54 Updated: 17 Dec. 2024, 18:26

PARK EUN-JEE
[email protected]

Audio report: written by reporters, read by AI

Amcham Chairman James Kim speaks at the National Assembly in western Seoul on Dec. 16 alongside Democratic Party leader Lee Jae-myung. [YONHAP]

The American Chamber of Commerce in Korea (Amcham) expressed its opposition to new legislation prohibiting companies from refusing to submit documents requested as part of parliamentary audits or investigations on the basis of confidentiality.

James Kim, chairman and CEO of Amcham, presented the potential downsides of the revision from the perspectives of foreign businesses during a meeting on Monday with Democratic Party leader Lee Jae-myung. Lee pledged to review the revision at the site, according to multiple media reports.

“It is true that the Amcham chairman delivered concerns from businesses,” said an Amcham spokesperson, adding that the regulation could deal a serious blow to the concerned parties.

Kim made the statement to reflect some Amcham member companies' apprehension about the amendment, the spokesperson said.

Lawmakers affiliated with the main opposition party, which controls the majority of the National Assembly, passed the bill on Nov. 28 to amend the Act on Testimony and Appraisal before the National Assembly.

The revision also requires all requested witnesses to appear, even if virtually, a clear departure from the previous policy of accepting abnormal circumstances, such as illnesses and overseas stays, as reasons for absence.

As for the documents, the previous act neither specified the range of materials for parliamentary inquires nor the punishment in cases where witnesses declined to submit.

The revised version states that personal information and sensitive data including trade secretes should be submitted without exception and warrants punishment if the subject either denies or forges the requested documents.

Advocates for the more heavy-handed revision believe that it could help enhance transparency and prevent witnesses from abusing it in order to avoid testimony.

But critics claim that the stronger rule runs the risk of exposing critical business information to competitors and hurting businesses. Major Korean law firm Shin & Kim noted in its newsletter that under the revised law, a business “is not allowed to deny submission even if the material contains personal information and trade secrets, which increases the possibility of leaking management data.”

Members of the People Power Party and Korea's six major business lobbies insisted Tuesday that acting President Han Duck-soo veto the revision.

BY PARK EUN-JEE [[email protected]]