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Anti-corruption

In South Korea, Olympic torch may shine light on track record of corruption

Jesse Spiro  Head of Threat Finance & Emerging Risks, Thomson Reuters

Jesse Spiro  Head of Threat Finance & Emerging Risks, Thomson Reuters

As the world turns its eyes to PyeongChang for the XXIII Olympic Winter Games, South Korea must confront its problem of corruption - or risk disgrace.

When the 2018 Olympic Games kick off next month, they’ll shine a global spotlight on PyeongChang, the city South Korea has chosen to receive thousands of athletes, fans, politicians and celebrities beginning February 7. They’ll also shine a light on something South Korea may prefer they not – the country’s troubling modern history of corruption.

All eyes on South Korea

As a global spectacle, the Olympics are unrivaled. They’re an unsurpassed occasion for the host country to display itself on the worldwide stage. South Korea has spent an estimated US$13 billion making PyeongChang (it capitalizes the “C” now to avoid confusion with Pyongyang, the North Korean capital) into a world-class winter playground and has used the Olympics as a chance to make diplomatic overtures to North Korea, with which it has had an acrimonious relationship for decades.

South Korea badly wants to capitalize on the rare public-relations opportunity the Olympics offer, and early indicators are that it’s well on its way.

The big caveat to this all, though, is that the Olympics are an image-burnishing opportunity only if there are no corruption scandals tied to the host nation.

When it comes to South Korea, that’s a big “if.”

Assistants change target boards during shooting practice for the biathlon events for the Pyeongchang 2018 Winter Olympics. REUTERS/Toby Melville
Assistants change target boards during shooting practice for the biathlon events for the Pyeongchang 2018 Winter Olympics. REUTERS/Toby Melville

In the national fabric, a concerning thread

Corruption and bribery in South Korea are cultural and endemic. Chaebols, i.e. corporate conglomerates, like Samsung, are still guilty of jeonggyeong yuchak, which translates as collusion between politicians and businesses.

South Korea comes in at 52nd on Transparency International’s corruption index of 176 countries, which is a very poor showing for such a powerful, industrialized nation. For comparison’s sake, this is slightly worse than Rwanda and just above Namibia; in contrast, Japan is ranked 20th.  It’s no wonder nearly 70 percent of South Koreans distrust their government.

A lack of example-setting

Corruption and and bribery taint modern-day South Korea in part because there have been very few high-profile cases were graft has been punished. There have been only two impeachments in modern South Korean political history.

  • In March 2004, former president Roh Moo-hyun was impeached for “electioneering.” He was acquitted and reinstated in May 2014.
  • In December 2016, former president Park Geun-hye was impeached over her role in a corruption scandal that involved her aide and confidante, Choi Soon-sil, and some of South Korea’s largest corporate conglomerates. Her impeachment was heavily supported by the public, and became law by a 234-56 vote. Geun-hye’s impeachment was much more of a scandal than Moo-hyun’s. It included extortion, abuse of power, bribery, leaking classified documents, and constitutional violations.
A volunteer stands at the base of the Olympic Cauldron for the upcoming 2018 Pyeongchang Winter Olympic Games at the Alpensia resort in Pyeongchang, South Korea. REUTERS/Eric Gaillard
A volunteer stands at the base of the Olympic Cauldron for the upcoming 2018 Pyeongchang Winter Olympic Games at the Alpensia resort in Pyeongchang, South Korea. REUTERS/Eric Gaillard

What’s on the horizon

The lack of high-profile example-setting aside, South Korea has taken steps to ban common cultural practices that foster corruption and bribery, like the giving of gifts or payments at ceremonies for occasions like weddings and funerals.

However, for South Korea to truly make headway in its fight against corruption, it must address the Chaebol and government corruption issue. More transparency is needed in South Korea around Ultimate Beneficial Ownership (UBO) if graft, bribery and corruption are to be identified and rooted out.  Appropriate Know Your Customer and Enhanced Due Diligence is imperative to combating jeonggyeong yuchak. Taking into account the revenue the Olympics will bring, they could potentially serve as a major turning point in changing the “corruption culture” in South Korea.


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