South Korea Plans Ministry Investigators and Tougher Financial Penalties for Technology Leaks

Technology theft crackdown targets profits, investigations and overseas deals

South Korea plans to give its industry ministry powers to investigate technology theft and make companies' development costs a minimum basis for damages, following 107 overseas industrial technology leak cases detected by the National Intelligence Service between 2021 and 2025.

Industry Minister Kim Jung-kwan chaired the 76th Industrial Technology Protection Committee meeting at the Korea Trade Insurance Corporation on October 19, 2026. Officials discussed broader confiscation of criminal proceeds, tougher sentencing and closer scrutiny of corporate transactions that could move sensitive technology abroad.

The proposed changes would affect semiconductor and display companies, smaller suppliers, universities and foreign investors buying businesses that hold protected technology. They would also bring the ministry that designates national core technologies directly into criminal investigations through special judicial police powers.

Representatives from 15 ministries attended the meeting, alongside the National Police Agency, the Serious Crimes Investigation Agency, the Public Prosecution Office and the Defense Acquisition Program Administration. Their participation put coordination between technology officials and criminal investigators at the centre of the proposals.

The government plans to introduce amendments to the Industrial Technology Protection Act and the National High-Tech Strategic Industry Act during October. It also intends to announce its sixth comprehensive industrial technology protection plan before the end of 2026, one year earlier than originally scheduled.

The package combines three approaches: stopping sensitive knowledge from leaving, improving investigations when a leak is suspected, and making offenders surrender more of the financial gains. Several measures require legislation, while proposed sentencing changes would also involve the Supreme Court's guidelines.

What the intelligence figures show

The National Intelligence Service detected 22 overseas industrial technology leak cases in 2021, 20 in 2022, 23 in 2023, 23 in 2024 and 19 in 2025. The five annual figures total 107, or slightly more than 21 detected cases a year.

The 2025 figure was four cases below the 23 recorded in 2024, a decline of about 17%. Even with that decrease, the agency detected between 19 and 23 cases in every year covered by the figures, showing why officials are treating technology protection as a continuing enforcement task.

The NIS series lists 23 cases for 2024; government figures cited during the 2025 display investigations listed 27 for that year. The counting basis behind that difference was not specified.

Concern about the loss of manufacturing knowledge was already visible in the display technology raids involving LG Display in Paju and Samsung Display in Asan in 2025. Investigators suspected employees of passing advanced manufacturing information to a Chinese company and seized photographs of process documents, production diagrams and laboratory notes.

Those investigations illustrate what can be at stake beyond a stolen document. Manufacturing instructions can contain settings and practical knowledge refined through years of experiments. A competitor obtaining that information may save time and money that the original developer spent learning how to make a product reliably.

Why the industry ministry wants investigative powers

The industry ministry already designates and manages national core technologies, a category for capabilities whose loss could damage national security or the economy. Companies holding those technologies face approval or reporting requirements when exporting or transferring them, and certain foreign acquisitions undergo security review.

The proposed special judicial police authority would let designated ministry officials investigate crimes within a defined legal field. Their value would come from combining knowledge of protected technologies with investigative responsibilities, including closer information sharing with intelligence and police agencies.

The existing arrangement divides responsibilities. Special judicial police officers at the intellectual property ministry investigate trade secret infringement under the Unfair Competition Prevention and Trade Secret Protection Act. Their current authority does not extend to violations of the Industrial Technology Protection Act, which covers national core technology leaks.

Prosecutors have traditionally taken over cases from those officers and applied additional relevant laws. Bringing industry ministry investigators into the process would change that division of work, placing officials responsible for technology protection policy closer to the gathering and assessment of evidence.

Two ministries seek a role as prosecution rules change

The industry ministry conveyed its request for special judicial police authority to the Supreme Prosecutors' Office after that office surveyed ministries and agencies in January about their needs. The intellectual property ministry has also sought an expansion of its authority to cover Industrial Technology Protection Act violations.

The intellectual property ministry submitted its position to the Ministry of Justice through a consultative body last year and is pursuing related amendments. The Office for Government Policy Coordination is reviewing improvements to the special judicial police system across agencies.

The proposed Public Prosecution Office Act adds another issue. Its text does not specify prosecutorial direction over special judicial police officers, while the future of the Criminal Procedure Act provisions allowing that direction remains uncertain. The final allocation of responsibilities between the ministries, police and prosecutors has not been settled.

For a technology owner reporting a suspected leak, those decisions will shape which agency investigates and how technical findings move into a prosecution. The October committee meeting sought to strengthen cooperation across those organisations as the government prepares the legislation.

Making theft cost more than it earns

The government wants to broaden confiscation and recovery of criminal proceeds so that the financial consequences of technology theft outweigh the rewards. Confiscation takes assets connected to a crime; recovery can require payment of their value when those assets cannot be seized directly.

Compensation for the victim company would be another part of the response. Officials want damages to include, at a minimum, the amount the company invested in developing the technology. That would place research spending at the centre of the calculation rather than relying solely on an estimate of sales or profits lost after a leak.

The industry ministry's technology protection statement, responding to an October 6 parliamentary audit, gives a further detail: courts would be able to ask specialist institutions to assess the financial damage. It also proposes recognising the victim company's technology development expenditure as damage.

That approach matters for technologies built through repeated testing. A manufacturing process may represent years of spending before it generates a finished product or dependable revenue. Development costs give courts a financial record to examine when assessing the harm to the owner.

The government also plans to seek higher Supreme Court sentencing guidelines for technology leak offences and new guidelines for fines. Sentencing guidelines help judges decide penalties in individual cases. Confiscation, criminal fines and compensation would address different parts of the financial consequences: unlawful gains, punishment and repayment to the victim.

Courts would get a formal route to technical answers

The proposals would create a legal basis for courts to ask the industry ministry whether information involved in a trial qualifies as industrial technology. That classification matters because it helps determine which legal protections and offences apply.

The October 6 parliamentary audit had raised calls for mandatory ministry confirmation during trials. The ministry's stated response was to establish a basis allowing courts to obtain that confirmation. The October 19 package likewise described a procedure through which courts could consult the ministry.

The ministry also wants authority to request information from intelligence and investigative agencies about the scale of damage and the methods used in technology leaks. Its official statement identifies the National Intelligence Service, National Police Agency and Ministry of Justice as partners in closer information sharing.

The government already operates a joint response team for technology leaks and an industrial technology protection policy council. The new proposals seek to connect those cooperation arrangements more closely with investigations, court proceedings and the ministry's policy decisions.

Overseas subsidiaries and indirect acquisitions face scrutiny

The committee discussed expanding advance screening to cover sales or withdrawals of overseas subsidiaries connected to national core technologies. Foreign acquisitions made through domestic corporations or organisations would also come within the broader review system.

An indirect acquisition can take place when a foreign buyer uses a company established in South Korea to purchase another domestic business. The proposal would require officials to look through that structure when deciding whether protected technology could come under foreign control.

Overseas restructuring presents a different route. A Korean company may hold technology through a subsidiary abroad, then sell that subsidiary or withdraw from the operation. The government wants review procedures to cover those transactions where national core technologies are involved.

For affected companies, the practical change would be a wider range of transactions requiring attention to technology protection rules. The committee also considered export approvals and streamlined export reviews, bringing both security controls and the administration of legitimate technology transfers into its discussions.

Smaller companies, universities and engineers are part of the plan

Small and medium-sized businesses and universities would face more frequent and broader checks of their technology protection practices. The government also plans stronger security oversight of research and development projects involving national core technologies.

The official ministry statement pairs supervision with assistance. It proposes expanding support for security equipment and consulting at smaller companies, helping organisations improve protection rather than relying entirely on penalties after information has escaped.

Officials also want authority to issue corrective orders when companies fail to carry out required improvements. That would turn an identified security weakness into a matter on which the government could require action.

The ministry identifies wider use of artificial intelligence and the expansion of businesses overseas as reasons to strengthen inspections. Its response is to examine how companies actually protect technology as their tools, operations and exposure change.

Engineers and other key technical personnel are another focus, particularly in semiconductors. The government will review incentives to retain them and ways to obtain information needed to confirm job changes, while minimising interference with the constitutional freedom to choose an occupation. The proposal therefore combines efforts to keep skilled staff with closer attention to movements that could put sensitive knowledge at risk.

October legislation and a plan before year end

The October 19 measures follow earlier legal changes and parliamentary pressure. The ministry says amendments made in 2025 strengthened management of companies holding national core technologies, including authority to determine whether a company possesses such technology, and increased fines for offenders.

The next steps follow a short timetable:

• 2025: Amendments strengthened company oversight and penalties under the Industrial Technology Protection Act.
• October 6, 2026: A parliamentary audit called for stronger ministry staffing, investigative powers, information sharing and court procedures.
• October 19, 2026: The 76th Industrial Technology Protection Committee discussed the expanded package.
• During October 2026: The government plans to introduce amendments to the two technology protection laws.
• Before the end of 2026: Officials plan to announce the sixth comprehensive industrial technology protection plan, one year ahead of schedule.

Kim Jung-kwan, the industry minister who chaired the committee, described the stakes in terms of both industrial investment and security:

"Technology leaks are a grave problem that can destroy in an instant the industrial competitiveness that the state and companies have built up over long periods and at enormous cost, and that even threaten national security," Kim said.

The legislative proposals would put that response into several parts of the system at once: ministry investigations, company security, foreign transaction reviews, court assessments and financial penalties. Their practical effect will depend on the powers and procedures adopted through the amendments and the comprehensive plan.

Key Points

• The National Intelligence Service detected 107 overseas industrial technology leak cases from 2021 through 2025.
• The industry ministry seeks special judicial police powers to investigate technology leak offences directly.
• The government wants broader recovery of criminal gains and damages based at least on the victim company's technology development costs.
• Proposed screening changes cover certain overseas subsidiary transactions and foreign acquisitions through domestic entities.
• Smaller companies and universities would receive closer inspections, alongside expanded security support.
• Amendments are planned for introduction in October 2026, with a comprehensive protection plan due before year end.