June 26 Legislative Report: Push for Legislation to Block Dummy Accounts and Discussions on Reducing Prosecutorial Investigative Scope

National Assembly Pushes for 'Dummy Account Blocking' Legislation Amidst Moves to Strengthen Shell Company Regulations

The judiciary, government, and National Assembly have reached an agreement to intensify crackdowns on shell companies, identified as a primary conduit for financial crimes such as voice phishing. This initiative specifically focuses on establishing AI-powered systems and implementing preventative measures from the company registration stage.

On the 25th, the Supreme Court's Court Administration and Management Office announced plans to develop an AI system to flag suspicious shell company cases and share the information with relevant agencies including the National Tax Service, police, and banks. A system to prevent the creation of shell companies from the outset of the registration process is also planned. An official from the Court Administration and Management Office stated, "We are deeply concerned about the company registration system being exploited for financial crimes like the opening of dummy accounts." This effort is seen as a response to the issues of shell companies and neglected dummy accounts, stemming from information silos between agencies, as highlighted in the Dong-A Ilbo's investigative series, 'Hidden: The Veins of Dirty Money, Dummy Accounts.'

The government is also stepping up its measures. The Integrated Response Unit for Telecommunications and Financial Fraud, led by the Ministry of Government Policy Coordination, held a meeting with financial authorities and other related agencies on the 26th. Further follow-up actions are anticipated, with a meeting hosted by the Financial Services Commission scheduled for July 2nd.

Discussions Accelerate on Criminal Procedure Act Amendments to Reduce Prosecutors' Direct Investigative Scope

Meanwhile, a legislative push to curtail the scope of prosecutorial direct investigations is gaining momentum among members of the Legislation and Judiciary Committee. Rep. Kim Ok-soo of the Cho Kuk Innovation Party has indicated the possibility of co-sponsoring legislation during the 22nd National Assembly to amend the Prosecutors' Office Act and narrow the scope of direct investigations by prosecutors.

In related remarks, former Democratic Party leader Rep. Chung Chester-chin described the government's decision to abolish supplementary investigative powers as a race against time, urging those in the National Assembly who agree with the abolition to unite for irreversible action. He declared his intention to join the sponsorship of a Criminal Procedure Act amendment bill that would fully abolish these powers and proposed that pro-government parties, including the Democratic Party, Cho Kuk Innovation Party, and the Progressive Party, adopt it as party policy.

Indeed, on the 26th, Rep. Kim Yong-min of the Democratic Party, Rep. Park Eun-jeong of the Cho Kuk Innovation Party, and independent Rep. Choi Hyuk-jin, among other pro-government lawmakers, introduced a bill to abolish prosecutors' supplementary investigative powers, accelerating legislative efforts in this area. This is considered a key task for prosecutorial reform, and discussions are expected to intensify amidst ongoing pressure from the opposition parties. The government has stated that it has begun reviewing the proposed amendments to the Criminal Procedure Act.

Calls for National Election Commission Reform Spread, Demanding Dissolution via Constitutional Amendment

Amidst recent controversies surrounding the National Election Commission (NEC), the Democratic Party is driving a powerful reform agenda, advocating for the dissolution of the NEC through constitutional amendment. Rep. Song Ki-heon, head of the Democratic Party's Task Force for Safeguarding Citizens' Participatory Rights and NEC Reform, stated at the TF's sixth meeting on the 26th, "We will change the name and structure of the NEC to ensure it can become a constitutional body that guarantees citizens' participatory rights."

Rep. Song also emphasized the need to ensure transparency in the NEC's overall financial operations through an audit by the Board of Audit and Inspection (BAI). He argued, "Through constitutional amendment, 'NEC audits' must be included in the BAI's functions," further elaborating on the party's stance that the BAI itself should ultimately be transferred to the National Assembly. Even before a constitutional amendment, proposals were made to strengthen accountability by making the NEC Chairperson a permanent position and expanding the number of standing commissioners. The plan is to increase the number of standing commissioners from the current one to three, assigning them responsibilities for election/voting management, investigation/enforcement, and organizational operations, thereby enhancing internal oversight.

These demands for NEC reform have garnered significant public attention following a series of incidents, including the shortage of ballots during the June 3rd local elections and issues of budgetary waste. They are highly likely to emerge as major contentious issues in the National Assembly going forward.

Rival Parties Clash Sharply Over Bill Processing in National Assembly

Meanwhile, tensions between the ruling and opposition parties are escalating over the handling of legislation in the National Assembly. The People Power Party recently pointed to instances of internal dissent, noting that 10 party members abstained from voting on the 'Act on the Korea Rural Community Corporation and the Agricultural and Fisheries Resources Management Fund Amendment (Alternative Bill),' with 64 voting for and 10 against. Another eight party members deviated from the party line on the 'Act on Promoting Resource Conservation and Recycling Amendment,' with 66 votes in favor and 8 against. The party is analyzing this internal division and has called for the disclosure of the names of dissenting members.

The People Power Party strongly objects to the arbitrary allocation of members to standing committees for the latter half of the parliamentary session by Speaker Chung Sye-kyun (Democratic Party), labeling it 'dictatorial.' Rep. Chung Jeung-sik, the People Power Party's floor leader, criticized the Speaker's actions by releasing the official document detailing the committee assignments. With continued failures in negotiating parliamentary committee formations, the conflict between the ruling and opposition parties is expected to deepen, creating obstacles for the passage of key legislation.

These ongoing parliamentary activities clearly illustrate how political dynamics and internal party structures, in addition to the substance of legislation, influence the legislative process. The clash of interests and policy objectives among political parties is causing considerable friction in the lawmaking process, making the timeline for the passage of bills that could impact public life and the economy uncertain.