South Korea puts price cap on business lunches

South Korea is bringing in 'draconian' new legislation curtailing business-related entertainment, including steep restrictions on business lunches and gifts.

The new anti-corruption law, which comes into effect next month, will see stringent limits put on how much can be spent on entertaining business people, as well as journalists and even teachers, BBC reports.

The law will enforce approximate limits of US$30 a head on business lunches, and US$50 per head for gifts, the report claims.

The legislation has been introduced as a way of combatting corruption in the professional world, in a country that ranks 37th out of 168 on Transparency International's corruption perceptions index, a Reuters report said.

Former Prime Minister Lee Wan-koo is currently appealing after he was convicted last year of receiving 30 million won (US$27,000) in a shopping bag during a parliamentary election in 2013, according to prosecutors. 

A Seoul government official told the BBC that the law aimed to restrict "over-entertaining", which he suggested may be due to the nature of the country's culture.

"[South] Korea is a very much a relationship-based country," Peter Kim told the BBC.

"Therefore if they want to get something they have to build a relationship."

A Financial Times report said the law had provoked a 'business backlash' over fears that the rules could affect the country's domestic consumption.

Chang Yoo-shik, a lawyer with civic group People’s Solidarity for Participatory Democracy told the paper: “Our connection-oriented culture provides a fertile ground for corruption and injustice.” 

“People’s distrust of the public sector including the judiciary runs high, while our society suffers huge economic losses from bribery and favouritism.”