The prosecution has non-custodially indicted one corporation each from Korea and the United States, along with 12 individuals, on charges of collusion amounting to 25.5 billion won in the bidding for the management and supply of goods for U.S. military facilities. This case marks the first successful outcome in a cooperative investigation into violations of the Fair Trade Act since Korea and the U.S. law enforcement agencies signed a Memorandum of Understanding (MOU) on cartel investigation collaboration in 2020.
On the 9th, the Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (Director General Kim Yong-sik) announced it uncovered 11 companies that colluded 229 times in facility management and goods procurement services ordered by the U.S. Army Corps of Engineers (USACE) and the Defense Logistics Agency (DLA) from January 2019 to November 2023.
The prosecution has non-custodially indicted 9 individuals, including the representatives of these companies, on charges of violating the Fair Trade Act and bid interference. Additionally, they non-custodially indicted a Korean corporation, identified as a main contributor to the crimes, and an American corporation that was involved in collusion, on charges of violating the Fair Trade Act. Three individuals, including the head of the American corporation's Korean office, were also non-custodially indicted on charges of violating the Fair Trade Act and bid interference.
The U.S. Department of Justice initially began the investigation. In March 2022, the U.S. Department of Justice indicted three Koreans and three Korean corporations in the U.S. in connection with bid collusion involving U.S. military facilities. The U.S. Department of Justice then determined that, since the suspects in this case are Korean, they should conduct a cooperative investigation with the Korean prosecution and requested the Supreme Public Prosecutors' Office to review the related materials and commence an investigation.
The governments of South Korea and the United States can conduct cooperative investigations into violations of the Fair Trade Act under the 'Memorandum of Understanding on Cartel Criminal Enforcement Cooperation' signed in 2020, and this case is the first instance of that.
The Korean prosecution uncovered additional collusion through searches of domestic subcontractors and investigations of related individuals. According to the prosecution, the companies suspected of collusion determined the likely winners of bids and coerced other companies to submit losing bids.
The prosecution has determined that employees from the Korean office of the American corporation conducting the bidding were also involved in this process. They are suspected of conspiring with subcontractors to conduct the losing bid process in favor of one company. The prosecution believes that the bidding corporation engaged in these actions to grant preferential treatment to companies with which they had collusion.