How Should Foreign Companies Respond to Government Investigations in Korea?

Short Answer

Foreign companies should cooperate appropriately with Korean authorities, but they should first determine which authority is conducting the investigation and what legal procedure is being used.

Each authority has different legal powers, investigative procedures, and potential consequences. The appropriate response depends on the type of investigation—not simply on the fact that government officials have arrived.

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Why Does the Investigating Authority Matter?

Different authorities have different powers.

For example:

• The Korea Fair Trade Commission (KFTC) may investigate competition law and unfair trade practices.
• The Personal Information Protection Commission (PIPC) may investigate personal data protection issues.
• The National Tax Service (NTS) may conduct tax audits.
• Korean prosecutors or police may execute criminal search warrants or conduct criminal investigations.
• Other regulators may investigate industry-specific compliance obligations.

Understanding the legal basis of the investigation is the first step toward an appropriate response.

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What Documents Should Be Reviewed First?

Companies should immediately request and review any official documents presented.

Depending on the authority, these may include:

• An investigation notice
• A request for documents
• An on-site inspection notice
• A preservation request
• A court-issued search warrant

The company should carefully confirm:

• The purpose of the investigation
• The scope of the investigation
• The relevant time period
• The documents or electronic data requested
• The legal basis for the investigation

Companies should avoid assuming that every request automatically extends beyond what is stated in the official documents.

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Should the Company Cooperate?

Generally, yes.

Companies should remain professional and cooperate with lawful investigations.

However, cooperation does not mean providing documents or information beyond what is legally required.

Before responding, companies should understand:

• Which authority is making the request
• What legal powers that authority has
• Whether the request falls within the stated scope
• Whether outside counsel should be involved

A controlled and organized response is generally better than an immediate but unstructured reaction.

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What Should Employees Do?

Employees should stay calm and avoid acting independently.

They should:

• Refer investigators to the designated company contact
• Answer factual questions honestly
• Avoid speculation
• Avoid guessing or making assumptions
• Preserve relevant documents
• Follow internal legal or compliance instructions

Employees should not delete emails, messages, or documents after learning of an investigation.

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Should the Company Preserve Documents?

Absolutely.

Once an investigation becomes reasonably foreseeable, companies should preserve potentially relevant information.

A proper legal hold may include:

• Emails
• Internal messaging platforms
• Electronic documents
• Accounting records
• Contracts
• Cloud storage
• Mobile devices
• Local computer files
• Backup systems

Early preservation reduces legal risk and helps ensure an organized response.

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How Should Electronic Data Be Managed?

Electronic data is often one of the most important parts of a government investigation.

Companies should identify:

• Where relevant data is stored
• Which employees control the data
• Whether overseas servers are involved
• Whether personal information is included
• Whether confidential business information is affected

IT personnel should avoid altering systems or deleting information without legal review.

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Should Internal Interviews Be Conducted?

Often, yes.

Internal interviews can help the company understand the relevant facts before responding to investigators.

Interview participants should be encouraged to:

• Provide accurate factual information
• Distinguish facts from assumptions
• Identify relevant documents
• Avoid speculation
• Report concerns promptly

Where appropriate, interviews should be coordinated through legal or compliance personnel.

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Can Internal Emails Be Protected?

Companies should be careful when assuming that communications with lawyers are automatically protected.

Unlike some common law jurisdictions, Korea does not generally recognize attorney-client privilege in the same way.

Although lawyers have important confidentiality obligations, communications involving legal advice are not automatically immune from disclosure or use simply because a lawyer was included.

Companies should therefore adopt careful document management and communication practices rather than assuming that all legal communications receive blanket protection.

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What If Investigators Request Interviews?

Interview requests should be handled carefully.

Before answering detailed questions, companies should understand:

• Which authority is conducting the interview
• Whether the interview is voluntary or compulsory
• Whether counsel may attend
• Whether documents should be reviewed first
• Who is authorized to speak for the company

If the answer is uncertain, it is generally better to confirm the facts before responding than to speculate.

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Should Foreign Headquarters Be Involved?

Often, yes.

Many investigations affect multinational operations.

Headquarters should be informed where appropriate, particularly if the investigation involves:

• Cross-border data transfers
• Global compliance policies
• International reporting obligations
• Overseas management decisions
• Parent company involvement
• Global document preservation

Coordination between the Korean subsidiary and overseas headquarters often helps ensure a consistent response.

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What Mistakes Should Companies Avoid?

Common mistakes include:

• Ignoring official requests
• Destroying or deleting documents
• Providing inconsistent explanations
• Allowing unauthorized employees to speak for the company
• Producing documents without reviewing the request
• Assuming all communications with lawyers are automatically privileged
• Failing to preserve electronic evidence
• Delaying contact with legal counsel

Early mistakes can significantly affect the course of an investigation.

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Practical Considerations

Foreign companies should prepare for investigations before they occur.

Good preparation includes:

• Maintaining an internal investigation response plan
• Identifying a response team
• Training management and reception staff
• Establishing document preservation procedures
• Maintaining organized records
• Reviewing electronic data management
• Identifying external legal counsel in advance
• Coordinating Korean and overseas compliance teams

Preparation often reduces disruption and improves the company's ability to respond effectively.

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Conclusion

Government investigations in Korea can arise from many different authorities, each operating under different legal procedures.

Foreign companies should first identify the investigating authority, understand the legal basis for the investigation, preserve relevant documents, coordinate internal communications, and respond in an organized and legally appropriate manner.

A structured response not only reduces legal risk but also helps protect the company's operations, reputation, and long-term compliance.

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