Lawmakers, High-Ranking Officials Subject to Blind Trust of Stocks

By October at the earliest, high-ranking government officials, including lawmakers, at the first level or above will be required to sell their holdings of stocks related to their duties or delegate the management and disposal of such stocks to entrusted agencies.

On April 21, at a general session, the Government Administration and Local Autonomy Committee (GALAC) of the National Assembly passed a revision of the ethics law for officials, focusing on blind trusts for stock.

If the reform bill passes the plenary meeting during the upcoming special session of the National Assembly, the system of Blind Trust of Stocks will be fully introduced. The reform bill states the subject of the Blind Trust of Stocks system as high-ranking officials at the first level or above, but has authorized the presidential decree to include public officials of class two or lower who are posted at the Ministry of Finance and Economy and the Financial Supervisory Service.

Subjects of the Blind Trust of Stocks system will need to sell all stocks deemed to be related to their jobs by the Inspection Committee for the Blind Trust of Stock, which will be installed under the Ministry of Government Administration and Home Affairs, or contract a Blind Trust of Stocks agreement that delegates to trust agencies the authority of management, operation, and disposal for such entrusted assets.

The lower boundary for the total amount of stocks owned by officials in question and by interested parties such as the spouse, direct ascendants and descendants will be determined between 10 million won and 50 million won by a presidential decree.

In the case of a Blind Trust of Stocks agreement, the rule will be that the trust agency will need to dispose of the designated stocks within 60 days, but for stocks that are difficult to sell, such as a stock whose price has plummeted or an unlisted stock, the term may be extended.

Concerning the controversial real estate trust system for high-ranking public officials, the GALAC has decided to carefully consider its introduction through such procedures as a public hearing.

Young-Chan Yoon yyc11@donga.com