With the induction of Korea’s new anticorruption law looming, much of the workforce public is left speculating as to the extent of how it will affect their businesses when it officially takes effect on Sept. 28. The new law restricts public officials, private school faculty and journalists from receiving certain amounts of gifts or paid-for entertainment.

According to a report by the Korea Economic Research Institute released in June, the law’s effectuation is expected to result in a loss of roughly 11.6 trillion won ($10.6 billion) in annual sales for local businesses.

Under the Improper Solicitation and Graft Act, more often called the Kim Young-ran law, the definition of “gifts” includes gift certificates and accommodation vouchers as well as complimentary tickets for cultural arts performances including concerts, musicals and theater shows.

So what does all this mean for the future of the local entertainment industry?

“One of the biggest worries for us is what this new Kim Young-ran law will mean for the future of our productions,” said a spokesperson at one of the country’s largest theater and musical companies, asking not to be named.

“For us, not being able to give out complimentary tickets to journalists is what we are the most concerned about,” the spokesperson continued. “Press tickets are not about giving away gifts to journalists, for us, press tickets are a means for us to promote and publicize our productions. This is something we fear will greatly cut into our profits.”

It has been customary for entertainment and performance companies to invite reporters to their shows to write reviews. The industry insiders said they are skeptical that media companies would spend out of their own budget to dispatch reporters to the shows.

Some have also suggested the new law particularly has an impact on smaller and independent productions that are already struggling to capture media attention at minimum cost.

“I’ve spoken with employees from other concert and theater companies and we are all basically in the same position -- worried and unsure about what the future will hold for us and what other ways will we be able legally promote our shows to the media.”

Meanwhile, proponents to the antigraft law have pointed to the “entertainment expense” fund as an alternative.

The fund is a fiscal practice the government has enacted in recent years, hoping to encourage companies to spend money on cultural events in an effort to support the local arts industry and to abolish “unhealthy” ways of soliciting businesses.

As an incentive, companies are given a 20 percent tax exemption on expenses in which at least 3 percent of the funds are spent on anything cultural or arts related, such as concert tickets, exhibitions and sporting events.

The system, however, also is subject to the antigraft law in that each fund or ticket must not exceed the 50,000 won cap.

While some may see the new law as a burden or obstacle, proponents and lawmakers of the new provisions have vouched for it as a means to combat public officials, journalists and teachers from receiving overly generous privileges in an effort to help restore “fair practices” and minimize abuse of power.

By Julie Jackson (juliejackson@heraldcorp.com)