ENFORCEMENT DECREE OF THE REGIONAL CREDIT GUARANTEE FOUNDATION ACT
Presidential Decree No. 16736, Feb. 28, 2000
Amended by Presidential Decree No. 17366, Sep. 27, 2001
Presidential Decree No. 17936, Mar. 12, 2003
Presidential Decree No. 18312, Mar. 17, 2004
Presidential Decree No. 19025, Aug. 31, 2005
Presidential Decree No. 19494, May 30, 2006
Presidential Decree No. 19507, jun. 12, 2006
Presidential Decree No. 19569, jun. 29, 2006
Presidential Decree No. 20138, jun. 29, 2007
Presidential Decree No. 20728, Feb. 29, 2008
Presidential Decree No. 21518, May 29, 2009
Presidential Decree No. 21591, jun. 30, 2009
Presidential Decree No. 22075, Mar. 15, 2010
Presidential Decree No. 22151, May 4, 2010
Presidential Decree No. 22220, jun. 28, 2010
Presidential Decree No. 22304, Jul. 26, 2010
Presidential Decree No. 22493, Nov. 15, 2010
Presidential Decree No. 23535, Jan. 25, 2012
Presidential Decree No. 24023, Aug. 3, 2012
Presidential Decree No. 25050, Dec. 30, 2013
Presidential Decree No. 25945, Dec. 30, 2014
Presidential Decree No. 27273, jun. 28, 2016
Presidential Decree No. 27524, Sep. 29, 2016
Presidential Decree No. 27556, Oct. 25, 2016
Presidential Decree No. 28213, Jul. 26, 2017
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 2 (Scope of Individual) |
The term "person prescribed by Presidential Decree" under subparagraph 3 of Article 2 of the Regional Credit Guarantee Foundation Act (hereinafter referred to as "Act"), means a national of the Republic of Korea, to whom any of the following is applicable: <Amended by Presidential Decree No. 28213, Jul. 26, 2017> | 1. | In cases of a business on a personal credit guarantee account under Article 35-7 (2) of the Act: A person whose credit rating, income, etc., correspond to the standards determined and publicly notified by the Minister of SMEs and Startups; |
| 2. | In cases of a business on an asset-based loan guarantee account for living expenses under Article 35-7 (2) of the Act: A person whose assets, income, etc. correspond to the standards determined and publicly notified by the Minister of Health and Welfare. |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 3 (Financial Companies, etc.) |
As referred to in subparagraph 4 (f) of Article 2 of the Act, "a person ... prescribed by Presidential Decree" means the following: <Amended by Presidential Decree No. 27556, Oct. 25, 2016> [This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 4 (Other Financial Obligations to Be Covered by Credit Guarantee) |
A financial obligation that a credit guarantee foundation under Article 9 of the Act (hereinafter referred to as "foundation") and the Korean Federation of Credit Guarantee Foundations under Article 35 of the Act (hereinafter referred to as "Federation") can provide pursuant to subparagraph 5 (c) of Article 2 of the Act, shall be as follows: <Amended by Presidential Decree No. 27524, Sep. 29, 2016; Presidential Decree No. 28213, Jul. 26, 2017> | 1. | National taxes and local taxes to be borne by small and medium enterprises falling under a promotion plan for local small and medium enterprises (hereinafter referred to as "promotion plan for local small and medium enterprises") under Article 62-15 of the Small and Medium Enterprises Promotion Act, and by small enterprises, micro enterprises and individuals (hereinafter referred to as "small enterprise, etc."); |
| 2. | A debt on a note issued (including accepted and endorsed) by a small enterprise, etc. when a commercial transaction is accompanied by the note, and a debt on a note endorsed by a small enterprise, etc. for financing when the note is acquired for a commercial transaction; |
| 3. | A debt borne by a small enterprise, etc. when a facility is leased; |
| 4. | A debt for payment of various security deposits that a small enterprise, etc. bears when entering into a contract for construction works, supply of articles, provision of services, etc. (including bidding for such); |
| 5. | Other monetary debts determined and publicly notified by the Minister of SMEs and Startups. |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 5 (Business Territory) |
Where any of the following applies, a foundation may provide a guarantee to small companies, etc. in the Special Metropolitan City, Metropolitan Cities, Dos or Special Self-Governing City outside the business territory of the foundation: <Amended by Presidential Decree No. 28213, Jul. 26, 2017>
| 1. | Where the Minister of SMEs and Startups, Special Metropolitan City Mayor, Metropolitan City Mayors, Do Governors or Special Self-Governing City Mayor (hereinafter referred to as "Mayor/Do Governor") deem assistance is urgent due to disasters; |
| 2. | Where relevant Mayors/Do Governors deem needs arise as local government jurisdictions are changed or for the revitalization of local economies. |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 5-2 (Scope of Loans) |
| (1) | The scope of loans under Article 7 (3) of the Act provided by financial companies, etc. (hereinafter referred to as "bank, etc.") under subparagraph 4 (a) through (e) of Article 2 of the Act shall be the loans under subparagraph 1 excluding the loans under subparagraph 2: <Amended by Act No. 25945, Dec. 30, 2014> |
| 1. | Loans falling under any of the following, among the accounting headings on the balance sheet: |
| (a) | Loans receivable in the bank account; |
| (b) | Those in the trust account falling under any of the following: |
| (ii) | Privately-placed corporate bonds (applicable only to those purchased directly from enterprises); |
| (iii) | Bills bought (applicable only to those purchased directly from enterprises); |
| (iv) | Credit card loans (applicable only to a claim for price on purchasing cards and distribution cards); |
| (c) | Those in the merchant banking account falling under any of the following: |
| (ii) | Discounted trade drafts; |
| (iv) | Advances for customers; |
| (v) | Operating assets on cash management account; |
| 2. | Loans falling under any of the following: |
| (a) | Loans labeled loans receivable of a bank account falling under any of the following: |
| (i) | Loans denominated in won falling under any of the following: |
| a. | Facility loans among business loans; |
| (ii) | Loans denominated in foreign currency falling under any of the following: |
| b. | Loans obtained in foreign countries by branch offices, agents, business offices or offices established in foreign countries by financial companies, etc.; |
| c. | Loans granted by a financial company, etc. that have dealings with an importing enterprise to settle imports by sending money directly to such enterprise's trading partner, repayment period of which does not exceed one year; |
| (iii) | Domestic import usance; |
| (iv) | Off-shore loans denominated in foreign currency; |
| (vi) | Bills bought (excluding commercial papers purchased directly from enterprises); |
| (vii) | Bills bought in foreign currency; |
| (viii) | Credit card receivables (excluding receivables from purchasing cards and distribution cards); |
| (ix) | Debit card receivables (excluding receivables from purchasing cards and distribution cards); |
| (x) | Bonds purchased under resale agreements; |
| (xi) | Factoring receivables (excluding those subject to a financial company, etc. right of recourse to the transferor of accounts receivable); |
| (xii) | Loans for debt-equity swap; |
| (b) | Loans falling under any of the following among loans on a trust account: |
| (i) | Facility loans among business loans; |
| (ii) | Loans to households; |
| (c) | Loans falling under any of the following, among discounted bills on a merchant bank account and in the operating asset heading in a cash management account: |
| (i) | Those among discounted bills to be sold within five business days from the date of purchase; |
| (ii) | Those among operating asset heading in a cash management account, which fall under any of the following: |
| a. | Those among discounted bills in a cash management account to be sold within five business days from the date of purchase; |
| b. | Securities in a cash management account; |
| c. | Deposits in a cash management account; |
| d. | Other operating assets in a cash management account; |
| (d) | Loans from treasury funds or public funds financed with money borrowed from the state, local governments or public organizations or with funds; |
| (e) | Loans underwritten with foreign loans; |
| (f) | Loans between financial companies, etc.; |
| (l) | Loans by financial companies, etc. under subparagraphs 1, 2, 6, 7, and 10 of Article 3; |
| (m) | Special facility loans to promote investment by enterprises; |
| (n) | Loans denominated in won financed with foreign currency funds among loans to support enterprise investment in facilities, which are determined by the Minister of Strategy and Finance; |
| (o) | Those determined by the Minister of Strategy and Finance among loans supported for the structural improvement projects of small and medium enterprises; |
| (r) | Loans, the interest on which is reduced or exempted or interest on loans of which collection is postponed among loans to enterprises subject to rationalization under Article 12 (2) of Addenda of the Act on Regulation of Tax Reduction and Exemption (Act No. 5584); |
| (u) | Loans financed with borrowings (limited to funds borrowed after the day the Korea Development Bank Act amended wholly pursuant to Act No. 12663 enters into force) from the Korea Development Bank under the Korea Development Bank Act (hereinafter referred to as "Korea Development Bank"); |
| (v) | Borrowings from the Korea Development Bank that finance loans under item (u); |
| (w) | Loans (including loans granted by the Korea Development Bank according to a loan contract concluded by the Korea Finance Corporation before the day merger thereof is registered) succeeded by the Korea Development Bank from the Korea Finance Corporation following a merger under Article 6 (2) of Addenda of the Korea Development Bank Act as amended wholly by Act No. 12663; |
| (x) | Loans, financed with borrowings from the Bank of Korea or own funds to increase the capital of banks, granted to the Korea Asset Management Corporation or companies in which the Korea Asset Management Corporation made investments. |
| (2) | The scope of loans under Article 7 (3) of the Act granted by agricultural cooperatives, fisheries cooperatives, mutual savings banks, community credit cooperatives, credit unions and forestry cooperatives (hereinafter referred to as "agricultural cooperatives, etc.") among financial companies, etc. shall be the sum of the following loans: |
| 2. | Loans on a credit line or loans on deposits; |
| 3. | Merchant passbook loans; |
| 4. | Mutual finance mid-term loans. |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 5-3 (Rate, Time, Methods, etc. of Contribution) |
| (1) | Pursuant to Article 7 (3) of the Act, a financial company, etc. shall contribute an amount calculated by applying the contribution rate under attached Table to the average monthly balance of loans under Article 5-2 (1) and (2) as at the end of each month to a foundation and the Federation: Provided, That an agricultural cooperative, etc. shall make contributions to a foundation and the Federation through the National Agricultural Cooperative Federation, the National Federation of Fisheries Cooperatives, the Korea Federation of Savings Banks, the Korea Federation of Community Credit Cooperatives, the National Credit Union Federation of Korea or the National Forestry Cooperative Federation (hereafter referred to as "National Agricultural Cooperative Federation, etc." in this Article) with which they are affiliated. |
| (2) | A financial company, etc. shall pay a monthly contribution under paragraph (1), to the Federation by the end of the following month. |
| (3) | When a financial company, etc. pay contributions under paragraph (2), they shall submit the following documents to the Federation: Provided, That an agricultural cooperative, etc. shall submit the following documents to the Federation through the National Agricultural Cooperative Federation, etc.: <Amended by Presidential Decree No. 28213, Jul. 26, 2017> |
| 1. | Statement of contributions; |
| 2. | Documents evidencing average monthly balance; |
| 3. | Statement of loans classified as follows: |
| (a) | A bank, etc.: Statement of loans under the items of Article 5-2 (1) 2; |
| (b) | An agricultural cooperative, etc.: Statement of loans under the subparagraphs of Article 5-2 (2); |
| 4. | Other documents determined and publicly notified by the Minister of SMEs and Startups. |
| (4) | Notwithstanding paragraph (2), where a foundation and the Federation jointly make a request concerning the amount to be contributed, timing for payment, method of ex post facto settlement of contributions, etc. to a financial company, etc. with the approval of the Minister of SMEs and Startups, a financial company, etc. may first pay contributions that are to be paid in the future. <Amended by Presidential Decree No. 28213, Jul. 26, 2017> |
| (5) | The period during which agricultural cooperatives, etc. make contributions to foundations and the Federation shall not exceed ten years from the date they begin to make a contribution. |
| (6) | The date on which agricultural cooperatives, etc. can cease to make a contribution shall be separately determined and publicly notified by the Minister of SMEs and Startups, and the Minister of SMEs and Startups shall notify the National Agricultural Cooperative Federation, etc. thereof by not later than three months before such date. <Amended by Presidential Decree No. 28213, Jul. 26, 2017> |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 5-4 (Standards for Allocation of Contribution and Time) |
| (1) | The standards for allocation of contributions paid by banks, etc. pursuant to Article 5-3 shall be classified as follows: <Amended by Presidential Decree No. 28213, Jul. 26, 2017> |
| 1. | The standards for allocation of contributions among foundations and the Federation shall be determined and publicly notified by the Minister of SMEs and Startups based upon following matters: |
| (b) | The scale, etc. of compensation paid to foundations by the Federation as the Federation gave a re-guarantee for foundations; |
| (c) | Matters under the items of subparagraph 2; |
| 2. | The standards for allocation of contributions to each foundation as prescribed in subparagraph 1 shall be determined and publicly notified by the Minister of SMEs and Startups in consideration of following matters: |
| (a) | The scale of contributions made by local governments to foundations pursuant to Article 7 (1) 1 of the Act and the financial status of relevant local governments; |
| (b) | Records of credit guarantees that foundations gave in the immediately preceding year; |
| (c) | The number and scale of small enterprises, etc. located in the business territory of foundations; |
| (2) | The standards for allocation of contributions paid by agricultural cooperatives, etc. pursuant to Article 5-3 shall comply with the following classifications: <Amended by Presidential Decree No. 28213, Jul. 26, 2017> |
| 1. | The standards for allocation of the total amount of contributions among foundations and the Federation shall be determined and publicly notified by the Administrator of Small and Medium Business Administration in consideration of the following matters: |
| (b) | The scale of credit guarantees provided by foundations and the Federation with agricultural cooperatives, etc. as a creditor; |
| (c) | The scale of compensation paid by the Federation to foundations as the foundations met guarantee obligations for agricultural cooperatives, etc; |
| 2. | The standards for allocation of contributions to each foundation according to the standards under subparagraph 1 shall be determined and publicly notified by the Administrator of Small and Medium Business Administration in consideration of the following matters: |
| (a) | The scale of contributions made by local governments to foundations pursuant to Article 7 (1) 1 of the Act and the financial status of relevant local governments; |
| (b) | Records of guarantees provided by each foundation, where agricultural cooperatives, etc. are the creditor. |
| (3) | Where the Federation receives contributions from banks, etc. pursuant to Article 5-3 (2), it shall, without delay, allocate them to foundations according to the standards prescribed in paragraph (1). |
| (4) | Where the Federation receives contributions from agricultural cooperatives, etc. pursuant to Article 5-3 (2), it shall allocate them to foundations at the time determined by the Minister of SMEs and Startups in the fiscal year contributions are made according to the standards prescribed in paragraph (2). <Amended by Presidential Decree No. 28213, Jul. 26, 2017> |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 6 (Application Documents, etc. for Establishment of Foundation) |
| 1. | Documents in which the details of endowment are stated; |
| 2. | Resumes, written acceptance of office and certificates of seal of the chief director and proposed directors. |
| (2) | Determination of whether establishment of a foundation is authorized pursuant to Article 9 (4) of the Act and notification thereof shall be made within 30 days from the date of receipt of application. In such cases, if authorization is denied, detailed grounds therefor shall be notified. |
| (3) | The Minister of SMEs and Startups in receipt of an application for authorization under Article 9 (3) of the Act shall verify the abstract copy of resident registration card of the chief director and proposed directors through sharing of administrative information under Article 36 (1) of the Electronic Government Act: Provided, That where an applicant does not give consent, he/she shall be required to attach relevant documents. <Amended by Presidential Decree No. 28213, Jul. 26, 2017> |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 7 (Matters to Be Stated in Articles of Association) |
| 1. | Matters concerning the total limit on credit guarantee; |
| 2. | Matters concerning the operation of surplus funds; |
| 3. | Other important matters concerning the operation of foundation. |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 8 (Registration for Incorporation) |
The registration for incorporation of a foundation under Article 11 of the Act shall include the following matters: | 1. | Purpose of incorporation of foundation; |
| 3. | Location of main office; |
| 4. | Location of branch offices; |
| 5. | Endowment at the time of incorporation; |
| 6. | Name, resident registration number and address of chief director; |
| 7. | Names and resident registration numbers of directors and auditor; |
| 8. | Method of making public announcement. |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 9 (Registration of Establishment of Branch Offices) |
| (1) | Where the branch offices of a foundation are established, the following matters shall be registered: |
| 1. | In cases of location of main office: The fact of establishing branch offices within two weeks; |
| 2. | In cases of location of newly established branch offices: Matters under subparagraphs 1 through 3, 6, and 8 of Article 8 within three weeks. |
| (2) | Where a new branch office is established in the jurisdiction of a registry office having jurisdiction over the location of main office or a branch office, only the establishment shall be registered. |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 10 (Registration of Relocation) |
| (1) | If a foundation relocates its main office, it shall register the relocation within two weeks. |
| (2) | If a foundation relocates a branch office, it shall register the relocation within three weeks at previous location, and register matters under subparagraphs 1 through 3, 6 and 8 of Article 8 at the new location within four weeks: Provided, That where the branch office is relocated within the jurisdiction of the same registry office, only the fact of relocation shall be registered within two weeks. |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 11 (Registration of Modification) |
| (1) | Where any of the matters under the subparagraphs of Article 8 is modified, such modification shall be registered at the seat of the main office within two weeks. |
| (2) | Where any of the matters under subparagraphs 1 through 3, 6, and 8 of Article 8 is modified, such modification shall be registered at the seat of a branch office within three weeks. |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 12 (Registration of Appointment of Representative) |
Where the chief director of a foundation appoints a representative pursuant to Article 16 of the Act, he/she shall register the following matters at the seat of the main office and a branch office to which the representative is assigned. The same shall also apply to the modification of registered matters: | 1. | Name, resident registration number, and address of the representative; |
| 2. | Name of main office or branch office to which the representative is assigned; |
| 3. | Where the authority of the representative is restricted, the details of restriction. |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 13 (Counting of Registration Period) |
Where matters to be registered pursuant to Articles 9 through 12 require authorization or approval from the Minister of SMEs and Startups, registration period shall be counted from the day relevant written authorization or written approval arrives. <Amended by Presidential Decree No. 28213, Jul. 26, 2017> [This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 14 (Applicants, etc. for Registration) |
| (1) | The registration for incorporation under Article 8 shall be filed by the representative of promoters, and the registration under Articles 9 through 12 shall be filed by the chief director of a foundation. |
| (2) | An application for registration under Articles 8 through 12 shall be accompanied by the following documents: |
| 1. | Registration of establishment under Article 8: Copies of the articles of association of a foundation, written authorization for establishment, and documents evidencing appointment of the chief director pursuant to Article 15 (1) of the Act; |
| 2. | Registration of establishment of branch offices under Article 9: Documents evidencing establishment of branch offices; |
| 3. | Registration of relocation under Article 10: Documents evidencing relocation of the main office or branch office; |
| 4. | Registration of modification under Article 11: Documents evidencing relevant modification; |
| 5. | Registration of appointment of a representative under Article 12: Documents evidencing that appointment of the representative complies with Article 16 of the Act (including document evidencing restriction where authority of the representative is restricted). |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 15 (Provisions concerning Registration to Be Applied with Necessary Modifications) |
The provisions concerning incorporated foundations under the Civil Act shall apply to the registration of foundations unless otherwise expressly provided for by this Decree. [This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 16 (Limit of Credit Guarantee, etc.) |
| (1) | The limit of total amount of credit guarantee to be provided by a foundation and the Federation under Article 19 (1) of the Act (including cases in which such provision applies mutatis mutandis pursuant to Article 35-9 of the Act) shall be as follows: |
| 1. | Foundation: It shall be 15 times the sum of endowment and profit carried forward, but be operated after separating a personal credit guarantee account from other accounts; |
| 2. | Federation: It shall be 15 times the sum of endowment on a personal credit guarantee account and profit carried forward. |
| (2) | A foundation and the Federation may separately determine the total limit on credit guarantee by articles of association in consideration of the economic circumstances, etc. of the area under jurisdiction within the total limit on credit guarantee under paragraph (1). |
| (3) | The maximum limit on credit guarantee that a foundation and the Federation can provide to small enterprises, etc. pursuant to Article 19 (2) of the Act (including cases in which such provision applies mutatis mutandis pursuant to Article 35-9 of the Act) shall be as follows: <Amended by Presidential Decree No. 27273, Jun. 28, 2016; Presidential Decree No. 28213, Jul. 26, 2017>> |
| 1. | Maximum limit of credit guarantee a foundation can provide: It shall be 800 million won, but the maximum limit on personal credit guarantee operated within a personal credit guarantee account shall be 50 million won: Provided, That for medium and small enterprises, small enterprises and micro enterprises funded by Mayors/Do Governors according to a local small and medium enterprise promotion plan, maximum limit of credit guarantee that can be provided may be fixed at an amount in excess of 800 million won with the approval of the Mayors/Do Governors after resolution by the board of directors; |
| 2. | Maximum limit of personal credit guarantee the Federation can provide: 50 million won: Provided, That where the Minister of SMEs and Startups deems special needs exist for the national economy, it may set a separate maximum limit upon determination by the steering committee under Article 24-3. |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 17 (Guarantee Obligation) |
The scope of a financial obligation for which a credit guarantee is provided by a foundation pursuant to Article 20 of the Act shall be a guarantee amount for which a guarantee relationship is established pursuant to Article 23 of the Act and a subordinate obligation under Article 20. [This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 18 (Preferential Guarantee) |
The term "funds prescribed by Presidential Decree" under subparagraph 3 of Article 21 of the Act means the following: <Amended by Presidential Decree No. 28213, Jul. 26, 2017> | 2. | Funds deemed by the Minister of SMEs and Startups or Mayors/Do Governors to be necessary for the revitalization of regional economy or for the promotion of regional specialized industry. |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 19 (Cause for Requesting Fulfillment of Guarantee Obligations) |
| 1. | In cases of credit guarantee for a financial obligation under subparagraph 5 (a) of Article 2 of the Act: Where small enterprises, etc. provided with credit guarantee fails to fulfill a financial obligation by the due date or when three months pass from when the benefit of time is lost; |
| 2. | In cases of credit guarantee for a financial obligation under subparagraph 5 (b) of Article 2 of the Act: When three months pass from the time a creditor fulfills a guarantee obligation; |
| 3. | In cases of credit guarantee for a financial obligation under subparagraph 5 (c) of Article 2 of the Act: Where a cause specified in the business manual under Article 18 of the Act (hereinafter referred to as "business manual") arises. |
| (2) | Where a small enterprise, etc. falls under any of the following, a creditor may request a foundation to fulfill a guarantee obligation notwithstanding paragraph (1): |
| 1. | Where a small enterprise, etc. goes bankrupt or dissolve; |
| 2. | Where a small enterprise, etc. fails to carry on business continuously for six months or more; |
| 3. | Where there are reasonable grounds to believe that debts are impossible to collect from a small enterprise, etc., which are approved by the board of directors of the foundation. |
| (3) | Where a creditor intends to request the fulfillment of a guarantee obligation pursuant to paragraph (2), he/she shall prove the ground thereof. |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 20 (Scope of Subordinate Obligation) |
| 1. | In cases of credit guarantee for a financial obligation under subparagraph 5 (a) of Article 2 of the Act: Interest accruing until a foundation fulfills a guarantee obligation after a primary obligation reaches maturity. In such cases, the interest rate applied to the contract period of the primary obligation shall be applicable; |
| 2. | In cases of credit guarantee for a financial obligation under subparagraph 5 (b) and (c) of Article 2 of the Act: Interest specified in the business manual and other amounts to be borne by a debtor; |
| 3. | Other expenses incurred by a creditor for the collection of a debt, which are recognized by the board of directors of a foundation. |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 20-2 (Sale of Claim for Indemnity) |
The term "persons ... prescribed by Presidential Decree" under subparagraph 3 of Article 25-2 of the Act means the following: | 1. | The Korea Asset Management Corporation; |
[This Article Newly Inserted by Presidential Decree No. 21591, Jun. 30, 2009]
| Article 21 (Guarantee Fees, etc.) |
| (1) | The guarantee fees under Article 27 (1) and additional guarantee fees under paragraph (2) of the same Article shall be calculated by a foundation at the rate specified in the business manual in consideration of the credit worthiness of a small enterprise, etc., kind of guarantee, etc. |
| (2) | The late-payment penalty under Article 27 (3) of the Act shall be calculated by multiplying the unpaid guarantee fee by an annual interest rate of 10/100. |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
The damages under Article 28 shall be calculated by multiplying a guarantee obligation fulfilled by a foundation or the Federation by the rate specified in the business manual in consideration of the interest rate for a loan in arrears of a financial company, etc. [This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 23 (Procedures, etc. for Establishing Federation) |
| (1) | Where a Federation is to be established, five or more foundations shall promote the establishment thereof. |
| (2) | Matters necessary for the affairs and operation of the Federation shall be specified by the articles of association of the Federation. |
| (3) | In addition to those prescribed by this Decree, procedures for the incorporation of the Federation shall follow the precedents on incorporation of incorporated associations under the Civil Act. |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 24 (Articles of Association of Federation) |
The articles of association of the Federation shall include the following:
| 5. | Matters concerning the collection of membership fees and operating expenses; |
| 6. | Matters concerning executives and employees; |
| 7. | Matters concerning general meetings; |
| 8. | Matters concerning board of directors; |
| 9. | Matters concerning reguarantee; |
| 10. | Matters concerning personal credit guarantee; |
| 11. | Matters concerning affairs of collection of debts from debtors, which are entrusted by foundations; |
| 12. | Matters concerning accounting; |
| 13. | Matters concerning dissolution; |
| 14. | Matters concerning amendment of the articles of association; |
| 15. | Matters concerning requesting information and data to foundations; |
| 16. | Other important matters concerning the operation of the Federation. |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 24-2 (Standards of Reguarantee for Individual Agreements) |
“If the guarantee amount, etc. meets the standards prescribed by Presidential Decree” under the proviso to Article 35-5 (2) of the Act means where the guarantee amount is at least 200 million won. [This Article Newly Inserted by Presidential Decree No. 27273, Jun. 28, 2016]
| Article 24-3 (Composition of Steering Committee) |
| (1) | The members of the steering committee under Article 35-5 (3) of the Act (hereinafter referred to as "committee") shall consist of the following persons: <Amended by Presidential Decree No. 27524, Sep. 29, 2016; Presidential Decree No. 28213, Jul. 26, 2017> |
| 1. | The chairperson and a managing director of the Federation; |
| 2. | One person nominated by the Minister of Strategy and Finance among public officials under his/her jurisdiction; |
| 3. | One person nominated by the Minister of SMEs and Startups among public officials under his/her jurisdiction; |
| 4. | Two persons, each nominated respectively by heads of two banks designated by the Minister of SMEs and Startups (referring to banks under Article 2 (1) 2 of the Banking Act) among executives affiliated with such banks; |
| 6. | Two persons selected at the general meeting of the Federation from among the chief directors of foundations. |
| (2) | The term of office of the members under paragraph (1) 4 through 6 shall be two years. |
| (3) | The chairperson of the committee (hereinafter referred to as "chairperson") shall become the chairperson of the Federation. |
| (4) | The chairperson shall represent the committee and manage the duties of the committee. |
| (5) | Where the chairperson is unable to perform any of his/her duties due to unavoidable reasons, his/her duties shall be performed by persons in the following order: The managing director of the Federation and members designated by the chairperson. |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 24-4 (Operation of Committee) |
| (1) | The chairperson shall call and chair meetings of the committee. |
| (2) | The meetings of the committee shall convene with a majority of the members in attendance; and resolutions shall be passed with the affirmative vote of a majority of members present. |
| (3) | Matters necessary for the operation of the committee in addition to those prescribed by this Decree shall be determined by the chairperson after discussion by the committee. |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 24-5 (Rate of Reguarantee) |
"Ratio ... prescribed by Presidential Decree" under Article 35-5 (5) of the Act means 50/100: Provided, That in any of the following cases, the Minister of SMEs and Startups may set different ratios which are classified as follows: <Amended by Presidential Decree No. 28213, Jul. 26, 2017> | 1. | If deemed necessary to further vitalize the economy, expand guarantee support for small enterprises, etc., stabilize the livelihood of people, or to recover from a pressing disaster: Greater than 50/100 but not greater than 80/100; |
| 2. | If deemed necessary to maintain the financial strength of the Federation, for instance, cases where a guarantee event is highly likely to occur or where the guarantee period is long term: Not less than 30/100 but less than 50/100. |
[This Article Wholly Amended by Presidential Decree No. 27273, Jun. 28, 2016]
| Article 24-6 (Contract Period, etc. of Reguarantee) |
| (1) | The reguarantee contract period shall be within one year. |
| (2) | The reguarantee contract under paragraph (1) shall provide for matters concerning the payment of reguarantee fees, payment of compensation, etc. and submission of reports for the verification as to whether such matters are implemented, and inspection of the status of duties, etc. |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 24-7 (Maximum Limit of Reguarantee) |
The maximum limit of reguarantee to be provided to the same small enterprise, etc. shall be 400 million won: Provided, That where the Minister of SMEs and Startups deems it necessary for the revitalization of the economy, increase in support with guarantee to small enterprises, stabilization of the living condition of individuals, recovery from emergencies, etc., maximum limit shall be 500 million won. <Amended by Presidential Decree No. 28213, Jul. 26, 2017>
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 24-8 (Calculation of Compensation) |
The compensation paid by the Federation where a foundation makes a substitute payment to fulfill a guarantee obligation shall be an amount calculated by multiplying the amount calculated by subtracting an amount collected by the foundation by exercising its right of indemnity from the amount paid by the foundation in substitution for a defaulter by the rate of reguarantee.
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 24-9 (Return of Compensation) |
Where a foundation, after the Federation compensates the foundation under Article 24-8 and the foundation pays a guarantee obligation in substitute for a defaulter, collects the amount paid in substitute for a defaulter by exercising its right of indemnity, it shall return an amount calculated by multiplying the collected amount by the rate of reguarantee to the Federation. <Amended by Presidential Decree No. 27273, Jun. 28, 2016> [This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 24-10 (Termination and Change of Reguarantee Contracts) |
Where a foundation fails to implement a contract under Article 35-5 (1) of the Act, the Federation may terminate or amend the contract. [This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 24-11 (Provisions to Be Applied with Necessary Modifications) |
The provisions of Articles 9 through 13, 14 (2) 2 through 5, 17, 19, 20, 20-2, 21, and 22 shall apply mutatis mutandis to the Federation. In such cases, "foundation" shall be construed as "Federation", "chief director" as "chairperson", "board of directors" as "steering committee", "main office" as "company" and "branch office" as "office", respectively. [This Article Newly Inserted by Presidential Decree No. 21591, Jun. 30, 2009]
| Article 25 (Delegation, Entrustment, etc.) |
| (1) | Pursuant to Article 40 (1) of the Act, the Minister of SMEs and Startups shall delegate the following authority to Mayors/Do Governors: <Amended by Presidential Decree No. 28213, Jul. 26, 2017> |
| 1. | Approval for duties incidental to credit guarantee among duties under subparagraph 6 of Article 17 of the Act; |
| (2) | Where a foundation entrusts duties to financial companies, the Federation, the Korea Asset Management Corporation, or credit information companies pursuant to Article 40 (3) of the Act, it shall determine the details and conclude a contract. |
| (3) | Where the chairperson of the Federation entrusts duties to financial companies, the Federation, the Korea Asset Management Corporation or credit information companies pursuant to Article 40 (3) of the Act, he/she shall determine the details and conclude a contract. |
[This Article Wholly Amended by Presidential Decree No. 24023, Aug. 3, 2012]
| Article 26 (Reexamination of Regulations) |
The Minister of SMEs and Startups shall examine the validity of the following matters every three years (meaning until the day preceding every third anniversary from the base date) from the following base dates and implement improvement measures, etc.: <Amended by Presidential Decree No. 28213, Jul. 26, 2017>
| 1. | The ratio of money to be contributed to foundations and the Federation by financial companies, etc. under Article 5-3 (1) through (4) and attached Table, time and method of contribution and the period under Article 5-3 (5) during which agricultural cooperatives, etc. make contributions to foundations and the Federation: January 1, 2014; |
| 2. | The limit on total credit guarantees under Article 16 to be provided by a foundation and the Federation, and the maximum limit on credit guarantee under Article 16 to be provided by a foundation and the Federation to the same small enterprise, etc.: January 1, 2014. |
[This Article Newly Inserted by Presidential Decree No. 25050, Dec. 30, 2013]
ADDENDA
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 Omitted.
ADDENDA <Presidential Decree No. 17366, Sep. 27, 2001>
| (1) | (Enforcement Date) This Decree shall enter into force on the date of its promulgation. |
ADDENDUM <Presidential Decree No. 17936, Mar. 12, 2003>
This Decree shall enter into force on the date of its promulgation.
ADDENDUM <Presidential Decree No. 18312, Mar. 17, 2004>
This Decree shall enter into force on the date of its promulgation.
ADDENDUM <Presidential Decree No. 19025, Aug. 31, 2005>
This Decree shall enter into force on September 1, 2005.
ADDENDA <Presidential Decree No. 19494, May 30, 2006>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 6 Omitted.
ADDENDUM <Presidential Decree No. 19507, Jun. 12, 2006>
This Decree shall enter into force on the date of its promulgation.
ADDENDUM <Presidential Decree No. 19569, Jun. 29, 2006>
This Decree shall enter into force on July 1, 2006: Provided, That the provisions concerning differential rates in the attached Table shall enter into force on January 1, 2007.
ADDENDUM <Presidential Decree No. 20138, Jun. 29, 2007>
This Decree shall enter into force on July 1, 2007.
ADDENDA <Presidential Decree No. 20728, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 and 3 Omitted.
ADDENDA <Presidential Decree No. 21518, May 29, 2009>
Article 1 (Enforcement Date)
This Decree shall enter into force on June 1, 2009.
Articles 2 and 3 Omitted.
ADDENDA <Presidential Decree No. 21591, Jun. 30, 2009>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Transitional Measures concerning Credit Guarantee)
The credit guarantee provided according to guidelines for credit guarantee by the Administrator of the Small and Medium Business Administration from January 12, 2009 until the day before the date this Decree enters into force shall be deemed provided pursuant to the amended provisions of Articles 16 (3), 24-4 and 24-6. Article 3 (Transitional Measures concerning Credit Guarantee Providers)
The "credit information company" under subparagraph 5 of Article 2 of the Use and Protection of Credit Information Act under the amended provisions of subparagraph 3 of Article 20-2, and the "credit information company" under the amended provisions of Article 25 (2) and (3) shall be construed as "credit information provider" under subparagraph 4 of Article 2 of the Use and Protection of Credit Information Act until October 1, 2009, respectively.
ADDENDA <Presidential Decree No. 22075, Mar. 15, 2010>
Article 1 (Enforcement Date)
This Decree shall enter into force on March 19, 2010. (Proviso Omitted.)
Article 2 Omitted.
ADDENDA <Presidential Decree No. 22151, May 4, 2010>
Article 1 (Enforcement Date)
This Decree shall enter into force on May 5, 2010.
Articles 2 through 4 Omitted.
ADDENDA <Presidential Decree No. 22220, Jun. 28, 2010>
Article 1 (Enforcement Date)
This Decree shall enter into force on July 6, 2010.
Articles 2 and 3 Omitted.
ADDENDUM <Presidential Decree No. 22304, Jul. 26, 2010>
This Decree shall enter into force on August 1, 2010: Provided, That the amended provisions of subparagraph 11 of Article 3 shall enter into force on the date of promulgation.
ADDENDA <Presidential Decree No. 22493, Nov. 15, 2010>
Article 1 (Enforcement Date)
This Decree shall enter into force on November 18, 2010.
Articles 2 through 5 Omitted.
ADDENDA <Presidential Decree No. 23535, Jan. 25, 2012>
Article 1 (Enforcement Date)
This Decree shall enter into force on January 26, 2012.
Articles 2 and 3 Omitted.
ADDENDUM <Presidential Decree No. 24023, Aug. 3, 2012>
This Decree shall enter into force on the date of its promulgation.
ADDENDUM <Presidential Decree No. 25050, Dec. 30, 2013>
This Decree shall enter into force on January 1, 2014. (Proviso Omitted.)
ADDENDA <Presidential Decree No. 25945, Dec. 30, 2014>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date a merger under Article 4 (6) of Addenda of the Korea Development Bank Act as amended wholly by Act No. 12663 is registered. Articles 2 through 5 Omitted.
ADDENDUM <Presidential Decree No. 27273, Jun. 28, 2016>
This Decree shall enter into force on July 7, 2016.
ADDENDA <Presidential Decree No. 27524, Sep. 29, 2016>
Article 1 (Enforcement Date)
This Decree shall enter into force on September 30, 2016.
Articles 2 through 4 Omitted.
ADDENDA <Presidential Decree No. 27556, Oct. 25, 2016>
Article 1 (Enforcement Date)
This Decree shall enter into force on December 1, 2016.
Article 2 Omitted.
ADDENDA <Presidential Decree No. 28213, Jul. 26, 2017>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 6 Omitted.