INTRODUCTION AND MANAGEMENT OF PUBLIC LOANS ACT
Act No. 5551, Sep. 16, 1998
Amended by Act No. 6627, Jan. 26, 2002
Act No. 8852, Feb. 29, 2008
Act No. 9823, Dec. 29, 2009
Act No. 10569, Apr. 8, 2011
Act No. 17130, Mar. 31, 2020
Act No. 17339, jun. 9, 2020
CHAPTER I GENERAL PROVISIONS
The purpose of this Act is to contribute to the sound development of the national economy by prescribing necessary matters for the efficient introduction and management of public loans.
[This Article Wholly Amended on Apr. 8, 2011]
The terms used in this Act shall be defined as follows: <Amended on Mar. 31, 2020; Jun. 9, 2020>
| 1. | The term "foreign government" means any foreign government or international economic cooperation organization prescribed by Presidential Decree; |
| 2. | The term "foreign juristic person" means any juristic person established under laws and regulations of any foreign country; |
| 3. | The term "Korean juristic person" means any juristic person (including a local government) established under the Acts of the Republic of Korea; |
| 4. | The term "capital goods" means any machinery, equipment, facilities, appliances, parts and accessories which correspond to industrial establishments (including ships, vehicles, aircraft, etc.), livestock, seeds, trees, fish and shellfish necessary for the development of agriculture, forestry and fishery, and other raw materials and spares the competent Minister (referring to the head of a central administrative agency who takes charge of the relevant business; hereinafter the same shall apply) deems necessary for the pilot operation (including any business for a test) of the said establishments and freight and insurance premiums resulting from the introduction thereof, and technology or services necessary for constructing facilities or giving advice; |
| 5. | The term "raw materials" means any raw materials or other materials necessary for key industries or agriculture, forestry and fishery, and freight and insurance premiums resulting from the introduction thereof; |
| 6. | The term "public loans" means any means of foreign payment which the Government of the Republic of Korea borrows from a foreign government and or foreign juristic person, or which a Korean juristic person as prescribed by Presidential Decree borrows from a foreign government under payment guarantee of the Government of the Republic of Korea, and capital goods and raw materials introduced under an export credit system; |
| 7. | The term "public loan convention" means an agreement, convention or contract which is concluded for the purpose of the introduction of public loans; |
| 8. | The term "borrower" means the Government of the Republic of Korea or a Korean juristic person that is liable to a lender for debts (excluding guarantee debts) pursuant to any public loan convention, or a person who underwrites the said debts; |
| 9. | The term "sublessee" means a person to whom all or part of a public loan whose borrower is the Government of the Republic of Korea is subleased and who implements a project financed by such loan; |
| 10. | The term "lender" means any foreign government or foreign juristic person that has a claim against a borrower pursuant to any public loan convention, or any person to whom the said claim is transferred. |
[This Article Wholly Amended on Apr. 8, 2011]
| Article 3 (Criteria of Introduction of Public Loans) |
Where the introduction of public loans falls under any of the following subparagraphs, the Minister of Economy and Finance shall not include it in a plan for the introduction of public loans under Article 6 (2), or shall not approve the conclusion of any public loan convention under Article 7 (2): | 1. | Where the introduction of public loans causes difficulty in maintaining national security and public order; |
| 2. | Where the introduction of public loans causes injury to the national health and sanitation or the conservation of environment, or is clearly contrary to social morals and customs; |
| 3. | Where the introduction of public loans violates the Acts and subordinate statutes of the Republic of Korea. |
[This Article Wholly Amended on Apr. 8, 2011]
| Article 4 (Guarantee of Overseas Remittance) |
The overseas remittance of the principal and interest, and commissions which are paid under a public loan convention shall be guaranteed pursuant to the terms of such convention.
[This Article Wholly Amended on Apr. 8, 2011]
| Article 5 (Impartial Treatment) |
The provisions concerning the reduction of or exemption from a tax under Acts relevant to taxes which apply to Korean citizens or Korean juristic persons shall apply to a lender without discrimination, unless otherwise prescribed in the Acts.
[This Article Wholly Amended on Apr. 8, 2011]
CHAPTER II INTRODUCTION OF PUBLIC LOANS
| Article 6 (Plan for Introduction of Public Loans) |
| (1) | If a government agency or Korean juristic person intends to introduce public loans, it shall apply for such introduction to the Minister of Economy and Finance. In such cases, a Korean juristic person shall specify the extent of debts for which it intends to be under payment guarantee of the Government. |
| (2) | If the Minister of Economy and Finance upon receipt of an application under paragraph (1) decides to promote the introduction of public loans, he or she shall prepare a plan for the introduction of public loans which includes details of each project financed by public loans he or she intends to introduce, the amount, prospective lenders and terms of such loans, the extent of debts subject to the payment guarantee of the Government, and other necessary matters. |
| (3) | The Government shall, in advance, obtain a resolution of the National Assembly on a plan for the introduction of public loans as prescribed in paragraph (2). Where any of the following cases arises, the same shall apply: |
| 1. | Where the amount of loans extended to the project exceeds that of a resolution of the National Assembly; |
| 2. | Where the terms of loans extended to the project are more unfavorable than those of a resolution of the National Assembly; |
| 3. | Where the details of the project are significantly revised in comparison with those at the time of a resolution of the National Assembly. |
| (4) | If the Minister of Economy and Finance obtains a resolution of the National Assembly under paragraph (3), he or she shall, without delay, notify the government agency or Korean juristic person concerned of the details thereof. |
[This Article Wholly Amended on Apr. 8, 2011]
| Article 7 (Conclusion of Public Loan Convention) |
| (1) | The Minister of Economy and Finance shall, on behalf of the Government, perform any negotiation for the purpose of the introduction of public loans and any adjustment necessary therefor, and conclude any public loan convention after obtaining a resolution of the National Assembly under the former part of Article 6 (3): Provided, That if a borrower of public loans is a Korean juristic person, the Korean juristic person shall conclude such public loan convention. <Amended on Mar. 31, 2020> |
| (2) | If a Korean juristic person concludes a public loan convention under the proviso to paragraph (1) or concludes a contract which has a direct effect on the conclusion of the public loan convention, it shall obtain prior approval of the Minister of Economy and Finance. The same shall apply to any amendment to the convention or contract. |
| (3) | If the Minister of Economy and Finance concludes a public loan convention under the main sentence of paragraph (1), he or she shall, without delay, give public notice of such convention through the Official Gazette. |
[This Article Wholly Amended on Apr. 8, 2011]
| Article 8 (Exemption from Taxes and Other Public Dues) |
| (1) | Taxes and other public dues which a lender shall pay in direct connection with the introduction of public loans shall be reduced or remitted pursuant to the public loan convention concerned. |
| (2) | With respect to costs of technology or services paid to a foreigner in connection with the introduction of public loans, an income tax or corporate tax shall be reduced or remitted pursuant to the public loan convention concerned. |
| (3) | It may be determined not to reduce or remit the taxes and other public dues provided for in paragraphs (1) and (2) by an application of a lender or technology provider. |
[This Article Wholly Amended on Apr. 8, 2011]
CHAPTER III MANAGEMENT OF PUBLIC LOANS
| Article 9 (Sublease of Public Loans) |
The Minister of Economy and Finance may sublease all or part of public loans whose borrower is the Government to a government agency or a Korean juristic person that is to conduct the project financed by such loans, as prescribed by Presidential Decree. <Amended on Mar. 31, 2020>
[This Article Wholly Amended on Apr. 8, 2011]
| Article 10 (Acquirement and Management of Securities) |
The Minister of Economy and Finance shall acquire and manage securities equivalent to the amount of the payment guarantee of the Government and the amount subleased under Article 9: Provided, That if an entity which is under payment guarantee of the Government or to which public loans are subleased is a local government, a public institution under the Act on the Management of Public Institutions or any other person prescribed by Presidential Decree, it may determine not to acquire such securities. [This Article Wholly Amended on Apr. 8, 2011]
| Article 11 (Compulsory Disposition of Securities) |
| (1) | If a Korean juristic person fails to repay full or some of debts which cause a payment guarantee, the Minister of Economy and Finance may dispose of securities acquired under Article 10. Where a person to whom public loans are subleased under Article 9 fails to fulfill his or her obligation related to such sublease, the same shall apply. |
| (2) | Notwithstanding the Civil Act and the Civil Execution Act, securities specified in paragraph (1) shall be disposed of in the same manner of dispositions of national taxes in arrears. |
[This Article Wholly Amended on Apr. 8, 2011]
| Article 12 (Joint and Several Liability of Executive Officers) |
| (1) | If an executive or managing partner of a Korean juristic person or sublessee (excluding a government agency and local government) causes any damage to the Government due to the payment guarantee of the Government or the sublease of public loans, he or she shall be jointly and severally liable for such damage. In such cases, even if the executive or managing partner is dismissed from his or her office, he or she shall not be discharged from damage caused while in office. <Amended on Mar. 31, 2020> |
| (2) | The amount of damages prescribed in paragraph (1) shall be collected in the same manner of dispositions of national taxes in arrears. |
[This Article Wholly Amended on Apr. 8, 2011]
| Article 13 (Supervision of Juristic Person Guaranteed by Government) |
If deemed necessary for securing a claim for reimbursement for the exercise of a right of reimbursement resulting from the nonfulfillment of an obligation of a Korean juristic person which is under payment guarantee of the Government or a person to whom public loans are subleased or for accomplishing the purpose of any public loan business, the Minister of Economy and Finance may inspect the state of business operation and property of the said Korean juristic person or sublessee, and take necessary measures, such as the replenishment of securities. <Amended on Mar. 31, 2020>
[This Article Wholly Amended on Apr. 8, 2011]
CHAPTER IV SUPPLEMENTARY PROVISIONS
| Article 14 (Report on Records of Introduction of Public Loans) |
The Minister of Economy and Finance shall report matters concerning the actual performance in a plan for the introduction of public loans on which the National Assembly has passed a resolution pursuant to Article 6 (3) to the National Assembly at least 90 days prior to the expiration of each fiscal year. [This Article Wholly Amended on Apr. 8, 2011]
| Article 15 (Consultation) |
If the Minister of Economy and Finance intends to approve the conclusion of any public loan convention referred to in Article 7 (2) or any contract which has a direct effect on the conclusion of the public loan convention, he or she shall, in advance, consult with the competent Minister. [This Article Wholly Amended on Apr. 8, 2011]
| (1) | A person who has introduced any public loan under this Act shall submit a written report of introduction thereof to the Minister of Economy and Finance within one month from the date on which the said public loan has been introduced. |
| (2) | The Minister of Economy and Finance or any other competent Minister may have a borrower, a sublessee, the head of any institution related to the introduction and management of public loans as prescribed by Presidential Decree, or other interested persons report on matters deemed necessary for the introduction and management of public loans under this Act. <Amended on Mar. 31, 2020> |
[This Article Wholly Amended on Apr. 8, 2011]
| Article 17 (Investigation, Correction, and Disposition) |
| (1) | If deemed necessary for the operation of this Act, the Minister of Economy and Finance may have a public official under his or her control or the head of any institution related to the introduction and management of public loans investigate the following matters: |
| 1. | Introduction, use, or disposition of public loans; |
| 2. | Performance of matters approved under Article 7 (2). |
| (2) | A person who makes an investigation under paragraph (1) shall carry a certificate indicating his or her authority and present it to any interested person. |
| (3) | If the Minister of Economy and Finance finds any illegal or unjustifiable act in the introduction, use, or disposition of public loans or the fulfillment of such approval prescribed in this Act, he or she may issue a corrective order to a person who introduces, uses or disposes of the said public loans or any other interested person, or take other necessary measures. |
[This Article Wholly Amended on Apr. 8, 2011]
| Article 18 (Clearance and Disposition of Public Loans) |
| (1) | A person who introduces public loans under this Act shall clear and underwrite them within the duration of storage as prescribed in the Customs Act. |
| (2) | If a person who has introduced public loans fails to clear and underwrite them within such duration as prescribed in paragraph (1), the head of the competent customs house may sell them, as prescribed by Presidential Decree. |
[This Article Wholly Amended on Apr. 8, 2011]
| Article 19 (Relationship to Other Statutes) |
| (1) | With respect to matters concerning foreign exchange and foreign transactions of this Act, the Foreign Exchange Control Act shall apply unless otherwise prescribed by this Act. |
| (2) | The terms of a public loan convention concluded under this Act shall, unless it violates other Acts, be observed in accordance with the said convention. |
| (3) | The validity of approval prescribed in Article 7 (2) shall have no effect on any authorization, permission, approval, or report as prescribed in other Acts in connection with the business concerned. |
[This Article Wholly Amended on Apr. 8, 2011]
| Article 20 (Relationship to International Treaties) |
This Act shall not be construed as amending or restricting the provisions of any international treaty concluded and promulgated by the Republic of Korea.
[This Article Wholly Amended on Apr. 8, 2011]
| Article 21 (Delegation and Entrustment of Authority) |
| (1) | The Minister of Economy and Finance may delegate part of his or her authority prescribed in this Act to the head of any agency under his or her control, as prescribed by Presidential Decree. |
| (2) | The Minister of Economy and Finance may entrust part of his or her authority prescribed in this Act to the head of the competent central administrative agency, as prescribed by Presidential Decree. |
| (3) | The Minister of Economy and Finance may entrust the following authority to the head of any institution specified by Presidential Decree as related to the introduction and management of public loans, as prescribed by the Presidential Decree: |
| 1. | Negotiations for the purpose of the introduction of public loans as prescribed in Article 7 (1); |
| 2. | Acquirement and management of securities as prescribed in Article 10; |
| 3. | Disposition of securities as prescribed in Article 11; |
| 4. | Receipt of a written report as prescribed in Article 16. |
[This Article Wholly Amended on Apr. 8, 2011]
CHAPTER V PENALTY PROVISIONS
| Article 22 (Penalty Provisions) |
Any person who has illegally transmitted public loans abroad in connection with an overseas remittance or the introduction of public loans under this Act (in case of an enterprise, including the representative thereof), shall be punished by imprisonment with labor for not less than one year or by a fine between two times or more and ten times or less of that of public loans so transmitted. In such cases, public loans as illegally transmitted shall be confiscated, and if such confiscation is impossible, the value equivalent thereto shall be collected.
[This Article Wholly Amended on Apr. 8, 2011]
| Article 23 (Penalty Provisions) |
Any person who falls under any of the following subparagraphs shall be punished by imprisonment with labor for not more than three years or by a fine not exceeding 30 million won:
| 1. | A person who submits any false document in connection with an application prescribed in Article 6 (1) or approval prescribed in Article 7 (2); |
| 2. | A person who submits a false report, in violation of Article 16 (1). |
[This Article Wholly Amended on Apr. 8, 2011]
| Article 24 (Penalty Provisions) |
Any person who falls under any of the following subparagraphs shall be punished by imprisonment with labor for not more than one year or by a fine not exceeding 10 million won: <Amended on Jun. 9, 2020>
| 1. | A person who fails to undergo, or refuses, obstructs, or evades an inspection or investigation under Article 13 or 17 (1) (in cases of an enterprise, including the representative thereof); |
| 2. | A person who fails to comply with measures or orders under Article 13 or 17 (3) (in cases of an enterprise, including the representative thereof). |
[This Article Wholly Amended on Apr. 8, 2011]
| Article 25 (Joint Penalty Provisions) |
When a representative of a corporation or an agent, employee, or any other servant of the corporation or an individual commits an offense under Articles 22 through 24 in connection with the business of the corporation or the individual, not only shall such offender be punished, but also the corporation or the individual shall also be punished by a fine under the relevant provisions: Provided, That where such corporation or individual has not been negligent in giving due attention and supervision concerning the relevant duties to prevent such offense, this shall not apply. [This Article Wholly Amended on Dec. 29, 2009]
| Article 26 (Administrative Fines) |
| (1) | A person who fails to submit a written report of introduction under Article 16 (1) by the prescribed deadline shall be subject to an administrative fine not exceeding two million won. |
| (2) | An administrative fine referred to in paragraph (1) shall be imposed and collected by the Minister of Economy and Finance, as prescribed by Presidential Decree. |
[This Article Wholly Amended on Apr. 8, 2011]
ADDENDA <Act No. 5551, Sep. 16, 1998>
Article 1 (Enforcement Date)
This Act shall enter into force two months after the date of its promulgation.
Article 2 (Transitional Measures concerning Permission)
Article 3 (Transitional Measures concerning Public Loan Whose Introduction Is in Progress)
Article 4 (Transitional Measures concerning Management of Public Loan Which has already been Introduced)
Article 5 (Transitional Measures concerning Reduction of or Exemption from Taxes)
Article 6 (Transitional Measures concerning Penal Provisions)
Article 7 Omitted.
Article 8 (Relationship to Other Acts and Subordinate Statutes)
ADDENDA <Act No. 6627, Jan. 26, 2002>
Article 1 (Enforcement Date)
This Act shall enter into force on July 1, 2002.
Articles 2 through 7 Omitted.
ADDENDA <Act No. 8852, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 7 Omitted.
ADDENDUM <Act No. 9823, Dec. 29, 2009>
This Act shall enter into force on the date of its promulgation.
ADDENDUM <Act No. 10569, Apr. 8, 2011>
This Act shall enter into force on the date of its promulgation.
ADDENDUM <Act No. 17130, Mar. 31, 2020>
This Act shall enter into force on the date of its promulgation.
ADDENDUM <Act No. 17339, Jun. 9, 2020>
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)