South Korea expands espionage law beyond acts benefiting North Korea, creating a new offense for spying on behalf of any foreign country or equivalent organization. The revised Criminal Act took effect on September 13 after a six-month grace period.

 

The change has four immediate consequences for the technology sector:

  • Foreign-directed espionage now carries a minimum three-year prison term
  • Semiconductor and AI secrets gain a stronger national-security route
  • Prosecutors no longer need to treat most cases only as trade-secret theft
  • The separate enemy-state espionage provision remains in force

 

South Korea Expands Espionage Law Beyond Enemy States

The National Assembly passed the Criminal Act revision on February 26, and the government promulgated it on March 12. The change responds to years of criticism that the existing offense was too narrow because it applied to conduct benefiting an enemy state, a category that in practice meant North Korea.

 

The new Article 98-2 covers espionage conducted for a foreign country or an organization treated as its equivalent. The official National Law Information Center publishes the consolidated Criminal Act, while Reuters reported that the new offense carries at least three years in prison.

 

The older provision for espionage benefiting an enemy state is not replaced. It remains a distinct, more serious offense. That distinction matters because the amendment broadens the countries and organizations covered without erasing the legal framework created around South Korea’s continuing security confrontation with North Korea.

 

Semiconductors and AI Move Into a National-Security Frame

South Korea’s National Intelligence Service welcomed the amendment when it passed, identifying semiconductors, displays, batteries and AI among the strategic technologies that need stronger protection. The list reflects industries where South Korean companies hold valuable process knowledge and compete against heavily funded global rivals.

 

AI demand has raised the strategic value of memory chips, packaging methods and manufacturing expertise. Samsung Electronics and SK Hynix occupy central positions in the supply chain for high-bandwidth memory and other components used by AI accelerators. A leak can therefore affect both a company’s balance sheet and national industrial policy.

 

Prosecutors previously had to rely on laws covering industrial technology or trade secrets in many cases involving foreign governments or companies. Supporters of the revision argue that those statutes produced lighter penalties and did not fully capture the national-security dimension of technology transfers directed by foreign actors.

 

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Article 98-2 Still Requires a National Secret

The expanded reach does not turn every corporate information leak into espionage. Reporting on the law describes a national secret as non-public information whose disclosure could threaten national security, including matters involving the economy, science and technology as well as diplomacy, defense and unification.

 

Authorities must also establish the connection to a foreign country or equivalent organization. Those elements create a higher bar than simply proving that an employee copied confidential files. Courts will have to determine which industrial information is sufficiently important to qualify and what evidence demonstrates foreign direction or benefit.

 

The law does not name China or any other country. Asked whether the revision targeted Beijing, China’s foreign ministry said its companies must follow international rules and local laws, while governments should provide a fair and non-discriminatory business environment. Enforcement will show whether cases concentrate on particular jurisdictions.

 

The amendment follows prominent allegations involving Korean chip technology. In 2025, prosecutors indicted five former Samsung employees accused of transferring dynamic random-access memory technology to Chinese memory maker CXMT. Reuters noted that Samsung and CXMT did not comment at the time.

 

Enforcement Shifts Toward Deterrence and Corporate Controls

The new offense gives investigators a tool with a higher minimum penalty, but legal text alone cannot prevent leaks. Semiconductor manufacturing knowledge often resides across engineering teams, suppliers and smaller contractors. Those organizations may lack the monitoring, retention programs and post-employment controls available to the largest chipmakers.

 

Companies operating in South Korea will need to identify which technical material could be treated as a national secret, document access and strengthen controls around overseas recruitment, consulting and research partnerships. Employees also need clear notice about which transfers may now expose them to espionage charges rather than only civil or commercial penalties.

 

Cross-border collaboration presents the harder boundary. Chip development depends on multinational equipment vendors, materials suppliers, customers and research institutions. An aggressive interpretation could discourage legitimate exchange, so prosecutors and courts will need to distinguish covert extraction from authorized cooperation with precision.

 

The first cases under Article 98-2 will define that boundary. They will determine how broadly judges read national secrets, which foreign-linked organizations qualify and what proof is needed to show that a transfer served a foreign country. Those rulings will matter far beyond Korea’s chip sector as AI competition increases the value of industrial knowledge.