CHAPTER I GENERAL PROVISIONS
The purpose of this Act is to promote the industrial revival and the stability of the national economy by appropriately disposing of property devolving upon the State.
The property devolving upon the State as prescribed in this Act refers to all the property transferred to the Government of the Republic of Korea pursuant to Article 5 of the Initial Financial and Property Settlement Agreement concluded on September 11 of Dangun Year 4281 between the Government of the Republic of Korea and the Government of the United States of America: Provided, That farmland shall be treated separately pursuant to the Farmland Reform Act. Any property directly, indirectly, wholly, or partially owned by Japanese nationals, enterprises, organizations, associations, or agencies thereof, organizations of the Japanese Government, or organizations controlled by the Japanese Government as of August 9, Dangun Year 4278, among the property items located in the regained area north of 38 degrees North latitude, shall be treated as property devolving upon the State prescribed in the preceding paragraph and such property shall be governed by this Act. <Newly Inserted on Dec. 31, 1956>
In cases of profit-making enterprises or other associations, etc. established in the Republic of Korea prior to August 9, Dangun Year 4278, whose stocks or shares belonged to any institution, national, or organization of Japan, it shall be deemed that such stocks or shares have devolved upon the State (hereinafter referred to as “stocks or shares devolving upon the State”).
In cases of incorporated foundations or incorporated associations established in the Republic of Korea prior to August 9, Dangun Year 4278, in whose case the right regarding directors of the board of directors or employees belonged to any institution, national, or organization of Japan, it shall be deemed that such right regarding directors of the board of directors or employees have been devolved upon the State (hereinafter referred to as "right regarding directors of the board of directors or employees devolved upon the State").
Any property devolving upon the State shall be sold to citizens or enterprises of the Republic of Korea, except for property devolving upon the State that has been designated as State property, public property, State enterprises, or public enterprises pursuant to this Act or any order issued pursuant to this Act.
Except as otherwise expressively provided for in other Acts, property devolving upon the State shall be managed by the Government in accordance with this Act until they are designated or sold pursuant to the preceding Article.
In cases of property devolving upon the State designated as State or public enterprises, the Government shall manage such property until a statute to govern such property enters into force.
CHAPTER II STATE OWNERSHIP AND PUBLIC OWNERSHIP
With respect to the property devolving upon the State, State ownership or public ownership shall be recognized in cases of forests as necessary for securing the right to natural resources listed in Article 85 of the Constitution of the Republic of Korea or forest property; historically valuable land, buildings, souvenirs, works of art, or documents; and other immovables and movables having public values or requiring permanent preservation. The preceding paragraph shall also apply to movables and immovables required by the Government or public organizations for official use, public use, or certified public edification or by welfare agencies for performing public service projects.
With respect to the property devolving upon the State, State ownership or public ownership shall be recognized in cases of the enterprises listed in Article 87 of the Constitution of the Republic of Korea, and other enterprises of a public nature, including important mines, steel mills, machinery factories, etc.
The procedures for designating property or enterprises as State property, public property, State enterprises, or public enterprises under the second immediately preceding Article shall be prescribed by Presidential Decree.
The sale of property devolving upon the State shall be divided into the following four categories: <Amended on Dec. 18, 1959>
Selling, among the property devolving upon the State, all the property used for a profit-making business by an institution, national, or organization of Japan, including immovables, movables, and other rights of various kinds, by comprehensively evaluating such property as a single unit: Provided, That such property may be divided and sold when the relevant enterprise lacks grounds to survive or when no obstacle to the operation of the relevant enterprise is expected;
Selling, among the property devolving upon the State, houses, stores, land, and other immovable property that do not belong to enterprises referred to in the preceding subparagraph;
Selling, among the property devolving upon the State, movables that do not fall under subparagraph 1;
| 4. | Sale of stocks or shares: |
Selling stocks or shares devolving upon the State: Provided, That to the extent that the operation of an enterprise is not undermined, the property of an enterprise falling under Article 2 (3) may be divided and sold by dissolving the relevant enterprise or association, etc. The Commercial Act shall not apply to the aforementioned dissolution. The examples prescribed in subparagraph 1 or 4 of the preceding paragraph shall apply when selling businesses devolved upon the State that have been managed as an incorporated foundation or incorporated association.
None of the following persons shall be allowed to purchase any property devolving upon the State: <Amended on Mar. 31, 2020>
| 1. | A person under adult guardianship or limited guardianship; |
| 2. | A person who has been declared bankrupt and not yet reinstated; |
| 3. | A person who is under the execution of, or the suspension of the execution of, imprisonment without labor or greater punishment as declared by a court; |
| 4. | A person deprived of his/her civil rights; |
| 5. | A person found to have engaged in illegal disposal, intentional destruction or damaging, or false reporting, etc. in relation to the managing and operating of property devolving upon the State, and his/her family members; |
| 6. | A person who has been subject to cancellation or revocation of a contract due to the reasons falling under Article 21, the last paragraph of Article 22 or Article 36, in relation to the purchasing, lending, or managing of property devolving upon the State; |
| 7. | Any other person prohibited under other statutes. |
Where a member of a family has purchased an enterprise or immovable property, other than a house or land, of the property devolving upon the State, no member of the same family may repurchase it: Provided, That where it is essential to operate the enterprise, an exception shall be allowed only for the manager of the relevant enterprise.
Where a member of a family has purchased a house or land of the property devolving upon the State, no member of the same family may repurchase it.
In cases of selling land, up to 200 pyeong of land per buyer shall be allowed for sale: Provided, That the foregoing shall not apply when constructing a building other than housing for personal residence.
Where a member of a family is to purchase a house or land devolving upon the State, any other member of the same family owning a house located within 20 kilometers from the house or land to be purchased shall not be allowed to purchase the relevant house or land devolving upon the State.
The foregoing shall also apply to a person who has owned or occupied the aforementioned house for at least one year as from August 9 of Dangun Year 4278.
In applying this Act, matters subject to the prohibition of leasing, management, or purchase on the ground that the relevant persons belong to the same family shall also apply when organizing a family company.
A family company referred to in the preceding paragraph means a company where the sum of stocks or investments held or made by its shareholders or employees or the sum of stocks or investments held or made by its shareholders or employees and family members thereof amounts to at least 50 percent of the total amount of stocks or investments of the relevant company.
Leasing, managing, or selling any property devolving upon the State shall not have the same effects as a family company prescribed in the preceding paragraph for at least two enterprises.
The provisions of the fifth immediately preceding Article shall also apply to a person who has purchased any property devolving upon the State before this Act enters into force.
Any property devolving upon the State shall be sold preferentially to a relative who is legitimate and has a sound mind and operational capacity, an employee, or a person whose farmland has been purchased by the State under the Farmland Reform Act; and in cases of houses devolving upon the State, the houses shall be sold preferentially to a houseless person of distinguished service to the State and his/her bereaved family, a houseless and needy worker, or a person who cannot afford to purchase a house other than houses devolving upon the State. With respect to property devolving upon the State needed by a non-profit enterprise established as an association or foundation related to certified public edification, welfare, or other public interests, preferential sale of such property may also be allowed.
Notwithstanding the second immediately preceding paragraph, large enterprises prescribed by Presidential Decree among the property devolving upon the State shall be sold to the highest bidder. <Newly Inserted on Sep. 23, 1954>
Where it is deemed impossible or inappropriate to sell any property devolving upon the State pursuant to the preceding Article, it shall be sold to the highest bidder by holding a general or designated public auction.
Where the Government deems that the bid prices are inappropriate, it shall refuse the sale and proceed with re-bidding.
If the second bidding on the property devolving upon the State is also deemed inappropriate, the relevant property devolving upon the State may be sold at an appropriate price under a negotiated contract: Provided, That an appropriate price in such cases shall exceed the highest bid price rejected.
Notwithstanding the third immediately preceding paragraph, in cases of any property valued at less than 100,000 won by Government appraisal (it shall be less than 300,000 won in the case of the Seoul Metropolitan City), such property may be sold by a negotiated contract in the priority order of preferred purchasers prescribed in Article 15. <Newly Inserted on Jul. 14, 1962>
The Commissioner of the National Tax Service shall determine the purchaser of any property devolving upon the State. <Amended on Dec. 31, 1956; Mar. 8, 1966>
[This Article Wholly Amended on Sep. 23, 1954]
The sale price of any property devolving upon the State shall not be less than its market price as at the time of selling the relevant property devolving upon the State.
The market price referred to in the preceding paragraph shall be determined by adjusting it based on the amount of money prescribed in Article 23. With respect to the employees of financial institutions commissioned to appraise the value of any property devolving upon the State, Articles 129 through 134 of the Criminal Act shall apply to their performance of the relevant duties. <Newly Inserted on Dec. 31, 1956>
In principle, the purchase price of any property devolving upon the State shall be paid fully in cash in a lump sum, but in cases of selling property devolving upon the State other than movable property, the payment may be made in installments for a period of up to 15 years.
When the purchase price is paid in installments pursuant to the preceding paragraph, the first installment shall be at least ten percent of the total purchase price.
Where fluctuations of general prices during the payment period of the purchase price are significant, the payment amount thereafter may be adjusted by the Act.
The purchase price of any property devolving upon the State may be paid in farmland bonds prescribed in the Farmland Reform Act.
Where liabilities are secured by any property devolving upon the State, such liabilities shall be redeemed within the limit of the purchase price of the relevant property devolving upon the State.
Where the purchaser of any property devolving upon the State fails to pay the purchase price or any installment thereof within a predetermined period, a fixed amount of administrative fine may be imposed or the relevant contract may be canceled as prescribed by Presidential Decree.
The sale price of any property devolving upon the State or any installment thereof, or an administrative fine prescribed in the preceding Article shall be collected in the same manner as delinquent taxes are collected under the National Tax Collection Act. [This Article Newly Inserted on Dec. 18, 1959]
Where a person who has purchased any property devolving upon the State fails to pay any installment of its purchase price payable by June 30, 1964 under the sales contract by March 31, 1965, the sales contract for the relevant property shall be canceled: Provided, That the foregoing shall not apply when the payment has not been made due to extenuating circumstance. <Amended on Jan. 27, 2005>[This Article Newly Inserted on Dec. 31, 1964]
[98Heon-Ga13, June 1, 2000; The provision of Article 21-3 of the Act on Disposal of Property Devolving upon the State (which was newly inserted by Act No. 1675 on Dec. 31, 1964) is in violation of the Constitution, which stipulates that where a purchaser of any property devolving upon the State fails to pay any installment of its purchase price even due to extenuating circumstances, the sales contract for the relevant property shall be canceled.]
In selling any property devolving upon the State, where a purchaser pays at least 50 percent of the purchase price within two years from the date of the relevant sales contract or at least 70 percent of the purchase price within four years from the date of the relevant sales contract, the ownership of the relevant property devolving upon the State may be transferred to such purchaser by establishing a mortgage on the value equivalent to the balance of the payment to the Government.
The purchaser of any property devolving upon the State shall perform the duties as a custodian prescribed in Chapter IV of this Act until the ownership of the relevant property is transferred.
Where the purchaser violates the duties prescribed in the preceding paragraph, the relevant contract may be canceled.
In cases of a person subject to cancellation of a contract pursuant to the second immediately preceding Article or a person who withdraws from a contract for such reasons as change of professions, migration, etc., any of the following measures may be taken regarding such person, by taking into account the relevant circumstances:
| 1. | Returning all or some of the deposit or purchase price already paid; |
| 2. | Redeeming all or some of the expenses spent to increase the value of the relevant property; |
| 3. | Paying the amount equivalent to the profits and rent received during the period of managing and operating the relevant property; |
| 4. | Compensating for loss to the relevant property due to reasons attributed to the purchaser. |
Where the purchaser fails to make a payment or compensation prescribed in subparagraph 3 or 4 of the preceding paragraph, the collection shall be made in the same manner as the delinquent national taxes are collected.
Article 19 (3) may apply mutatis mutandis to cases prescribed in this Article.
| (1) | Any property devolving upon the State managed by the State pursuant to Article 4 of this Act may be leased to a citizen or enterprise of the Republic of Korea. |
| (2) | Articles 18, 19, 21, and 21-2 may apply mutatis mutandis to the rent prescribed in the preceding paragraph. <Amended on Dec. 31, 1956; Dec. 18, 1959> |
| (3) | Deleted. <Dec. 18, 1959> |
In cases of property devolving upon the State not suitable for leasing prescribed in the preceding Article, the Government shall select custodians to be in charge of managing such property.
Any person falling under any subparagraph of Article 9 shall not be entitled to lease or take custodianship of any property devolving upon the State.
Articles 10 through 12 shall apply mutatis mutandis to leasing or taking custodianship of property devolving upon the State prescribed in this Chapter.
The second immediately preceding Article shall also apply to those engaged in leasing or taking custodianship of any property devolving upon the State before this Act enters into force.
Article 15 shall also apply to the leasing or custodianship of property devolving upon the State.
In cases of important enterprises devolving upon the State, the board of directors may be established by selecting up to nine joint custodians.
The lessee or custodian of an enterprise devolving upon the State shall be appointed by a Minister having jurisdiction over the business affairs of the relevant enterprise in consultation of the Minister of Strategy and Finance. <Amended on Sep. 23, 1954; Dec. 2008, 1956; Feb. 29, 2008>
The foregoing shall also apply to leasing or taking custodianship of stocks or shares devolving upon the State.
The custodian of any property devolving upon the State may receive a certain amount of remuneration as prescribed Presidential Decree.
Regarding the right or authority as a shareholder, employee, or any other person holding the right of quota with respect to the stocks or shares devolving upon the State, the Government may allow the lessee or custodian of the relevant property devolving upon the State to wholly or partially exercise such right or authority.
The foregoing shall also apply to the right regarding directors of the board of directors or employees.
The lessee or custodian of any property devolving upon the State shall comply with the following:
| 1. | He/she shall operate the relevant property devolving upon the State in a way that maximizes its value so as to promote national industries and the welfare of the people; |
| 2. | He/she shall preserve the relevant property devolving upon the State as instructed by the Government, and shall not relocate, sublease, or dispose of such property without approval of the Government; |
| 3. | He/she shall preserve the relevant property devolving upon the State with the care of a good custodian, and shall not diminish the value or utility of such property; |
| 4. | He/she shall keep accurate records and books of account. |
In any of the following cases, the relevant lease or custodianship contract may be revoked, and an order may be issued to return the relevant property devolving upon the State:
| 1. | When falling under grounds for disqualification prescribed in this Act; |
| 2. | When violating any of the obligations of lessees or custodians prescribed in this Act; |
| 3. | When failing to comply with any of the Government's instructions or orders related to managing and operating the relevant property devolving upon the State. |
Article 23 may apply to any person who becomes subject to revocation of the contract pursuant to the preceding Article or a person who withdraws from the leasing or custodianship contract for such reasons as change of professions, migration, etc., by taking into account the relevant circumstances.
A person who has occupied or used any property devolving upon the State without permission may be charged damages equivalent to the amount of the gain or rent obtained during the period of such occupation or use.
Where the damages referred to in the preceding paragraph is not paid within a predetermined period, it shall be collected in the same manner as delinquent national taxes are collected.
[This Article Newly Inserted on Dec. 31, 1956]
CHAPTER V AUTHORITY IN CHARGE OF PROPERTY CUSTODIANSHIP
Regional tax offices shall take charge of the business affairs related to property devolving upon the State prescribed in this Act.
[This Article Wholly Amended on Dec. 14, 1963]
| Article 38 Deleted. <Sep. 23, 1954> |
| (1) | A deliberative council on petitions for property devolving upon the State shall be established under the National Tax Service to review and make decisions regarding petitions related to disposing of property devolving upon the State. <Amended on Dec. 31, 1956; Mar. 8, 1966> |
| (2) | Necessary matters concerning the organization, services, etc. of the deliberative council on petitions for property devolving upon the State shall be prescribed by Presidential Decree. |
[This Article Wholly Amended on Dec. 31, 1956]
CHAPTER VI PENALTY PROVISIONS
Any person who has illegally acquired, disposed of, lost, destroyed, damaged, or concealed any property devolving upon the State shall be punished by imprisonment with labor for up to five years or by a fine not exceeding 300,000 hwan: Provided, That where the value of the relevant property exceeds 300,000 hwan, the amount of fine shall be the same as the value of the property. <Amended on Dec. 31, 1956>
Any person who intentionally makes false reports or statements regarding the lease, custodianship, or sale of property devolving upon the State shall be punished by imprisonment with labor for up to three years or by a fine not exceeding 150,000 hwan. <Amended on Dec. 31, 1956>
The Presidential Decree to be enacted pursuant to this Act may include a penalty provision for punishing any violator thereof by imprisonment with labor for up to six months or by a fine not exceeding 100,000 hwan. <Amended on Dec. 31, 1956>
CHAPTER VII SUPPLEMENTARY PROVISIONS
| Article 42-2 (Special Cases concerning Sale of Stocks Devolving upon the State) |
Notwithstanding the provisions of Chapter III, Article 5 (4) of the Act on Temporary Special Cases concerning Disposal of State or Public Property shall apply mutatis mutandis to the sale of stocks devolving upon the State.
[This Article Newly Inserted on Dec. 7, 1962]
ADDENDA <Act No. 74, Dec. 19, 1949>
Article 43
Provisions necessary for enforcing this Act shall be prescribed by Presidential Decree.
Article 44
Article 9 shall apply to a person failing to pay taxes imposed for managing and operating or using property devolving upon the State. Article 45
The provisions of any statute found to be contradictory to this Act, among the statues enacted before this Act enters into force, shall be repealed to the extent of such contradiction.
Article 46
This Act shall enter into force on the date of its promulgation.
ADDENDUM <Act No. 342, Sep. 23, 1954>
A provisional sale contract concluded by the Government before the amended provisions of this Act enter into force shall be deemed a contract concluded pursuant to this Act as of the date of such contract.
This Act shall enter into force on the date of its promulgation.
ADDENDUM <Act No. 427, Dec. 31, 1956>
This Act shall enter into force on the date of its promulgation.
ADDENDUM <Act No. 521, Dec. 18, 1959>
This Act shall enter into force 60 days after the date of its promulgation.
ADDENDUM <Act No. 1099, Jul. 14, 1962>
Articles 4, 6, and 8 (2) and (4) of the Act on Temporary Special Cases concerning Disposal of State or Public Property shall apply mutatis mutandis to disposing of property devolving upon the State: Provided, That any provisions of the aforementioned Act found to conflict with this paragraph shall be invalidated to the extent of such contradiction.
This Act shall enter into force on the date of its promulgation.
ADDENDUM <Act No. 1204, Dec. 7, 1962>
This Act shall enter into force on the date of its promulgation.
ADDENDUM <Act No. 1515, Dec. 14, 1963>
This Act shall enter into force on December 17, 1963.
ADDENDUM <Act No. 1675, Dec. 31, 1964>
This Act shall enter into force on the date of its promulgation.
ADDENDUM <Act No. 1760, Mar. 8, 1966>
This Act shall enter into force on the date of its promulgation.
ADDENDUM <Act No. 7346, Jan. 27, 2005>
This Act shall enter into force on the date of its promulgation.
ADDENDA <Act No. 8852, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation: Provided, That ... <Omitted.> ... the amended provisions of the Acts promulgated before this Act enters into force but the dates they enter into force have yet to arrive, from among the Acts amended pursuant to Article 6 of the Addenda, shall enter into force on the respective dates the relevant Acts enter into force.
Articles 2 through 7 Omitted.
ADDENDUM <Act No. 17140, Mar. 31, 2020>
This Act shall enter into force on the date of its promulgation.