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Act on Promotion of Use of Local Love Gift Certificates

Act No. 17252, May 1, 2020

 Article 1 (Purpose)
The purpose of this Act is to establish a sound distribution order for gift certificates issued by local governments and to contribute to strengthening local communities and invigorating local economies by prescribing matters necessary for the issuance, exchange, management, etc. of local love gift certificates.
 Article 2 (Definitions)
The terms used in this Act are defined as follows:
1. The term “local love gift certificate” means any securities, the electronic prepayment means defined in subparagraph 14 of Article 2 of the Electronic Financial Transactions Act, and the pre-paid card defined in subparagraph 8 of Article 2 of the Specialized Credit Finance Business Act by which the holder of any certificate, which the head of a local government issues and sells in whatsoever name or form, such as a local gift certificate or local currency, and in which a certain amount or the quantity of goods or services is stated (including recording by electronic or magnetic means; hereinafter the same shall apply), can be provided with goods or services by the head of a local government or a merchant (hereinafter referred to as “gift certificate issuer, etc.”) in accordance with the details stated in such certificate by presenting or delivering the certificate to the gift certificate issuer, etc. or using any other means;
2. The term "sales agency" means any financial company defined in subparagraph 3 of Article 2 of the Electronic Financial Transactions Act and any electronic financial business entity defined in subparagraph 4 of the same Article that act as an agent for the keeping, sale, exchange, etc. of local love gift certificates by entering into an agreement with the head of a local government under Article 6 (1);
3. The term "merchant" means any person who is registered pursuant to Article 7 (1) and falls under any of the following:
(a) A person who sells goods or provides services under a transaction using local love gift certificates (hereinafter referred to as "individual merchant");
(b) A person who act as an agent for the exchange of local love gift certificates for an individual merchant (hereinafter referred to as "merchant for exchange as an agent").
 Article 3 (Relationship to Other Statutes)
Except as otherwise provided in other statutes, this Act shall apply to local love gift certificates.
 Article 4 (Issuance of Local Love Gift Certificates)
(1) The head of a local government may issue local love gift certificates to invigorate the local economy and strengthen the local community.
(2) A local love gift certificate shall be valid for five years from the date such gift certificate is issued: Provided, That the head of a local government may issue local love gift certificates by reducing or extending the validity period thereof, as prescribed by municipal ordinances, only to the extent that the rights of local love gift certificates holders, etc. are not infringed upon.
(3) The area where local love gift certificates are distributed shall be an administrative district under the jurisdiction of the head of the local government that issues such gift certificates: Provided, That the head of the local government may, where necessary, otherwise designate such area, as prescribed by municipal ordinances.
(4) Other matters necessary for the issuance of local love gift certificates, such as the types and face values of such gift certificates and matters to be stated therein, shall be prescribed by municipal ordinances.
 Article 5 (Reporting on Issuance, and Discontinuation of Issuance, of Local Love Gift Certificates)
(1) Where the head of a local government intends to issue, or discontinue the issuance of, local love gift certificates, he or she shall report such issuance or discontinuation to the Minister of the Interior and Safety with documents stating the types, face values, etc. of such gift certificates, as prescribed by Presidential Decree. The same shall also apply to any change to be made to the matters reported.
(2) The Minister of the Interior and Safety shall disclose the matters reported under paragraph (1), as prescribed by Presidential Decree.
 Article 6 (Agreement by and Management of Sales Agencies)
(1) A person who intends to operate a sales agency shall enter into an agreement on sales agency services with the head of a local government, as prescribed by municipal ordinances.
(2) The head of a local government shall disclose information on the sales agency with which he or she enters into an agreement pursuant to paragraph (1), as prescribed by municipal ordinances.
(3) A sales agency shall submit a report on the sales, inventory, withdrawn quantity of local love gift certificates to the head of a local government, as prescribed by municipal ordinances.
 Article 7 (Registration of Merchants)
(1) A person who intends to operate a merchant shall file for registration of the merchant with the head of a local government, as prescribed by ordinance of the relevant local government.
(2) Where a person who has filed for registration of a merchant falls under any of the following, the head of a local government may refuse such registration:
1. Where the person engages in the gaming industry defined in subparagraph 1 of Article 2 of the National Gambling Control Commission Act or the illegal gaming business defined in subparagraph 3 of the same Article;
2. Where the person engages in an enterprise that is not the small and medium enterprise defined in Article 2 (1) of the Framework Act on Small and Medium Enterprises;
3. Where the person engages in a type of business that does not serve the purpose of this Act and is subject to restriction on registration as prescribed by ordinance of a local government.
(3) The head of a local government shall determine whether a merchant is registered within seven days from the date he or she receives an application for registration of such merchant and inform the applicant of his or her determination.
(4) Matters necessary for the registration of a merchant, such as qualification requirements for a merchant and criteria for registration, shall be prescribed by municipal ordinances.
 Article 8 (Revocation of Registration of Merchants)
(1) The head of a local government may revoke the registration of a merchant in any of the following cases: Provided, That in cases falling under subparagraph 1, the registration shall be revoked:
1. Where the merchant is registered by fraud or other improper means;
2. Where the merchant engages in a type of business that is subject to restriction on registration under Article 7 (2) 3;
3. Where the merchant commits any violation referred to in Article 10.
(2) Where the head of a local government revokes registration pursuant to paragraph (1), he or she shall disclose such revocation to make it known to users, etc., as prescribed by municipal ordinances.
 Article 9 (Exchange of Local Love Gift Certificates)
No person other than a merchant shall exchange local love gift certificates at a sales agency. In such cases, a merchant for exchange as an agent may exchange local love gift certificates only for an individual merchant.
 Article 10 (Matters to Be Observed by Merchants)
(1) No individual merchant shall conduct any of the following acts:
1. Refusing to settle local love gift certificates or treating local love gift certificate holders disadvantageously;
2. Exchanging, or requesting a merchant for exchange as an agent to exchange, the following local love gift certificates:
(a) Local love gift certificates received without selling goods or providing services;
(b) Local love gift certificates received through a transaction in an amount exceeding the actual sales amount.
(2) Where a local love gift certificate holder purchases goods or is provided with services, in an amount equivalent to or above the percentage prescribed by Presidential Decree, and requests a refund of the balance, an individual merchant shall comply with such request immediately.
(3) No merchant for exchange as an agent shall conduct any of the following acts:
1. Exchanging local love gift certificates for a person who is not an individual merchant;
2. Exchanging local love gift certificates as an agent while knowing that such gift certificates fall under the items of paragraph (1) 2.
 Article 11 (Matters to Be Observed by Users)
(1) No user of a local love gift certificate shall resell such gift certificate.
(2) No user of a local love gift certificate shall request a sales agency or a merchant to exchange such gift certificate.
 Article 12 (Re-Issuance of Local Love Gift Certificates)
(1) Where a person who holds a local love gift certificate requests the re-issuance thereof because such gift certificate is damaged, the head of a local government shall comply with such request.
(2) Where it is impossible to verify whether a local love gift certificate is issued by the head of a local government because such gift certificate is damaged, a gift certificate issuer, etc. may refuse the re-issuance and use of such gift certificate: Provided, That where it is possible to verify whether a local love gift certificate is issued by the head of a local government but its type, amount, quantity, etc. are uncertain, the local love gift certificate holder may be reissued or use a local love gift certificate at a minimum price within an extent that is identifiable.
 Article 13 (Prohibition of Use of Local Love Gift Certificates for Purposes Other Than Intended Purposes)
The head of a local government may not give local love gift certificates in any of the following cases:
1. Where he or she give wages under the main clause of Article 43 (1) of the Labor Standards Act or remuneration under Article 45 (1) of the Local Public Officials Act;
2. Where he or she pays the price for a contract that incurs financial expenditures borne by the local government, such as construction works, services, and goods, under the Act on Contracts to Which a Local Government Is a Party.
 Article 14 (Submission of Records of Issuance)
The head of a local government that issues local love gift certificates shall prepare a semi-annual report on the records of the issuance of such gift certificates, including the sum of face values of the gift certificates issued, as prescribed by Presidential Decree, and submit such report to the Minister of the Interior and Safety within one month after the end of each half-year.
 Article 15 (Support for Promotion of Local Love Gift Certificates)
(1) The State and a local government may provide support necessary for the management of local love gift certificates, such as the issuance, sale, and exchange thereof, as prescribed by Presidential Decree, in order to promote such gift certificates.
(2) The head of a local government may sell local love gift certificates at a discount price within the percentage prescribed by municipal ordinances.
(3) The Minister of the Interior and Safety and the head of a local government shall endeavor to establish a computerized management system and to develop and distribute related programs in order to efficiently manage affairs regarding local love gift certificates under this Act and to improve the convenience of using such gift certificates.
 Article 16 (Establishment of Local Love Gift Certificate Fund)
(1) A local government may establish a local love gift certificate fund to support projects or activities for promoting local love gift certificates.
(2) Matters necessary for the financing, purpose of use, operation, etc. of a local love gift certificate fund under paragraph (1) shall be prescribed by municipal ordinances.
 Article 17 (Investigation of Violations)
(1) When the head of a local government finds it necessary to investigate a violation of this Act based on a reasonable doubt, he or she may require a sales agency or merchant to submit a report on its business affairs or data or issue other necessary orders and may have public officials under his or her authority enter its office to inspect books, documents, etc., as prescribed by Presidential Decree.
(2) A public official who enters an office and conducts an inspection pursuant to paragraph (1) shall carry identification indicating his or her authority and present it to relevant persons.
 Article 18 (Issuance of Local Love Gift Certificates and Entrustment of Affairs regarding Management Thereof)
(1) The head of a local government may entrust part of affairs related to the issuance and management of local love gift certificates to a related institution or organization, as prescribed by municipal ordinances.
(2) The head of a local government may subsidize the implementation of projects entrusted under paragraphs (1) within the budget.
 Article 19 (Handling of Personally Identifiable Information)
Where unavoidable to perform the following affairs, the head of a local government (including persons entrusted with affairs under Article 18) may handle personally identifiable information under Article 24 of the Personal Information Protection Act:
1. Sale and exchange of local love gift certificates;
2. Registration of merchants;
3. Revocation of registration of merchants;
4. Re-issuance of local love gift certificates;
5. Investigation of violations under Article 17.
 Article 20 (Administrative Fines)
(1) Any of the following persons shall be subject to an administrative fine not exceeding 20 million won:
1. A person who keeps, sell, or exchanges local love gift certificates as an agent without entering into an agreement with the head of a local government, in violation of Article 6 (1);
2. A person who performs the affairs of a merchant without filing for registration of a merchant, in violation of Article 7 (1);
3. An individual merchant who exchanges, or requests a merchant for exchange as an agent to exchange, local love gift certificates, in violation of Article 10 (1) 2;
4. A merchant for exchange as an agent which exchanges local love gift certificates, in violation of Article 10 (3).
(2) A person who refuses, obstructs, or evades an investigation of violations under Article 17 shall be punished by an administrative fine not exceeding five million won.
(3) An administrative fine under paragraphs (1) and (2) shall be imposed and collected by the head of the relevant local government, as prescribed by Presidential Decree.
ADDENDA <Act No. 17252, May 1, 2020>
Article 1 (Enforcement Date)
This Act shall enter into force two months after the date of its promulgation.
Article 2 (Transitional Measures concerning Local Love Gift Certificates Being Distributed)
Gift certificates issued by the head of a local government pursuant ordinance of the local government before this Act enters into force shall be deemed local love gift certificates issued pursuant to this Act.
Article 3 (Transitional Measures concerning Reporting on Issuance of Gift Certificates)
The head of a local government that is issuing local love gift certificates as at the time this Act enters into force shall report such issuance to the Minister of the Interior and Safety under Article 5 (1) within three months from the enforcement date of this Act.
Article 4 (Transitional Measures concerning Sales Agencies and Merchants)
(1) A person who performs the affairs of a sales agency pursuant to ordinance of a local government as at the time this Act enters into force may perform such affairs without entering into an agreement under Article 6 (1) for up to three months from the enforcement date of this Act.
(2) A person who performs the affairs of a merchant pursuant to ordinance of a local government as at the time this Act enters into force may perform such affairs without filing for registration of a merchant under Article 7 (1) for up to three months from the enforcement date of this Act.