CHAPTER I GENERAL PROVISIONS
The purpose of these Regulations is to prescribe matters mandated by the Foreign Exchange Transactions Act (hereinafter referred to as “Act”) and the Enforcement Decree of the Foreign Exchange Transactions Act (hereinafter referred to as “Decree”) and other matters necessary for the enforcement thereof.
| Article 1-2 (Definitions) |
The terms used in these Regulations are defined as follows:
| 1. | The terms “Capital A Fund” and “Capital B Fund”, respectively, mean the “Capital A Fund” and “Capital B Fund” as provided for in the Regulation on Supervision of Banking Business of the Financial Services Commission; <Amended on Feb. 4, 2009> |
| 2. | The term “affiliated company” means an affiliated company as provided in Article 2 of the Monopoly Regulation and Fair Trade Act; |
| 3. | The term “loans to overseas Koreans, etc.” means loans provided by overseas branch offices of a foreign exchange bank which has its head office in the Republic of Korea and local subsidiary financial institutions, etc. under Chapter IX to residents in foreign countries (excluding ordinary overseas travelers), non-residents who are nationals of the Republic of Korea, or local subsidiaries incorporated and wholly owned by non-residents who are nationals of the Republic of Korea; |
| 3-1. | The term “financial/insurance business” means financial and insurance business according to the Korea Standard Industrial Classification publicly notified by the Statistics Korea; <Newly Inserted on Dec. 17, 2007> |
| 4. | The term “institutional investor” means a financial institution as provided in Article 10 (2) of the Enforcement Decree of the Financial Investment Services and Capital Markets Act (excluding foreign financial institutions as provided in subparagraph 18), a collective investment scheme, a person as provided in subparagraphs 3, 12, and 13 of Article 10 (3), or the postal service agency under subparagraph 4 of Article 7 of the Decree; <Amended on Dec. 19, 2013> |
| 5. | The term “short-term foreign currency funds” means funds falling under the following: <Newly Inserted on Jan. 1, 2006> |
| (a) | Foreign currency funds with a repayment period of one year or less from the date of fund withdrawal (meaning less than a year in the case of issuance of securities, and excluding depository receipts); |
| (b) | Foreign currency borrowings with a repayment period exceeding one year which are repayable in installments or before maturity, or prepayable, within not more than a year from the date of fund withdrawal (excluding any foreign currency fund whose average borrowing period is more than a year and whose amount of repayment within a year is not more than 20/100 of the total borrowing amount); |
| 6. | The term “goods” means movables, other than documents representing means of payment, securities, and other claims; <Amended on Feb. 4, 2009> |
| 7. | The term "basic rate" means the market average exchange rate calculated by weight-averaging the spot transaction rates and the transaction volume formed in next-business-day settlement in USD and RMB effected through a foreign exchange broker as of the latest transaction date. The term "arbitrated basic rate" means the cross rate of USD and currencies other than the USD and RMB, which has been recently formed in major international financial markets, arbitrated using the market average exchange rate; <Amended on Mar. 22, 2016> |
| 8. | The term “USD” means the currency of the United States of America; provided that amounts denominated in USD shall be deemed to also represent the amounts denominated in other currencies equivalent thereto except as provided otherwise; |
| 9. | The term “intercompany transactions” means transactions between a domestic company that has its head office in the Republic of Korea and a branch in a foreign country or local subsidiary thereof; |
| 10. | The term “real estate-related business” means real estate leasing business, real estate lot sale business, and golf course management business; <Amended on Dec. 17, 2007> |
| 11. | The term “forward exchange transaction” means a transaction where means of foreign payment are traded and the payment therefor is made at an exchange rate which was agreed in advance at the time of the purchase and sale agreement between the parties to the transaction, on an agreed future date after the third business day from the date of such agreement, excluding those transactions made in a derivatives market or an overseas derivatives market under the Financial Investment Services and Capital Markets Act; <Amended on Feb. 4, 2009> |
| 12. | The terms "trade", “import”, “import performance”, “export”, and “export performance” respectively mean "trade", “import”, “import performance”, “export”, and “export performance” as provided for in the Foreign Trade Act; <Amended on Jun. 8, 2016> |
| 13. | The term “declaration, etc.” means permission, acceptance of a declaration, declaration, confirmation, and acknowledgment under the Act, the Decree, and these Regulations; |
| 13-1. | The term "credit derivative-linked securities" means credit-linked notes regarding which credit risks are transferred to either party to a transaction upon a credit event, first-to-default or first-loss synthetic collateralized debt obligations, or other transactions similar thereto, among the securities under the Financial Investment Services and Capital Markets Act; <Amended on Feb. 4, 2009> |
| 13-2. | The term “credit derivatives” means derivatives with credits risks as the underlying asset, among the derivatives as provided in Article 5 of the Financial Investment Services and Capital Markets Act; <Newly Inserted on Feb. 4, 2009> |
| 13-3. | The term "credit cards, etc." means a credit card, debit card, prepaid card, traveler's card, or any other card with a cash withdrawal function issued by a foreign exchange bank, as provided in the Specialized Credit Finance Business Act; <Amended on Aug. 4, 2020> |
| 13-4. | The term "ordinary commodity" means an underlying asset as provided in Article 4 (10) 3 of the Financial Investment Services and Capital Markets Act; <Newly Inserted on May 19, 2010> |
| 14. | The term "traveler's card" means a certificate that a foreign exchange bank issues or sells, as a means for payment of overseas travel expenses, where the bank receives an amount in advance and records an equivalent amount in foreign currency (meaning recording thereof in an individual card or a central processing unit by electronic or magnetic means) and enables the purchaser of the traveler's card to withdraw cash or to receive goods or services within the scope of such recorded amount; <Amended on Aug. 4, 2020> |
| 15. | The term “offshore financial company” means a company (including a company in the course of establishment and such contractual form) established under a foreign law for the primary purpose of generating profits by investing, directly or through a subsidiary, etc., in securities, bonds, and derivatives and which has not established a business office for substantial business activities in the jurisdiction subject to the statutes governing the establishment thereof; <Amended on Feb. 4, 2009> |
| 15-1. | The term “permanent residency, etc.” means permanent residency, citizenship, non-immigrant investor visa, and retirement visa of a foreign country; <Newly Inserted on Dec. 17, 2007> |
| 16. | The term “foreign exchange bank” means a domestic business office engaging in foreign exchange services of a financial company as provided in subparagraph 1 of Article 14 of the Decree; <Amended on Dec. 19, 2013> |
| 17. | The term “payment, etc. through a foreign exchange bank” means performing payment, collection, or receipt through a foreign exchange bank, or performing payment, etc. by means of transfer between accounts held at a foreign exchange bank; <Amended on Feb. 4, 2009> |
| 18. | The term “outbound transporter” means a person who falls under any of the following after obtaining a permit or license, making a declaration, or obtaining registration according to the Marine Transportation Act, Aviation Act, or Goods Distribution Promotion Act: |
| (a) | Airline or shipping company of the Republic of Korea providing services on an overseas route; |
| (b) | Shipping agent, air cargo agent, and air transportation general sales agent which vicariously performs business affairs of a foreign shipping or airline company (including branches of a foreign shipping or airline company in the Republic of Korea); |
| (d) | Ship management company; |
| 19. | The term “foreign currency acquisition track record” means foreign currency acquisition track record by any of the following means: |
| (a) | Export performance acknowledged as provided in the Foreign Trade Act; |
| (b) | Foreign currency acquisition track record by means of sale of goods to, receipt of construction orders from, and provision of services to, the United Nations Forces or other foreign military forces in the Republic of Korea; |
| (c) | Foreign currency acquisition track record by means of the tourism business as provided in the Tourism Promotion Act; |
| (d) | Foreign currency acquisition track record by means of the overseas construction and services business; |
| (e) | Foreign currency acquisition track record by means of the outbound transport business; |
| (f) | Foreign currency acquisition track record by means of other acknowledged transactions; |
| 20. | The term “continuous linked settlement system” means the settlement system operated by CLS Bank International, an institution specializing in foreign currency settlement which was set up for the purpose of reducing foreign exchange settlement risks through simultaneous settlement of the currencies sold and purchased; <Newly Inserted on Jul.1, 2005> |
| 20-1. | The term “foreign exchange margin transaction” means a transaction where currencies are traded without actual delivery thereof by depositing a certain margin with a foreign exchange bank and then settling the profits or losses according to exchange rate fluctuations, interest rate gaps between currencies, etc.; <Newly Inserted on Dec. 17, 2007> |
| 20-2. | The term “foreign exchange derivatives” means derivatives whose underlying asset is a foreign currency, among derivatives as provided in Article 5 of the Financial Investment Services and Capital Markets Act; <Newly Inserted on Feb. 4, 2009> |
| 21. | The term “services” means technical assistance, provision of news or information, entertainment (including provision of film screening rights), harbor work, supply of harbor facilities, repair of vessels and aircraft, performance of vicarious business affairs, banking services, insurance, storage, transportation, and provision of any other labor, convenience or amusement in favor of other persons; |
| 22. | The term “deep-sea fisher” means a person, as acknowledged by the Minister of Oceans and Fisheries according to the Fisheries Act, who uses a foreign port as the primary fishing base or engages in mothership fishing operations, or exclusive docking fisheries business, etc. using a domestic port as the base thereof; <Amended on Dec. 19, 2013> |
| 23. | The term “Korean won-linked foreign securities” means foreign securities whose quote currency, payment amount determination currency, or settlement currency is the domestic currency; |
| 24. | The term “Korean won securities” means securities whose quote currency, payment amount-determining currency, or settlement currency is the domestic currency; |
| 24-2. | The term "RMB" means the currency of the People's Republic of China; <Newly Inserted on Mar. 22, 2016> |
| 25. | The term “acknowledged transaction” means a transaction for which a declaration, etc. or report has been made pursuant to the Act, the Decree, and these Regulations, or which does not require a declaration, etc.; <Amended on Jul. 4, 2023> |
| 26. | The term “bidding guarantee, etc.” means a bidding guarantee, performance guarantee, defect guarantee, initial and advance payment refund guarantee, and any other guarantee that replaces payment of a security deposit; |
| 27. | The term "integrated fund management" means integrated management of any fund surpluses or deficiencies among participating companies where a domestic company or a foreign invested company under the Foreign Investment Promotion Act enters into a fund sharing contract with a local company or foreign headquarters (including its affiliated companies; hereafter in this subparagraph the same shall apply) which allows for lending or borrowing as needed and enables foreign currency deposit, foreign currency borrowing, collateralized transactions with domestic and foreign financial institutions or foreign currency lending transactions with local companies or foreign headquarters; <Newly Inserted on Jul.1, 2005> |
| 27-1. | The term “exchange-traded derivative” means a derivative traded on a derivatives market or an overseas derivatives market as provided in Article 5 (2) of the Financial Investment Services and Capital Markets Act; <Newly Inserted on Feb. 4, 2009> |
| 27-2. | The term “over-the-counter derivatives” means the derivatives as provided in Article 5 (3) of the Financial Investment Services and Capital Markets Act that are not exchange-traded derivatives; <Newly Inserted on Mar. 22, 2016> |
| 28. | The term “public institution” means a public institution designated according to the Act on the Management of Public Institutions; <Amended on Feb. 4, 2009> |
| 29. | The term “overseas Korean” means a person who falls under any of the following: |
| (a) | Emigrants under the Emigration Act who obtained nationality of a foreign country; |
| (b) | Nationals of the Republic of Korea who obtained permanent residency in a foreign country or other qualifications equivalent thereto; |
| 30. | Deleted; <Amended on Apr. 16, 2012> |
| 31. | The terms “main creditor bank” and “enterprises in the main debtor group” respectively mean a “main creditor bank” and companies which belong to a “main debtor group” as provided in the Regulation on Supervision of Banking Business of the Financial Services Commission; <Amended on Feb. 4, 2009> |
| 32. | The term “small and medium enterprises” means small and medium enterprises as provided in the Framework Act on Small and Medium Enterprises; |
| 33. | The term “acquisition of securities” means acquisition of securities or other rights appurtenant thereto, including conversion rights, subscription rights, and exchange rights (excluding collateral rights); |
| 33-1. | The term “payment, etc.” means any payment or receipt under the Act; <Newly Inserted on Feb. 4, 2009> |
| 34. | The term “means of payment” means government notes, bank notes, coins, checks, postal money orders, letters of credit, bills of exchange, promissory notes, gift certificates, other postal or telegraphic payment instructions indicating the details of any entitlement to payment, or means of payment by electronic means such as electronic money and prepaid electronic means of payment under the Electronic Financial Transactions Act, as provided in Article 3 (1) 3 of the Act; provided that gold coins, etc. that are traded in excess of their face value are excluded from coins; <Amended on Aug. 4, 2020> |
| 35. | The term “designated foreign exchange bank” means a foreign exchange bank designated by a party to any act or transaction subject to these Regulations for the purpose of cross-border transactions and post management thereof; |
| 36. | The term “accrual of claim, etc.” means accrual, modification, redemption, extinguishment, direct or indirect transfer or other disposition of any claims or debts; |
| 37. | The term “specified insurance company” means a person who engages in insurance business as provided for in the Trade Insurance Act and Industrial Accident Compensation Insurance Act; <Amended on Apr. 16, 2012> |
| 38. | The term “overseas construction and services business” means overseas construction works and services, harbor services, transportation and other services directly related thereto which entail local expense disbursement in connection with the relevant business (including cases where a subcontract is concluded with regard to all or a part of the relevant business) as well as turnkey contract exports as provided in the Foreign Trade Act; <Amended on Jan. 1, 2006> |
| 39. | The term “overseas travel expense” means an expense necessary for overseas travel payable by an overseas traveler; |
| 40. | The term “overseas traveler” shall be classified as follows: |
| (a) | A person staying overseas: A person who falls under any of the following and stays overseas for more than 30 days: |
1) A person staying overseas for the purpose of commercial or cultural activities, public duties, technical training, or overseas training (limited to less than six months); provided that any foreign resident who has resided in the Republic of Korea for less than five years shall be excluded;
2) A foreign resident residing in the Republic of Korea for less than five years and a Korean national overseas with permanent residency or qualifications for long-term stay in a foreign country who work for a domestic company, research institute, etc. and stay overseas for the purpose of business affairs of such organization;
| (b) | A student studying overseas: A person who falls under any of the following and stays overseas for the purpose of learning, academic or technological research, or training at a foreign educational, research, or training institute for not less than six months: <Amended on Dec. 17, 2007> |
1) National of the Republic of Korea who is not a permanent resident in a foreign country, or a foreigner who has resided in the Republic of Korea for not less than five years; <Newly Inserted on Dec. 17, 2007>
2) Person who does not fall under subitem 1) and whose parent paying expenses for overseas studies thereof is a resident and national of the Republic of Korea and is not a permanent resident in a foreign country; <Newly Inserted on Aug. 4, 2020>
| (c) | Ordinary overseas traveler: Overseas traveler who is a resident and does not fall under Items (a) and (b); |
| 41. | The term “overseas relocation costs” means expenses payable by emigrants (meaning persons whose overseas emigration is acknowledged under related statutes including the Emigration Act) and prospective emigrants (meaning persons who intend to acquire permanent residency, etc.); <Amended on Dec. 17, 2007> |
| 42. | The term "local finance" means an act of a resident and a person who falls under any subparagraph of Article 7-14-2 (1), to borrow any fund (including those cases by means of issuance of securities) or to obtain any payment guarantee overseas for the purpose of use thereof overseas, excluding a financial institution (referring to a financial institution, etc., as provided in Article 3 (1) 17 of the Act, including its branch offices in foreign countries), a local subsidiary of the financial institution, a local subsidiary financial institution established by a non-financial institution, and an individual resident; <Amended on Dec. 17, 2007><Amended on Jul. 4, 2023> |
| 43. | The term “local subsidiary” means an overseas corporation established by means of a declaration, etc. hereunder; |
| 44. | The term “local subsidiary financial institution” means a foreign corporation engaging in the financial/insurance business established by means of a declaration, etc. according to the Financial Services Commission's Regulation on Overseas Advance of Financial Institutions; <Amended on Feb. 4, 2009> |
| 45. | The term “domestic import usance” means credit granted by a foreign exchange bank to a Korean importer until the payment due date by opening an import usance letter of credit and accepting and negotiating an export bill issued by a foreign exporter based on the said letter of credit; <Newly Inserted on Dec. 19, 2013> |
| 46. | The term “Account AA” means funds with a contract maturity of more than one year in Account A of the head office and overseas branches referred to in Appendix 4-1 of the Detailed Enforcement Rule of the Regulation on Supervision of Banking Business prescribed by the Governor of the Financial Supervisory Service after re-entrusted by the Financial Services Commission pursuant to Article 37 (2) of the Enforcement Decree of the Foreign Exchange Transactions Act. <Newly Inserted on Dec. 19, 2013> |
| Article 1-3 (Recovery of Debts) |
Deleted. <Jun. 29, 2017>
| Article 1-4 (Processing Period regarding Registration) |
| (1) | The period to process each of the following business affairs shall be as follows: |
| 1. | Registration of a foreign exchange agency: Within 20 days from the date of application for registration; |
| 2. | Registration of a professional foreign exchange dealer: Within 20 days from the date of application for registration; <Amended on Jun. 29, 2017> |
| 3. | Authorization, declaration, etc.: Within 20 days from the date of application for authorization, declaration, etc. <Amended on Feb. 4, 2009> |
| (2) | In counting the processing period as provided in paragraph (1), the initial date shall be included, but public holidays and a period required for any supplementation shall not be included. |
| (3) | Except as otherwise provided in these Regulations (including the regulations determined by a person to whom authority has been entrusted) regarding handling of business affairs such as registration, authorization, declaration, etc., the provisions of the statutes on handling of civil petitions and the statutes on administrative procedures shall apply mutatis mutandis. |
CHAPTER II FOREIGN EXCHANGE AGENCIES
Section 1 Foreign Exchange Banks
| Article 2-1 (Registration and Modification of Foreign Exchange Services) |
| (1) | Any person who intends to register foreign exchange services pursuant to Article 13 (1) of the Decree or to request a prior examination of the requirements pursuant to Article 13 (3) of the Decree shall file with the Minister of Economy and Finance an application for registration of foreign exchange services using Form 2-1, with the following documents attached thereto: <Amended on Oct. 30, 2020> |
| 1. | A copy of written authorization of establishment of the relevant financial company, etc. (in cases of a financial company which has its head office in a foreign country, written authorization of establishment issued by the government of such country), or any document in lieu thereof; <Amended on Dec. 19, 2013> |
| 2. | Latest balance sheet and income statement of the relevant financial company; <Amended on Dec. 19, 2013> |
| 3. | Details of the domestic business office which intends to perform foreign exchange services. |
| (2) | If intending to change the registration details of the foreign exchange services (excluding the establishment, closure, or change of location of the domestic business office) or discontinue foreign exchange services pursuant to Article 16 (2) of the Act, a declaration of change of foreign exchange services registration details in Form 2-2 shall be submitted to the Minister of Economy and Finance; provided that if the head office of a foreign exchange agency is relocated, the declaration of change shall be submitted to the Minister of Economy and Finance within 30 days from the date of relocation: <Amended on Dec. 24, 2018> |
| (3) | A foreign exchange bank shall not engage in brokerage or recommendation of any foreign exchange transactions regarding which the parties thereto attempt to evade a declaration, etc. as provided herein. |
| Article 2-1-2 (Payments and Receipts) |
| (1) | If a foreign exchange bank receives a request for payment or receipt subject to these Regulations, such transaction shall be carried out according to the procedures of payment, etc. as provided in Chapter IV. <Amended on Feb. 4, 2009> |
| (2) | With respect to any payment, etc. that exceeds USD5,000 per transaction, the head of a foreign exchange bank shall confirm whether the relevant payment, etc. requires a declaration, etc. under the Act, Decree and these Regulations, and shall keep for five years the payment application and, in the case of payments and receipts provided in the proviso of Article 4-3 (1) 2, documents proving that such confirmation procedures have been completed. <Amended on May 3, 2019> |
| (3) | In cases where the cause of a receipt cannot be confirmed because the prospective recipient's whereabouts are unknown, the confirmation procedures as provided in paragraph (2) need not be carried out. <Amended on Feb. 4, 2009> |
| (4) | The head of a foreign exchange bank shall return documentary evidence for payments, etc. and the sources of funds, which were submitted as provided in Chapter IV, after verifying them. <Amended on Dec. 24, 2018> |
| Article 2-2 (Purchase of Foreign Exchange) |
| (1) | In cases where a foreign exchange bank intends to purchase foreign exchange, it shall confirm whether acquisition of the relevant foreign exchange by the prospective seller requires a declaration, etc. hereunder; provided that this shall not apply in any of the following cases: |
| 1. | Where it purchases any means of foreign payment not exceeding USD20,000; provided that in cases of purchasing any means of foreign payment from the same person on the same date twice or more, this shall be limited to cases where the combined amount of such purchase is not more than USD20,000; |
| 2. | Where it purchases any means of foreign payment from the government, local governments, foreign exchange agencies, currency exchange operators, and small-sum overseas remittance business entities pursuant to Article 2-31 (2); <Amended on Jun. 29, 2017> |
| 3. | Where it purchases from a resident any foreign exchange deposited in the relevant resident's resident account and resident foreign currency trust account; |
| 4. | Where it purchases any means of foreign payment from persons who fall under Article 10 (2) 1, 2, or 6 (a) or (b) of the Decree. <Amended on Feb. 4, 2009> |
| (2) | In cases where a foreign exchange bank purchases any means of foreign payment, it shall give the Commissioner of the National Tax Service and the Commissioner of the Korea Customs Service a monthly notice on the particulars of such purchase by the 10th day of the immediately following month except for purchases of means of foreign payment with a value of USD10,000 or less on the basis of the same person on the same date, cases under paragraph (1) 2 through 4, purchases from financial institutions in foreign countries, and purchases of foreign currency-denominated local Letter of Credit (L/C) bills. <Amended on Dec. 17, 2007> |
| (3) | Except in the cases under paragraph (1) 1 and 4, where a foreign exchange bank purchases from a foreign resident or non-resident any means of foreign payment regarding which documents evidencing the sources of funds are not to be submitted, any person who intends to conduct the relevant sale shall make a declaration thereof to the Governor of the Bank of Korea through a declaration of purchase and sale of the means of foreign payment in Form 7-4. |
| (4) | In cases where a foreign exchange bank purchases foreign exchange from a foreign resident or non-resident, it shall issue and deliver, only once, documents evidencing such purchase including a certificate of foreign exchange purchased, receipt, statement, etc. |
| Article 2-3 (Sale of Foreign Exchange) |
| (1) | A foreign exchange bank may sell foreign exchange in exchange for any means of domestic payment, only in the following cases: |
| 1. | Sale to a resident which falls under any of the following: |
| (a) | Where a person who intends to purchase foreign exchange intends to use the relevant foreign exchange for the purpose of any acknowledged transaction or payment; |
| (b) | Where the amount of foreign exchange sold, in cases of sale to a foreign resident, is within USD10,000 since the latest date of entry or within the scope of the amount as provided in Article 4-4; <Amended on Aug. 4, 2020> |
| (c) | Where a resident, other than a foreign resident, purchases foreign currency or traveler's check for the purpose of possession; <Amended on Aug. 4, 2020> |
| (d) | Where foreign exchange is sold for the purpose of deposit thereof in a resident account and a resident foreign currency trust account as provided in Article 7-8 (1) 2; |
| (e) | Where foreign exchange is sold for transfer to another foreign exchange bank; provided that this shall be limited to payments according to acknowledged transactions in cases where such foreign exchange is to be transferred to an external account or a non-resident foreign currency trust account; |
| (f) | Where foreign currency is sold to a small-sum overseas remittance business entity pursuant to Article 2-31 (2); <Newly Inserted on Jun. 29, 2017> |
| (g) | Where foreign currency is sold to a currency exchange operator pursuant to Article 2-29 (6); <Newly Inserted on Jun. 29, 2017> |
| 2. | Sale to a non-resident which falls under any of the following: |
| (a) | Where such sale is within the scope of foreign exchange sale by a non-resident to a foreign exchange agency or currency exchange operator in exchange for the domestic currency or traveler's checks denominated in Korean won during the relevant period of stay in the Republic of Korea since the latest date of the entry; |
| (b) | Where such sale is within the scope of foreign exchange sale by a non-resident to a foreign exchange bank's branch office in a foreign country, local subsidiary financial institution, or such foreign financial institution as provided in Article 7-48 (1) 8 in exchange for the domestic currency or traveler's checks denominated in Korean won; <Amended on Dec. 17, 2007> |
| (c) | Where such sale is within the scope of the amount of cash advance services or debit card withdrawals if any non-resident possessing a credit card or debit card issued overseas, receives a cash advance or uses such debit card to make a withdrawal in Korean won in the Republic of Korea; |
| (d) | Where such sale is not more than USD10,000 in cases of any non-resident who does not have any sales performance, etc. as provided in items (a) through (c); |
| (e) | Where such sale is for the purpose of any foreign payment according to an acknowledged transaction; |
| (f) | Where such sale is within the scope of the amount provided in Article 4-4; <Newly Inserted on Dec. 17, 2007> |
| 3. | Notwithstanding subparagraphs 1 (b) and 2 (e), in cases of sale for payment which falls under any of the following, the prospective purchaser shall make a declaration thereof to the Governor of the Bank of Korea through a declaration of purchase and sale of the means of foreign payment in Form 7-4: |
| (a) | Payment of principal and interest in connection with any domestic deposit or trust accounts in Korean won provided in Article 7-6 (1) 2; provided that the provisions of Article 4-7 shall apply to cases where overseas Koreans export domestic property overseas; <Amended on Dec. 17, 2007> |
| (b) | Payment of proceeds from the sale of domestic real estate by a foreign resident; provided that this shall not apply to cases where the foreign resident acquires real estate in the Republic of Korea with funds hand-carried or remitted (including funds deposited in an external account) from a foreign country and submits a written confirmation on funds for purchasing real estate issued by the head of the competent tax office of the location of real estate or the last domicile of an applicant in accordance with attached Form 4-2 in order to pay the price for real estate within the amount of acquisition; <Amended on Aug. 4, 2020> |
| (c) | Payment of proceeds from the disposal of domestic property by non-residents after providing collateral or guarantees in transactions between non-residents, excluding any substitute payment according to provision of collateral or guarantees and cases falling under the proviso of Article 2-8 (1) 5 (d) in connection with loans to overseas Koreans, etc.; <Amended on Dec. 19, 2013> |
| (d) | Foreign payment of any Korean won funds acquired by a non-resident as provided in Article 2-6 (limited to the cases where a resident provides security or issues a guarantee), subparagraph 4 of Article 7-13, Article 7-16, subparagraph 9 of Article 7-17, Article 7-45 (1) 11, and the proviso of Article 7-45 (1) 18; provided that in cases of foreign payment of any Korean won funds acquired by overseas Koreans in accordance with Article 2-6, Article 7-45 (1) 11, the proviso of Article 7-45 (1) 18, and Article 7-45 (1) 23, the provisions of Article 4-7 shall apply; <Amended on Aug. 4, 2020> |
| (e) | Intended payment in exchange for any means of domestic payment in excess of such scope as provided in subparagraphs 1 (b) and 2. |
| (2) | In cases of sale of any foreign exchange within the scope of USD10,000 as provided in paragraph (1) 1 (b) and according to paragraph (1) 2 (d), the head of a foreign exchange bank shall indicate the amount of such sale on the relevant transaction counter-party's passport; provided that this shall not apply to sale of any foreign currency equivalent to not more than KRW1 million. <Amended on Jun. 2, 2008> |
| (3) | In exchange for any foreign exchange, the acquisition or possession of which by a resident or non-resident is acknowledged, a foreign exchange bank may sell foreign exchange denominated in any other foreign currency; provided that if the foreign exchange bank intends to sell, in exchange for any foreign exchange regarding which documents evidencing the sources of funds are not to be submitted, foreign exchange denominated in any other foreign currency to a foreign resident or non-resident, the provisions of Article 2-2 (3) shall apply thereto mutatis mutandis. |
| (4) | In cases where a foreign exchange bank sells foreign exchange to a foreign resident or non-resident who has resided in the Republic of Korea for less than five years, it shall obtain documentary evidence for foreign exchange sales performance, etc. and record the date and amount of the relevant foreign exchange sale and other necessary matters; provided that with respect to non-residents provided in Articles 10 (2) 1, 10 (2) 6 (a), and 10 (2) 6 (b) of the Decree, such documentary evidence may be substituted by a letter of confirmation issued by the non-resident. <Amended on Feb. 4, 2009> |
| (5) | In cases where a foreign exchange bank sells to a resident any foreign currency, traveler's card, or traveler's check that exceeds USD10,000 on the basis of the same person on the same date in accordance with paragraph (1) 1, it shall give notice thereof to the Commissioner of the National Tax Service and the Commissioner of the Korea Customs Service on a monthly basis by the 10th day of the immediately following month; provided that this shall not apply to any such sale to the Government, local governments, foreign exchange agencies, foreign residents, and currency exchange operators as provided in Article 2-29 (6) 2. <Amended on Aug. 4, 2020> |
| Article 2-4 (Purchase and Sale of Foreign Exchange from and to Foreign Exchange Banks) |
| (1) | In cases where a foreign exchange bank conducts purchase and sale of foreign exchange with the Bank of Korea, Foreign Exchange Equalization Fund, a merchant bank, an investment trader, an investment broker, or an insurance company which is a foreign exchange agency, an overseas financial institution (excluding purchase and sale of any means of foreign payment in exchange for the means of domestic payment) and any other foreign exchange bank, the provisions of Articles 2-2 and 2-3 shall not apply; provided that for securities finance companies, those provisions shall apply only to transactions in which different currencies are exchanged according to the current contract exchange rate and re-exchanged according to the exchange rate determined at the time of the initial contract after a certain period of time. <Amended on Feb. 4, 2009><Amended on Jul. 4, 2023> |
| (2) | Paragraph (1) shall also apply to cases where an investment trader or investment broker which is a foreign exchange agency conducts purchase and sale of foreign exchange with other investment traders, investment brokers, securities finance companies, and overseas financial institutions (excluding purchase and sale of any means of foreign payment in exchange for the means of domestic payment). <Newly Inserted on Dec. 19, 2013><Amended on Jul. 4, 2023> |
| Article 2-4-2 (Foreign Exchange Margin Transaction) |
| (1) | ?A foreign exchange bank which intends to engage in foreign exchange margin transactions shall comply with the inter-bank common transaction standards (including a minimum contract unit, minimum margin, etc.). |
| (2) | In determining the transaction standards provided in paragraph (1), prior consultation shall be made with the Minister of Economy and Finance. |
| (3) | ?The head of a foreign exchange bank shall file a monthly report on performance of foreign exchange margin transactions with the Governor of the Bank of Korea by the 10th day of the following month, and the Governor of the Bank of Korea shall file a report on such performance of transactions for each bank with the Minister of Economy and Finance by the 20th day of the following month. <Newly Inserted on Dec. 17, 2007> |
| Article 2-5 (Borrowing of Foreign Currency and Issuance of Securities) |
| (1) | Where a foreign exchange bank intends to borrow foreign currency funds (including the issuance of foreign securities) in excess of USD50 million from a non-resident with a repayment period exceeding one year (including any grace period; hereinafter the same shall apply), it shall make a declaration thereof to the Minister of Economy and Finance. <Amended on Aug. 3, 2006> |
| (2) | Where a foreign exchange bank borrows any foreign currency fund (including issuance of foreign securities) except cases provided in paragraph (1), no declaration thereof is required. <Amended on Jan. 1, 2006> |
| (1) | Where a foreign exchange bank intends to provide any foreign currency loan to a resident or non-resident, no declaration thereof is required; provided that if a foreign exchange bank provides any foreign currency loan to a non-resident with a guarantee or collateral provided by a resident, the non-resident who intends to obtain such loan shall make a declaration thereof to the Governor of the Bank of Korea, and if necessary, the Governor of the Bank of Korea shall require the Commissioner of the National Tax Service to inspect the details of such declaration. <Amended on Apr. 16, 2012〉 |
| (2) | ?Notwithstanding the proviso of paragraph (1), Article 7-14-2 shall apply where a foreign exchange bank provides an offshore bank loan to a local subsidiary, etc. prescribed in Article 7-14-2 under Article 2-10, and no declaration is required in any of the following cases: <Amended on Jan. 1, 2006><Amended on Jul. 4, 2023> |
| 1. | Business loans to a foreign corporation supported under the Export-Import Bank of Korea Act and loans to a foreign government, etc. within the scope of a business plan regarding which the Chairperson and President of the Export-Import Bank of Korea obtained approval from the Minister of Economy and Finance; |
| 2. | Business loans to an export-insured foreign corporation supported under the Export Insurance Act and loans to a foreign government, etc. within the scope of a business plan regarding which the Chairperson and President of the Korea Export Insurance Corporation obtained approval from the Minister of Trade, Industry and Energy. <Amended on Dec. 19, 2013> |
| (3) | Where a foreign exchange bank intends to provide any of the following loans in Korean won to non-residents in the Republic of Korea, no declaration thereof is required: <Amended on Jan. 1, 2006> |
| 1. | Loans in Korean won to non-residents who fall under Article 10 (2) 1 and 6 (a) and (b) of the Decree; <Amended on Feb. 4, 2009> |
| 2. | Overdrafts to non-residents who opened a non-resident free transfer Korean won account (limited to checking accounts) for settlement within two business days; |
| 3. | Loans in Korean won to non-residents who are nationals of the Republic of Korea; |
| 4. | Loans in Korean won not exceeding KRW1 billion (including loans from other foreign exchange banks) to the same person who does not fall under subparagraphs 1 through 3. |
| (4) | Except for any cases falling under paragraph (3), if a foreign exchange bank intends to provide loans in Korean won not exceeding KRW30 billion (including loans from other foreign exchange banks) to the same non-resident in the Republic of Korea, the relevant non-resident shall make a declaration thereof to the head of the foreign exchange bank; provided that in cases of loans with a guarantee or collateral provided by a resident, the relevant non-resident shall make a declaration thereof to the Governor of the Bank of Korea. <Amended on Dec. 17, 2007> |
| (5) | Where a foreign exchange bank intends to provide to a non-resident loans in Korean won that do not fall under paragraph (3) or (4), the non-resident who intends to obtain such loans shall make a declaration thereof to the Governor of the Bank of Korea by specifying the purpose, etc. of the borrowed funds. <Amended on Aug. 3, 2006> |
| Article 2-6-2 (Deposits and Trusts) |
| (1) | The types of deposit accounts and cash trust accounts that a foreign exchange bank may open for residents or non-residents shall be as follows: |
| 1. | Resident accounts and resident foreign currency trust accounts for the deposit of foreign currency funds of residents, excluding subparagraph 2 (b) (excluding foreign residents who are a sole proprietor) and (c); <Amended on Apr. 16, 2012> |
| 2. | External accounts and non-resident foreign currency trust accounts for the purpose of the deposit of foreign currency funds of a person who falls under any of the following: |
| (b) | Foreign residents who are individuals; |
| (c) | Staff of the overseas diplomatic missions of the Government of the Republic of Korea and their cohabitating family members; |
| 3. | Non-resident Korean won accounts in which non-residents deposit Korean won funds for the purpose of use thereof in the Republic of Korea; |
| 4. | Non-resident free transfer Korean won accounts and non-resident Korean won trust accounts in which non-residents (including foreign residents) deposit Korean won funds whose foreign payment is free; <Amended on Jun. 2, 2008> |
| 5. | Emigrant accounts in which emigrants, prospective emigrants, or overseas Koreans deposit foreign currency funds for the purpose of exporting domestic property; |
| 6. | Investment-only foreign currency account for foreign securities in which residents deposit foreign currency funds for the purpose of making investments in foreign securities; |
| 7. | Investment-only non-resident Korean won accounts and investment-only external accounts in which non-residents or foreign residents deposit funds in Korean won and foreign currency funds respectively for the purpose of making investments in Korean won securities and exchange-traded derivatives; <Amended on Feb. 4, 2009> |
| 7-2. | Investment-only non-resident Korean won accounts and investment-only external accounts in which non-residents or foreign residents deposit Korean won funds and foreign currency funds respectively for the purpose of liquidation of over-the-counter derivatives (referring to bearing debts arising from transactions in over-the-counter derivatives by debt assumption, novation, and other means); <Newly Inserted on Mar. 22, 2016> |
| 8. | Investment-only foreign currency accounts in which investment traders, investment brokers, the Korea Exchange, and securities finance companies deposit foreign currency funds pursuant to Sections 6 and 7 of Chapter VII for the purpose of managing funds of non-residents or foreign residents for making investments in securities and exchange-traded derivatives; <Amended on Apr. 16, 2012> |
| 8-2. | Investment-only foreign currency accounts in which a clearing company (referring to a central counterparty that obtains authorization for the central counterparty clearing business under Article 9 (25) of the Financial Investment Services and Capital Markets Act from the Financial Services Commission pursuant to Article 323-3 of that Act) deposits foreign currency funds pursuant to Sections 6 and 7 of Chapter VII for the purpose of liquidation of over-the-counter derivatives of non-residents or foreign residents; <Newly Inserted on Mar. 22, 2016> |
| 9. | Foreign currency accounts for Korean won securities in which the Korea Securities Depository (hereinafter referred to as the “Depository”) deposits foreign currency funds to manage funds related to issuance of securities depository receipts by non-residents. <Amended on Feb. 4, 2009> |
| (2) | The types of deposits by account provided in each subparagraph of paragraph (1) shall be determined by the Governor of the Bank of Korea, and where the Governor of the Bank of Korea establishes or modifies the types of deposits, he or she shall without delay file a report on the details thereof with the Minister of Economy and Finance. |
| (3) | The reasons for deposits or dispositions by account provided in each subparagraph of paragraph (1) shall be governed by Chapter VII. <Newly Inserted on Dec. 17, 2007> |
| Article 2-7 (Purchase and Sale of Loan Receivables) |
Where a foreign exchange bank purchases or sells any loan receivables, loan notes, rights to collect the principal and interest of loan receivables, foreign securities, and foreign currency bonds from or to a resident or non-resident, no declaration thereof is required. <Amended on Dec. 17, 2007>
| Article 2-7-2 (Issuance of Means of Foreign Payment) |
Any means of foreign payment by electronic means, such as electronic currency or electronic prepayment means under the Electronic Financial Transactions Act, which are issued by a foreign exchange bank shall be limited to those used for the purchase of goods and services, other than other electronic payment means and assets such as securities, bonds, and derivatives; only those issued in real name under subparagraph 4 of Article 2 of the Act on Real Name Financial Transactions and Confidentiality or those issued in connection with a deposit account may be held; and those transferred from other persons shall not be held. <Newly Inserted on Dec. 24, 2018>
| (1) | Where a foreign exchange bank intends to issue a guarantee which falls under any of the following, no declaration thereof is required: <Amended on Jan. 1, 2006> |
| 1. | Where it issues a guarantee in connection with any transaction between residents; |
| 2. | Where it issues a guarantee in favor of a resident who is the creditor in connection with an acknowledged transaction between a resident (creditor) and a non-resident (debtor), with a guarantee or collateral provided by a non-resident to the foreign exchange bank; |
| 3. | Where it issues a guarantee in favor of a non-resident who is the creditor in connection with an acknowledged transaction between a resident (debtor) and a non-resident (creditor); |
| 4. | ?Where it issues a guarantee (including acceptance of collateral management) for an amount not exceeding USD500,000 for the same person receiving the relevant loans in connection with loans to overseas Koreans, etc.; <Amended on Dec. 24, 2018> |
| 5. | Where it issues a guarantee which falls under any of the following in connection with any transaction between non-residents: |
| (a) | A guarantee corresponding to local finance; <Amended on Jul. 4, 2023> |
| (b) | A guarantee which replaces payment of any security deposit for a bidding guarantee, etc. regarding construction contracts where a resident receives an order or performs construction jointly with a non-resident in connection with the overseas construction and services business; |
| (c) | A guarantee which replaces payment of any security deposit for a bidding guarantee, etc. regarding contracts for overseas construction and services business, export, or other foreign currency acquisition concluded by local subsidiaries of a domestic company or its overseas branch offices; <Amended on Aug. 4, 2020> |
| (d) | A guarantee where a resident does not provide a guarantee or collateral to the foreign exchange bank, except for cases falling under items (a) through (c); provided that such exclusion shall not apply where a guarantee (including acceptance of collateral management) is issued with domestic property as collateral provided by a non-resident. |
| (2) | Except for cases falling under paragraph (1), if a foreign exchange bank intends to issue a guarantee (including acceptance of collateral management), the party requesting such guarantee shall make a declaration thereof to the Governor of the Bank of Korea, and if necessary, the Governor of the Bank of Korea shall require the Commissioner of the National Tax Service to inspect the details of such declaration. <Amended on Dec. 19, 2013> |
| Article 2-9 (Classification of Foreign Exchange Positions) |
The overbought amount of foreign currency and the oversold amount of foreign currency of a foreign exchange bank (hereinafter referred to as "foreign exchange position") shall be classified as follows:
| 1. | Spot exchange position (the amount equivalent to the difference between the spot foreign currency asset balance and the spot foreign currency liability balance); |
| 2. | Forward exchange position (the amount equivalent to the difference between the forward foreign currency asset balance and the forward foreign currency liability balance); |
| 3. | Overall position (the amount equivalent to the difference between the sum of the spot foreign currency asset balance and the forward foreign currency asset balance and the sum of the spot foreign currency liability balance and the forward foreign currency liability balance). <Newly Inserted on Jul. 9, 2010> |
| Article 2-9-2 (Limits on Foreign Exchange Positions) |
| (1) | The limits on overall positions shall be as follows: |
| 1. | For the overall overbought position, the amount equivalent to 50/100 of the equity capital at the end of the previous month based on the sum of the overbought amount for each foreign currency; provided that in the case of the Export-Import Bank of Korea, the amount shall be 150/100 of the outstanding balance of foreign currency loans; |
| 2. | For the overall oversold position, the amount equivalent to 50/100 of the equity capital at the end of the previous month based on the sum of the oversold amount for each foreign currency. <Amended on Jul. 9, 2010> |
| (2) | The limits on forward exchange positions shall be as follows: |
| 1. | The amount equivalent to 50/100 of the equity capital at the end of the previous month based on the overbought position or the oversold position of a foreign exchange bank; provided that in the case of a domestic branch office of a foreign financial institution under Article 58 of the Banking Act, the amount shall be equivalent to 250/100 of the equity capital at the end of the previous month; |
| 2. | Notwithstanding subparagraph 1, the Minister of Economy and Finance may increase or decrease the limit set forth in subparagraph 1 within the scope of 50/100 pursuant to Article 10-15, if it is urgently necessary for the stabilization, etc. of the foreign exchange market due to an increase in the volatility in capital inflows and outflows, etc. <Newly Inserted on Jul. 9, 2010> |
| (3) | With respect to a domestic branch office of a foreign bank which intends to have a separate limit acknowledged concerning any foreign exchange purchased for the purpose of hedging the exchange risk of carried forward retained earnings and a foreign exchange bank for which it is deemed necessary to exceed the limits on foreign exchange positions, the Governor of the Bank of Korea may acknowledge a separate limit other than the limits on foreign exchange positions provided in paragraphs (1) and (2). <Amended on Jul. 9, 2010> |
| (4) | Equity capital provided in paragraphs (1) and (2) means the sum of paid-in capital, reserves, and carried forward retained earnings in cases of a domestic foreign exchange bank, and the sum of Capital A Fund, Capital B Fund, reserves, and carried forward retained earnings in cases of a domestic branch office of a foreign bank. <Amended on Jul. 9, 2010> |
| (5) | In connection with the limits on foreign exchange positions, the head of a foreign exchange bank shall file a monthly report on its foreign exchange position with the Governor of the Bank of Korea, who shall give notice thereof to the Governor of the Financial Supervisory Service. <Amended on Jul. 9, 2010> |
| Article 2-10 (Establishment and Operation of Offshore Account) |
| (1) | Where a foreign exchange bank establishes an offshore account that is financed with foreign currency funds from non-residents (including other offshore accounts) and is operated for non-residents (including other offshore accounts), such account shall be subject to separate accounting from the general account. |
| (2) | Fund transfers between offshore and general accounts shall require permission by the Minister of Economy and Finance; provided that this shall not apply to any fund transfer within the scope of 10/100 of the average balance (referring to the average balance on the basis of the balance as of the end of each month) of offshore foreign currency assets during the immediately preceding fiscal year. <Amended on Jul. 2, 2002> |
| (3) | Where a foreign exchange bank intends to issue foreign securities exceeding USD50 million with a repayment period exceeding one year for the purpose of depositing them in an offshore account, it shall make a declaration thereof to the Minister of Economy and Finance. |
| (4) | The head of a foreign exchange bank shall file a report on the status of assets and liabilities of the offshore accounts of the relevant corporation during the relevant month with the Governor of the Bank of Korea and the Governor of the Financial Supervisory Service by the 10th day of the following month, and the Governor of the Bank of Korea shall submit a comprehensive report thereof with the Minister of Economy and Finance on a quarterly basis. <Amended on Jan. 1, 2006> |
| Article 2-10-2 (Derivative Transactions) |
| (1) | Where a foreign exchange bank agrees on any foreign exchange derivative transaction with residents and non-residents and intends to physically settle all or part of the contract amount on the date of settlement, Articles 2-2 through 2-4 shall apply mutatis mutandis to the settlement of such foreign exchange. <Amended on Feb. 4, 2009> |
| (2) | A foreign exchange bank shall file a monthly report on performance of its derivative transactions (including brokerage of derivatives trading) with the Governor of the Bank of Korea; provided that in cases of any credit derivative transactions (including credit derivative-linked securities), it shall file a report on the transaction details with the Governor of the Bank of Korea within five business days from such transaction date. <Amended on Sep. 30, 2009> |
| (3) | The Governor of the Bank of Korea shall compile the details of reports under paragraph (2) and file a report thereof with the Minister of Economy and Finance. <Newly Inserted on Dec. 17, 2007> |
| Article 2-11 (Domestic Branch Offices and Business Offices of Foreign Banks) |
| (1) | The regulations determined by the Financial Services Commission shall apply to intercompany transactions of domestic branch offices of a foreign bank. <Amended on Feb. 4, 2009> |
| (2) | Article 9-34 shall apply mutatis mutandis to expenses, etc. necessary to maintain and operate domestic business offices of a foreign bank. <Amended on Dec. 17, 2007> |
| (3) | The Banking Act shall apply to the establishment, etc. of domestic branch offices and business offices of a foreign bank. |
| Article 2-11-2 (Non-Deposit Foreign Currency Liabilities) |
| (1) | "Titles of accounts publicly notified by the Minister of Economy and Finance" excluded from non-deposit foreign currency liabilities, etc. pursuant to Article 9-2 of the Enforcement Decree of the Foreign Exchange Transactions Act means any of the following titles of accounts, among the titles of accounts for liabilities specified in Appendix 4-1 (Accounting Standards for Foreign Exchange Accounts) of the Detailed Regulations on Supervision of Banking Business re-entrusted by the Financial Services Commission and determined by the Governor of the Financial Supervisory Service pursuant to Article 37 (2) of the Enforcement Decree of the Foreign Exchange Transactions Act: <Amended on Sep. 9, 2021> |
| 1. | Foreign exchange sold; |
| 2. | Foreign exchange payable; |
| 3. | Interest on overdrafts in foreign currency; |
| 4. | Foreign currency-denominated Korean won borrowings; |
| 6. | Foreign currency deposits; |
| 7. | Foreign currency debit card debts; |
| 8. | Foreign currency accounts payable; |
| 9. | Foreign currency temporary receivable accounts; |
| 10. | Foreign currency deferred revenue; |
| 11. | Foreign currency accrued expenses; |
| 12. | Unsettled spot foreign currency obligations; |
| 13. | Foreign currency guarantees reserve; |
| 14. | Foreign currency derivative liabilities; |
| 15. | Offshore foreign currency deposits; |
| 16. | Offshore derivative liabilities; |
| 17. | Other foreign currency borrowings related to domestic import usance; |
| 18. | Other foreign currency borrowings obtained from the Government, a local government, or a public institution other than a foreign exchange bank for the purpose of implementing policies of the Government or a local government; |
| 19. | Titles of accounts falling under subparagraph 3, 12, or 17 of the head office and branch offices in a foreign country and those within the limit of Capital B Fund of Account AA. |
| (2) | The amount related to the role performed to promote foreign currency transactions under Article 21-4 (2) 2 of the Enforcement Decree of the Foreign Exchange Transactions Act means the amount calculated by multiplying the sum of the following amounts by the rate of a period for performing the role to promote foreign currency transactions during the business year: <Amended on Apr. 11, 2022> |
| 1. | The sum of an amount equivalent to 1.5 times the daily average transaction amount in the spot exchange market in Korean won and Chinese yuan and an amount equivalent to 50 times the daily average transaction amount in Korean won and Chinese yuan that does not correspond to the purchase and sale of foreign exchange between a foreign exchange bank under Article 2-4 of the Regulations and another foreign exchange bank; |
| 2. | The following amounts which are denominated in Chinese yuan among the balance of non-deposit liabilities in foreign currency, etc. calculated pursuant to Article 21-4 (1) of the Decree (hereinafter referred to as "pre-deduction balance"); in such cases, where the relevant amount is less than zero, it shall be deemed zero: |
| (a) | Where a person liable to pay charges is designated as a clearing bank for the spot exchange market in Korean won and Chinese yuan pursuant to Article 10-21 (1) of the Regulations, the entire pre-deduction balance denominated in Chinese yuan; |
| (b) | The amount equivalent to the balance of foreign currency liabilities arising from foreign currency loans for funds for currency swaps between the Bank of Korea and foreign central banks; |
| 3. | The amount equivalent to the daily average of the value obtained by multiplying the amount of two-way transactions by the proportion of two-way transactions in the spot exchange market in Korean won and US dollar; in such cases, the amount of two-way transactions shall be the smaller of the amounts of sale and purchase, and the proportion of two-way transactions shall be deemed the proportion of an amount equivalent to twice the smaller of the amounts of sale and purchase to the entire amount of transactions. |
| (3) | The amount calculated under Article 21-4 (2) 1 of the Enforcement Decree of the Foreign Exchange Transactions Act shall not exceed 30/100 of the pre-deduction balance. <Amended on Apr. 11, 2022> |
| (4) | The sum of the amounts calculated pursuant to paragraph (2) 1 through 2 shall not exceed 20/100 of the pre-deduction balance. <Newly Inserted on Apr. 11, 2022> |
| (5) | Paragraphs (2) and (4) shall apply only to cases of imposing foreign currency soundness charges for the business years of 2022 and 2023. <Amended on Apr. 11, 2022> |
Section 2 Other Foreign Exchange Agencies
| Article 2-12 (Foreign Exchange Services of Other Foreign Exchange Agencies) |
| (1) | This Section shall apply to the scope of foreign exchange services of foreign exchange agencies other than foreign exchange banks (hereinafter referred to as "other foreign exchange agencies"). <Amended on Mar. 22, 2016> |
| (2) | Deleted. <Amended on Mar. 22, 2016 > |
| (3) | Notwithstanding paragraph (1), Chapters VII through IX shall apply where other foreign exchange agencies intend to borrow money (including issuance of securities) from a resident or non-resident or to engage in capital transactions in the capacity of an ordinary resident. <Amended on Mar. 22, 2016> |
| Article 2-13 (Postal Service Agencies) |
| (1) | A postal service agency under subparagraph 3 of Article 14 of the Decree may engage in foreign exchange services directly related to the business affairs of a postal service agency under the Act on Special Cases concerning the Management of Postal Services. <Amended on Mar. 22, 2016> |
| (2) | Deleted. <Amended on Mar. 22, 2016 > |
| (3) | The Minister of Science and ICT shall annually notify the Governor of the Bank of Korea of the performance of the foreign currency denominated foreign exchange services by postal service agencies under paragraph (1). <Amended on Dec. 19, 2013><Amended on Jul. 4, 2023> |
| Article 2-14 (Investment Traders) |
| (1) | Pursuant to subparagraph 4 of Article 14 of the Decree, an investment trader, a collective investment business entity for investment brokers, a discretionary investment business entity, a trust business entity, and a securities finance company under the Financial Investment Services and Capital Markets Act may engage in foreign exchange services directly related to the business affairs of the relevant financial company under the Financial Investment Services and Capital Markets Act; provided that the following business affairs shall be excluded: <Amended on Dec. 24, 2018> |
| 1. | Business affairs under subparagraph 4 (d) of Article 14 of the Decree; |
| 2. | Deposit business among the business affairs under subparagraph 4 (e) and (f) of Article 14 of the Decree. |
| (2) | Notwithstanding paragraph (1), an investment trader and an investment broker may conduct the business affairs under subparagraph 4 (d) of Article 14 of the Decree within the limit of payment and receipt of USD5,000 per transaction and within the limit of a cumulative annual payment and receipt of USD50,000 for the same person; provided that the limit shall not include the amounts for which a small-sum overseas remittance business entity under Article 15-2 (6) of the Decree requests an investment trader or investment broker to make payment, etc. for the purpose of depositing settlement funds in advance to a foreign partner to perform small-sum overseas remittance business. <Amended on Oct. 30, 2020> |
| (3) | An investment trader or an investment broker who is designated as a comprehensive financial investment business entity by the Financial Services Commission under Article 77-2 of the Financial Investment Services and Capital Markets Act may purchase and sell domestic currency and foreign currency under Articles 2-2 and 2-3 of the Regulations on Foreign Exchange Transactions with the confirmation from the Minister of Economy and Finance after meeting the human and physical requirements set force in Appendix 1. <Newly Inserted on Jul. 4, 2023> |
| (4) | Article 2-31 (3) through (5) shall apply mutatis mutandis to the overseas remittance business of an investment trader and an investment broker under this Article. <Amended on Sep. 9, 2021> |
| Article 2-15 (Investment Broker) Deleted. <Amended on Mar. 22, 2016> |
| Article 2-16 (Foreign Exchange Broker) Deleted. <Amended on Mar. 22, 2016> |
| Article 2-17 (Collective Investment Manager) Deleted. <Amended on Mar. 22, 2016> |
| Article 2-18 (Discretionary Investment Company) Deleted. <Amended on Mar. 22, 2016> |
| Article 2-19 (Trust Business Company) Deleted. <Amended on Mar. 22, 2016> |
| Article 2-20 (Insurance Companies) |
An insurance company under the Insurance Business Act may engage in foreign exchange services directly related to the business affairs of an insurance company under the Insurance Business Act, pursuant to subparagraph 4 of Article 14 of the Decree; provided that the following business affairs shall be excluded: <Amended on Mar. 22, 2016>
| 1. | Business affairs under subparagraph 4 (d) of Article 14 of the Decree; |
| 2. | Deposit business among business affairs under subparagraph 4 (e) and (f) of Article 14 of the Decree. |
| Article 2-21 (Mutual Savings Banks) |
| (1) | Pursuant to subparagraph 4 of Article 14 of the Decree, mutual savings banks under the Mutual Savings Banks Act, credit unions and the National Federation under the Credit Unions Act, community credit cooperatives and the Federation under the Community Credit Cooperatives Act, and the Korea Ocean Business Corporation under the Korea Ocean Business Corporation Act may engage in foreign exchange services directly related to the business affairs of mutual savings banks under the Mutual Savings Banks Act, credit unions and the National Federation under the Credit Unions Act, community credit cooperatives and the Federation under the Community Credit Cooperatives Act, and the Korea Ocean Business Corporation under the Korea Ocean Business Corporation Act; provided that the following business affairs shall be excluded: <Amended on Jul. 1, 2018> |
| 1. | Business affairs under subparagraph 4 (d) of Article 14 of the Decree; |
| 2. | Brokerage of cash loan between residents and non-residents. |
| (2) | Notwithstanding paragraph (1), foreign exchange services in which the National Credit Union Federation of Korea and the Korean Federation of Community Credit Cooperatives may engage shall be limited to the issuance of debit cards for overseas use. |
| (3) | Notwithstanding paragraph (1), if a mutual savings bank under the Mutual Savings Bank Act holds total assets of KRW1 trillion or more at the end of the immediately preceding quarter, it may conduct the business affairs under subparagraph 4 (d) of Article 14 of the Decree within the limit of payment and receipt of USD5,000 per transaction and within the limit of a cumulative annual payment and receipt of USD50,000 for the same person; provided that if a mutual savings bank opens an account under Article 15-2 (1) 5 of the Decree to a small-amount overseas remittance business entity under Article 15-2 (6) of the Decree, the amount used for the small-amount overseas remittance business shall not be included in the limit. <Amended on May 3, 2019> |
| (4) | Articles 2-31 (3) through (5) shall apply mutatis mutandis to the overseas remittance business of mutual savings banks under this Article. <Amended on Sep. 9, 2019> |
| Article 2-22 (Specialized Credit Financial Company) |
| (1) | Pursuant to subparagraph 4 of Article 14 of the Decree, a specialized credit financial company under the Specialized Credit Finance Business Act may engage in foreign exchange services directly related to the business affairs of a specialized credit financial company under the Specialized Credit Finance Business Act; provided that the following business affairs shall be excluded: <Amended on Dec. 24, 2018> |
| 1. | Business affairs under subparagraph 4 (d) of Article 14 of the Decree; |
| 2. | Deposit business among business affairs under subparagraph 4 (e) and (f) of Article 14 of the Decree. |
| (2) | Notwithstanding paragraph (1), a credit card company under the Specialized Credit Finance Business Act may conduct the business affairs under subparagraph 4 (d) of Article 14 of the Decree within the limit of payment and receipt of USD5,000 per transaction and within the limit of a cumulative annual payment and receipt of USD50,000 for the same person; provided that the limit shall not include the amounts for which a small-sum overseas remittance business entity under Article 15-2 (6) of the Decree requests a credit card company under the Specialized Credit Finance Business Act to make payment, etc. for the purpose of depositing settlement funds in advance to a foreign partner to perform small-sum overseas remittance business. <Amended on Oct. 30, 2020> |
| (3) | Article 2-31 (3) through (5) shall apply mutatis mutandis to the overseas remittance business of a credit card company under this Article. <Amended on Sep. 9, 2021> |
| Article 2-22-2 (Electronic Payment Settlement Agencies) Deleted. <Amended on Jun. 29, 2017> |
| Article 2-23 (Merchant Banks) |
| (1) | Pursuant to subparagraph 2 of Article 14 of the Decree, a merchant bank under the Financial Investment Services and Capital Markets Act may engage in foreign exchange services directly related to the business affairs of a merchant bank under the Financial Investment Services and Capital Markets Act; provided that deposit business among the business affairs under subparagraph 4 (e) and (f) of Article 14 of the Decree shall be limited to the business affairs as classified in the following: <Amended on Mar. 22, 2016> |
| 1. | Subparagraph 4 (e) of Article 14 of the Decree: Deposit business denominated in or paid in a foreign currency with other foreign exchange agencies; |
| 2. | Subparagraph 4 (f) of Article 14 of the Decree: Deposit business denominated in or paid in a foreign currency with a foreign financial institution. |
| (2) | If a merchant bank engages in foreign exchange services pursuant to paragraph (1), Articles 2-1 through 2-10-2 shall apply. <Newly Inserted on Mar. 22, 2016> |
| (3) | An investment trader or investment broker that merges with a merchant bank pursuant to the Act on the Structural Improvement of the Financial Industry may continue to engage in the foreign exchange services of the merchant bank prior to the merger for 10 years from the date of the merger. <Newly Inserted on Feb. 4, 2009> |
| Article 2-23-2 (Declaration of Other Foreign Exchange Agencies) |
| (1) | Where other foreign exchange agencies engage in the business affairs of providing monetary loans or payment guarantees denominated in foreign currency, the limit shall be 50/100 of the equity capital as of the end of the immediately preceding quarter; provided that the limit of foreign currency loans shall only apply to investment traders and investment brokers. <Newly Inserted on Mar. 22, 2016> |
| (2) | Where a customer intends to commission discretionary investment or trust assets for the purpose of avoiding a declaration, etc. under the Act or the Decree, other foreign exchange agencies shall not comply with such request. |
| (3) | Where other foreign exchange agencies perform the following business affairs or brokerage therefor, they shall make a declaration thereof to the Governor of the Bank of Korea: |
| 1. | Purchase and sale of credit derivative-linked securities (including issuance and acquisition) or derivatives the underlying assets of which are credit, the protection sale of which is intended; |
| 2. | Purchase and sale of derivatives the underlying assets of which are natural, environmental, and economic phenomena, etc.; |
| 3. | Purchase and sale of other tangible and intangible assets for which it is impracticable to specify the nature of assets, excluding securities, derivatives, real estate, foreign currency loans, sale and purchase of foreign currency loan receivables, etc. (excluding where a trust business entity follows the management instructions of a collective investment business entity). |
| (4) | Where other foreign exchange agencies perform the following business affairs or brokerage therefor, they shall file a monthly report on the performance of transactions with the Governor of the Bank of Korea and the Governor of the Financial Supervisory Service by the 10th day of the following month: |
| 1. | Where a monetary loan or payment guarantee denominated in foreign currency is provided; |
| 2. | Where overseas real estate is acquired through assets subject to trust or discretionary investment. |
| Article 2-23-3 (Non-Deposit Foreign Currency Liabilities) |
| (1) | “Titles of accounts publicly notified by the Minister of Economy and Finance” excluded from non-deposit foreign currency liabilities, etc. of investment traders, investment brokers, insurance companies, and specialized credit financial companies under Article 9-2 of the Enforcement Decree of the Foreign Exchange Transactions Act means any of the following titles of accounts, among the titles of accounts for liabilities specified in Appendix 2 of the Detailed Regulations of the Regulations on Financial Investment Business, Appendix 4-1 of the Detailed Regulations on Supervision of Insurance Business, and Form 5-1 of the Detailed Regulations on Supervision of Specialized Credit Finance Business re-entrusted by the Financial Services Commission and determined by the Governor of the Financial Supervisory Service pursuant to Article 37 (2) of the Enforcement Decree of the Foreign Exchange Transactions Act: <Newly Inserted on Jun. 29, 2015> |
| 1. | Investment traders and investment brokers: |
| (a) | Foreign currency-denominated Korean won borrowings; |
| (b) | Sale of foreign currency repurchase agreements (limited to sale of foreign currency repurchase agreements to customers); |
| (c) | Foreign currency accounts payable; |
| (d) | Foreign currency temporary receivable accounts; |
| (e) | Foreign currency deferred revenue; |
| (f) | Foreign currency accrued expenses; |
| (g) | Unsettled spot foreign currency obligations; |
| (h) | Foreign currency payment guarantees reserve; |
| (i) | Foreign currency derivatives liabilities; |
| (j) | Other foreign currency borrowings obtained from the Government, a local government, or a public institution other than a foreign exchange bank for the purpose of implementing policies of the Government or a local government; |
| (a) | Foreign currency-denominated Korean won borrowings; |
| (b) | Foreign currency liability reserves; |
| (c) | Foreign currency accounts payable; |
| (d) | Foreign currency temporary receivable accounts; |
| (e) | Foreign currency deferred revenue; |
| (f) | Foreign currency accrued expenses; |
| (g) | Unsettled spot foreign currency obligations; |
| (h) | Foreign currency payment guarantees reserve; |
| (i) | Foreign currency derivatives liabilities; |
| (j) | Other foreign currency borrowings obtained from the Government, a local government, or a public institution other than a foreign exchange bank for the purpose of implementing policies of the Government or a local government; |
| 3. | Specialized credit financial companies: |
| (a) | Foreign currency-denominated Korean won borrowings; |
| (c) | Foreign currency lease liabilities (limited to foreign currency lease security deposits); |
| (d) | Foreign currency revenue deposits (limited to foreign currency lease security deposits); |
| (e) | Foreign currency debit card debts; |
| (f) | Foreign currency accounts payable; |
| (g) | Foreign currency temporary receivable accounts; |
| (h) | Foreign currency deferred revenue; |
| (i) | Foreign currency accrued expenses; |
| (j) | Unsettled spot foreign currency obligations; |
| (k) | Foreign currency payment guarantees reserve; |
| (l) | Foreign currency lease deposits and prepayments from other foreign currency liabilities; |
| (m) | Foreign currency derivative liabilities; |
| (n) | Other foreign currency borrowings obtained from the Government, a local government, or a public institution other than a foreign exchange bank for the purpose of implementing policies of the Government or a local government. |
| (2) | The Governor of the Bank of Korea may request the relevant financial company to submit relevant data to the extent necessary to determine whether investment traders, investment brokers, insurance companies, and specialized credit financial companies are the persons liable to pay charge under subparagraph 7 of Article 21-2 of the Decree and whether the relevant liabilities are excluded from the net balance of non-deposit foreign currency liabilities, etc. under paragraph (1). |
| Article 2-24 (Provisions to Be Applied Mutatis Mutandis) |
Articles 2-1, 2-1-2, 2-2, 2-3, 2-6, 2-7, 2-7-2, 2-8, 2-10-2, and 2-11-2 (2) through (5) shall apply mutatis mutandis when other foreign exchange agencies conduct the relevant foreign exchange services. <Amended on Sep. 9, 2021><Amended on Jul. 4, 2023>
Section 3 Foreign Exchange Services of the Bank of Korea
| Article 2-25 Foreign Exchange Services of the Bank of Korea |
The Bank of Korea may engage in the following business affairs:
| 1. | Purchase and sale of foreign exchange and derivatives transactions; |
| 2. | Possession and management of foreign currency funds and foreign exchange; |
| 3. | Receipt of foreign currency deposits from the Government and its agencies, and domestic financial institutions; |
| 4. | Receipt of deposits from foreign financial institutions, international financial organizations, foreign governments and their agencies, or United Nations organs; |
| 5. | Foreign currency borrowings from overseas financial institutions or foreign governments; |
| 6. | Assumption and guarantee of debt; |
| 7. | Investments in and loans to international financial organizations; |
| 8. | Provision of foreign currency loans to foreign exchange banks; |
| 9. | Purchase and sale of precious metals; |
| 10. | Receipt of Korean won deposits from foreign central banks; |
| 11. | Conclusion of foreign exchange transaction agreements; |
| 12. | Other business affairs incidental to those provided in subparagraphs 1 through 11. <Amended on Feb. 4, 2009> |
| Article 2-26 (Commissioning of Brokerage of Foreign Exchange Services by the Bank of Korea) |
The Bank of Korea may, where necessary, commission the brokerage of the relevant foreign exchange services or entrust the handling of such business affairs to a foreign exchange bank to conduct the business affairs provided in Article 2-25. <Amended on Feb. 4, 2009>
| Article 2-27 (Intervention in Foreign Exchange Market and Management of Foreign Currency Reserves by the Bank of Korea) |
When deemed necessary for the stability of the foreign exchange market, the Governor of the Bank of Korea may intervene in the foreign exchange market by using funds of the Bank of Korea and the Foreign Exchange Equalization Fund, and the Minister of Economy and Finance may give necessary instructions on intervention in the foreign exchange market, and the financing and management of foreign currency funds. <Amended on Feb. 4, 2009>
Section 4 Currency Exchange Operators among Professional Foreign Exchange Dealers
| Article 2-28 (Registration of Currency Exchange Services) |
| (1) | A person who intends to register currency exchange services pursuant to Article 15 (1) of the Decree shall submit an application for registration of currency exchange services in Form 3-1 to the Commissioner of the Korea Customs Service, along with documentary evidence such as a certified copy of the building register to prove compliance with the requirements specified in the subparagraphs of Article 15 (2) of the Decree, indicating the method(s) of currency exchange services desiring to engage in (multiple selections allowed) from the following methods: <Amended on May 1, 2018> |
| 2. | Unmanned currency exchange kiosks; |
| (2) | "Data processing equipment ... determined and publicly notified by the Minister of Economy and Finance" in Article 15-2 (2) 2 of the Decree means data processing equipment including computers, which can facilitate the reporting and submission of data under Article 20 (1) or (2) of the Act; provided that in the case of a person who operates currency exchange services through an unmanned currency exchange kiosk (hereinafter referred to as "unmanned currency exchange kiosk operator") and a person who operates currency exchange services through an online method (hereinafter referred to as "online currency exchange operator"), it means data processing equipment recognized by the Commissioner of the Korea Customs Service as an information processing and information protection system that can ensure the stability and reliability of currency exchange services. <Amended on May 1, 2018> |
| (3) | For modifications of the registered matters of currency exchange services or termination of currency exchange services under Article 16 of the Decree, the provisions of any of the following subparagraphs shall apply: <Amended on Jun. 29, 2017> |
| 1. | A person who intends to modify his or her name and location shall submit a declaration of modification of the registered matters of currency exchange services in Form 3-2 to the Commissioner of the Korea Customs Service, along with the following documents: <Amended on Mar. 22, 2016> |
| (a) | A registration certificate of currency exchange operator; |
| (b) | Documentary evidence for the modified matters; |
| 2. | A person who intends to terminate currency exchange services shall submit a declaration on the termination of currency exchange services in Form 3-3 to the Commissioner of the Korea Customs Service, along with the following documents: <Amended on Mar. 22, 2016> |
| (a) | A registration certificate of currency exchange operator; |
| (b) | A certificate of sale of the foreign exchange net balance held (including foreign currency deposits) to a designated foreign exchange bank; |
| (c) | A letter confirming return of a certificate of unused foreign currencies (referring to an application for the sale of foreign exchange and a certificate of foreign exchange purchased) and a void foreign exchange certificate to a designated foreign exchange bank; |
| (d) | Where a copy of the currency exchange ledger under Article 2-29 (1) is not submitted, a copy of the relevant currency exchange ledger. <Newly Inserted on Jun. 29, 2017> |
| (4) | The Commissioner of the Korea Customs Service to verify the maintenance of the registration requirement under Article 15 (2) of the Decree may require a currency exchange operator to provide documentary evidence to verify compliance with the requirements specified in Article 15 (2) of the Decree. In such cases, the currency exchange operator shall comply with the request of the Commissioner of the Korea Customs Service. <Newly Inserted on Jun. 29, 2017> |
| Article 2-29 (Business Affairs of Currency Exchange Operators) |
| (1) | A currency exchange operator shall record on a currency exchange ledger the date of currency exchange, the name, resident registration number, and passport number of the seller (or the purchaser), and the amount of exchange, the exchange rate applied, and details of the transaction in Form 3-3-2, and shall submit a copy of the currency exchange ledger (including in electronic form) to the Commissioner of the Korea Customs Service by the 10th of the immediately following month for each six month period in accordance with Article 20 (1) of the Act; provided that where an online currency exchange operator deposits a performance bond or purchases a surety bond, submission of the relevant copy shall be the 10th of the immediately following month for each quarter. <Amended on May 1, 2018> |
| (2) | A currency exchange operator may purchase foreign currency and traveler's check (hereafter in this Article referred to as "foreign currency, etc.") from residents or non-residents in exchange for means of domestic payment, as prescribed in any of the following subparagraphs: |
| 1. | In cases of purchasing foreign currency, etc., the applicant shall submit an application for the sale of foreign exchange in Form 3-4 to the currency exchange operator and such currency exchange operator shall verify the personal information of the applicant by means of certificates of real-name verification, such as a resident registration certificate, passport, business registration certificate, and tax payment number certificate, after receiving an application for the sale of foreign exchange in Form 3-4; provided that this shall not apply where the currency exchange operator purchases foreign currency by installing an automatic coin exchange machine; <Amended on Jan. 1, 2006> |
| 2. | In cases of purchasing foreign currency, etc., the currency exchange operator shall verify whether the acquisition of the relevant foreign currency, etc. is subject to declaration, etc. (limited to cases where the amount of such purchase on the same date by the same person exceeds USD20,000), and submit a copy of an application for the sale of foreign exchange to the Commissioner of the National Tax Service and the Commissioner of the Korea Customs Service by the 10th of the immediately following month; provided that this shall not apply to cases falling under the proviso of subparagraph 1 and cases where the currency exchange operator purchases foreign currency, etc. in an amount not exceeding USD10,000 on the same date by the same person; <Amended on Apr. 16, 2012> |
| 3. | In cases of purchasing foreign currency, etc. from a foreign resident or non-resident, the currency exchange operator shall issue and deliver certificates of foreign exchange purchased in Form 3-5 only once; provided that this shall not apply where the currency exchange operator purchases foreign currency by installing an automatic coin exchange machine. <Proviso Newly Inserted on Jul. 1, 2005> |
| (3) | A currency exchange operator may re-exchange foreign currencies only in any of the following cases: <Amended on Jul. 1, 2005> |
| 1. | Where a non-resident has sold a means of foreign payment to a foreign exchange agency or currency exchange operator during the period of stay after the last date of entry into the Republic of Korea; |
| 2. | Where a non-resident or a foreign resident redeems money won or unused amounts at a casino of the relevant currency exchange operator. <Amended on Jul. 1, 2005> |
| (4) | A currency exchange operator shall, upon receipt of an application for re-exchange from a non-resident or a foreign resident under paragraph (3), have such applicant submit an application for re-exchange in Form 3-6, a certificate of foreign exchange purchased in Form 3-5, and a passport; provided that if the currency exchange operator receives an application for re-exchange from a non-resident or a foreign resident who falls under Article 10 (2) 2 or 6 (a) or (b) of the Decree, the currency exchange operator may verify his or her personal information by means of certificate of real-name verification, such as an identification card or alien registration certificate, other than a passport. <Amended on Feb. 4, 2009> |
| (5) | Notwithstanding paragraphs (2) through (4), a currency exchange operator may purchase or sell foreign currency, etc. without an application for the sale of foreign exchange and a certificate of foreign exchange purchased up to USD2,000 from or to the same person on the same date (provided that in the case of a service provider electronically managing currency exchange ledger defined in subparagraph 5 of Article 2 of the Public Notice on the Management of Currency Exchange Operators, up to USD4,000). <Amended on May 3, 2019><Amended on Dec. 29, 2021> |
| (6) | A currency exchange operator shall designate a foreign exchange bank for transactions falling under any of the following subparagraphs: |
| 1. | Sale and deposit of foreign currency, etc. to and with the foreign exchange bank as provided in paragraph (2); |
| 2. | Purchase of foreign currency from the foreign exchange bank for the purposes of paragraphs (3) and (5). <Amended on Dec. 24, 2018> |
| (7) | A currency exchange operator shall retain documents related to currency exchange, such as currency exchange ledgers, applications for the sale of foreign exchange, and certificates of foreign exchange purchased, for five years after the relevant year. |
| (8) | An unmanned currency exchange kiosk operator may purchase or sell foreign currency, etc. in an amount of up to USD2,000 from or to the same person on the same date (provided that in the case of an operator electronically managing currency exchange ledger, up to USD4,000), and in providing currency exchange services, shall comply with the following: <Amended on Sep. 9, 2021> |
| 1. | Verify the personal information of a seller or a buyer by scanning and recognizing certificates of real-name verification such as a resident registration certificate, a passport, a business registration certificate, a tax payment number certificate, and an alien registration certificate of such seller or buyer; |
| 2. | Operate a customer support center to protect customers and to address their inconveniences. |
| (9) | An online currency exchange operator may purchase or sell foreign currency, etc. from or to the same person on the same date for an amount of up to USD2,000 (provided that in the case of a service provider electronically managing currency exchange ledger, up to USD4,000), and may receive or pay foreign currency, etc. from or to a customer, at any place other than a business office or via an account opened with a financial company, etc., and in providing currency exchange services, shall comply with the following: <Amended on Sep. 9, 2021> |
| 1. | Verify the resident registration number, passport number, and other personally identifiable information of the customer by means of a certificate of real-name verification, such as a resident registration certificate and a passport or by means recognized by the Commissioner of the Korea Customs Service before receiving or paying foreign currency, etc. from or to the customer when entering into an online currency exchange contract; |
| 2. | Comply with the procedures determined by the Commissioner of the Korea Customs Service in relation to the specification, establishment, and modification of the terms and conditions when entering into an online currency exchange contract; |
| 3. | Formulate procedures to reflect reasonable opinions or complaints of the customer and to compensate for damages incurred in connection with currency exchange services; |
| 4. | Deposit the settlement amount with a third party until the customer receives foreign currency, etc., through currency exchange or deposit a performance bond of at least KRW100 million in cash with the head of the competent customs office (provided that in the case of a performance bond, such customer may refrain from depositing all or part of the performance bond amount, within the limits of the coverage provided by a license and permit bond issued by a domestic surety company, where the head of the competent customs office is the beneficiary); |
| 5. | Use a foreign currency account for the purpose of currency exchange services opened at a designated foreign exchange bank in the name of the online currency exchange operator where the online currency exchange operator receives or pays foreign currency, etc. from or to a customer through an account. |
| (10) | Where a currency exchange operator intends to engage in providing currency exchange services by combining unmanned currency exchange kiosks and online methods, the currency exchange operator shall comply with all matters prescribed in paragraph (8) 2 and (9) 2 through 4, and the scope of foreign currency, etc. that can be sold according to the personal information verification methods shall be as follows: <Amended on Sep. 9, 2021> |
| 1. | Where personal information is verified pursuant to paragraph (8) 1, up to USD2,000 for the same person on the same day (provided that in the case of a service provider electronically managing currency exchange ledger, up to USD4,000); |
| 2. | Where personal information is verified pursuant to paragraph (9) 1, up to USD2,000 for the same person on the same day (provided that in the case of a service provider electronically managing currency exchange ledger, up to USD4,000). |
| (11) | The head of a designated foreign exchange bank under paragraph (6) shall report the details of a transaction with a currency exchange operator to the Governor of the Bank of Korea by the next business day immediately following the date of such transaction. <Newly Inserted on Aug. 4, 2020> |
| (12) | The Governor of the Bank of Korea shall immediately notify the Commissioner of the Korea Customs Service of the contents of the report received from the head of the designated foreign exchange bank pursuant to paragraph (11). <Newly Inserted on Aug. 4, 2020> |
Section 5 Small-Sum Overseas Remittance Business Entities among Professional Foreign Exchange Dealers
| Article 2-30 (Registration of Small-Sum Overseas Remittance Business) |
| (1) | A person who intends to register a small-sum overseas remittance business pursuant to Article 15-2 (1) of the Decree shall submit an application for registration of small-sum overseas remittance business in Form 3-7 to the Minister of Economy and Finance through the Governor of the Financial Supervisory Service, along with the following documents: |
| 1. | An articles of incorporation; |
| 2. | A corporation registration certificate; |
| 3. | Explanatory materials on the scope of the small-sum overseas remittance business and the methods of operation; |
| 4. | A copy of the bankbook of the account to be used for small-sum overseas remittance business; |
| 5. | Documentary evidence (including Korean translations) to prove that the foreign partner is able to lawfully conduct the relevant business in the home country of such foreign partner, such as a copy of the written authorization for establishment issued by the government of the foreign partner’s country; |
| 6. | Documentary evidence to prove that the person meets the requirements for equity capital, the criteria for financial soundness, and the requirements for computer facilities and professional human resources necessary to conduct small-sum overseas remittance business; |
| 7. | Resumes of executive officers; |
| (2) | Deleted. <Amended on Oct. 8, 2019> |
| (3) | "Criteria for financial soundness determined and publicly notified by the Minister of Economy and Finance" in Article 15-2 (2) 2 of the Decree means that the ratio of total liabilities to equity capital shall be not more than 200/100. |
| (4) | The debt-to-equity ratio under paragraph (3) shall be calculated by using the equity capital and total liabilities in the statement of financial position at the end of the business year immediately preceding the relevant business year that includes the date on which the application is filed (or the most recent quarter-end or month-end statement of financial position confirmed by an accounting firm, if the applicant intends to use the most recent statement of financial position). In such cases, the amount temporarily retained at the request of customers for payment, etc. shall be deducted from the total liabilities. |
| (5) | Upon receipt of an application for registration of small-sum overseas remittance business under paragraph (1), the Governor of the Financial Supervisory Service shall notify the head of a foreign exchange information aggregation agency of the relevant facts to enable the verification of network connectivity pursuant to Article 15-2 (3) of the Decree; and the Governor of the Financial Supervisory Service and the head of the foreign exchange information aggregation agency shall confirm the contents of the registration application and the fulfillment of the registration requirements pursuant to Articles 15-2 (3) and 37 (4) 4 of the Decree and shall notify the Minister of Economy and Finance of the results of such verification. |
| (6) | Any person intending to modify the registered details of a small-sum overseas remittance business or to terminate small business pursuant to Article 16 of the Decree shall comply with the following requirements: |
| 1. | A person who intends to modify any registered matter shall submit a declaration of modification of registered matters (or the termination) of small-sum overseas remittance business in Form 3-8 to the Governor of the Financial Supervisory Service, along with the following documents: |
| (a) | A certificate of registration of small-sum overseas remittance business; |
| (b) | Documentary evidence for the modification (in cases of a declaration of modification under Article 16 (3) of the Decree, including documentary evidence to prove that the requirements for equity capital are satisfied); |
| 2. | A person who intends to terminate small-sum remittance business shall submit a declaration of modification of registered matters (or the termination) of small-sum overseas remittance business in Form 3-8 to the Governor of the Financial Supervisory Service, along with the following documents: |
| (a) | A certificate of registration of small-sum overseas remittance business; |
| (b) | Documentary evidence to prove the completion of the fulfillment of the obligations owed to the customer in relation to small-sum overseas remittance business. |
| (7) | Deleted. <Amended on Sep. 9, 2021> |
| (8) | In order to verify whether the requirements for registration under Article 15-2 (2) of the Decree are maintained, the Governor of the Financial Supervisory Service may request a small-sum overseas remittance business entity to, among other things, submit documentary evidence to prove that the requirements under Article 15-2 (2) of the Decree are maintained. In such cases, the business entity shall comply with the request of the Governor of the Financial Supervisory Service. |
| Article 2-31 (Business Affairs of Small-Sum Overseas Remittance Business Entities) |
| (1) | The limit on payment or receipt for each transaction of small-sum overseas remittance business under Article 15-3 (1) of the Decree shall be USD5,000 per transaction, and the limit on the aggregate annual amounts of payment or receipt per person shall be USD50,000, respectively. <Amended on Oct. 8, 2019> |
| (2) | A small-sum overseas remittance business entity may purchase or sell foreign currencies from or to foreign exchange banks in order to conduct the business affairs under paragraph (1). |
| (3) | When receiving funds from a customer, a small-sum overseas remittance business entity shall receive such funds on a per-transaction basis. <Newly Inserted on Sep. 9, 2021> |
| (4) | "In cases of paying or receiving money in a manner assured of transparency equivalent to the transparency of transaction through such accounts and recognized by the Minister of Economy and Finance" in Article 15-3 (2) of the Decree means any of the following: <Amended on Sep. 9, 2021> |
| 1. | In cases of paying money to or receiving money from a customer through a financial company, etc. which have filed for registration of foreign exchange services under Article 8 (2) of the Act (provided that the Korea Ocean Business Corporation under the Korea Ocean Business Corporation Act referred to in subparagraph 7 of Article 7 of the Decree shall be excluded herefrom) or through a person who has filed for registration of other professional foreign exchange services under Article 15-5 (2) of the Decree (provided that such person shall be limited to any person who conducts business affairs under Article 2-39 (2) or (3)); |
| 2. | In cases of paying money to or receiving money from a customer through a currency exchange operator that conducts business affairs in a manner prescribed in Article 2-28 (1) 2 or through a business entity under subparagraph 2 of Article 3 of Regulations on Supervision of Electronic Financial Transactions (including paying money to a customer or receiving money from a customer through an unmanned currency exchange kiosk owned by a small-sum overseas remittance business entity, if such business entity has filed for registration of business affairs under Article 2-28 (1) 2). |
| (5) | A small-sum overseas remittance business entity shall record the details of payment, etc. by each domestic payer and recipient and shall retain such record for five years; and shall notify such details of payment, etc. for each month to the Commissioner of the Korea Financial Intelligence Unit, the Commissioner of the National Tax Service, the Commissioner of the Korea Customs Service, and the Governor of the Financial Supervisory Service via a foreign exchange information aggregation agency, by the 10th day of the each immediately following month. |
| (6) | A small-sum overseas remittance business entity shall record the details of the settlement and the transactions in the course of conducting small-sum overseas remittance business (including the details of the payment, etc. or offset made with a foreign partner and all transactions or acts for completing the small-sum overseas remittance business) and shall retain such record for five years; and shall submit such record to the Governor of the Financial Supervisory Service upon request. |
| (7) | The provisions of Articles 4-3 (3), 4-4 (1) 3 and (2), and 4-5, which require payments to be made via a designated foreign exchange bank, need not apply to payment under this Article. |
| Article 2-32 (Criteria for Safety of Small-Sum Overseas Remittance Business) |
Criteria prescribed in Articles 8 through 18, and 19-2 through 37 of the Regulations on Supervision of Electronic Financial Transactions shall apply mutatis mutandis to “criteria determined by the Minister of Economy and Finance" in Article 15-4 (1) of the Decree. In such cases, "financial company or electronic financial business entity" shall be construed as "small-sum overseas remittance business entity"; "electronic financial business" as "small-sum overseas remittance business through electronic devices"; "electronic financial transaction" as "transaction for small-sum overseas remittance business through electronic devices between customers and small-sum overseas remittance business entities without any face-to-face meeting"; and "Financial Services Commission” as “Governor of the Financial Supervisory Service”.
| (2) | "Qualifications determined by the Minister of Economy and Finance" in Article 15-4 (2) of the Decree shall be as specified in Appendix 1 of the Enforcement Decree of the Electronic Financial Transactions Act. |
| (3) | The business affairs of the chief information security officer referred to in Article 15-4 (2) of the Decree shall be as follows: |
| 1. | Formulation of strategies and plans to ensure the stability of small-sum overseas remittance business and customer protection; |
| 2. | Protection of the information technology sector; |
| 3. | Management of human resources and budget allocation necessary for the security of the information technology sector; |
| 4. | Prevention and response measures for accidents related to business conducted through electronic devices; |
| 5. | Matters related to internal deliberations on security for the information technology sector; |
| 6. | Matters related to the education of executive officers and employees on the security of the information technology sector. |
| (4) | "Important information relating to small-sum remittance business, which is determined and publicly notified by the Minister of Economy and Finance" in Article 15-4 (7) of the Decree means the following: |
| 1. | Estimated period required for payment and receipt; |
| 2. | Amount of fees payable by customers; |
| 3. | Korean won and foreign currency amounts of funds to be paid and received by customers, and the applicable exchange rates; |
| 4. | Procedures for dispute settlement under Article 15-4 (6) of the Decree and related contact information. |
| Article 2-33 (Specification of Terms and Conditions) |
| (1) | A small-sum overseas remittance business entity shall prepare the terms and conditions relating to overseas remittance business (hereinafter referred to as "terms and conditions"). |
| (2) | Where a small-sum overseas remittance business entity intends to conduct small-sum overseas remittance business, such entity shall deliver, to the customer, a copy of the terms and conditions by means of electronic transmission (including transmission by electronic mail), facsimile, mail, or direct delivery. |
| (3) | Where a customer requests an explanation of the terms and conditions, the relevant small-sum overseas remittance business entity shall explain the essential contents of the terms and conditions to the customer by any of the following means: |
| 1. | Directly explaining the essential contents of the terms and conditions to the customer; |
| 2. | Displaying the essential contents of the terms and conditions through an electronic device to facilitate better comprehension by the customer and receiving confirmation through such electronic device that the customer fully understands the essential contents. |
| Article 2-34 (Establishment or Amendment of Terms and Conditions) |
| (1) | A small-sum overseas remittance business entity who intends to establish or modify the terms and conditions shall submit the relevant documents required for increasing the understanding of the relevant terms and conditions and the details thereof to the Governor of the Financial Supervisory Service not later than 45 days before the date on which they are scheduled to take effect. (The period required to recommend the modification of the terms and conditions and to report on whether such recommendation is accepted under paragraphs (2) and (3) shall not be counted, and those documents shall be submitted when applying for the registration of small-sum overseas remittance business). In such cases, the terms and conditions and the relevant documents may be submitted in electronic form. |
| (2) | The Governor of the Financial Supervisory Service shall examine the terms and conditions submitted pursuant to paragraph (1) and, where deemed necessary for the maintenance of sound foreign exchange practices, may recommend that the relevant small-sum overseas remittance business entity amend such terms and conditions. |
| (3) | Upon receipt of a recommendation for amendment pursuant to paragraph (2), a small-sum overseas remittance business entity shall report to the Governor of the Financial Supervisory Service regarding the acceptance or rejection of the recommendation. |
| Article 2-35 (Deposit of Performance Bond) |
| (1) | "Institution designated by the Minister of Economy and Finance" in Article 8 (7) of the Act means the Financial Supervisory Service. |
| (2) | A performance bond of a small-sum overseas remittance business entity under Article 17-2 (1) of the Decree shall be at least KRW300 million from the date of commencement of business to the last day of the following month, and upon expiry of such period, it shall be at least the amount calculated in accordance with the determined formula after such period expires; provided that where the amount calculated with the determined formula is less than KRW300 million, the amount shall be KRW300 million. |
| (3) | "Insurance policy recognized by the Minister of Economy and Finance" in Article 17-2 (2) of the Decree means a license and permit bond issued by a domestic surety company, with the Governor of the Financial Supervisory Service as the insured. |
| (4) | "Within the period fixed by the Minister of Economy and Finance" in Article 17-2 (3) of the Decree means within the first seven days of each month. |
| (5) | The specific details, procedures, and inspection intervals that a small-sum overseas remittance business entity is required to report to the Governor of the Financial Supervisory Service pursuant to Article 17-2 (4) and Article 37 (4) 9 of the Decree shall be determined by the Governor of the Financial Supervisory Service. |
| Article 2-36 (Procedures for Payment of Performance Bond) |
| (1) | Where the Governor of the Financial Supervisory Service receives an application for the payment of performance bonds from a customer of a small-sum overseas remittance business entity (limited to customers who have requested payment from the Republic of Korea to a foreign country; hereafter in this Article, the same shall apply) under Article 17 (3) 1 of the Decree, the Governor of the Financial Supervisory Service shall notify the relevant small-sum overseas remittance business entity of such fact without delay and conduct an investigation into the relevant facts. |
| (2) | The Governor of the Financial Supervisory Service shall provide the relevant parties with an opportunity to submit evidence and express their opinions in connection with the investigation conducted under paragraph (1). |
| (3) | Where the Governor of the Financial Supervisory Service recognizes that there is a valid reason for the customer to apply for the payment of a performance bond according to the results of the investigation under paragraph (1), the Governor shall set a period of at least 60 days for any customer to apply for the payment of the performance bond who have requested the payment to a foreign country but whose request has not been complied with, and where the customer does not apply within the period, the customer shall be excluded from the performance bond distribution procedures of the relevant small-sum overseas remittance business entity, and shall publicly disclose such notice in daily newspapers or on the Internet, etc. |
| (4) | Paragraphs (1) and (2) shall apply mutatis mutandis to the processing of applications for the payment of a performance bond made in accordance with the public disclosure pursuant to paragraph (3). |
| (5) | The Governor of the Financial Supervisory Service, upon the completion of the procedures as stipulated in paragraphs (1) through (4), shall prepare a distribution table of performance bonds for each applicant whose application for the payment of performance bonds is recognized, and shall inform the relevant parties accordingly, and any person with objections regarding the distribution amount may raise an objection within 14 days. |
| (6) | Where there are no objections from the relevant persons as a result of the notification under paragraph (5), the Governor of the Financial Supervisory Service shall distribute the funds in accordance with the distribution table. |
| Article 2-37 (Procedures for Return of Performance Bond) |
| (1) | Where a small-sum overseas remittance business entity intends to have a performance bond returned in accordance with Article 17-4 of the Decree, it shall file with the Governor of the Financial Supervisory Service an application, accompanied by documents proving the occurrence of any of the circumstances specified in the subparagraphs of Article 17-4 of the Decree. In such cases, the form of the application for such return and the required accompanying documents shall be determined by the Governor of the Financial Supervisory Service. |
| (2) | "Period fixed by the Minister of Economy and Finance" in subparagraph 4 of Article 17-4 of the Decree means a consecutive period of three months. |
| (3) | Where a small-sum overseas remittance business entity files an application for the return of a performance bond on any of the grounds under subparagraphs 1 through 3 of Article 17-4 of the Decree, the Governor of the Financial Supervisory Service shall publicly disclose the following matters in a daily newspaper, on the Internet, or by other means: |
| 1. | The fact that an application for the return of a performance bond has been filed by the relevant small-sum overseas remittance business entity and the reasons for such application; |
| 2. | A statement that customers whose request for overseas payment has not been complied with by the relevant small-sum overseas remittance business entity shall file an application for the payment of a performance bond within six months from the date of public disclosure, and that those who fail to file such application within the specified period shall not be eligible to receive a distribution from the performance bond deposited by the relevant small-sum overseas remittance business entity. |
| (4) | In the case of an application for the payment of performance bonds resulting from the public disclosure under paragraph (3), Article 2-36 (1), (2), (5), and (6) shall apply mutatis mutandis to the procedures for processing an application for the payment of a performance bond. |
| (5) | The Governor of the Financial Supervisory Service shall only return the remaining amount of the performance bond deposited by the relevant small-sum overseas remittance business entity after the procedures under paragraphs (3) and (4) are undertaken, and where it is deemed that such action does not adversely affect the protection of customers. |
| (6) | Matters necessary for the payment, return procedures, and other related aspects of performance bonds shall be determined by the Governor of the Financial Supervisory Service. |
Section 6 Professional Foreign Exchange Dealers Who Have Other Professional Foreign Exchange Services Registered
| Article 2-38 (Registration of Other Professional Foreign Exchange Services) |
| (1) | A person who intends to have other professional foreign exchange services registered pursuant to Article 15-5 (1) through (3) of the Decree shall submit to the Minister of Economy and Finance an application for registration of other professional foreign exchange services in Form 3-9, along with the following documents: |
| 1. | A copy of a certificate of registration of payment gateway services, a copy of a certificate of permission for the issuance and management of electronic currency, or a copy of a certificate of registration of the issuance and management of electronic prepayment means of the relevant electronic financial business entity; |
| 2. | The most recent balance sheet and income statement of the relevant electronic financial business entity; |
| 3. | Details of the domestic business offices that intend to engage in foreign exchange services. |
| (2) | A person who intends to modify any of the registration details of other professional foreign exchange services or to terminate such services pursuant to Article 16 (2) of the Decree shall submit to the Minister of Economy and Finance a declaration of change (termination) of other professional foreign exchange services in Form 3-10. |
| Article 2-39 (Scope of Other Professional Foreign Exchange Services) |
| (1) | "Foreign exchange services determined and publicly notified by the Minister of Economy and Finance ... directly related to ... payment gateway services under the Electronic Financial Transactions Act" in Article 15-5 (1) of the Decree means the following: |
| 1. | Payment, collection, and receipt between the Republic of Korea and a foreign country in the course of providing payment gateway services under the Electronic Financial Transactions Act; |
| 2. | Purchase and sale of foreign currency bonds in relation to the business affairs specified in subparagraph 1. |
| (2) | "Foreign exchange services determined and publicly notified by the Minister of Economy and Finance ... directly related to the issuance and management of electronic currencies ... under the Electronic Financial Transactions Act" in Article 15-5 (1) of the Decree means the following: |
| 1. | Issuance of electronic currency as a means of foreign payment in the course of issuing and managing electronic currency under the Electronic Financial Transactions Act; |
| 2. | Payment, collection, and receipt between the Republic of Korea and a foreign country in relation to the business affairs specified in subparagraph 1. |
| (3) | "Foreign exchange services determined and publicly notified by the Minister of Economy and Finance ... directly related to the issuance and management ... of electronic prepayment means ... under the Electronic Financial Transactions Act" in Article 15-5 (1) of the Decree means the following: |
| 1. | Issuance of electronic prepayment means as a means of foreign payment in the course of issuing and managing electronic prepayment means under the Electronic Financial Transactions Act; |
| 2. | Payment, collection, and receipt between the Republic of Korea and a foreign country in relation to the business affairs specified in subparagraph 1. |
| (4) | Electronic currency and electronic prepayment means referred to in paragraphs (2) 1 and (3) 1 shall be limited to those exclusively for purchasing goods and services, other than any other electronic payment means or assets etc., such as stocks, bonds, and derivatives. |
| (5) | Electronic currency and electronic prepayment means referred to in paragraphs (2) 1 and (3) 1 shall be permitted to be held only when those are issued in the real name as prescribed in subparagraph 4 of Article 2 of the Act on Real Name Financial Transactions and Confidentiality or issued with a link to a savings account, and those transferred from a third person shall not be held. |
| (6) | A person who has other professional foreign exchange services registered pursuant to Article 15-5 of the Decree shall notify the Commissioner of the National Tax Service, the Commissioner of the Korea Customs Service, and the Governor of the Financial Supervisory Service of the following information by the 10th day of the first month of the immediately following quarter after the end of each quarter: |
| 1. | A person who provides foreign exchange services directly related to payment gateway services under the Electronic Financial Transactions Act: Details of transactions, etc. related to the settlement of prices in exchange for the purchase of goods or use of services by electronic means; |
| 2. | A person who provides foreign exchange services directly related to the issuance and management of electronic currency under the Electronic Financial Transactions Act: Details of purchase of goods or services in a foreign country using electronic currency as a means of foreign payment, and details, etc. of payment, collection, and receipt between the Republic of Korea and a foreign country related thereto; |
| 3. | A person who provides foreign exchange services directly related to the issuance and management of electronic prepayment means under the Electronic Financial Transactions Act: Details of purchase of goods or services in a foreign country using electronic prepayment means as a means of foreign payment, and details, etc. of payment, collection, and receipt between the Republic of Korea and a foreign country related thereto. |
Section 7 Foreign Exchange Brokers
| Article 2-40 (Authorization for Foreign Exchange Brokerage) |
| (1) | A person who intends to obtain authorization for foreign exchange brokerage as provided in Article 9 (1) of the Act and Article 18 (1) of the Decree shall file with the Minister of Economy and Finance an application for authorization for foreign exchange brokerage in Form 3-11. <Amended on Jun. 29, 2017> |
| (2) | A person who intends to apply for authorization under paragraph (1) (hereafter in this Article referred to as “final authorization”) may apply for preliminary authorization to the Minister of Economy and Finance; and in such cases, a person who intends to apply for preliminary authorization shall file with the Minister of Economy and Finance an application for preliminary authorization for foreign exchange brokerage in Form 3-12. <Newly Inserted on Jun. 29, 2017> |
| (3) | Where a foreign exchange broker intends to merge or transfer or acquire all or part of its business pursuant to Article 9 (3) of the Act and Article 18 (5) of the Decree, such broker shall file with the Minister of Economy and Finance an application for authorization for merger (business transfer or acquisition) by a foreign exchange broker in Form 3-13. <Amended on Jun. 29, 2017> |
| 1. | ~ 2. Deleted. <Amended on Jul. 1, 2005> |
| (4) | Where a foreign exchange broker intends to dissolve or cease all or part of its business pursuant to Article 9 (3) of the Act and Article 18 (7) of the Decree or modify any matter specified in the subparagraphs of Article 18 (1) of the Decree, such broker shall file with the Minister of Economy and Finance a declaration of dissolution (business cessation) of a foreign exchange broker in Form 3-14 or a declaration of modification of authorized foreign exchange brokerage in Form 3-15, at least seven days prior to the scheduled date of the relevant dissolution, cessation, or modification. <Amended on Jun. 29, 2017> |
| (5) | A foreign exchange broker that intends to obtain authorization or modify any authorized matter in order to engage in foreign exchange brokerage overseas as provided in Article 9 (5) of the Act and Article 19 (1) of the Decree shall file with the Minister of Economy and Finance an application for authorization for foreign exchange brokerage overseas in Form 3-16 or an application for authorization for modified foreign exchange brokerage overseas in Form 3-17. <Amended on Jun. 29, 2017> |
| (6) | Upon receipt of an application for authorization under paragraphs (1), (3), and (5) or an application for preliminary authorization under paragraph (2), the Minister of Economy and Finance shall determine whether to grant authorization or preliminary authorization and give notice thereof to the applicant within 30 days from the date of such application; and a person who receives preliminary authorization under paragraph (2) shall apply for final authorization within six months from the date of receipt of such preliminary authorization; provided that the Minister Economy and Finance may request the applicant to supplement the application if such application is incomplete, and in such cases, the period required for the supplementation shall not be included in the period for determination of authorization and notification. <Proviso Newly Inserted on Apr.16, 2012> |
| Article 2-41 (Scope of Foreign Exchange Brokerage) |
A foreign exchange broker that is authorized by the Financial Services Commission to engage in the following brokerage shall be deemed to have been registered as a foreign exchange agency under these Regulations for such brokerage: <This Article Newly Inserted on Mar. 22, 2016>
| 2. | Repurchase agreements; |
| 3. | Interest rate derivatives. |
| Article 2-42 (Supervision of Business Affairs) |
| (1) | The Governor of the Bank of Korea may supervise business affairs of a foreign exchange broker and may issue an order necessary for such supervision; and where such broker commits a serious violation, the Governor may recommend revocation of its authorization to the Minister of Economy and Finance. |
| (2) | The Governor of the Bank of Korea may determine matters necessary for reporting, inspection, post management, and sanctions, etc. for foreign exchange brokerage. |
CHAPTER III ENTRUSTMENT AND BROKERAGE, AND NEW BUSINESS REGULATORY EXPEDITED REVIEW AND EXEMPTION SYSTEM
Section 1 Entrustment and Brokerage of Business Affairs Related to Purchase and Sale of Foreign Exchange and Payment
| Article 3-1 (Entrustment of Business Affairs Related to Purchase and Sale of Foreign Exchange) |
| (1) | Pursuant to Article 10-2 (1) of the Act, the head of a foreign exchange bank or a currency exchange operator (hereafter in this Article referred to as “entrusting agency”) may entrust part of business affairs related to purchase and sale of foreign exchange amounting to up to USD2,000 based on the same person on the same date criteria, to another foreign exchange bank, any other foreign exchange agency, a small-sum overseas remittance business entity, a person who has other professional foreign exchange services registered, a currency exchange operator, a company established in the Republic of Korea under Article 169 of the Commercial Act that meets the requirements prescribed in the items of Article 20-3 (2) 1 of the Decree, or a domestic business office of a foreign company under Article 614 of that Act (hereafter in this Article referred to as “entrusted agency”); provided that where an entrusting agency is a general currency exchange operator prescribed in Article 2-28 (1) 1 of the Regulations, it shall be limited to a service provider electronically managing currency exchange ledger under the proviso of Article 2-29 (5). <Amended on Sep. 9, 2021> |
| (2) | Where a company established in the Republic of Korea under Article 169 of the Commercial Act, a domestic business office of a foreign company under Article 614 of that Act, or a currency exchange operator is an entrusted agency, real-name verification among the business affairs specified in Article 20-3 (1) of the Decree (hereafter in this Article referred to as “entrusted business affairs”) shall be excluded from the entrusted business affairs. <Amended on Sep. 9, 2021> |
| (3) | “Other business affairs determined and publicly notified by the Minister of Economy and Finance for improving convenience in foreign exchange transactions” in Article 20-3 (1) 5 of the Decree means the operation of a customer support center prescribed in Article 2-29 (8) 2 of the Regulations; provided that an entrusted agency eligible to be entrusted with such business affairs shall be limited to a person who has currency exchange services registered in the manner specified in Article 2-28 (1) 2 of these Regulations. <Newly Inserted on Sep. 9, 2021> |
| (4) | Where the head of a foreign exchange bank entrusts business affairs related to purchase and sale of foreign exchange under paragraph (1), Article 2-2 (4), the main clause of Article 2-3 (2), and Article 2-3 (4) shall not apply. |
| (5) | Where an entrusting agency entrusts business affairs pursuant to paragraph (1), it shall establish standards for handling entrusting or entrusted business affairs that include the following; provided that when the business affairs specified in Article 20-3 (1) 1 of the Decree are only entrusted, matters regarding the issuance of a performance bond by the entrusted agency or a surety bond in lieu thereof, among those regarding the protection of financial consumers referred to in subparagraph 3 shall be excluded herefrom: <Amended on Sep. 9, 2021> |
| 1. | Specific matters among the entrusted business affairs specified in Article 20-3 (1) of the Decree (including the total daily limit on the purchase and sale of foreign exchange by the entrusted agency); |
| 2. | Clear procedures outlining the allocation of responsibilities between the entrusting agency and the entrusted agency in the management of business affairs; |
| 3. | Matters regarding the protection of financial consumers, such as the procedures for cancellation and refund upon withdrawal of an application by a customer, and the issuance of a performance bond by the entrusted agency or a surety bond in lieu thereof; |
| 4. | Matters regarding internal control measures for the handling of entrusted business affairs by the entrusted agency and management and supervision by the entrusting agency regarding the handling of entrusted business affairs by the entrusted agency; |
| 5. | Other matters regarding the entrusted business affairs. |
| (6) | Pursuant to Article 20-3 (3) of the Decree, an entrusting agency shall file a report on the entrustment of the business affairs related to purchase and sale of foreign exchange in Form 2-3 with the Minister of Economy and Finance, along with the following documents, and the Minister may request that the Governor of the Financial Supervisory Service review such report on entrustment concerning the entrustment of business affairs by the head of a foreign exchange bank and that the Commissioner of the Korea Customs Service review such report on entrustment concerning the entrustment of business affairs by a currency exchange operator pursuant to Article 20 (6) of the Act: <Amended on Sep. 9, 2021> |
| 1. | A copy of the contract (draft) related to entrustment; |
| 2. | Qualifications of an entrusted agency under paragraph (1); |
| 3. | Standards for handling entrusting or entrusted business affairs under paragraph (5); |
| 4. | Review opinions on the potential for damage to financial consumers and impairment of the sound order of foreign exchange transactions, and violation of relevant statutes or regulations, such as the Act on Real Name Financial Transactions and Confidentiality and the Act on Reporting and Using Specified Financial Transaction Information, and the ability of an entrusted agency to handle business affairs in an appropriate manner; |
| 5. | Necessity and expected effectiveness of entrustment. |
| (7) | Where an entrusting agency intends to amend the terms and conditions of an entrustment contract concluded pursuant to Article 20-3 (4) of the Decree or to terminate such contract, it shall file a report on such fact in Form 2-3-2 with the Minister of Economy and Finance. <Amended on Sep. 9, 2021> |
| (8) | The head of an entrusted agency shall file a report on the details of purchase and sale of foreign exchange by each customer through the entrusting agency as specified in any of the following: |
| 1. | In cases of entrustment by the head of a foreign exchange bank, a report on the details shall be filed with the Governor of the Bank of Korea and the Governor of the Financial Supervisory Service by the 10th day of the immediately following month on a monthly basis; |
| 2. | In cases of entrustment by a currency exchange operator (excluding an online currency exchange operator), it shall file a report on the details with the Commissioner of the Korea Customs Service by the 10th day of the first month of the immediately following half year after the end of each half year; |
| 3. | In cases of entrustment by an online currency exchange operator, a report on the details shall be filed with the Commissioner of the Korea Customs Service by the 10th day of the first month of the immediately following quarter after the end of each quarter. |
| (9) | The Minister of Economy and Finance may restrict entrustment by an entrusting agency or may request that corrective measures be taken under Article 11 (1) of the Act, where there is a potential violation of relevant statutes or regulations, such as the Act on Real Name Financial Transactions and Confidentiality and the Act on Reporting and Using Specified Financial Transaction Information, or any illegal foreign exchange transaction is likely to be made in the course of concluding an entrustment contract or handling entrusted business affairs; where there is difficulty in transparent management and supervision of the details of purchase and sale of foreign exchange or any loss is likely to occur; or where the qualifications or standards for handling business affairs of the entrusted agency are inadequate or it is deemed impracticable to perform business affairs related to purchase and sale of foreign exchange due to the possibility of damage to financial consumers or impairment of the sound order of foreign exchange transactions, or any similar reason. In such cases, the entrusting agency shall comply therewith. |
| (10) | Pursuant to Article 20 (6) of the Act and Articles 35 (4) 2 and 37 (2) of the Decree, the Governor of the Financial Supervisory Service may inspect the handling of entrusted business affairs by the head of a foreign exchange bank and an entrusted agency that have concluded an entrustment contract; and where any illegal activities are discovered as a result of the inspection, the Governor may order such bank and such agency to make a correction or may take other necessary measures. |
| (11) | Pursuant to Article 20 (6) of the Act and Articles 35 (4) 3 and 37 (1) of the Decree, the Commissioner of the Korea Customs Service may inspect the handling of entrusted business affairs by a currency exchange operator and an entrusted agency that have concluded an entrustment contract; and where any illegal activities are discovered as a result of the inspection, the Commissioner may order such operator and such agency to make a correction or may take other necessary measures. |
| Article 3-2 (Entrustment of Business Affairs Related to Payment) |
| (1) | Pursuant to Article 10-2 (1) of the Act, the head of a foreign exchange bank, or any other foreign exchange agency specified in the following, or a small-sum overseas remittance business entity (hereafter in this Article referred to as "entrusting agency"), may entrust part of business affairs related to payment, etc. to another foreign exchange bank, any other foreign exchange agency, a person who has other professional foreign exchange services registered, a currency exchange operator, or a subsidiary electronic financial business entity defined in subparagraph 5 of Article 2 of the Electronic Financial Transactions Act (hereafter in this Article referred to as "entrusted agency"); provided that entrustment to a person who has other professional foreign exchange services registered shall be limited to a person who engages in the business affairs specified in Article 2-39 (2) and (3); entrustment to a currency exchange operator shall be limited to a currency exchange operator who engages in the business in the manner specified in Article 2-28 (1) 2; and entrustment to a subsidiary electronic financial business entity shall be limited to a business entity specified in subparagraph 2 of Article 3 of the Regulations on Supervision of Electronic Financial Transactions: <Amended on Sep. 9, 2021> |
| 1. | An investment trader or investment broker that engages in the business specified in subparagraph 4 (d) of Article 14 of the Decree pursuant to Article 2-14 (2); |
| 2. | A mutual savings bank with the total assets of at least KRW1 trillion at the end of the immediately preceding quarter, which engages in the business affairs specified in subparagraph 4 (d) of Article 14 of the Decree pursuant to Article 2-21 (3); |
| 3. | A credit card company that engages in the business specified in subparagraph 4 (d) of Article 14 of the Decree pursuant to Article 2-22 (2). |
| (2) | For an entrusted agency under the proviso of paragraph (1), real-name verification among the business affairs specified in Article 20-3 (1) of the Decree (hereafter in this Article referred to as "entrusted business affairs") shall be excluded from the entrusted business affairs. <Amended on Sep. 9, 2021> |
| (3) | The scope of entrustment under paragraph (1) shall be within USD5,000 for each payment and receipt, and the cumulative limit of annual payments and receipts for the same person shall not exceed USD50,000, respectively; provided that the payment, etc. to be made through a designated foreign exchange bank for transaction in accordance with these Regulations shall be excluded from the entrusted business affairs. |
| (4) | Where an entrusting agency entrusts business affairs pursuant to paragraph (1), it shall establish standards for handling entrusting or entrusted business affairs that include the following; provided that where the business affairs specified in Article 20-3 (1) 1 of the Decree are only entrusted, matters regarding the issuance of a performance bond by the entrusted agency or a surety bond in lieu thereof, among those regarding the protection of financial consumers referred to in subparagraph 3 shall be excluded herefrom: <Amended on Sep. 9, 2021> |
| 1. | Specific matters among the entrusted business affairs specified in Article 20-3 (1) of the Decree (including the total limit of daily payments, etc. by the entrusted agency); |
| 2. | Clear procedures outlining the allocation of responsibilities between the entrusting agency and the entrusted agency in the management of business affairs; |
| 3. | Matters regarding the protection of financial consumers, such as the procedures for cancellation and refund upon withdrawal of an application by a customer, and the issuance of a performance bond by the entrusted agency or a surety bond in lieu thereof; |
| 4. | Matters regarding internal control measures for the handling of entrusted business affairs by the entrusted agency and management and supervision by the entrusting agency regarding the handling of entrusted business affairs by the entrusted agency; |
| 5. | Other matters regarding the entrusted business affairs. |
| (5) | Pursuant to Article 20-3 (3) of the Decree, an entrusting agency shall file a report on the entrustment of the business affairs related to payments, etc. in Form 2-3, along with the following documents, with the Minister of Economy and Finance, who may request that the Governor of the Financial Supervisory Service review such report on the entrustment pursuant to Article 20 (6) of the Act: <Amended on Sep. 9, 2021> |
| 1. | A copy of the contract (draft) related to entrustment; |
| 2. | Matters regarding the qualifications of an entrusted agency under paragraph (1); |
| 3. | Standards for handling entrusting or entrusted business affairs under paragraph (4); |
| 4. | Review opinions on the potential for damage to financial consumers and impairment of the sound order of foreign exchange transactions, and violation of relevant statutes or regulations, such as the Act on Real Name Financial Transactions and Confidentiality and the Act on Reporting and Using Specified Financial Transaction Information, and the ability of an entrusted agency to handle business affairs in an appropriate manner; |
| 5. | Necessity and expected effectiveness of entrustment. |
| (6) | Where an entrusting agency intends to amend the terms and conditions of an entrustment contract concluded under Article 20-3 (4) of the Decree or to terminate such contract, it shall file a report on such fact in Form 2-3-2 with the Minister of Economy and Finance. <Amended on Sep. 9, 2021> |
| (7) | The head of an entrusted agency shall file a report on the details of monthly payments, etc. by each domestic payer and recipient, through the entrusting agency with which the entrusted agency has concluded an entrustment contract, with the Governor of the Bank of Korea and the Governor of the Financial Supervisory Service by the 10th day of the immediately subsequent month after the end of each month. In addition, the head shall file a report on the annual performance of payments and other transactions with such Governors by the 20th day of the first month of the immediately following year after the end of each business year. |
| (8) | The Minister of Economy and Finance may restrict entrustment by an entrusting agency or may request that corrective measures be taken under Article 11 (1) of the Act, where there is a potential violation of relevant statutes or regulations, such as the Act on Real Name Financial Transactions and Confidentiality and the Act on Reporting and Using Specified Financial Transaction Information, or any illegal foreign exchange transaction is likely to be made in the course of concluding an entrustment contract or handling entrusted business affairs; where there is difficulty in transparent management and supervision of the details of payment, etc. or any loss is likely to occur; or where the qualifications or standards for handling business affairs of the entrusted agency are inadequate or it is deemed impracticable to perform business affairs related to payment, etc. due to the possibility of damage to financial consumers or impairment of the sound order of foreign exchange transactions, or any similar reason. In such cases, the entrusting agency shall comply therewith. |
| (9) | Pursuant to Article 20 (6) of the Act and Articles 35 (4) 2 and 37 (2) of the Decree, the Governor of the Financial Supervisory Service may inspect the entrusted business affairs handled by an entrusting agency and an entrusted agency that have concluded an entrustment contract; and where any illegal activities are discovered as a result of the inspection, the Governor may order such agencies to make a correction or may take other necessary measures. |
| Article 3-2-2 (Entrustment of Part of Business Affairs Related to Payment by Foreign Exchange Banks to Non-Financial Companies) |
| (1) | Notwithstanding Article 3-2, the head of a foreign exchange bank may entrust the business affairs within the scope of the receipt of an application for payment, etc., and the support for verification of the real names of persons who apply for payment, etc., and business affairs incidental thereto, to a currency exchange operator (excluding a person who engages in the business affairs in the manner specified in Article 2-28 (1) 2), to a company established in the Republic of Korea pursuant to Article 169 of the Commercial Act, or to a domestic business office of a foreign company under Article 614 of that Act (provided that it shall be limited to a person who meets the requirements specified in the items of Article 20-3 (2) 1 of the Decree with at least one professional personnel member who is qualified for the registration of foreign exchange services pursuant to Article 13 (2) 4 of the Decree). <Amended on Sep. 9, 2021> |
| (2) | Article 3-2 (3) through (9) shall apply mutatis mutandis to entrustment under this Article. |
| Article 3-2-3 (Entrustment of Business Affairs Related to Payment to Nonghyup Bank and Suhyup Bank) |
| (1) | Notwithstanding Articles 3-2 through 3-2-2, the heads of the following foreign exchange banks may entrust part of business affairs related to payment, etc. to a credit union which is a foreign exchange agency established under the following statutes: |
| 1. | Nonghyup Bank established under the Agricultural Cooperatives Act; |
| 2. | Suhyup Bank under the Fisheries Cooperatives Act. |
| (2) | Business affairs that may be entrusted to a credit union under paragraph (1) shall be as follows: |
| 1. | Real-name verification; |
| 2. | Receipt of applications for payment, etc. (including applications for designation of a correspondent foreign exchange bank); |
| 3. | Receipt of payments, etc.; |
| 4. | Business affairs incidental to those specified in subparagraphs 1 through 3. |
| (3) | Entrustment under paragraph (1) shall be within the following scope, and the aggregate of any of the following amounts shall not exceed USD50,000 for the same person per year: |
| 1. | Payment, etc. of up to USD5,000 per transaction; |
| 2. | Payment, etc. under Article 4-3 (1) 1 (a); |
| 3. | Payment, etc. under Article 4-4. |
| (4) | Where the head of a foreign exchange bank specified in the subparagraphs of paragraph (1) entrusts business affairs pursuant to paragraph (1), the head shall ensure that the business affairs are properly handled in consideration of the following: |
| 1. | Cost-benefit analysis with regard to entrusting or being entrusted with business affairs; |
| 2. | Evaluation of potential harm to financial users and any disturbance to the order of financial and foreign exchange transactions; |
| 3. | Assessment of whether a credit union can properly perform the entrusted business affairs; |
| 4. | Determination of compliance with relevant statutes or regulations, such as the Act on Real Name Financial Transactions and Confidentiality. |
| (5) | Where the head of a foreign exchange bank specified in the subparagraphs of paragraph (1) intends to entrust business affairs pursuant to paragraph (1), the head shall file a report on the entrustment of business affairs related to payment, etc. in Form 2-3, along with the following documents, at least seven business days prior to the scheduled date of conclusion of the contract, with the Minister of Economy and Finance, who may request that the Governor of the Financial Supervisory Service review such report on the entrustment pursuant to Article 20 (6) of the Act; provided that if a contract to be concluded is to renew the entrustment contract on the same terms and conditions, the report may be filed within one month from the renewal of the contract: <Amended on Sep. 9, 2021> |
| 1. | A copy of a contract (draft) related to entrustment; |
| 2. | Review opinions of the relevant compliance officer (referring to the relevant auditor or other persons equivalent thereto, if there is no compliance officer) on the matters specified in the subparagraphs of paragraph (4) and copies of relevant materials; |
| 3. | Necessity and expected effectiveness of entrustment; |
| 4. | Operational standards for the entrustment of business affairs, including business procedures following entrusting or being entrusted with business affairs and the management and supervision of the entrustee. |
| (6) | The Minister of Economy and Finance may restrict the entrustment by an entrusting agency or request to make corrections under Article 11 (1) of the Act, where there is a potential violation of relevant statutes or regulations, such as the Act on Real Name Financial Transactions and Confidentiality and the Act on Reporting and Using Specified Financial Transaction Information, or any illegal foreign exchange transaction is likely to be made in the course of concluding an entrustment contract or handling entrusted business affairs; where there is difficulty in transparent management and supervision of the details of payment, etc. or any loss is likely to occur; or where the qualifications or standards for handling business affairs of the entrusted agency are inadequate or it is deemed impracticable to perform business affairs related to payment, etc. due to the possibility of damage to financial consumers or impairment of the sound order of foreign exchange transactions, or any similar reason. In such cases, the entrusting agency shall comply therewith. |
| (7) | Pursuant to Article 20 (6) of the Act and Articles 35 (4) 2 and 37 (2) of the Decree, the Governor of the Financial Supervisory Service may inspect entrusted business affairs handled by an entrusting agency and an entrusted agency that have concluded an entrustment contract; and where any illegal activities are discovered as a result of the inspection, the Governor may order such agencies to make a correction or may take other necessary measures. |
| Article 3-3 (Brokerage of Business Affairs Related to Payment) |
| (1) | To perform such business affairs as payment, etc., each of the following other foreign exchange agencies and small-sum overseas remittance business entities (hereafter in this Article referred to as "brokerage requesting agency”) may request another foreign exchange agency or small-sum overseas remittance business entity specified in the following (hereafter in this Article referred to as "brokering agency") to broker business affairs related to payment, etc.: |
| 1. | An investment trader or investment broker that engages in the business affairs specified in subparagraph 4 (d) of Article 14 of the Decree pursuant to Article 2-14 (2); |
| 2. | A mutual savings bank with the total assets of at least KRW1 trillion at the end of the immediately preceding quarter, which engages in the business affairs specified in subparagraph 4 (d) of Article 14 of the Decree pursuant to Article 2-21 (3); |
| 3. | A credit card company that engages in the business affairs specified in subparagraph 4 (d) of Article 14 of the Decree pursuant to Article 2-22 (2). |
| (2) | Business affairs related to payment, etc. that a brokerage requesting agency may request a brokering agency to broker pursuant to paragraph (1) shall be any of the following business affairs: |
| 1. | Exchange of payment instructions with a foreign partner for payments within the limits of payment and receipt for each transaction pursuant to Article 2-31 (1) that the brokerage requesting agency has received from a person intending to make payment, etc.; |
| 2. | Settlement of payments resulting from the exchange of payment instructions under subparagraph 1. |
| (3) | The maximum amount of exchange of payment instructions, which a brokering agency may broker pursuant to paragraph (1), shall be KRW15 billion per quarter. |
| (4) | Where a brokering agency intends to engage in the brokerage of business affairs related to payment, etc. pursuant to paragraph (1), standards shall be established for the handling of brokerage affairs that include the following: |
| 1. | Specific details of the brokerage affairs under paragraph (2) (including the total daily limit on brokerage by a brokering agency); |
| 2. | Clear procedures outlining the allocation of responsibilities between the brokering agency and the brokerage requesting agency in the management of business affairs; |
| 3. | Matters regarding the protection of financial consumers, such as the procedures for cancellation and refund upon withdrawal of an application by a customer, and the issuance of a performance bond by the brokering agency or a surety bond in lieu thereof; |
| 4. | Matters regarding internal control measures for the brokerage of business affairs related to the payment, etc., by the brokering agency and management and supervision by the brokerage requesting agency regarding the brokerage of business affairs related to the payment, etc., by the brokering agency; |
| 5. | Other matters regarding the brokerage of business affairs related to payment, etc. |
| (5) | Where a small-sum overseas remittance business entity brokers business affairs related to payment, etc. under paragraph (1), such entity shall have a separate account, other than the account under Article 15-2 (1) 5 of the Decree, registered with the Minister of Economy and Finance and shall treat the account, separately from other assets. |
| (6) | Where a brokerage requesting agency and a brokering agency intend to conclude a brokerage contract for business affairs relating to payment, etc., they shall file a report on the brokerage of business affairs related to payment, etc. in Form 2-4, along with the following documents, at least 15 business days prior to the scheduled date of conclusion of the contract with the Minister of Economy and Finance, who may request that the Governor of the Financial Supervisory Service review such brokerage report pursuant to Article 20 (6) of the Act; provided that if a contract to be concluded is to renew the brokerage contract on the same terms and conditions, the report may be filed within one month from the renewal of the contract: <Amended on Sep. 9, 2021> |
| 1. | A copy of a contract (draft) related to brokerage of business affairs related to payment, etc.; |
| 2. | Matters regarding the qualifications of a brokering agency under paragraph (1); |
| 3. | Standards for handling brokerage affairs related to payment, etc. under paragraph (4); |
| 4. | Review opinions on the potential for damage to financial consumers and impairment of the sound order of foreign exchange transactions, and violation of relevant statutes or regulations, such as the Act on Real Name Financial Transactions and Confidentiality and the Act on Reporting and Using Specified Financial Transaction Information, and the ability of a brokering agency to handle the business affairs in an appropriate manner; |
| 5. | Necessity and expected effectiveness of brokering business affairs related to payment, etc. |
| (7) | Where a brokering agency and a brokerage requesting agency intend to amend the terms and conditions of a brokerage contract concluded pursuant to paragraph (1) or terminate the contract, such agencies shall file a report thereon in Form 2-4-2 with the Minister of Economy and Finance at least seven business days prior to the scheduled date of conclusion of the relevant amended contract or the expiration date of the contract. <Amended on Sep. 9, 2021> |
| (8) | A brokering agency shall record the details of brokerage of business affairs related to payment, etc. for each domestic payer and recipient and retain such records for five years, and shall notify the details of the daily brokerage to the Commissioner of the Korea Financial Intelligence Unit, the Commissioner of the National Tax Service, the Commissioner of the Korea Customs Service, and the Governor of the Financial Supervisory Service, through a foreign exchange information aggregation agency. |
| (9) | The Minister of Economy and Finance may restrict the brokerage for a brokerage requesting agency and a brokering agency or request to make corrections under Article 11 (1) of the Act, where there is a potential violation of relevant statutes or regulations, such as the Act on Real Name Financial Transactions and Confidentiality and the Act on Reporting and Using Specified Financial Transaction Information, or any illegal foreign exchange transaction is likely to be made in the course of concluding a brokerage contract for business affairs relating to payment, etc. or in the brokering process; where there is difficulty in transparent management and supervision of brokering business affairs regarding payment, etc. or any loss is likely to occur; or where the qualifications or standards for handling business affairs of the brokering agency are inadequate or it is deemed impracticable to broker business affairs regarding payment, etc. due to the possibility of damage to financial consumers or impairment of the sound order of foreign exchange transactions, or any similar reason. In such cases, the brokerage requesting agency and the brokering agency shall comply therewith. |
| (10) | Pursuant to Article 20 (6) of the Act and Articles 35 (4) 2 and 37 (2) of the Decree, the Governor of the Financial Supervisory Service may inspect a brokerage requesting agency and a brokering agency that have concluded a brokerage contract; and where any illegal activities are discovered as a result of the inspection, the Governor may order such agencies to make a correction or may take other necessary measures. |
Section 2 New Business Regulatory Expedited Review and Exemptions
| Article 3-4 (New Business Regulatory Expedited Review and Exemption System) |
| (1) | With regard to the methods recognized by the Minister of Economy and Finance under Articles 3-1 through 3-3 and the proviso of Article 15-3 (2) of the Decree, a person who intends to provide a service that is recognized as differentiated from the existing service provided by a foreign exchange agency, etc. in terms of content, method, and form, etc. (hereafter in this Article referred to as “new business”) may file an application with the Minister of Economy and Finance for review (hereafter in this Article referred to as “expedited review”) of the applicability of the Act, the Decree, and these Regulations (hereafter in this Article referred to as “foreign exchange transaction statutes or regulations, etc.”); and if these Regulations have no provisions governing the conduct of new business or the application of the standards and requirements of these Regulations is not appropriate, the person may file an application for the establishment of the relevant applicable provisions or an exemption from the application of the relevant standards and requirements (hereafter in this Article referred to as "exemption, etc."), respectively. <This Article Newly Inserted on Oct. 30, 2020> |
| (2) | Upon receipt of an application under paragraph (1), the Minister of Economy and Finance shall reply with the results of the review of the applicability of foreign exchange transaction statutes or regulations, etc. and the plan for exemption, etc. |
| (3) | The Minister of Economy and Finance may take measures under Article 10-15 within the scope of the authority granted under the Act or the Decree for exemption, etc. under paragraph (1). |
| (4) | Where an application under paragraph (1) requires review by another administrative agency, the head of the relevant administrative agency shall be notified of the details of the application and may be requested to give his or her opinion within a specified period. |
| (5) | Matters necessary for the detailed operation of the new business regulatory expedited review and exemption system shall be separately determined by the Minister of Economy and Finance. |
CHAPTER IV PAYMENT AND RECEIPT
| Article 4-1 (Scope of Application) |
| (1) | This Chapter shall apply to permission and procedures for a payment, etc. under Articles 15 and 25 (1) of the Act and Article 29 (1) of the Decree. <Amended on Feb. 4, 2009> |
| (2) | No person shall make payments, etc. in connection with any act contrary to treaties, generally accepted international laws, and domestic statutes or regulations. |
| Article 4-2 (Procedures for Payment) |
| (1) | Any person who intends to make payments, etc. exceeding USD5,000 per transaction shall submit to the head of a foreign exchange bank documents evidencing grounds for and amount of such payment, etc. (hereafter in this chapter referred to as “documents evidencing payments, etc.”); provided that this shall not apply to any receipt which constitutes a transaction for which a declaration is not required under these Regulations and is conducted by a non-resident or foreign resident to import any capital into the Republic of Korea from overseas. <Amended on May 3, 2019> |
| (2) | Any person who intends to make payments, etc. shall make a declaration, etc. prior to making the relevant payment, etc., where the Act, the Decree, these Regulations, other statutes or regulations, etc. require that the relevant payment, etc. or the transaction or act causing such payment, etc. be declared. |
| (3) | Where any person, who intends to make payments, etc., violates the Act, the Decree or these Regulations by failing to make declarations, etc. or file reports necessary in connection with such payment, etc., he or she may make payments, etc. after filing a report on such violation with the head of a sanctioning agency (including the Governor of the Financial Supervisory Service; hereafter the same shall apply in this Article) via a foreign exchange bank and subsequently completing the required declaration or report procedures; provided that such person may proceed the receipt after filing a report on such violation with the head of a sanctioning agency. <Amended on Dec. 24, 2018><Amended on Jul. 4, 2023> |
| (4) | The head of a sanctioning agency may suspend a payment, etc. until the relevant sanctions are finalized, where there exists concern that a violator may be subject to any sanctions under Article 19 (2) of the Act or where such suspension is deemed necessary for ensuring the effectiveness of the sanctions. <Amended on Dec. 24, 2018> |
| (5) | Where a foreign exchange bank is designated under these Regulations, a payment, etc. (including currency exchange for import or export by hand) shall be made through the relevant foreign exchange bank. <Amended on Feb. 4, 2009> |
| (6) | Any person who intends to make payments, etc. may submit documents evidencing payments, etc. under paragraph (1) by electronic means. <Newly Inserted on Dec. 24, 2018> |
| Article 4-3 (Exceptions to Payment Procedures by Residents) |
| (1) | Notwithstanding Article 4-2 (1), residents (excluding foreign residents) may make payments, etc. without submitting documents evidencing payments, etc. in any of the following cases: |
| 1. | Any of the following payments which constitutes a transaction, for which a declaration is not required under these Regulations: |
| (a) | Transactions with the aggregate annual amount of payments not exceeding USD100,000 (including payments from transactions under subparagraph 8 of Article 7-2); <Amended on Jul. 4, 2023> |
| (b) | Payments exceeding an aggregate annual amount of USD100,000, where in the details and amount of the transaction can be verified by documentation through which the head of a foreign exchange bank can confirm the particulars of the transaction; <Amended on Jul. 4, 2023> |
| 2. | Receipt for which a declaration is not required under these Regulations; provided that where the aggregate amount exceeds USD100,000 for the same person on the same date, written confirmation of the reason for receipt shall be obtained from the head of a foreign exchange bank; <Amended on Dec. 24, 2018><Amended on Jul. 4, 2023> |
| 3. | Payment, etc. from the Government or local governments; |
| 4. | Payment made prior to the occurrence of a transaction or act, excluding payments under Articles 4-5 through 4-7. In such cases, the payment shall be settled through the submission of documents evidencing the payment within a specified period after the occurrence of such transaction or act; provided that the settlement obligation may be exempted within 10/100 of the amount of such payment; |
| 5. | Receipt of export payments, by remittance, for a company whose export performance during the immediately preceding year was not less than USD30 million, and import payments, by remittance, for a company whose import performance during the immediately preceding year was not less than USD30 million (provided that in the case of a company located in the Saemangeum Project Area under subparagraph 1 of Article 2 of the Special Act on Promotion and Support for Saemangeum Project, its export or import performance during the immediately preceding year shall be not less than USD10 million); provided that any company exempted from the submission of documents evidencing payments, etc. shall retain the related documents evidencing payments, etc. for five years; <Amended on Aug. 4, 2020> |
| 6. | Payment for the reimbursement of expenses incurred by a non-resident to incorporate a foreign invested company and a domestic branch of a foreign company under the Foreign Investment Promotion Act and receipt for the reimbursement of expenses incurred by a resident for foreign direct investment or the incorporation of an overseas branch; provided that such payment, etc. shall be made through a foreign exchange bank that facilitated the payment and receipt of the expenditure; <Amended on Aug. 4, 2020> |
| 7. | Payment of funds specified separately to allow payment without the submission of documents evidencing payments, etc. under Articles 4-5 through 4-7. |
| (2) | Even where evidentiary documents are not submitted under paragraph (1) 1 through 2, any person who intends to make payments, etc. shall explain the details of the relevant transaction to the head of a foreign exchange bank and obtain confirmation therefrom, according to the procedures under Article 2-1-2. |
| (3) | Any person who intends to make payments under paragraph (1) 1 shall designate a foreign exchange bank therefor. |
| (4) | Deleted. <Amended on Jun. 2, 2008> |
| Article 4-4 (Payments by Non-Residents or Foreign Residents) |
| (1) | Notwithstanding Article 4-2 (1), non-residents and foreign residents may make payments when confirmation from the head of a foreign exchange bank is obtained through the submission of documents evidencing sources of funds which fall under any of the following (hereinafter referred to as “documents evidencing sources of funds”): |
| 1. | Where the funds are within the means of foreign payment that non-residents or foreign residents (including spouses and lineal ascendants and descendants) have received or imported by hand as provided in these Regulations; provided that in cases of non-residents, this shall be limited to means of foreign payment received or imported by hand since the most recent date of entry; <Amended on Feb. 4, 2009> |
| 2. | Where the funds are within the scope of a declaration made to the Governor of the Bank of Korea under Article 2-3 (1) 3; |
| 3. | Payment through a designated foreign exchange bank within the scope of domestic remuneration acquired as a result of employment or work in the Republic of Korea, or income acquired from self-employment therein, and social insurance and security benefits or annuity benefits paid therein, and other income similar thereto; provided that receipt of departure guarantee insurance under the Act on the Employment of Foreign Workers need not be made through the designated foreign exchange bank; <Amended on Aug. 4, 2020> |
| 4. | Payment of consular revenue and other fees collected by foreign diplomatic missions in the Republic of Korea; |
| 5. | Payment within the scope of sales performance under Article 2-2 (1) 4; |
| 6. | Payment by non-residents under the proviso of Article 2-3 (4); |
| 7. | Payment of other funds, the foreign payment of which has been acknowledged pursuant to Chapters VII through IX. <Amended on Dec. 19, 2013> |
| (2) | Where any of the reasons under any subparagraph of paragraph (1) are not applicable, non-residents, etc. may make payments through a designated foreign exchange bank specified in paragraph (1) 3 within the amount not exceeding USD50,000 per year (including an amount under the proviso of Article 4-5 (6)). <Amended on Jun. 2, 2008> |
| (3) | Notwithstanding paragraphs (1) and (2), non-residents and foreign residents may make payment for the following amounts: |
| 1. | Foreign currencies purchased under Article 2-3 (1) 2 (d); |
| 2. | Payment made by foreign residents for overseas travel expenses not exceeding USD10,000; <Newly Inserted on Feb. 4, 2009> |
| 3. | Payment made by foreign residents through a postal service agency under subparagraph 3 of Article 14 of the Decree by submitting documents evidencing sources of funds under paragraph (1) 3. <Newly Inserted on May 3, 2019> |
| Article 4-5 (Procedures for Payment of Overseas Travel Expenses) |
| (1) | Overseas travelers may pay overseas travel expenses through a foreign exchange bank, or export by hand any means of payment for the payment of such expenses under Article 5-11; provided that cases in which any ordinary overseas traveler may make payments to a foreign country through a foreign exchange bank shall be limited to any of the following: |
| 1. | Amount paid from the budget of any of the following institutions: |
| (a) | The Government and local governments; |
| (b) | Public institutions designated under the Act on the Management of Public Institutions; <Amended on Feb. 4, 2009> |
| (c) | The Bank of Korea and foreign exchange banks; |
| (d) | The Korea International Trade Association, the Korea Federation of Small and Medium Business, press agencies (limited to domestic newspaper companies, news agencies and broadcasting companies), the Korea Sports Council, the Federation of Korean Industries, and the Korea Chamber of Commerce and Industry; |
| 2. | The amount recommended by the competent Minister or the head of the Korea International Trade Association as deemed necessary for a person who falls under any of the following: |
| (a) | Travelers to acquire foreign currency through exports, overseas construction, etc.; |
| (b) | Workers for the defense industry; |
| (c) | Travelers for technology or research purposes; |
| 3. | Overseas medical treatment expenses; |
| 4. | Education-related expenses paid to the relevant educational institution, including registration fees, training fees, and textbook expenses; |
| 5. | Deleted; <Amended on Jun. 2, 2008> |
| 6. | Payment of overseas travel expenses to travel agents, accommodation providers and transportation providers located overseas (including where a corporation makes payment for ordinary overseas travel expenses for its executive officers and employees and the lump sum payment of tourism vouchers for overseas travelers by a travel agent). <Amended on Aug. 4, 2020> |
| (2) | Where persons staying overseas and students studying overseas intend to pay overseas travel expenses, such persons shall designate a foreign exchange bank therefor, and submit documents evidencing status as staying or studying overseas; provided that students studying overseas shall continue to annually submit documents evidencing enrollment status, such as a certificate of enrollment issued by the head of a foreign educational institute. |
| (3) | An overseas traveler who intends to travel overseas based on an agreement with a travel agent, an educational institute, etc. (including domestic agents for overseas training; hereafter the same shall apply in this Article) may make full or partial payments of overseas travel expenses to such travel agent, educational institute, etc. through a foreign exchange bank. Such travel agent, educational institute, etc. may pay the expenses to an accommodation provider, travel agency or overseas training institution in a foreign country (including overseas agents for such training) through a designated foreign exchange bank or by exporting by hand any means of payment under Article 5-11. <Amended on Aug. 4, 2020> |
| (4) | Where a travel agent, an educational institute, etc. intends to exchange currencies to cover necessary foreign currency expenses related to an agreement with an overseas traveler, confirmation from the head of a designated foreign exchange bank shall be obtained that the amount to be exchanged is for the necessary foreign currency expenses in accordance with the agreement with the overseas traveler. <Amended on Aug. 4, 2020> |
| (5) | The head of a designated foreign exchange bank shall indicate the amount of sale in the passport of the overseas traveler where the overseas traveler is a foreign resident for the sale of overseas travel expenses under paragraph (4); provided that this shall not apply to the sale of any foreign currency equivalent to not more than KRW1 million. <Amended on Jul. 2, 2002><Proviso Newly Inserted on Jul. 1, 2005> |
| (6) | An overseas traveler may make a payment (including withdrawal of foreign currencies overseas; hereafter the same shall apply in this paragraph) of overseas travel expenses by using a credit card, etc. (including a traveler's card); provided that a foreign resident may pay overseas travel expenses within the scope of such amount under Article 4-4 (2) by using a credit card, etc. through a designated foreign exchange bank under Article 4-4 (1) 3. <Main Clause Amended on Jun. 2, 2008><Proviso Newly Inserted on Jun. 2, 2008> |
| (7) | Where a corporation pays overseas travel expenses to its executive officers and employees (limited to ordinary overseas travelers) from its budget, such payment may be facilitated through currency exchange in its name or by using a credit card, etc. (including a traveler's card) in its name. <Amended on Dec. 19, 2013> |
| Article 4-6 (Payment Procedures for Overseas Relocation Costs) |
| (1) | Where an emigrant or a prospective emigrant intends to make payment for overseas relocation costs, such emigrant or prospective emigrant may make such payment through a designated foreign exchange bank or export by hand any means of payment under Article 5-11 within three years from any of the following dates; provided that an emigrant or a prospective emigrant may extend the deadline for overseas remittance after explaining a situation causing an extended emigration period: <Amended on May 3, 2019><Amended on Dec. 29, 2021> |
| 1. | An emigrant: Date on which the Ministry of Foreign Affairs and Trade issues a written confirmation of emigration; |
| 2. | A prospective emigrant: Date on which a foreign exchange bank is designated pursuant to paragraph (2). |
| (2) | Where a prospective emigrant intends to make any payment to acquire permanent residency, etc., such payment may be made through a designated foreign exchange bank or export by hand any means of payment under Article 5-11. <Newly Inserted on Dec. 17, 2007> |
| (3) | Where the cumulative amount of overseas relocation costs per household exceeds USD100,000, the relevant emigrant (including a prospective emigrant; hereafter the same shall apply in this paragraph) shall submit to the head of a designated foreign exchange bank a letter confirming the source of funds for the entire amount of overseas relocation costs issued by the head of the competent tax office of the emigrant. <Amended on Dec. 17, 2007> |
| (4) | A prospective emigrant shall submit documents evidencing acquisition of permanent residency, etc. within one year from payment of overseas relocation costs to the head of a designated foreign exchange bank, or recover the amount of such payment into the Republic of Korea; provided that, where proven that acquiring permanent residency, etc. within one year is not feasible, extension of the deadline to submit acquisition documents for permanent residency, etc. may be obtained, and in such cases, an annual notification of the status of obtaining permanent residency, etc. shall be provided. <Proviso Newly Inserted on Apr. 16, 2012> |
| (5) | In any case which falls under Article 4-6, the procedures under Article 4-7 shall not apply. <Newly Inserted on Dec. 17, 2007> |
| Article 4-7 (Procedures for Export of Domestic Property by Overseas Koreans) |
| (1) | Where an overseas Korean intends to export any of the following domestic property which is in possession in the name of such overseas Korean (including property acquired after obtaining status as an overseas Korean), such overseas Korean shall designate a foreign exchange bank therefor: <Amended on Dec. 17, 2007> |
| 1. | Proceeds from the disposal of real estate (including where the proceeds from real estate sale are in the form of financial assets); |
| 2. | Principal and interest regarding domestic deposit and trust accounts, and proceeds from the sale of securities; |
| 3. | Korean won-denominated loans acquired from a foreign exchange agency by providing any deposit or real estate in the name of the overseas Korean as collateral; <Amended on Dec. 29, 2021> |
| 4. | Security deposits for lease of real estate in the name of the overseas Korean. <Amended on Dec. 17, 2007> |
| (2) | Where an overseas Korean intends to export funds referred to in the subparagraphs of paragraph (1), the overseas Korean shall designate a foreign exchange bank, and submit to the head of the designated foreign exchange bank any of the following documents evidencing sources of funds to the head of the designated foreign exchange bank: <Amended on Dec. 19, 2013> |
| 1. | For proceeds from disposal of real estate, location of real estate in Form 4-2 or a written confirmation regarding proceeds from sale of real estate, which is issued by the head of the competent tax office having jurisdiction over the last domicile of the applicant; provided that this shall be limited to proceeds from the disposal of real estate for which no more than five years have elapsed from the disposal of such real estate as of the date that an application for the written confirmation is filed; <Amended on Apr. 16, 2012> |
| 2. | Where the cumulative amount of payments under paragraphs (1) 2 through (1) 4 exceeds USD100,000, a letter, etc. confirming the source of funds for the entire amount issued by the designated foreign exchange bank or the head of the competent tax office which has jurisdiction of the last domicile address of the applicant; provided that documents evidencing sources of funds may be submitted for domestic remuneration acquired as a result of employment or work in the Republic of Korea, or income acquired from self-employment therein, and social insurance and security benefits paid therein or other income similar thereto for the past three months from the month in which funds are exported. <Amended on Aug. 4, 2020> |
| (3) | Where any foreign payment under paragraph (1) is intended, the procedures for capital transactions under Article 7-11 and Sections 1 and 4 of Chapter IX shall not apply. <Newly Inserted on Dec. 17, 2007> |
| (4) | Funds pursuant to paragraph (1) may be disbursed through a designated foreign exchange bank or exported by hand under Article 5-11, and may be used as collateral where deposited in an emigrant account; provided that where overseas payment of the deposit through the execution of the collateral right shall be deemed to be the export of domestic property of the applicant. <Amended on Dec. 17, 2007> |
| Article 4-8 (Notification to Commissioner of the National Tax Service) |
| (1) | The head of a foreign exchange bank shall notify the Commissioner of the National Tax Service on a monthly basis of the details of such payments, etc. by the 10th day of the immediately following month under Article 21 of the Act and Article 36 of the Decree for any of the following payments; provided that this shall not apply to any payments, etc. by the Government or local governments: <Amended on Feb. 4, 2009> |
| 1. | Where the amount of payment, etc. by each payer or recipient under Article 4-3 (1) 1 and 2 exceeds USD10,000 per year and where the amount of payment by each payer under Article 7-11 (2) exceeds USD10,000 per year; <Amended on Apr. 16, 2012> |
| 2. | Where the amount of overseas travel expenses for students studying overseas and persons staying overseas under Article 4-5 exceeds USD100,000 per year; <Amended on Dec. 17, 2007> |
| 3. | Except as provided in subparagraphs 1 and 2, where any payment, etc. (including payment, etc. through a demand draft) exceeding USD10,000 per transaction is made through a foreign exchange bank. <Amended on Aug. 3, 2006> |
| (2) | The head of a foreign exchange bank shall notify the Commissioner of the Korea Customs Service by the 10th day of the immediately following month under Article 21 of the Act and Article 36 of the Decree on a monthly basis of the details of any of the following payments, etc.; provided that this shall not apply to any payment by the Government or local governments: <Amended on Feb. 4, 2009> |
| 1. | Payment or receipt of import or export payments; <Amended on Feb. 4, 2009> |
| 2. | Payment or receipt of consideration for services through a foreign exchange bank; <Amended on Feb. 4, 2009> |
| 3. | Payment, etc. under Article 4-3 (1) 1 and 2; <Amended on Apr. 16, 2012> |
| 4. | Payment of overseas relocation costs exceeding USD10,000 per transaction; |
| 5. | Except as provided in subparagraphs 1 through 4, where payment, etc. of an amount exceeding USD10,000 per transaction (including payment through a demand draft) is made through a foreign exchange bank. <Newly Inserted on Jan. 1, 2006> |
| (3) | The head of a foreign exchange bank shall notify the Governor of the Financial Supervisory Service by the 10th day of the immediately following month on a monthly basis of the details of any of the following payments, etc. pursuant to Article 21 of the Act and Article 36 of the Decree of any of the following payments, etc.; provided that this shall not apply to any payment by the Government or local governments: <Amended on Feb. 4, 2009> |
| 1. | Where the amount of payment by each payer under Articles 4-3 (1) 1 and 7-11 (2) exceeds USD10,000 per year; <Amended on Dec. 17, 2007> |
| 2. | Where the amount of overseas travel expenses for students studying overseas and persons staying overseas under Article 4-5 exceeds USD100,000 per year; <Amended on Dec. 17, 2007> |
| 3. | Except as provided in subparagraphs 1 and 2, where any payment, etc. exceeding USD10,000 per transaction (including payment through a demand draft) is made through a foreign exchange bank. |
CHAPTER V METHOD OF PAYMENT
Section 1 Common Provisions
| Article 5-1 (Scope of Application) |
This Chapter shall apply to a declaration of the method of payment, etc. under Article 16 of the Act and Article 30 of the Decree. <Amended on Feb. 4, 2009>
| Article 5-2 (Exceptions to Declaration) |
Pursuant to the proviso of Article 16 of the Act, declarations under this Chapter shall not be required in cases falling under subparagraphs 1 through 5 and declarations under Section 3 of this Chapter shall not be required in cases falling under subparagraphs 6 through 8:
| 1. | A person who has made a declaration of capital transactions under Chapters VII through IX (including a declaration made to a foreign exchange bank; provided that payments, etc. under Article 5-11 shall be excluded) makes a payment, etc. by using the method of payment, etc. indicated in such declaration; <Amended on Apr. 16, 2012><Amended on Dec. 29, 2021> |
| 2. | The Bank of Korea, a foreign exchange bank, any other foreign exchange agency, a small-sum overseas remittance business entity, a person who has other professional foreign exchange services registered, or a merchant bank makes a payment, etc. in connection with its foreign exchange services; <Amended on Aug. 4, 2020> |
| 3. | Deleted; <Amended on Mar. 22, 2016> |
| 4. | A payment, etc. is conducted through the use of the means of payment, etc. under treaties or generally accepted international laws; |
| 5. | A transaction where either party to the transaction makes a declaration; |
| 6. | A payment, etc. is made by the Government or local governments; <Amended on Aug. 4, 2020> |
| 7. | An import payment is made with foreign loan under the Introduction and Management of Public Loans Act; |
| 8. | An import or export payment made or received regarding goods specified in Appendices 3 and 4 of the Regulations on Management of Foreign Trade. <Amended on Sep. 30, 2009> |
| Article 5-3 (Declaration Procedures) |
| (1) | Any person who intends to make a declaration under this Chapter shall submit a declaration (report) of (modification of) the method of payment, etc. in Form 5-1 to a declaration receipt agency, along with related documents determined by the declaration receipt agency. The same shall apply where such person intends to modify any declared matter. <Amended on Aug. 4, 2020> |
| (2) | Except as provided in Article 5-2, documents, such as a declaration (method of payment, etc.) under Chapter V, may be submitted through electronic methods upon real name verification. <Amended on Jun. 18, 2021> |
Section 2 Method of Payment, etc. through Account Credits or Debits, Including Offsetting
Subsection 1 Offsetting
| Article 5-4 (Declaration) |
| (1) | No declaration shall be required where a payment, etc. is made in a manner corresponding to any of the following: |
| 1. | Where intending to offset a claim or debt, the amount (in the case of payments, etc. in installments, referring to the total amount of each payment, etc.) not exceeding USD5,000; <Amended on May 3, 2019> |
| 2. | Where a resident intends to offset a claim or debt, arising from a transaction or act between the resident and a non-resident, through a running account under Subsection 2 of this Section; |
| 3. | Where a credit card issuer offsets an amount receivable from an overseas credit card issuer against an amount payable to the relevant overseas credit card issuer (foreign credit card payments of residents, credit card service fees and membership dues), or makes payment or receipt of the net balance after offsetting; <Amended on Feb. 4, 2009> |
| 4. | Where an insurer under the Insurance Business Act and a specified insurance company (including a mutual aid provider under the Credit Unions Act, the Fisheries Cooperatives Act and the Community Credit Cooperatives Act) engages in the payment or receipt of re-insurance premiums, re-insurance benefits, agency and brokerage commissions, agency costs, court deposits and interest thereon, etc. under a re-insurance agreement with a foreign insurer, and settles the net balance after deducting the borrowings; <Amended on Dec. 19, 2013> |
| 5. | Where a resident offsets a claim or debt acquired from a derivatives transaction under Section 7 of Chapter VII with a claim or debt acquired in a reverse deal with the other party or a derivative transaction of the same kind in the relevant exchange-traded derivatives market, or makes payment or receipt of the net balance after offsetting; <Amended on Feb. 4, 2009> |
| 6. | Where intending to offset export payments and related import payments through interlinked trade, consignment processing trade, and bonded processing trade; <Amended on Jan. 1, 2006> |
| 7. | Where intending to offset import and export payments of goods against brokerage, agency commissions, etc. directly incidental to such export or import; |
| 8. | Where a domestic airline or shipping company operating on overseas routes offsets the overseas airfare or ocean freight and operating expenses incurred in overseas routes acquired from abroad, or makes payment or receipt of the net balance after offsetting; <Amended on Feb. 4, 2009> |
| 9. | Where a domestic shipping company operating on an overseas route enters into a joint service agreement with a foreign shipping company and intends to offset claims and debts for mutual use of vessels and equipment; <Newly Inserted on Jul. 1, 2005> |
| 10. | Where intending to offset the sales proceeds of domestic and overseas railroad tickets, etc. (including the use rights of vessels, aircraft, or other means of transportation) with directly associated commissions incurred in the respective transactions; <Amended on Dec. 19, 2013> |
| 11. | Where intending to offset foreign currency-denominated claims or debts between residents; <Newly Inserted on Apr. 16, 2012> |
| 12. | Where a Korean telecommunications service provider intends to offset the communications network usage fees to be received from a foreign telecommunications service provider and the communications network usage fees to be paid to the domestic telecommunications service provider, or to make payment or receipt of the net balance after offsetting; <Amended on Dec. 19, 2013> |
| 13. | Where making payment or receipt of the net balance after withholding tax on income arising from transactions between residents and non-residents pursuant to tax-related statutes, etc.; <Amended on Aug. 4, 2020> |
| 14. | Where offsetting or making payment or receipt of the net balance after offsetting litigation-related payments, etc. between residents and non-residents, including legal costs and other related expenses, arising from domestic litigation, arbitration, etc. <Amended on Dec. 19, 2021> |
| (2) | Except as provided in paragraph (1), where a resident, in the course of engaging in cross-border transactions including import and export, service transactions and capital transactions, intends to offset claims or debts from non-residents through account credits or debits, such resident shall make a declaration to the head of the foreign exchange bank or file a post-facto report with the head of the foreign exchange bank within one month after offsetting: <Amended on May 3, 2019> |
| 1. | Deleted; <Amended on Dec. 19, 2013> |
| 2. | Deleted. <Amended on Dec. 19, 2013> |
| (3) | Notwithstanding paragraph (2), where offsetting is conducted through an offset center of a multinational enterprise or involves the offsetting of claims or debts from multiple persons, a declaration of such offset shall be made to the Governor of the Bank of Korea. <Amended on Dec. 19, 2013> |
| (4) | The Governor of the Bank of Korea or the head of a foreign exchange bank, in receipt of a declaration or a post-facto report under paragraph (2) or (3), shall notify the Commissioner of the National Tax Service and the Commissioner of the Korea Customs Service of the details thereof by the last day of the first month of the immediately following semi-annual period. <Amended on Sep. 30, 2009> |
| (5) | Any person who conducts the offset shall retain related evidentiary documents for five years. <Amended on Dec. 19, 2013> |
Subsection 2 Running Account
| Article 5-5 (Declaration to Head of Designated Foreign Exchange Bank) |
| (1) | Any person who intends to make payments, etc. by a running account due to frequent transactions with the other party shall submit a running account declaration in Form 5-2 to the head of a designated foreign exchange bank, and where any person intends to close such account, a declaration thereof shall be made. |
| (2) | The head of a designated foreign exchange bank may close a running account where a person who uses the running account violates the Act, the Decree, these Regulations and other statutes or regulations or where such running account is no longer deemed necessary in consideration of performance and details of transactions and other circumstances. |
| (3) | Article 5-7 (3) shall apply mutatis mutandis to the credit and debit net balance of a closed account. |
| (4) | The head of a designated foreign exchange bank, in receipt of a declaration under paragraph (1), shall give notice thereof to the Commissioner of the National Tax Service and the Commissioner of the Korea Customs Service. <Amended on Apr. 16, 2012> |
| Article 5-6 (Crediting and Debiting Items and Recording Time) |
| (1) | Items which may be credited or debited through a running account shall be receivables or payables from the other party; provided that where the Act, the Decree and these Regulations require that a declaration be made with respect to any payments, payment methods and capital transactions, such declaration shall be made. <Amended on Dec. 17, 2007> |
| (2) | The recording of entries in a running account shall be performed within 30 days from completion of the import or export of any goods or provision of any services where such import or export of goods or such provision of services is incidental to the relevant transaction, and for other cases, within 30 days from finalization of claims or debts arising from the relevant transaction. |
| (1) | The settlement of a running account shall be conducted on a monthly basis within the scope of the accounting period; provided that such settlement cycle may be determined otherwise within the scope of an accounting period when necessary. <Proviso Newly Inserted on Feb. 4, 2009> |
| (2) | In the settlement of running accounts, the credit and debit net balance shall be the total combined amount of credit and debit net balance against each account of the other party. |
| (3) | Credit and debit net balances of running accounts shall be paid or received after a declaration thereof is made to the head of a designated foreign exchange bank within three months from the end of each settlement period. <Amended on Feb. 4, 2009> |
| (4) | Each person who uses a running account shall submit reports determined by the head of a designated foreign exchange bank including a report on settlement of accounts to the head of the designated foreign exchange bank. |
| (5) | Each person who uses a running account shall retain his or her books and related evidentiary documents for a period of five years. <Amended on Dec. 19, 2013> |
Section 3 Method of Payment Exceeding Period Determined by Minister of Economy and Finance
| Article 5-8 (Declaration) |
| (1) | No declaration shall be required where a resident intends to make payments, etc. for import or export; provided that a declaration shall be made to the Governor of the Bank of Korea, where a person intends to make payments, etc. by any of the following methods. In any case which falls under main clauses of subparagraphs 1 (c) and 2 (b) and is deemed unavoidable, such person may make a post-facto declaration thereof within three months from the end of the period exceeding one year: <Amended on Jan. 1, 2006〉 |
| 1. | Where a resident intends to receive export payments in excess of USD50,000 per agreement through any of the following methods: <Amended on Feb. 4, 2009> |
| (a) | Intercompany export transactions in which the period of settlement exceeds three years after the shipment of goods or the sight of an export bill under Documents against Acceptance (D/A) or Open Account (O/A); <Amended on Apr. 16, 2012> |
| (b) | Intercompany export transaction in which the receipt of export payments precedes the shipment of goods; <Amended on Feb. 4, 2009> |
| (c) | Non-intercompany export in which the receipt of export payments is more than one year prior to the shipment of goods; provided that this shall not apply to vessels, rolling stock, aircraft, and industrial facilities under the Foreign Trade Act; <Amended on Feb. 4, 2009> |
| 2. | Where a resident intends to make import payments by any of the following methods: |
| (a) | Import of gold exceeding USD50,000 per agreement for the purpose of re-exporting unprocessed gold where the payment therefor is made more than 30 days after the date of receipt of shipping documents or goods, or for the purpose of re-exporting unprocessed gold imported on a deferred payment basis for domestic supply exceeding 30 days; <Amended on Feb. 4, 2009> |
| (b) | Import where payments, exceeding USD20,000 per agreement, are made by the method of remittance for a period exceeding one year prior to the receipt of shipping documents or goods; provided that this shall not apply to import payments not exceeding USD5 million for vessels, rolling stock, aircraft, and industrial facilities under the Foreign Trade Act. <Amended on Aug. 4, 2020> |
| (2) | The Governor of the Bank of Korea, in receipt of a declaration under the proviso of paragraph (1), shall notify the Commissioner of the National Tax Service and the Commissioner of the Korea Customs Service of the fact of such declaration within 10 days of the immediately following month on a monthly basis. <Amended on Dec. 19, 2013> |
| Article 5-9 (Obligation to Perform Corresponding Imports and Exports) |
| (1) | Any person who has received export payments exceeding USD50,000 per transaction prior to the shipment of goods shall return such payments or perform the corresponding export. <Amended on Feb. 4, 2009> |
| (2) | Any person who makes import payments exceeding USD20,000 per transaction by remittance prior to the receipt of shipping documents or goods shall receive a refund thereof or perform the corresponding import. <Amended on Feb. 4, 2009> |
Section 4 Method of Payment Including Third-Party Payment
| Article 5-10 (Declaration) |
| (1) | No declaration of a third-party payment, etc. shall be required in any of the following circumstances: |
| 1. | Where a third-party payment, etc. of an amount equal to or less than USD5,000 (where such payment is made in installments, referring to the total amount of the individual payments) is made; <Amended on May 3, 2019> |
| 2. | Where, for the settlement of a transaction between residents or between a resident and a non-resident, a resident who is a party to the transaction receives the payment from a non-resident who is not a party thereto; <Amended on Feb. 4, 2009> |
| 3. | Where, for the settlement of a transaction between non-residents or between a resident and a non-resident, a resident who is not a party to the transaction receives the payment from a non-resident who is a party thereto and a resident who is a party to the transaction receives the payment from a resident who is not a party thereto; <Amended on Aug. 4, 2020> |
| 4. | Where a foreign exchange bank intends to make a payment using the principal and interest on the loans extended by an overseas branch office of such foreign exchange bank and its local subsidiary, which are collected from the borrowers, security providers or guarantors; |
| 5. | Where the Depository, that is a resident, acting as a depository institution, makes or receives payments in domestic or foreign currencies in connection with the exercise of rights and performance of obligations related to depositary receipts issued by a non-resident as provided in the provisions of the Act, the Decree and these Regulations; <Amended on Feb. 4, 2009> |
| 6. | Where the parties to the transaction, who are members of an internationally recognized settlement organization, makes or receives payments; <Amended on Feb. 4, 2009> |
| 7. | Where the purchase and sale, and transfer of claims, as well as the assumption of debts (including transfer of foreign currency bonds between non-residents) have occurred as a result of an acknowledged transaction; <Amended on Nov. 6, 2001> |
| 8. | Where a resident who intends to acquire real estate or rights in real estate located overseas as provided in Section 4 of Chapter IX according to an acknowledged transaction makes payment for the acquisition amount to a person engaged in the real estate contract brokerage and agency business in the country where such real estate is located (including the spouse of the resident in cases falling under Article 9-39 (2) 2); <Amended on Aug. 4, 2020> |
| 9. | Where a resident who has issued foreign securities overseas according to an acknowledged transaction intends to make a payment to a person with whom such resident concluded a fund management entrustment agreement for the purposes of the repayment of the principal and interest, optional redemption, etc.; <Newly Inserted on Dec. 17, 2007> |
| 10. | Where a person who intends to acquire foreign securities under an acknowledged transaction makes payment of the relevant funds to the Depository; <Amended on Feb. 4, 2009> |
| 11. | Where a foreign invested company under the Foreign Investment Promotion Act (including a domestic subsidiary), a domestic branch of a foreign company as provided in Section 3 of Chapter IX, or a domestic branch or business office of a foreign bank directly makes a payment to its head office (including a holding company or affiliate of the head office) for the acquisition of any shares or equities therein as provided in Article 7-31 (1) 10; <Amended on Feb. 4, 2009> |
| 12. | Where a resident who intends to establish a local subsidiary or an overseas branch as provided in Chapter IX makes payment to a resident or a non-resident with an authorized agency relationship in connection with a foreign direct investment; <Newly Inserted on Dec. 17, 2007> |
| 13. | Where an overseas diplomatic mission of the Republic of Korea provides an emergency expense to a non-resident national of the Republic of Korea according to the Guidelines on Operation of the Rapid Overseas Remittance Support System issued by the Ministry of Foreign Affairs and Trade; <Amended on Jun. 18, 2021> |
| 14. | Where a resident (a taxpayer) who entrusts an import agent (a resident) with simple import agency business makes import payment to a non-resident who is the exporter, in accordance with the predetermined terms and conditions specified in the import agency agreement; <Newly Inserted on Dec. 17, 2007> |
| 15. | Where a resident imports goods over the Internet and pays for the import through a domestic purchasing agent and where a purchasing agent who has received import payment makes a payment to an exporter; <Newly Inserted on Dec. 17, 2007> |
| 16. | Where a non-resident purchases goods over the Internet from a seller who is also a non-resident and pays for the purchase through a purchasing agent who is a resident, and where a purchasing agent, who is a resident, having received the purchase price makes payment to a non-resident seller; <Newly Inserted on Sep. 30, 2009> |
| 17. | Where an oil refining company or importer of crude oil, liquefied natural gas or liquefied petroleum gas which is a resident imports such products from a foreign government or a company operated thereby and makes import payment to the central bank of an exporting country as provided in the laws of such country in importing crude oil, liquefied natural gas or liquefied petroleum gas; <Newly Inserted on Sep. 30, 2009> |
| 18. | Where a shipping agency or a ship management company under subparagraph 18 of Article 1-2 pays maritime operating expenses, such as wages, etc. of crew members of an outbound ship entering the Republic of Korea or under construction in the Republic of Korea (hereinafter referred to as "outbound ship"), to the captain or other person in charge of the management of the outbound ship with funds received from a non-resident shipowner (including a ship transport service provider); <Newly Inserted on Aug. 20, 2010> |
| 19. | Where a resident who is a party to a transaction makes payment or engages in other financial transactions with another resident who is not a party to the relevant transaction for the settlement of the transaction between residents; <Amended on Aug. 4, 2020> |
| 20. | Where a resident who is a party to a transaction makes payment or engages in other financial transactions with a non-resident who is not a party to that transaction for the settlement of telecommunications network usage fees between resident and non-resident telecommunications service providers; <Newly Inserted on Dec. 19, 2013> |
| 21. | Where a telecommunications billing service provider registered pursuant to the Act on Promotion of Information and Communications Network Utilization and Information Protection makes a payment or engages in other financial transactions to settle the consideration for the purchase of goods or the use of services by a resident or a non-resident by electronic means on behalf of such resident or non-resident; <Amended on Jun. 29, 2015> |
| 22. | Where a resident makes a payment, etc. to a non-resident through an escrow account (an account in which a neutral third party temporarily deposits funds for a transaction in order to ensure the stability of the transaction and then releases the funds as originally agreed upon when certain conditions are satisfied) opened at a foreign exchange bank or equivalent foreign financial institution; <Amended on Aug. 4, 2020><Amended on Jun. 18, 2021> |
| 23. | Where a person acting as an agent for the performance of overseas advertising or ship management by proxy makes or receives a payment; |
| 24. | Where funds for international development cooperation under the Framework Act on International Development Cooperation are paid to a person who is not a party to a transaction; |
| 25. | Where an offset is made through an offsetting center of a multinational enterprise in accordance with Article 5-4 (3) and the net balance of the offset is paid to the relevant center after a declaration thereof is made to the Governor of the Bank of Korea; |
| 26. | Where a refund counter operator referred to in the Regulations on Special Cases concerning Value-Added Taxes and Individual Consumption Taxes for Foreign Tourists, who is a resident, pays a refund to a non-resident through an agent with which a payment by proxy agreement is concluded; <Newly Inserted on Dec. 24, 2018> |
| 27. | Where a resident designates a tax agent, who is a non-resident, to pay taxes to the tax authorities in a foreign country and makes a payment to the relevant agent; <Newly Inserted on Dec. 24, 2018> |
| 28. | Where a ship owners’ mutual protection and indemnity association under the Shipowners’ Mutual Protection and Indemnity Association Act pays funds to any person other than a party to the transaction; <Newly Inserted on Aug. 4, 2020> |
| 29. | Where a non-resident appoints a tax agent who is a resident to settle taxes that must be paid to the tax authorities or the competent authorities related to tax in the Republic of Korea, and the tax agent receives a refund in accordance with the Act, the Decree and these Regulations and subsequently pays such refund to the non-resident; <Newly Inserted on Jun. 18, 2021> |
| 30. | Where a non-resident appoints a resident legal representative (an attorney-at-law) for litigation in a domestic court, and the appointed representative in connection with the legal proceedings receives compensation or any refund related to general litigation costs (including a court deposit) as a result of a lawsuit from the competent court or from the counterpart to such lawsuit and pays it to the non-resident; <Newly Inserted on Jun. 18, 2021> |
| 31. | Where a non-resident appoints an agent who is a resident for a transaction conducted between a non-resident and a resident for the acquisition of real estate in the Republic of Korea or the rights thereto under Section 5 of Chapter IX, and in accordance with an acknowledged transaction the resident pays the acquisition cost to the appointed agent, who subsequently pays it to the non-resident. <Newly Inserted on Jun. 18, 2021> |
| (2) | Except in cases falling under paragraph (1), where a resident intends to make a payment or engages in other financial transactions exceeding USD5,000 but within USD10,000 (where such payment is made in installments, referring to the total amount of the individual payments) with a third party, a declaration thereof shall be made to the head of a foreign exchange bank. <Amended on May 3, 2019> |
| (3) | Except in cases falling under paragraphs (1) and (2), where a resident intends to make a payment or engages in other financial transactions with a third party, a declaration thereof shall be made to the Governor of the Bank of Korea. |
| (4) | Where a payment is made to a person designated as a specialized fund management company of a multi-national enterprise, that is not a party to the relevant transaction, for the settlement of a transaction conducted between a resident and a non-resident, which is a multi-national enterprise, post-facto report on declaration under paragraph (2) or (3) may be filed within one month from the date of payment. |
| (5) | The head of a foreign exchange bank or the Governor of the Bank of Korea, in receipt of a declaration under paragraph (2) or (3), shall notify the Commissioner of the National Tax Service or the Commissioner of the Korea Customs Service thereof within the 10th day of the following month on a monthly basis. <Amended on Apr. 16, 2012> |
Section 5 Payment Method Not Conducted Through Foreign Exchange Banks
| Article 5-11 (Declaration) |
| (1) | No declaration shall be required where a resident intends to receive any means of payment not through a foreign exchange bank and intends to make a payment by any of the following methods: <Amended on Feb. 4, 2009> |
| 1. | Direct payments or receipts between an outbound transporter and a passenger for goods purchased or sold on board an aircraft or vessel operating on an overseas route; <Amended on Feb. 4, 2009> |
| 2. | Where an overseas traveler (including a travel agent and an educational institution) or an emigrant (including a prospective emigrant) and an overseas Korean makes a direct payment of overseas travel expenses, overseas relocation costs and domestic property in a foreign country; provided that this shall be limited to any of the following cases if he or she makes such payment by exporting any means of foreign payment by hand, exceeding USD10,000: <Amended on Dec. 17, 2007> |
| (a) | Confirmation by the head of a designated foreign exchange bank: |
1) Where a person staying overseas or a student studying overseas makes a payment by exporting any means of foreign payment by hand; <Amended on Aug. 4, 2020〉
2) Where an emigrant, a prospective emigrant and an overseas Korean makes a payment by exporting any means of foreign payment by hand; <Amended on Dec. 17, 2007>
| (b) | Where an ordinary overseas traveler (excluding a foreign resident) makes a payment by exporting any means of foreign payment by hand upon a declaration thereof to the head of the competent customs office; |
| (c) | Where overseas travel expenses paid from the budget of any institution which falls under Article 4-5 (1) 1 are paid by exporting any means of foreign payment by hand; <Amended on Dec. 17, 2007> |
| (d) | Where a person staying overseas or a student studying overseas as provided in item (a) 1) makes a payment by exporting any means of foreign payment by hand in excess of the amount authorized by the head of a designated foreign exchange bank, upon a declaration thereof to the head of the competent customs office; provided that no declaration shall be required where the amount of such excess is not more than USD10,000; <Newly Inserted on Nov. 6, 2001><Amended on Jul. 2, 2002> |
| (e) | Where a travel agency (including an educational institute) makes a payment by exporting, by hand, any means of foreign payment authorized by the head of a foreign exchange bank; <Newly Inserted on Aug. 4, 2020> |
| 3. | Where a resident makes a payment with a demand draft, postal money order, or UNESCO coupon for the purpose of any payment in connection with an acknowledged transaction; |
| 4. | Where a resident makes a direct payment for consideration upon an acknowledged transaction in a foreign country by using any means of foreign payment, possession of which is acknowledged in a foreign country; |
| 5. | A transaction in the Republic of Korea between a resident and non-resident denominated in the domestic currency where the resident intends to make payment using any means of domestic payment; |
| 6. | Where a payment authorized by the head of a foreign exchange bank upon completion of the procedures provided in Article 4-2 falls under any of the following cases: |
| (a) | Where a person who departs from the Republic of Korea for the purposes of overseas repair or inspection of any goods set forth in Appendices 3 and 4 of the Foreign Trade Management Regulation makes a direct payment for such repair or inspection in a foreign country by exporting foreign currencies and traveler's checks by hand; <Amended on Dec. 28, 2017> |
| (b) | Where an airline or a shipping company operating on an overseas route directly pays operating expenses in a foreign country by exporting foreign currencies by hand; |
| (c) | Where a deep-sea fisher pays expenses payable to a supervisor, etc. of a counter-party country, who aboards for verification of compliance with fisheries regulations, etc., by exporting any means of foreign payment by hand; <Amended on Apr. 16, 2012> |
| (d) | Where the relevant resident directly pays the expenses necessary for producing motion pictures, sound recordings, broadcasts, and advertisements in a foreign country by exporting any means of foreign payment by hand; |
| (e) | Where a prize related to a sports game, prize advertisement, international academic competition, etc. is paid directly to the relevant winner; <Amended on Aug. 4, 2020> |
| (f) | Where a foreign resident (including a non-resident) makes a payment by exporting, by hand, any means of foreign payment purchased from a designated foreign exchange bank in accordance with Article 4-4 (1) 3; <Amended on Apr. 16, 2012> |
| (g) | Where a person pays overseas travel expenses as provided in Article 4-5 (1) 2 through 4 by exporting any means of payment by hand; <Amended on Dec. 17, 2007> |
| (h) | Where a foreign resident (including a non-resident) makes a payment by exporting, by hand, any means of foreign payment acquired in accordance with Article 2-3 (1) 3; <Amended on Apr. 16, 2012> |
| (i) | Where a shipping agency or a ship management company under subparagraph 18 of Article 1-2 pays maritime operating expenses, such as wages, etc. of crew members of an outbound ship entering the Republic of Korea or under construction in the Republic of Korea (hereinafter referred to as "outbound ship"), to the captain or other person in charge of the management of the outbound ship with funds received from a non-resident shipowner (including a ship transport service provider); <Newly Inserted on Aug. 20, 2010> |
| 7. | Where any foreign currency funds authorized under Section 2 of Chapter VII are directly deposited or disposed of and where any consideration for an acknowledged transaction is directly paid in the Republic of Korea using a foreign currency check issued by the relevant depository institution or a credit card, etc.; |
| 8. | Where any consideration for a current transaction between a resident and a non-resident or between the resident and any other resident involving an amount not exceeding USD10,000 per transaction (but not more than USD100,000 for a transaction in a free economic zone under the Special Act on Designation and Management of Free Economic Zones) is directly paid using any means of foreign payment; <Amended on Aug. 4, 2020> |
| 9. | Where a person intends to make any of the following payments using a credit card, etc. in his or her name (including a traveler's card): <Amended on Jun. 2, 2008> |
| (a) | For overseas travel expenses by a resident in a foreign country (including payments after foreign currency withdrawals); <Amended on Dec. 17, 2007> |
| (b) | For subscription fees, dues, and other contributions by a resident to an international organization, international group and international conference; |
| (c) | For publication fees, supplementary fees, and other expenses by a resident for the publication of research papers, creative works, etc. in a foreign publication; |
| (d) | For an acknowledged transaction (excluding a capital transaction) with a non-resident settled in the Republic of Korea (referring to payment made from a domestic account); <Amended on Dec. 17, 2007> |
| 10. | For a direct disbursement of a refund service provider under the Special Regulation on Value Added Taxes and Special Excise Taxes for Foreign Tourists; <Amended on Apr. 16, 2012> |
| 11. | Where an overseas traveler (limited to an ordinary overseas traveler), who is affiliated with a corporation and intends to travel overseas using the budget of such corporation, pays overseas travel expenses by exporting, by hand, any foreign currencies exchanged in the name of such corporation; <Newly Inserted on Dec. 17, 2007> |
| 12. | Where a resident directly makes a payment of any means of foreign payment not exceeding USD10,000 per transaction as provided in Sections 1, 2 and 4 of Chapter IX; <Newly Inserted on Dec. 17, 2007> |
| 13. | For repayment or payment by a deep-sea fisher for local financing for deep-sea fishing operations, interest, fishing expenses, and overseas branch maintenance expenses directly through the proceeds from the sale of catch exported from a foreign country; <Newly Inserted on Apr. 16, 2012> |
| 14. | Deleted. <Amended on Aug. 4, 2020> |
| (2) | Upon receipt of a request for confirmation under paragraph (1), the head of a foreign exchange bank shall confirm the acquisition details of the means of payment and shall issue and deliver to the relevant resident a Declaration of Currency or Monetary Instruments in Form 6-1. |
| (3) | Except in cases falling under paragraph (1), where a resident intends to make a payment, etc. (including settlement of any claims or debts involving a non-resident as a result of the provision of goods or services, transfer of rights, etc.) other than through a foreign exchange bank, he or she shall make a declaration thereof to the Governor of the Bank of Korea. <Amended on Aug. 4, 2020> |
| (4) | Upon receipt of a declaration under paragraph (1) 2 (b), the head of the competent customs office and the Governor of the Bank of Korea who delivers a certificate of completion of declaration on (modification of) the method of payment, etc. as provided in paragraph (3) shall give monthly notice of such declaration to the Commissioner of the National Tax Service and the Commissioner of the Korea Customs Office by the 10th day of the immediately following month. <Amended on Aug. 4, 2020> |
| (5) | Deleted. <Amended on Aug. 4, 2020> |
CHAPTER VI EXPORT AND IMPORT OF MEANS OF PAYMENT
| Article 6-1 (Scope of Application) |
The provisions of this Chapter shall apply to the scope of and standards for import and export of any means of payment or securities (hereinafter referred to as “means of payment, etc.”) required to be declared pursuant to Article 17 of the Act and Article 31 (2) of the Decree. <Amended on Feb. 4, 2009>
| Article 6-2 (Declaration) |
| (1) | No declaration shall be required where a resident or a non-resident imports or exports any means of payment, etc. which fall under any of the following: <Amended on Dec. 17, 2007> |
| 1. | Import of any means of payment, etc. not exceeding USD10,000; provided that means of domestic payment, other than the domestic currency, traveler's checks denominated in KRW and cashier's checks denominated in KRW, shall be excluded herefrom; <Amended on Feb. 4, 2009> |
| 2. | Import of promissory notes, bills of exchange or letters of credit; |
| 3. | Export of any means of payment not exceeding USD10,000 (referring to means of foreign payment, domestic currency, cashier's checks denominated in KRW, and traveler's checks denominated in KRW) and any means of foreign payment, for which the procedures as provided in paragraph (3) have been undergone; <Amended on Dec. 17, 2007> |
| 4. | Import or export of any means of foreign payment by a person who falls under Articles 10 (2) 1, 2, 6 (a) and (b) of the Decree; <Amended on Feb. 4, 2009> |
| 5. | Export of any means of payment, etc. which falls under any of the following: |
| (a) | Export of any means of foreign payment acknowledged in accordance with Article 5-11; |
| (b) | Export by a non-resident of any of the following means of foreign payment: |
1) Export of demand drafts or postal money orders for the purpose of any foreign payment in accordance with an acknowledged transaction;
2) Export of means of foreign payment within the scope of the means of foreign payment exported by hand by a non-resident upon his or her latest entry into the Republic of Korea or which was acquired through an acknowledged transaction;
3) Export of checks issued for the purpose of disposing of any claims acquired through a transaction not governed by the Act;
4) Export of any means of foreign payment acquired by the United States Armed Forces in the Republic of Korea and the United Nations Forces equivalent thereto for service or employment in connection with the Agreement under Article IV of the Mutual Defense Treaty between the Republic of Korea and the United States of America, Regarding Facilities and Areas and the Status of United States Armed Forces in the Republic of Korea or acquired from foreign sources or export of any means of foreign payment which constitute government funds of the relevant country;
| (c) | Export by a foreign resident of any means of foreign payment acquired from a transaction not governed by the Act; |
| (d) | Export of any means of domestic payment which falls under any of the following: |
1) Export of means of domestic payment as provided in the Foreign Trade Act incorporated or processed in the goods to be exported;
2) Export of traveler's checks denominated in KRW, which have been imported by hand upon entry in the Republic of Korea or purchased in the country by a non-resident;
3) Deleted; <Amended on Jul. 2, 2002>
| 6. | Import or export of the domestic currency by a foreign exchange bank from or to an overseas branch office of a foreign exchange bank, its local subsidiary, or a foreign financial institution (including a foreign currency exchange operator); <Amended on Jun. 2, 2008> |
| 7. | Import or export of any means of payment, etc. which falls under any of the following: |
| (a) | Deleted; <Amended on Feb. 4, 2009> |
| (b) | Import or export of any bearer or non-bearer securities which fall under any of the following: |
1) Import or export by a person, who has made a declaration of a capital transaction, of non-bearer securities as declared thereof; <Amended on Dec. 17, 2007>
2) Import or export of non-bearer securities acquired under the Foreign Investment Promotion Act;
3) Import or export of shares in a head office or international beneficiary certificates, etc. acquired by a resident in accordance with Article 7-31 (1) 10;
| (c) | Import or export by a resident of any foreign or domestic currency not exceeding USD50,000 for the purpose of collection of banknotes and coins, commemorative purposes, vending machine testing, overseas exhibition, or sale thereof to a banknote and coin collector, etc. instead of using such currency as means of payment; |
| (d) | Import or export of any means of foreign payment by the Bank of Korea, foreign exchange banks or postal service agencies in the course of its authorized business activities; |
| (e) | Import of any checks denominated in a foreign currency by a resident using any method other than import by hand for the purpose of receiving payment for export or services. <Amended on Aug. 4, 2020> |
| (2) | Except in cases falling under paragraph (1), a declaration thereof shall be made to the head of the competent customs office for any of the following: <Amended on Jul. 2, 2002〉 |
| 1. | Where a resident or a non-resident imports by hand any means of payment exceeding USD10,000 (referring to the means of foreign payment, domestic currency, traveler's checks denominated in KRW, and cashier's checks denominated in KRW); <Newly Inserted on Jul. 2, 2002〉 |
| 2. | Where a resident who is a national of the Republic of Korea exports by hand any means of payment exceeding USD10,000 (referring to the means of foreign payment, domestic currency, traveler's checks denominated in KRW, and cashier's checks denominated in KRW); <Amended on Dec. 17, 2007> |
| 3. | Deleted. <Amended on Feb. 4, 2009> |
| (3) | A person who acquires any means of foreign payment exceeding USD10,000 in the Republic of Korea shall obtain confirmation of such acquisition from the head of a foreign exchange bank in the following circumstances: |
| 1. | Where any non-resident other than persons who fall under Article 10 (2) 1, 2, 6 (a) and (b) of the Decree acquires such means of foreign payment by any of the following methods: <Amended on Feb. 4, 2009> |
| (a) | Acquisition of such means of foreign payment through withdrawals from an external account and non-resident foreign currency trust account, etc. or receiving remittance; <Amended on Feb. 4, 2009> |
| (b) | Acquisition of such means of foreign payment under Article 4-4 (1) 1; <Amended on Apr. 16, 2012> |
| 2. | Where any foreign resident acquires such means of foreign payment by any of the following methods: |
| (a) | Falling under subparagraph 1 (a); |
| (b) | Acquiring such means of foreign payment under Article 4-4 (1) 1; <Amended on Dec. 17, 2007> |
| (c) | Acquiring such means of foreign payment for the purpose of paying overseas travel expenses; provided that Article 5-11 shall apply to a person staying overseas and a student studying overseas. |
| (4) | The head of the competent customs office or the head of a foreign exchange bank in receipt of a declaration or a request for confirmation as provided in paragraphs (2) and (3) shall issue and deliver a Declaration of Currency or Monetary Instruments in Form 6-1 to the relevant resident or non-resident upon verifying the fact of declaration and acquisition of the means of payment. |
| (5) | The head of a customs office who has issued and delivered a Declaration of Currency or Monetary Instruments as provided in paragraph (4) shall give the Commissioner of the National Tax Service monthly notice of the details of such declaration by the 10th day of the immediately following month. <Amended on Dec. 17, 2007> |
| (6) | The head of a foreign exchange bank, which has imported and exported domestic currency in accordance with Article 6-2 (1) 6, shall compile its import and export performance of such currency on a quarterly basis, and shall file a report thereon with the Governor of the Bank of Korea by the 10th day of the first month of the immediately following quarter. <Newly Inserted on Jul. 2, 2002〉 |
| Article 6-3 (Making Declaration to Head of Competent Customs Office) |
| (1) | Except in cases falling under Article 6-2, where a resident or a non-resident intends to import or export any means of payment, etc., such resident or non-resident shall make a declaration thereof to the head of the competent customs office; and where inevitable circumstances are deemed to exist, such as not being aware of the importation of the means of payment, etc. because it was imported by airmail, he or she may file a post facto report thereon within 30 days from the date of such importation. <Amended on Dec. 24, 2018> |
| (2) | Any person who intends to make a declaration as provided in paragraph (1) shall submit to the relevant declaration-receipt agency a declaration of (modification of) the import or export of means of payment, etc. in Form 6-2, accompanied by the following documents. The same shall also apply to cases where such person intends to modify any of the declared matters: <Amended on Dec. 17, 2007> |
| 1. | Documents evidencing the transaction or act which causes or gives rise to the import or export of the relevant means of payment, etc.; |
| 2. | Documents evidencing the necessity of such import or export, including verification of whether it is in compliance with ordinary transaction practices. |
| (3) | Deleted. <Amended on Feb. 4, 2009> |
| Article 6-4 (Import or Export Restrictions by Head of Customs Office) |
In a case where a person who enters or departs from the Republic of Korea imports or exports any means of payment, etc., the head of a customs office shall confirm whether he or she has made a declaration thereof by asking questions, making a request for the presentation of evidentiary documents, etc.; and where a person imports or exports any means of payment, etc. without making a declaration thereof as required, the head of a customs office may take necessary measures such as requiring them to make a declaration under Article 6-3 or imposing restrictions on the import or export of such means of payment, etc. <Amended on Dec. 17, 2007>
CHAPTER VII CAPITAL TRANSACTIONS
Section 1 Common Provisions
| Article 7-1 (Scope of Application) |
Except as provided in Chapter IX, the provisions set forth in this Chapter shall apply to declarations, etc. on capital transactions under Article 32 of the Decree and other matters related to capital transactions. <Amended on Sep. 30, 2009><Amended on Jul. 4, 2023>
| Article 7-2 (Transactions Not Requiring Declaration) |
No declaration, etc. is required where a person intends to engage in any of the following capital transactions: <Proviso Deleted on Feb. 4, 2009>
| 1. | A transaction conducted by the Bank of Korea as part of its foreign exchange services; |
| 2. | A transaction conducted by a foreign exchange agency as its foreign exchange services or to which a foreign exchange agency is the other party to transaction (limited to cases where a declaration thereof has been made, where required pursuant to Chapter II and this Chapter); <Amended on Feb. 4, 2009> |
| 3. | A transaction conducted by a currency exchange operator as currency exchange services as prescribed in Section 4 of Chapter II; |
| 3-2. | A transaction conducted by a small-sum overseas remittance business entity as its small-sum overseas remittance business as prescribed in Section 5 of Chapter II; <Newly Inserted on Jun. 29, 2017> |
| 4. | A transaction conducted by the Foreign Exchange Equalization Fund under the Act, the Decree and these Regulations; |
| 5. | A transaction in which one party to the transaction submits a declaration, etc. (provided that if a declarant is designated, referring to a transaction in which the declarant has made a declaration, etc.); <Amended on Jan. 1, 2006〉 |
| 6. | An overseas deposit, a cash loan, or a collateralized transaction between a resident who has made a declaration under Article 7-46 (2) and a non-resident through a designated foreign exchange bank, and the provision of collateral to a foreign exchange bank, in an amount not exceeding USD50 million for the purpose of integrated fund management; <Amended on Jun. 29, 2017> |
| 7. | A capital transaction conducted under this Chapter where the amount of payment, etc. per transaction (where the payment is made in installments, referring to the total sum of the individual payments; hereafter in this Article, the same shall apply) does not exceed USD5,000; <Newly Inserted on May 3, 2019> |
| 8. | A capital transaction conducted under this Chapter where the amount of payment by a resident (excluding foreign residents; hereafter in this Article, the same shall apply) per transaction exceeds USD5,000, but does not exceed USD100,000, and the aggregate annual amount of payments does not exceed the amount as provided in the main clause of Article 4-3 (1) 1 (a); provided that in the event of such payment, the details of the transaction shall be confirmed by the head of a designated foreign exchange bank as provided in Article 4-3 (3); <Amended on May 3, 2019><Amended on Jul. 4, 2023> |
| 9. | A capital transaction conducted under this Chapter where the amount of receipt by a resident per transaction exceeds USD5,000, but does not exceed USD100,000, and the aggregate annual amount received does not exceed USD100,000; provided that the details of such transaction shall be confirmed by the head of a designated foreign exchange bank and such receipt shall be conducted according to the procedures as provided in Article 4-3. <Amended on May 3, 2019><Amended on Jul. 4, 2023> |
| Article 7-3 (Payment Procedures) |
| (1) | Except as provided in this Chapter, any payment, etc. arising from a capital transaction or act between residents shall be made and received through a foreign exchange bank; provided that this shall not apply to cases where the amount of payment or receipt per transaction does not exceed USD5,000 and cases falling under any of the following: <Amended on May 3, 2019> |
| 1. | A cash loan between residents staying overseas; |
| 2. | Conclusion of an insurance agreement denominated in a foreign currency between a specified insurance business company and a resident in the Republic of Korea; |
| 3. | Receipt by a resident of a gift of any means of foreign payment from a foreign resident to cover overseas travel expenses, which includes airline tickets, passenger vessel tickets, P.T.A. and airline ticket exchange voucher issued in a foreign country; |
| 4. | Acquisition of any foreign securities listed on the securities market under the Financial Investment Services and Capital Markets Act (hereinafter referred to as “securities market”) by a resident from any other resident through the Korea Exchange. <Amended on Feb. 4, 2009> |
| (2) | Notwithstanding the main clause of paragraph (1), where any person intends to make or receive a payment other than through a foreign exchange bank, he or she shall make a declaration thereof to the Governor of the Bank of Korea in accordance with Article 5-11. <Amended on Aug. 4, 2020> |
| Article 7-4 (Procedures for Declaration) |
| (1) | A person who intends to obtain acceptance of a capital transaction declaration or to make a declaration thereof or file a report thereon shall submit any of the following to the declaration or report-receiving (accepting) agency for the relevant capital transaction. In addition, a person who intends to modify any of the declared or reported matters shall submit a declaration or statement to the relevant declaration or statement-receiving (accepting) agency; provided that a report on any change in information about an existing declarant, agent, or the other party to the transaction may be filed thereafter: <Amended on Aug. 4, 2020><Amended on Jul. 4, 2023> |
| 1. | A transaction involving accrual of claims, etc. under a deposit or trust agreement: Form 7-1; |
| 2. | A transaction involving accrual of claims, etc. under a cash loan agreement: Form 7-2; |
| 3. | A transaction involving accrual of claims, etc. under a debt guarantee agreement: Form 7-3; |
| 4. | A transaction involving accrual of claims, etc. under a purchase and sale agreement in connection with means of foreign payment, claims, etc.: Form 7-4; |
| 5. | Issuance or offering of securities: Form 7-5; |
| 6. | Acquisition of securities: Form 7-6; |
| 7. | A derivative transaction: Form 7-7; <Amended on Feb. 4, 2009> |
| 8. | A transaction involving accrual of claims, etc. under a collateral agreement: Form 7-8; <Amended on Feb. 4, 2009> |
| 9. | A transaction involving accrual of claims, etc. under a lease agreement: Form 7-9; <Amended on Feb. 4, 2009> |
| 10. | A transaction involving accrual of claims, etc. under a securities lending and borrowing agreement: Form 7-11. <Amended on Feb. 4, 2009> |
| (2) | Except in cases falling under Article 7-2, any document regarding declarations, etc. or reports in accordance with Chapter VII may be submitted through electronic means upon real name verification. <Newly Inserted on Aug. 4, 2020><Amended on Jul. 4, 2023> |
| Article 7-5 (Acceptance of Provisional Declaration of Capital Transaction) |
| (1) | With regard to the acceptance of a capital transaction declaration as provided in Article 7-4, the declaration-accepting agency may provisionally accept such declaration and subsequently accept such capital transaction declaration after a certain preparatory period elapses. <Amended on Jan. 1, 2006〉 |
| (2) | “Certain preparatory period” in paragraph (1) refers to the period between the consent, pre-engagement, provisional agreement, etc. given by or reached between the parties to a capital transaction and the final agreement signed between the parties, and the period shall not exceed one year. |
Section 2 Capital Transactions under Deposit and Trust Agreements
Subsection 1 Domestic Deposit and Domestic Trust
| Article 7-6 (Transaction Procedures) |
| (1) | No declaration shall be required where a resident or non-resident intends to conduct any foreign currency deposit or trust transaction in the Republic of Korea: |
| 1. | A deposit transaction or cash trust transaction that a resident or non-resident conducts with a foreign exchange bank and a merchant bank (hereafter referred to as "foreign exchange banks, etc." in this Subsection) according to reasons for deposit and disposal provided in this Subsection; <Amended on Dec. 19, 2013> |
| 2. | A deposit transaction or trust transaction that a non-resident who is a Korean national conducts in the domestic currency for use thereof within the country. |
| (2) | Except as provided in paragraph (1), any resident or non-resident who intends to conduct any deposit or trust transaction with a resident in the Republic of Korea shall make a declaration thereof to the Governor of the Bank of Korea. |
| (3) | Where a person who conducts trust transactions with a resident (including Korean won trust transactions between residents) in the Republic of Korea as provided in paragraphs (1) and (2) intends to acquire non-monetary assets or any rights thereto upon expiration of the trust agreement, such person shall make declarations, etc. as stipulated in these Regulations. <Amended on Nov. 6, 2001> |
| Article 7-7 (Types of Accounts) Deleted. <Amended on Dec. 17, 2007> |
| Article 7-8 (Deposit in Accounts) |
| (1) | Means of payment which may be deposited in the resident account and the resident foreign currency trust account shall be the means of foreign payment specified in the following: |
| 1. | Means of foreign payment acknowledged for acquisition or possession; |
| 2. | Means of foreign payment purchased from foreign exchange banks, etc. in exchange for any means of domestic payment. |
| (2) | Means of foreign payment which may be deposited in the external account and the non-resident foreign currency trust account shall be the means of foreign payment specified in any of the following: |
| 1. | Means of foreign payment remitted from overseas; |
| 2. | Means of foreign payment acknowledged for foreign payment in accordance with acknowledged transactions; <Amended on Apr. 16, 2012> |
| 3. | Means of foreign payment acquired resulting from a foreign currency settlement between a domestic financial institution and an overseas branch office of a foreign exchange bank, a local subsidiary of a foreign exchange bank, or a foreign financial institution (hereinafter referred to as “overseas branch offices, etc. of a foreign exchange bank”; hereafter the same shall apply in this paragraph), or between such overseas branch offices, etc. of a foreign exchange bank; <Newly Inserted on Dec. 17, 2007> |
| 4. | Funds procured through issuance of securities in the Republic of Korea in accordance with the provisions of Subsection 2 of Section 5. <Newly Inserted on Dec. 17, 2007> |
| (3) | Means of payment that can be deposited in an emigrant account shall be the means of foreign payment purchased from foreign exchange banks, etc. in exchange for any means of domestic payment acquired by disposing of any of the following domestic property: |
| 1. | Property held in the name of an emigrant and prospective emigrant; <Amended on Dec. 17, 2007> |
| 2. | Domestic property held in the name of an overseas Korean. <Amended on Dec. 17, 2007> |
| (4) | Means of payment which may be deposited in the non-resident Korean won account shall be the means of domestic payment which fall under any of the following: |
| 1. | Means of domestic payment acquired by non-residents within the Republic of Korea (including means of domestic payment acquired in exchange for any means of foreign payment imported or received from a foreign country); <Amended on Feb. 4, 2009> |
| 2. | Means of domestic payment provided to non-residents according to a loan agreement under the Enforcement Decree of the Economic Development Cooperation Fund Act. |
| (5) | Means of payment which may be deposited into the non-resident free transfer Korean won account and the non-resident Korean won trust account shall be the means of domestic payment specified as follows: |
| 1. | Proceeds from the sale of foreign currencies that non-residents (including foreign residents; hereafter the same shall apply in this paragraph excluding subparagraph 2) remitted or obtained from a foreign country or deposited in the external account and the non-resident foreign currency trust account in their names, in exchange for any means of domestic payment; <Amended on Jun. 2, 2008> |
| 2. | Means of domestic payment acquired by non-residents (including an overseas branch office of a foreign exchange bank, local subsidiaries of a foreign exchange bank, and foreign financial institutions performing collection and settlement of payments for current transactions) in domestic currency-denominated current transaction payments (including freight and insurance premiums related with export and import transactions) or domestic currency-denominated reinsurance transaction payments; <Amended on Dec. 17, 2007> |
| 3. | Transfers of money by a non-resident from other non-resident free transfer Korean won account, investment-only non-resident Korean won account, and non-resident free Korean won trust account in the name of such non-resident; <Amended on Dec. 17, 2007> |
| 4. | Transfer of money by an international financial organization from a non-resident Korean won account in the real name of such organization in the Bank of Korea (limited to funds acknowledged for foreign payment); |
| 5. | Funds acquired in the Republic of Korea through an acknowledged capital transaction that is acknowledged for foreign payment; <Amended on Dec. 17, 2007> |
| 6. | Means of domestic payment acquired by a non-resident (including overseas financial institutions instructed to receive any funds) related to the continuous linked settlement system or other transactions; <Newly Inserted on Jul.1, 2005> |
| 7. | Korean won funds borrowed according to Articles 2-6 and 10-21 (but excluding Korean won funds borrowed with a guarantee or collateral from a resident); <Newly Inserted on Jun. 8, 2016> |
| 8. | Funds acquired from settlement of securities and exchange-traded derivatives in Korean won that are traded on an accredited foreign exchange; <Amended on Feb. 4, 2009> |
| 9. | Funds financed through the issuance of securities in the Republic of Korea in accordance with the provisions of Subsection 2 of Section 5; <Newly Inserted on Dec. 17, 2007> |
| 10. | Funds transferred from a non-resident Korean won account for investment in the name of the International Central Securities Depository, in the event the foreign investor entrusts the buying and selling of government bonds or currency stabilization bonds under Article 69 of the Bank of Korea Act to the International Central Securities Depository pursuant to the proviso of Article 7-37 (1); provided that this shall be limited to funds deposited in the customer account in the name of such investor under the investment-only non-resident Korean won account in the name of the International Central Securities Depository; <Newly Inserted on May 19, 2010> |
| 11. | Means of domestic payment acquired in connection with a domestic currency-denominated cash loan agreement between non-residents using currency swap funds between the Bank of Korea and a foreign central bank under Article 7-48 (1) 13 (in the case of an account in the name of an overseas branch office of a foreign exchange bank or a local subsidiary of a foreign exchange bank, where the relevant overseas branch office or local subsidiary of a foreign exchange bank performs the settlement of the money lending-related payments); <Newly Inserted on Dec. 19, 2013> |
| 12. | Means of domestic payment acquired by an overseas branch office of a foreign exchange bank, a local subsidiary of a foreign exchange bank, or a foreign financial institution in exchange for the export of domestic currency to a foreign exchange bank pursuant to Article 6-2 (1) 6 (as for an account in the name of an overseas branch office of a foreign exchange bank or a local subsidiary of a foreign exchange bank, it shall include the cases where an overseas branch office or a local subsidiary of the relevant foreign exchange bank performs the settlement of payment related to the export of domestic currency); <Newly Inserted on Dec. 19, 2013> |
| 13. | Means of domestic payment acquired in connection with the purchase and sale of gold commodities traded on the gold spot market established by the Korea Exchange; |
| 14. | Means of domestic payment received by a clearing bank from a non-resident free transfer Korean won account in the name of another clearing bank in connection with Article 10-21. <Newly Inserted on Jun. 8, 2016> |
| Article 7-9 (Disposal of Accounts) |
| (1) | No limitations shall be imposed on the disposal of resident accounts and resident foreign currency trust accounts; provided that in cases where any person intends to make a foreign payment (including transfers to the external account and the non-resident foreign currency trust account), the provisions of Chapter IV shall apply thereto. |
| (2) | The external accounts and non-resident foreign currency trust accounts may be disposed of for any of the following purposes: |
| 1. | Remittance to a foreign country; |
| 2. | Transfer to other foreign currency deposit accounts and foreign currency trust accounts; |
| 3. | Withdrawal of deposits into any means of foreign payment, or purchase of other means of foreign payment from foreign exchange banks, etc.; |
| 4. | Sale of any means of domestic payment to foreign exchange banks, etc.; |
| 5. | Other payments resulting from other acknowledged transactions; |
| 6. | Payment resulting from foreign currency settlement between a domestic financial institution and an overseas branch office of a foreign exchange bank, a local subsidiary of a foreign exchange bank, or a foreign financial institution (hereinafter referred to as “overseas branch offices, etc. of a foreign exchange bank”; hereafter the same shall apply in this paragraph), or between such overseas branch offices, etc. of a foreign exchange bank. <Newly Inserted on Dec. 17, 2007> |
| (3) | Emigrant accounts may be disposed of for any of the following purposes: |
| 1. | Remittance of overseas relocation costs acknowledged under Article 4-6 (including withdrawal of demand draft and traveler's check) and remittance of domestic property acknowledged under Article 4-7; <Amended on Dec. 17, 2007> |
| 2. | Sale of any means of domestic payment to foreign exchange banks, etc. |
| (4) | Non-resident Korean won accounts may be disposed of for any of the following purposes: |
| 1. | Withdrawal to any means of domestic payment or transfer to the resident Korean won accounts and other non-resident Korean won accounts; <Amended on Nov. 6, 2001> |
| 2. | Purchase of foreign exchange or use of purchased foreign currency for remittance to a foreign country through a foreign exchange bank or for other acknowledged transactions with deposits from a non-resident Korean won account as prescribed in a loan agreement under the Enforcement Decree of the Economic Development Cooperation Fund Act; |
| 3. | Sale of means of foreign payment to foreign exchange banks, etc. for overseas remittance of any interest accrued on non-resident Korean won accounts in a foreign country. |
| (5) | Non-resident free transfer Korean won account and non-resident Korean won trust account may be disposed of for any of the following purposes: |
| 1. | Sale to foreign exchange banks, etc. in exchange for any means of foreign payment; |
| 2. | Payment of domestic currency-denominated current account transactions or domestic currency-denominated reinsurance transactions (payers include an overseas branch office of a foreign exchange bank, a local subsidiary of a foreign exchange bank, and a foreign financial institution performing collection and settlement of payments for current account transactions, and the payment methods shall be limited to inter-account transfers); <Amended on Dec. 17, 2007> |
| 3. | Transfer to other non-resident free transfer Korean won accounts, investment-only non-resident Korean won accounts, and non-resident Korean won trust accounts held in the name of a non-resident (including foreign resident); <Amended on Jun. 2, 2008> |
| 4. | Transfer by international financial institutions to non-resident Korean won accounts in the name of the relevant non-resident at the Bank of Korea; |
| 5. | Loan of Korean won funds to residents acknowledged under Articles 7-15 and 10-21; <Amended on Jun. 8, 2016> |
| 6. | Payment of Korean won funds equivalent to not more than USD20,000 per transaction (based on the same person on the same date) as requested from overseas to the Republic of Korea (limited to the accounts held in the name of an overseas branch office of a foreign exchange bank, a local subsidiary of a foreign exchange bank, and a foreign financial institution); <Amended on Dec. 17, 2007> |
| 7. | Transfer of funds for payment through a continuous linked settlement system or for any other transactions related therewith (including disposition by an overseas financial institution instructed to make payment of such funds); <Newly Inserted on Jul. 1, 2005> |
| 8. | Repayment of principal and interest on any Korean won funds borrowed under Articles 2-6 and 10-21; <Amended on Jun. 8, 2016> |
| 9. | Payment for Korean won settlement of securities and exchange-traded derivatives traded on an accredited exchange overseas; <Amended on Feb. 4, 2009> |
| 10. | Repayment of the principal and interest of any securities issued under Subsection 2 of Section 5, acquisition of securities, and payment of issuance expenses, such as securities issuance fees; <Newly Inserted on Dec. 17, 2007> |
| 11. | Payment of charges incurred through the use of credit cards, etc. (limited to payment of credit card charges and cash withdrawals); <Newly Inserted on Jun. 2, 2008> |
| 12. | Disposition of deposits by a foreign exchange bank to exercise its security interest in the case of a loan in Korean won made by a foreign exchange bank using deposits in a nonresident Korean won free transfer account as collateral; <Newly Inserted on Sep. 30, 2009> |
| 13. | Where a foreign investor intends to entrust the purchase and sale of government bonds or monetary stabilization bonds under Article 69 of the Bank of Korea Act to the International Central Securities Depository pursuant to Article 7-37 (1), transfer to the customer account held in the name of such customer within the Korean won investment-only non-resident account in the name of the International Central Securities Depository; <Newly Inserted on May 19, 2010> |
| 14. | Provision of means of domestic payment related to domestic currency-denominated cash loan agreement between non-residents using currency swaps funds between the Bank of Korea and a foreign central bank under Article 7-48 (1) 13 (including in the case of an account in the name of an overseas branch office of a foreign exchange bank or a local subsidiary of a foreign exchange bank, where the relevant overseas branch office or local subsidiary of a foreign exchange bank performs the settlement of payment related to cash loan); <Newly Inserted on Dec. 19, 2013> |
| 15. | Payment by an overseas branch office of a foreign exchange bank, a local subsidiary of a foreign exchange bank, or a foreign financial institution in consideration of importing domestic currency from a foreign exchange bank in accordance with Article 6-2 (1) 6 (including, in the case of an account held in the name of an overseas branch office of a foreign exchange bank or a local subsidiary of a foreign exchange bank, where the relevant overseas branch office or local subsidiary of a foreign exchange bank performs the settlement of payment related to the import of the domestic currency); <Newly Inserted on Dec. 19, 2013> |
| 16. | Payment of means of domestic payment in connection with the purchase and sale of gold commodities traded in the gold spot market established by the Korea Exchange; |
| 17. | Transfer from a non-resident Korean won free transfer account in the name of a clearing bank to a non-resident Korean won free account in the name of another clearing bank, in respect of Article 10-21. <Newly Inserted on Jun. 8, 2016> |
| Article 7-10 (Confirmation) |
| (1) | The provisions of Articles 2-1-2, 2-2 (1), (3) and (4) shall apply mutatis mutandis to confirmation, etc. by foreign exchange banks, etc. in any of the following cases: <Amended on Aug. 4, 2020> |
| 1. | Receipt of any deposit or trust in the resident account and the resident foreign currency trust account under Article 7-8 (1) 1; provided that this shall not apply to transfers from other resident accounts and resident foreign currency trust accounts; |
| 2. | Disposal of an external account and a non-resident foreign currency trust account for any purpose specified in Article 7-9 (2)4. |
| (2) | For a deposit of any means of foreign payment specified in Article 7-8 (2) 2 into an external account or a non-resident foreign currency trust account, foreign exchange banks, etc. shall ascertain whether such deposit is subject to Articles 4-4 (1) and 4-4 (2). <Amended on Dec. 17, 2007> |
Subsection 2 Overseas Deposits and Trusts
| Article 7-11 (Transaction Procedures) |
| (1) | No declaration shall be required where a resident intends to conduct any of the following deposit or trust transactions with a non-resident overseas.: |
| 1. | Where a resident residing overseas conducts any foreign currency deposit or trust transaction; |
| 2. | Where a resident conducts any foreign currency deposit transaction related to foreign currency borrowing from a non-resident as provided under the Introduction and Management of Public Loans Act or these Regulations; |
| 3. | Where a resident who intends to conduct a foreign exchange-traded derivatives transactions as provided in Section 7 of this Chapter and other applicable statutes or regulations enters into any foreign currency deposit transaction with an overseas financial institution in connection with such transactions; <Amended on Feb. 4, 2009> |
| 4. | Where a resident who is a Korean national disposes of a foreign currency deposit account or foreign currency trust account in an overseas financial institution prior to becoming a resident; |
| 5. | Where a resident conducts any deposit transaction in connection with issuance of securities in a foreign country as provided in Section 5; |
| 6. | Where a resident conducts any foreign currency deposit transaction in connection with securities investment as provided in Section 6 of this Chapter, borrowing of foreign currency funds for local finance by residents as provided in Article 7-14 (1) and (5), and foreign direct investment and foreign currency deposit transactions with an overseas branch as provided in Chapter IX; <Amended on Dec. 17, 2007><Amended on Jul. 4, 2023> |
| 7. | Where the Korea Securities Depository deposits and stores any foreign currency securities acquired by a resident as provided in Subsection 2 of Section 6 at an overseas securities depository or financial institution, and conducts any foreign currency deposit transaction to exercise the rights of such deposited and stored securities; <Amended on Feb. 4, 2009> |
| 8. | Where a foreign currency deposit or a foreign currency trust account is disposed of for the payment of an acknowledged transaction; |
| 9. | Where a foreign exchange agency conducts any multi-currency (including Korean won) deposit or Korean won deposit transaction with the CLS Bank or a continuous linked settlement system of a non-resident member bank in connection with settlement through the continuous linked settlement system; <Amended on Mar. 31, 2015> |
| 10. | Where a resident who intends to acquire or has already acquired overseas real property or any rights thereto under Section 4 of Chapter IX through an acknowledged transaction conducts any foreign currency deposit transaction as previously declared, using funds remitted from the Republic of Korea for the acquisition of relevant real property; <Amended on Dec. 17, 2007> |
| 11. | Where the Korea Securities Depository, a securities finance company, or an investment trader or an investment broker conducting brokerage of securities lending and borrowing transactions conducts any foreign currency deposit transaction in connection with securities lending and borrowing transactions as provided in Article 7-45 (1) 16 and Article 7-48 (1) 6; <Amended on Feb. 4, 2009> |
| 12. | Where a resident who has made a declaration of a foreign currency deposit transaction as provided in paragraph (2) deposits funds acquired overseas through an acknowledged transaction; <Newly Inserted on Dec. 17, 2007> |
| 13. | Where any deposit is made into an overseas branch office of a foreign exchange bank or the local subsidiary of a financial institution which has its head office in the Republic of Korea, or a foreign financial institution, in accordance with Article 7-14 (8); <Amended on Feb. 4, 2009> |
| 14. | Where a resident trustee in bankruptcy under the Debtor Rehabilitation and Bankruptcy Act intends to conduct foreign currency deposit transactions with funds acquired from overseas debt recovery with a non-resident. <Newly Inserted on Dec. 24, 2018> |
| (2) | Except as provided in paragraph (1), where a resident intends to conduct any foreign currency deposit transactions overseas with a non-resident, a declaration shall be submitted to the head of a designated foreign exchange bank; provided that where such deposit is made with funds remitted from the Republic of Korea, such remittance shall be made through a designated foreign exchange bank. <Amended on Dec. 17, 2007> |
| (3) | A declaration shall be submitted to the Governor of the Bank of Korea where a resident intends to conduct any of the following deposit or trust transactions overseas with a non-resident: |
| 1. | Notwithstanding the provisions of paragraph (2), where a resident intends to deposit funds remitted from the Republic of Korea in excess of USD50,000 per transaction (based on the same person on the same date) other than for those specified in any of the following, such remittance shall be made through a designated foreign exchange bank: <Amended on Nov. 6, 2001> |
| (a) | An institutional investor; |
| (b) | A person with export-import performance exceeding USD5 million in the immediately preceding year; |
| (c) | An overseas construction business entity under the Overseas Construction Promotion Act; |
| (d) | A domestic airline or shipping company providing services on an overseas route; |
| 2. | Where a resident intends to conduct any trust transaction with an overseas non-resident, excluding cases specified in paragraph (1) 1, 4 and 8. |
| (4) | Where a resident who conducts any trust transaction overseas with a non-resident in accordance with paragraphs (1) and (3) intends to acquire non-monetary assets or any rights thereto upon the expiration of the terms of the trust agreement, declarations, etc. shall be submitted as provided for in these Regulations. |
| (1) | Pursuant to the provisions of Article 7-11 (1) 12, (2), and (3), a person conducting any deposit transactions overseas who deposits an amount exceeding USD10,000 per transaction shall submit an overseas deposit statement (in the case of an institutional investor, the statement shall be substituted by a statement pursuant to Article 7-35) to the head of a designated foreign exchange bank within 30 days from the date of deposit, and the head of a designated foreign exchange bank shall report thereon to the Governor of the Bank of Korea by the last day of the first month of the immediately following year. <Amended on Aug. 4, 2020> |
| (2) | Persons engaged in deposit transactions overseas pursuant to the provisions of Article 7-11 (1) 12, (2) and (3) (in the case of an institutional investor, the statement shall be substituted by a report provided in Article 7-35) and persons who conduct trust transactions overseas according to Articles 7-11 (3) (in the case of an institutional investor, such statement shall be substituted by a report provided in Article 7-35) shall submit a net balance status report to the Governor of the Bank of Korea by the end of the first month of the immediately following year through the designated foreign exchange bank, among any of the following persons: <Amended on Aug. 4, 2020> |
| 1. | A corporation: where the amount of annual deposits or the year-end balance exceeds USD500,000; |
| 2. | A person other than a corporation: where the amount of annual deposits or the year-end balance exceeds USD100,000. |
| (3) | The Governor of the Bank of Korea shall notify the Commissioner of the National Tax Service and the Commissioner of the Korea Customs Service of the details of an overseas deposit statement provided in paragraph (1) and the details of a net balance status report provided in paragraph (2). <Amended on Apr. 16, 2012> |
Section 3 Capital Transactions under Cash Loan Agreements and Debt Guarantee Agreements
Subsection 1 Cash Loan Agreement
| Article 7-13 (Transactions Exempt from Declaration Obligation) |
No declaration shall be required where a resident intends to conduct any transaction related to the occurrence of a claim arising from a cash loan agreement and satisfies any of the following: <Amended on Jan. 1, 2006〉
| 1. | Where a resident intends to enter into a transaction with another resident that involves the occurrence of a claim arising from a cash loan agreement denominated or payable in foreign currency; |
| 2. | Where a resident enters into a loan agreement with a nonresident under the Foreign Investment Promotion Act or a public loan convention under the Introduction and Management of Public Loans Act; |
| 3. | Where a resident enters into a loan agreement with a nonresident under the Economic Development Cooperation Fund Act; |
| 4. | Where a Korean national resident and a Korean national non-resident enter into a cash loan agreement denominated and payable in the domestic currency within the Republic of Korea; |
| 5. | Where the staff of overseas diplomatic missions of the government of the Republic of Korea and co-habiting family members or persons residing overseas and international students enter into a cash loan agreement with a non-resident for the payment of living expenses and school expenses, etc. necessary for residing overseas; <Amended on Dec. 19, 2013> |
| 6. | Where a resident who has membership in an international securities clearing house obtains intra-day credit or over-night credit from a non-resident in connection with settlement of securities transactions; <Amended on Apr. 16, 2012> |
| 7. | Where a resident acquires real property through an acknowledged transaction under Article 9-39 (2) and borrows foreign currency funds from a nonresident using the acquired real property as collateral to finance the acquisition; <Amended on Dec. 17, 2007> |
| 8. | Where a resident member bank receives a short position in Korean won from a CLS Bank up to a certain limit determined by CLS Bank or extends intra-day credit or overnight credit in Korean won to a non-resident, in connection with a payment through the continuous linked settlement system; <Newly Inserted on Jul. 1, 2005> |
| 9. | Where a foreign exchange agency receives intra-day credit or over-night credit in Korean won from a non-resident member bank in connection with settlement through the continuous linked settlement system. <Amended on Mar. 31, 2015> |
| Article 7-14 (Foreign Currency Borrowing by Residents) |
| (1) | Except as provided in Article 7-13, where a resident who satisfies any of the following subparagraphs intends to borrow foreign currency funds from a non-resident (including issuance of foreign currency securities and Korean won-linked foreign currency securities; hereafter the same shall apply in this subsection), a report on the transaction shall be submitted to the head of a designated foreign exchange bank within one month from the date of receipt of funds, specifying whether or not the funds are locally financed (in the case of local finance, limited to the case where no other resident provides a guarantee or collateral), and no report is be required for any transaction authorized under Article 7-18; provided that where the borrowing exceeds USD50 million (including the cumulative borrowing amount for the past year from the date of report on borrowing, excluding local financing funds; hereafter the same shall apply in this Article), a declaration thereon shall be submitted to the Minister of Economy and Finance through a designated foreign exchange bank: <Amended on Jan. 1, 2006><Amended on Jul. 4, 2023> |
| 1. | Local governments and public agencies; <Amended on Feb. 4, 2009> |
| 2. | Corporations established, invested, or funded by the government or institutions specified in subparagraph 1 to achieve the public objectives or corporations entrusted with government affairs; |
| 3. | For-profit corporations. |
| (2) | Notwithstanding paragraph (1), where a company engaging in an ordinary manufacturing business under the Foreign Investment Promotion Act (hereafter referred to as “ordinary manufacturer” in this paragraph), or a foreign invested company engaging in the advanced technology business or industrial support service business (hereafter referred to as “advanced technology company” in this paragraph) which has received a tax reduction or exemption as determined by the Minister of Economy and Finance intends to borrow from a non-resident any short-term foreign currency funds with a repayment period for which is less than a year, (computed from the date of fund withdrawal) within the following limits it shall submit a declaration thereon to the head of a designated foreign exchange bank as provided in paragraph (1): <Amended on Sep. 30, 2009> |
| 1. | For an advanced technology company, the amount of foreign investment (in foreign currency, referring to the amount of investment indicated in the certificate of registration of a foreign invested company and the amount of unregistered share contributions; hereinafter the same shall apply); provided that for advanced technology companies with less than one-third foreign investment, the amount of foreign investment shall not exceed 75/100 of the amount of foreign investment; |
| 2. | 50/100 of the amount of foreign investment for an ordinary manufacturer. |
| (3) | Notwithstanding paragraph (1), where an oil refining company, or an importer of crude oil, liquefied natural gas, or liquefied petroleum gas borrows short-term foreign currency funds with a repayment period of less than one year for the purpose of settlement of payments for import of crude oil, liquefied natural gas, or liquefied petroleum gas at sight payment, or by means of shipper's usance or post-shipment remittance, a declaration thereon shall be submitted to the head of its foreign exchange bank (referring to an issuing bank for an L/C (letter of credit); import bill of exchange collecting bank for a D/P (document against payment) and a D/A (document against acceptance), and a remitting bank for a settlement of payment for import for post-shipment remittance). <Newly Inserted on Dec. 17, 2007> |
| (4) | Notwithstanding paragraph (1), Article 2-5 shall apply where an investment trader or broker with equity capital exceeding KRW1 trillion won as at the end of the immediately preceding quarter borrows foreign currency funds from a non-resident. In such cases, "foreign exchange bank" shall be construed as "investment trader or broker with equity capital exceeding KRW1 trillion as at the end of the immediately preceding quarter."; provided that an investment trader or investment broker whose equity capital exceeds KRW1 trillion as at the end of the immediately preceding quarter shall submit a monthly report on the current status of foreign currency borrowings with the Governor of the Bank of Korea and the Governor of the Financial Supervisory Service by the 10th day of the following month. <Newly Inserted on Mar. 31, 2015> |
| (5) | Except as provided in Article 7-13, an individual or a non-profit corporation other than those set forth in paragraph (1) 1 and 2 intending to borrow foreign currency funds from a non-resident shall submit a declaration thereof to the Governor of the Bank of Korea through a designated foreign exchange bank; provided that in cases of local borrowing for local use by a non-profit corporation a report on the transactions shall be submitted to the head of a designated foreign exchange bank within one month from the date of the transaction. <Amended on Dec. 17, 2007><Amended on Mar. 31, 2015><Amended on Jul. 4, 2023> |
| (6) | Where a person specified in paragraph (1) 1 or 2 among persons who is required to make a declaration according to paragraph (1) intends to borrow foreign currency funds exceeding USD50 million, consultations with the Minister of Economy and Finance shall be undertaken prior to submitting a declaration. <Amended on Dec. 17, 2007><Amended on Mar. 31, 2015><Amended on Jul. 4, 2023> |
| (7) | Any person who intends to make a declaration in accordance with paragraphs (1) and (5) shall, at the time of borrowing, specify the use of the borrowed funds in the cash loan agreement in Form 7-2 (in the case of issuance of securities, a declaration on issuance of securities in Form 7-5), and submit such declaration to the competent declaration receipt agency, etc. <Amended on Mar. 31, 2015> |
| (8) | A resident who borrows foreign currency shall use the borrowed foreign currency funds (excluding foreign currency funds borrowed pursuant to subparagraph 7 of Article 7-13) in accordance with the following procedures: |
| 1. | For non-local finance, the borrowed foreign currency funds shall be deposited in the resident account opened with the designated foreign exchange bank and be used for the purposes specified in the declaration or report; provided that funds financed for the foreign payment for current transactions and foreign direct investment may be deposited with an overseas branch or local subsidiary of a foreign exchange bank which has its head office in the Republic of Korea or a foreign financial institution, or paid directly to a non-resident, and funds financed by the issuance of foreign currency securities may be deposited with an overseas branch or local subsidiary of a foreign exchange bank which has the head office in the Republic of Korea; |
| 2. | . For local financial transactions, no funds may be deposited in or brought into the Republic of Korea except for the modified reporting or declaration pursuant to paragraph (1) or the inflow of settlement funds in accordance with acknowledged current transactions between local subsidiaries, etc. and domestic residents; <Amended on Feb. 4, 2009><Amended on Mar. 31, 2015><Amended on Jul. 4, 2023> |
| (9) | A person who deposits or pays foreign currency funds in accordance with the proviso of paragraph (8) shall submit a report on the status of deposits, withdrawals, and repayments regarding the account concerned to the head of a designated foreign exchange bank. <Amended on Feb. 4, 2009><Amended on Mar. 31, 2015> |
| (10) | The head of each designated foreign exchange bank shall submit a quarterly report on the status of deposits, withdrawals, and repayments regarding the resident accounts or foreign currency deposit accounts as provided in paragraph (8) with the Governor of the Bank of Korea, and the Governor of the Bank of Korea shall compile the details of such reports and submit the consolidated report to the Minister of Economy and Finance by the 20th day of the first month of the subsequent quarter. <Amended on Dec. 17, 2007><Amended on Mar. 31, 2015> |
| (11) | The Minister of Economy and Finance may instruct a resident who has borrowed foreign currency funds for the purpose of acquiring Korean won among those required to submit a declaration pursuant to paragraph (1) or (4), to take necessary measures to prevent the risk of exchange rate fluctuations. <Amended on Mar. 31, 2015> |
| (12) | The head of a foreign exchange bank and the Governor of the Bank of Korea shall, if necessary, allow the Commissioner of the National Tax Service to inspect the content of a declaration made under paragraphs (1) through (5). <Amended on Mar. 31, 2015> |
| Article 7-14-2 (Foreign Currency Borrowing by Local Subsidiaries) |
| (1) | Where any of the following persons (hereinafter referred to as “local subsidiary, etc.”) intends to obtain local finance, a resident who has established a local subsidiary, etc. (where the resident has established a local subsidiary, etc. by a joint investment with another domestic company, referring to a company with the largest equity interests, and where joint investors have the same equity interests, referring to a company with the largest equity capital) shall file a report thereon with the head of a designated foreign exchange bank within one month from the date of obtaining local finance, and an enterprise in the main debtor group shall designate the main creditor bank as the foreign exchange bank for local finance-transactions, except in any unavoidable cases; provided that no report shall be required on transactions acknowledged under Article 7-18: <Newly Inserted on Jul. 4, 2023> |
| 1. | A local subsidiary of the resident (including a subsidiary in which the local subsidiary of the resident invests at least 50/100 of the total); |
| 2. | An overseas branch office of the resident (excluding an overseas branch office subject to non self-supporting accounting system prescribed in Article 9-19). |
| (2) | Notwithstanding paragraph (1), no report shall be required where a local subsidiary, etc. obtains local finance without securing guarantees or collateral from a resident; provided that in the case of an overseas branch office and any of the following local subsidiaries, a resident who has established a local subsidiary, etc. shall submit a semi-annual report on the status of local financing and repayment thereof by the local subsidiary, etc. to the head of a designated foreign exchange bank by the last day of the first month of the following semi-annual period: <Newly Inserted on Jul. 4, 2023> |
| 1. | A local subsidiary in which the percentage of investment by the resident is at least 50/100; |
| 2. | A subsidiary in which a local subsidiary under subparagraph 1 invests at least 50/100 of the total. |
| (3) | A person who obtains local finance pursuant to Articles 7-14 and 7-14-2 (including a resident who has established a local subsidiary, etc.) shall use the borrowed funds as declared or reported and shall submit a semi-annual report on the status of local financing and repayment thereof to the head of the designated foreign exchange bank of the relevant resident by the last day of the first month of the following semi-annual period. <Newly Inserted on Jul. 4, 2023> |
| (4) | The head of a designated foreign exchange bank who has received a report under Articles 7-14 (limited to funds for local finance), 7-14-2, and 7-18 (1) 4 and 5 shall submit a semi-annual report on the status of local financing and repayment thereof to the Governor of the Bank of Korea by the last day of the second month of the following semi-annual period, and the Governor of the Bank of Korea shall notify the Commissioner of the National Tax Service and the Governor of the Financial Supervisory Service of the status of local financing and repayment thereof. <Newly Inserted on Jul. 4, 2023> |
| (5) | Where a person who has received local finance or a person who has provided a guarantee, etc. related to local finance under Articles 7-14 (limited to funds for local finance), 7-14-2, and 7-18 (1) 4 and 5 intends to pay the relevant principal, interest, and incidental expenses to a foreign country from the Republic of Korea, he or she shall remit them through a designated foreign exchange bank; provided that this shall not apply where a foreign exchange bank makes a substitute payment in connection with a guarantee. <Newly Inserted on Jul. 4, 2023> |
| Article 7-15 (Borrowing of Korean Won Funds by Residents) |
| (1) | Except in any case falling under Article 7-13, where a resident intends to borrow any Korean won funds from a non-resident, the resident shall make a declaration thereof to the head of a designated foreign exchange bank; provided that where the resident intends to borrow funds exceeding KRW1 billion (including the cumulative borrowing amount for the previous one year from the time when a declaration of borrowing is made), he or she shall make a declaration thereof to the Minister of Economy and Finance through a designated foreign exchange bank. <Amended on Dec. 19, 2013> |
| (2) | Where a resident borrows Korean won funds from a non-resident, such borrowing shall be made only by means of domestic payment deposited in a non-resident free transfer Korean won account. <Newly Inserted on Dec. 19, 2013> |
| Article 7-16 (Loans Provided by Residents to Non-Residents) |
| (1) | Except as provided in Article 7-13, where a resident who has invested in a foreign corporation under Article 8 (1) 1 through 3 of the Decree lends money to the relevant foreign corporation with a repayment period of less than one year, he or she shall file a report on such fact with the head of a designated foreign exchange bank within one month from the date of disbursement of the funds. <Amended on May 3, 2019><Amended on Jul. 4, 2023> |
| (2) | Except as provided in Article 7-13 and paragraph (1), where a resident intends to provide a loan to a non-resident (excluding where the provision of a loan is permitted as the foreign exchange services of a foreign exchange agency under Chapter II), he or she shall make a declaration thereof to the Governor of the Bank of Korea; provided that, among the matters declared under this paragraph, where the resident provides a loan with a guarantee or collateral provided by another resident or intends to lend Korean won funds exceeding KRW1 billion, the non-resident who intends to receive the loan shall make a declaration thereof. <Amended on May 3, 2019> |
| (3) | With regard to a declaration made under paragraph (1) or (2) of a loan provided by a resident who is not a corporation to a non-resident, the head of a designated foreign exchange bank and the Governor of the Bank of Korea shall, respectively, notify the details of such declaration to the Commissioner of the National Tax Service on a monthly basis by the 20th day of the immediately following month. <Amended on May 3, 2019> |
Subsection 2 Debt Guarantee Agreements
| Article 7-17 (Transactions Not Requiring Declarations) |
Where any transaction involving accrual of claims, etc. under any of the following debt guarantee agreements intends to be conducted, no declaration thereof shall be required: <Amended on Jan. 1, 2006>
| 1. | Where a resident provides a foreign currency-denominated guarantee with regard to a transaction between a resident (creditor) and a resident (debtor); <Amended on Apr. 16, 2012> |
| 2. | Where a resident provides a foreign exchange bank with a foreign currency-denominated guarantee with regard to an offshore financial loan when a foreign importer obtains the offshore financial loan from the foreign exchange bank in connection with an export transaction of the resident (the foreign exchange bank shall submit a report on export-related offshore financial loan guarantee to the Governor of the Bank of Korea on a quarterly basis by the 20th day of the immediately following month); |
| 3. | Where a facility leasing company which has its head office in the Republic of Korea provides a foreign currency-denominated guarantee for an offshore financial loan by a foreign exchange bank to a local subsidiary of such facility leasing company within the amount of the equity investment of the main office; |
| 4. | Where a resident conducts an acknowledged transaction under these Regulations and receives a guarantee by a non-resident; |
| 5. | Where a resident provides any of the following guarantees: |
| (a) | Where a resident provides a non-resident with a guarantee with respect to a cash borrowing agreement prescribed in Articles 7-14 and 7-15 (excluding local finance); provided that this shall not apply where an enterprise in the main debtor group intends to provide a guarantee with regard to a foreign currency borrowing agreement of any of the 30 largest affiliated companies in the same group under Article 7-14 (1); <Amended on Apr. 16, 2012><Amended on Jul. 4, 2023> |
| (b) | Where a resident provides a foreign currency-denominated guarantee for the payment prescribed in Chapter IV (excluding any payment under Articles 4-5 through 4-7); <Amended on Dec. 17, 2007> |
| (c) | Where a resident enters into a lease agreement acknowledged under Subsection 2 of Section 8 of this Chapter and thereafter another resident in the Republic of Korea provides a foreign currency-denominated guarantee or where a facility leasing company provides a foreign currency-denominated guarantee with respect to an acknowledged facility leasing agreement between a foreign facility leasing company and an end user in the Republic of Korea; <Amended on Dec. 17, 2007> |
| (d) | Where an affiliated company of a resident provides a foreign currency-denominated guarantee in connection with the sale of promissory notes by such resident under Article 7-21 (1) 5; |
| (e) | Where a resident provides a guarantee or collateral when a non-resident makes a declaration to the Governor of the Bank of Korea to obtain a loan from a foreign exchange bank under the proviso of Article 2-6 (1) (including where the non-resident is exempt from making a declaration pursuant to Article 2-6 (2)); <Amended on Dec. 19, 2013> |
| 6. | Where a resident provides a guarantee in connection with the export or import of goods or services transactions with a non-resident; |
| 7. | Where an agreement is concluded under which a resident or an affiliated resident guarantees the payment of the debt assumed by a non-resident who provides a guarantee, etc. or pays such debt when the non-resident pays a guarantee deposit or provides a guarantee in lieu there for a bidding guarantee, etc. related to international bids or agreements conducted to acquire foreign currencies, such as export, and overseas construction, and services business by the resident, or any local subsidiary or overseas branch office of the resident; <Amended on Aug. 4, 2020> |
| 8. | Where an agreement is concluded under which a resident or an affiliated company thereof guarantees the payment of the debt assumed by a non-resident who makes a payment or provides a guarantee or pays off such debt when the non-resident makes a payment or provides a guarantee in lieu of the payment of funds required for the resident’s foreign exchange-traded derivatives transaction prescribed in Article 7-11 (1) 3; <Amended on Aug. 4, 2020> |
| 9. | Where a resident who is a national of the Republic of Korea and a non-resident who is a national of the Republic of Korea enters into an agreement to guarantee a debt denominated and payable in the domestic currency for another resident; |
| 10. | Where a securities finance company under the Financial Investment Services and Capital Markets Act provides a non-resident with a guarantee in connection with Articles 7-45 (1) 16 and 7-48 (1) 6; <Amended on Feb. 4, 2009> |
| 11. | Where a resident, or a local subsidiary or overseas branch office thereof provides a guarantee, etc. to a non-resident (including a bidding agency and an import agency) in connection with overseas construction, services business, or goods export transactions with a non-resident; <Amended on Aug. 4, 2020> |
| 12. | Where a resident provides a non-resident with a guarantee with regard to a derivatives transaction prescribed in Article 7-40 (2). <Newly Inserted on Feb. 4, 2009> |
| Article 7-18 (Reporting to Heads of Foreign Exchange Banks) |
| (1) | Where a resident intends to conduct a transaction with a non-resident involving accrual of claims, etc. under a debt guarantee agreement and any of the following cases is applicable, he or she shall file a report on such transaction with the head of a foreign exchange bank within one month from the date of the transaction (in cases falling under subparagraph 4 or 5, such report shall be filed with the head of the designated foreign exchange bank of the resident who obtains local finance or establishes a local subsidiary, etc.: <Amended on Jul. 4, 2023> |
| 1. | Where an investment trader or investment broker which has its head office in the Republic of Korea guarantees local borrowings accompanied by the acknowledged business affairs of a local subsidiary of such investment trader or investment broker; provided that the guaranteed amount shall not exceed 300 percent of the amount of the equity investment made by the resident in such local subsidiary; |
| 2. | Where a resident or an affiliated resident guarantees the payment of the debt assumed by a local subsidiary of the resident when such local subsidiary leases facilities necessary to conduct acknowledged business from a foreign facility leasing company; |
| 3. | Where a facility leasing company which has its head office in the Republic of Korea guarantees local borrowings accompanied by the acknowledged business affairs of a local subsidiary of such facility leasing company within the amount of the equity investment of the main office; |
| 4. | Where a resident falling under Article 7-14 (1) provides a guarantee (including collateral) in connection with local finance; <Newly Inserted on Jul. 4, 2023> |
| 5. | Where a resident falling under Article 7-14-2 provides a guarantee (including collateral) in connection with local finance. <Newly Inserted on Jul. 4, 2023> |
| (2) | Where an enterprise in the main debtor group intends to provide a guarantee in relation to a long-term foreign currency borrowing agreement with a repayment period exceeding one year under Article 7-14 (1) of any of the 30 largest affiliated companies in the same group, the person who intends to provide such guarantee shall file a report on the relevant transaction with the head of the designated foreign exchange bank of the borrower within one month from the date of the transaction. In such cases, the person who files a report on, or makes a declaration of, the borrowing under Article 7-14 (1) may file a report on the transaction on behalf of the person who provides the guarantee. <Amended on Jul. 4, 2023> |
| (3) | Where a resident or a non-resident who receives a loan to overseas Koreans, etc. intends to guarantee the repayment of the principal amount of up to USD500,000 to a financial institution in the Republic of Korea in connection with such loan, he or she shall file a report on the relevant transaction with the head of a designated foreign exchange bank within one month from the date of the transaction. In such cases, the designated foreign exchange bank shall be in the name of the person who receives the loan, and an overseas branch office of a foreign exchange bank or a local subsidiary financial institution, etc. shall also be designated as the financial institution for transactions in a foreign country. <Amended on Dec. 24, 2018><Amended on Jul. 4, 2023> |
| (4) | Where a person who has provided a guarantee in relation to paragraph (3) intends to make a substitute payment, he or she shall remit such payment through a designated foreign exchange bank; provided that this shall not apply where a foreign exchange bank makes a substitute payment. <Newly Inserted on Dec. 17, 2007> |
| Article 7-19 (Declarations to Governor of Bank of Korea) |
Except as provided in Articles 7-17 and 7-18, where a resident intends to enter into a transaction involving accrual of claims, etc. with a resident or a non-resident who is a creditor under a debt guarantee agreement (including provision of a guarantee or collateral to a foreign exchange bank; provided that cases falling under Article 2-6 (3) 3 and 4 shall be excluded herefrom) with respect to a transaction between a resident and a non-resident or between non-residents, he or she shall make a declaration of such transaction to the Governor of the Bank of Korea, who shall, if necessary, allow the Commissioner of the National Tax Service to inspect the details of the declaration. <Amended on Apr. 16, 2012>
Section 4 Capital Transactions under Agreements on Purchase and Sale of Means of Foreign Payment or Claims or Service Agreements
| Article 7-20 (Transactions Between Residents) |
| (1) | Where a resident intends to enters into a transaction involving accrual of claims, etc. denominated or payable in any foreign currency with another resident under an agreement on the purchase and sale of means of foreign payment, claims, etc. or under a service agreement, no declaration thereof shall be required in any of the following cases: |
| 1. | A transaction between a resident and another resident involving accrual of claims, etc. payable in any foreign currency under an agreement on the purchase and sale of goods, etc. or under a service agreement; |
| 2. | A transaction between residents on the purchase and sale of any foreign currency for currency collection or commemoration not for using such foreign currency as means of payment; |
| 3. | A transaction between a person engaging in overseas construction and services business and a manufacturer of duty-free goods on the purchase and sale of duty-free coupons for workers employed overseas; |
| 4. | A transaction in which a foreign exchange bank sells UNESCO coupons to a resident for the import payment of such resident; |
| 5. | A transaction involving accrual of claims, etc. denominated or payable in any foreign currency under an agreement on the purchase and sale of claims acquired through an acknowledged transaction between residents; |
| 6. | A transaction between residents on the purchase and sale of means of foreign payment on the same date in an amount not exceeding USD5,000 that are not for the purpose of generating any margin therefrom. <Amended on May 3, 2019> |
| (2) | Except in any case falling under paragraph (1), where a resident intends to enter into a transaction involving accrual of claims, etc. denominated or payable in any foreign currency with another resident under an agreement on the purchase and sale of means of foreign payment, he or she shall make a declaration of such transaction to the Governor of the Bank of Korea. |
| (3) | Payments provided in paragraph (1) 1 and 5 shall be made or received through a foreign exchange bank. <Amended on Feb. 4, 2009> |
| Article 7-21 (Transactions between Residents and Non-Residents) |
| (1) | Where a resident intends to enter into a transaction involving accrual of claims, etc. with a non-resident under an agreement on the purchase and sale of means of foreign payment or claims, no declaration thereof shall be required in any of the following cases: |
| 1. | Where an overseas branch office or a local subsidiary of a foreign exchange bank, or a foreign financial institution (including a foreign currency exchange operator) enters into a transaction on the purchase and sale of a Korean won-denominated traveler's check, a Korean won-denominated cashier's check, or the domestic currency with a resident staying overseas; <Amended on Dec. 17, 2007> |
| 2. | Where a resident staying overseas (including any staff of an overseas diplomatic missions of the Republic of Korea or any family member who cohabitates with such staff, and persons staying overseas) enters into a transaction on the purchase and sale of means of foreign payment or claims directly necessary for staying overseas with a non-resident; |
| 3. | Where a resident uses means of foreign payment or foreign currency bonds, the possession of which is acknowledged in a foreign country, to purchase means of foreign payment denominated in any other foreign currency or foreign currency bonds; |
| 4. | Where a resident sells export-related foreign currency bonds to a non-resident and repatriates the entire proceeds from such sale into the Republic of Korea through a foreign exchange bank; <Amended on Jul. 1, 2005> |
| 5. | Where a resident sells a non-resident any membership related to the use of domestic or overseas real estate, facilities, etc., promissory notes issued by a non-resident, foreign currency bonds against a non-resident, etc., and repatriates the proceeds from such sale into the Republic of Korea through a foreign exchange bank; <Amended on Dec. 17, 2007> |
| 6. | Where a resident re-purchases from a non-resident any membership, etc. related to the use of domestic real estate, facilities, etc. previously sold to the non-resident. |
| (2) | Except in any case falling under paragraph (1), where a resident intends to enter into a transaction with another resident or a non-resident on the purchase of any membership for the use of overseas real estate, facilities, etc. or the acquisition of any rights thereto, he or she shall file a report on such transaction with the head of a foreign exchange bank within one month from the date of the transaction. <Amended on Dec. 17, 2007><Amended on Jul. 4, 2023> |
| (3) | Except in any case falling under paragraphs (1) and (2), where a resident intends to enter into a transaction involving accrual of claims, etc. under an agreement on the purchase and sale of means of foreign payment or claims with a non-resident, he or she shall make a declaration of such transaction to the Governor of the Bank of Korea. <Amended on Jul. 1, 2005> |
| (4) | The head of a foreign exchange bank shall notify the details of the purchase and sale of any membership, etc. to the Commissioner of the National Tax Service and the Commissioner of the Korea Customs Service if the amount acquired under paragraph (2) exceeds USD100,000 per transaction, and the Governor of the Financial Supervisory Service if such amount exceeds USD50,000 per transaction, respectively, by the 10th day of the immediately following month. <Amended on Dec. 19, 2013> |
Section 5 Issuance of Securities
Subsection 1 Common Provisions
| Article 7-22 (Issuance of Securities by Residents) |
| (1) | Where a resident intends to issue or offer (hereafter in this section referred to as “issuance”) foreign securities in the Republic of Korea, permission for and declaration of such issuance shall not be required. |
| (2) | Where a resident intends to issue foreign securities in a foreign country (including where the foreign securities issued by a resident in the Republic of Korea are acquired by a non-resident through private placement provided in Article 9 (8) of the Financial Investment Services and Capital Markets Act), he or she shall file a report thereon with, or make a declaration, etc. thereof, to the head of a designated foreign exchange bank, etc., and Article 7-14 shall apply mutatis mutandis thereto; provided that where the resident intends to obtain local finance in an amount exceeding USD50 million through the issuance of foreign securities, he or she shall make a declaration thereof to the Minister of Economy and Finance through a designated foreign exchange bank. <Amended on Feb. 4, 2009><Amended on Jul. 4, 2023> |
| (3) | Where a resident (including a foreign exchange agency; hereafter in this Article, the same shall apply) intends to issue Korean won securities in a foreign country under Subsection 3 of this Section, he or she shall make a declaration thereof to the Minister of Economy and Finance. <Amended on Jan. 1, 2006> |
| (4) | Where a person who has issued securities completes a payment therefor, a report on securities issuance in Form 7-10 shall be submitted to the head of a declaration receipt agency without delay. <Amended on Feb. 4, 2009> |
| Article 7-23 (Issuance of Securities by Non-Residents) |
| (1) | Where a non-resident intends to issue any of the following securities, he or she shall make a declaration thereof to the Minister of Economy and Finance; provided that funds raised through the issuance of securities shall be used for the purpose specified in such declaration: <Proviso Newly Inserted on Jan. 1, 2006> |
| 1. | Where the non-resident intends to issue foreign securities, Korean won-linked foreign securities (including where foreign securities already issued in a foreign country are listed on a securities market), or Korean won securities in the Republic of Korea pursuant to Subsection 2 of this Section; <Amended on Feb. 4, 2009> |
| 2. | Where the non-resident intends to issue Korean won securities or Korean won-linked foreign securities in a foreign country pursuant to Subsection 3 of this Section. <Amended on Jan. 1, 2006> |
| (2) | Deleted. <Amended on Jan. 1, 2006> |
| Article 7-23-2 (Inter-Exchange Movement of Listed Securities) |
| (1) | Notwithstanding Articles 7-22 and 7-23, where a person intends to list securities in such a way where the securities are moved between domestic and foreign securities markets, he or she shall make a declaration thereof to the Minister of Economy and Finance only once at the time of initial listing of the securities. <Amended on Feb. 4, 2009> |
| (2) | Where securities are moved between markets or the total number of the securities issued is changed, a person who has made a declaration under paragraph (1) shall file a report thereon with the Minister of Economy and Finance on a monthly basis by the end of the immediately following month. <Newly Inserted on Dec. 17, 2007> |
Subsection 2 Procedures for Issuance of Securities by Non-Residents in the Republic of Korea
| Article 7-24 (Declarations and Use of Proceeds from Issuance) |
| (1) | A non-resident who intends to issue securities shall submit to the Minister of Economy and Finance a declaration on securities issuance in Form 7-5 accompanied by an issuance plan specifying the purpose of using the proceeds from such issuance. <Amended on Jan. 1, 2006> |
| (2) | A person who intends to issue a stock depository receipt shall request the Korea Securities Depository to open a foreign currency account for Korean won securities under the name of the Korea Securities Depository (the name of the issuer shall be added to such account) at a designated foreign exchange bank so as to deposit and dispose of any funds for the exercise of rights and the fulfillment of obligations related to the stock depository receipts issued as prescribed by this Subsection, including payments for securities and the payment of dividends upon the exercise of subscription rights of the stock depository receipts, and the Korea Securities Depository so requested shall open the account in its name at a designated foreign exchange bank. <Amended on Feb. 4, 2009> |
| (3) | Where a non-resident issues securities in the Republic of Korea under paragraph (1), he or she shall open a non-resident free transfer Korean won account for Korean won securities and an external account for foreign securities, and shall deposit payments for such securities therein. <Amended on Feb. 4, 2009> |
| Article 7-25 (Non-Resident Korean Won Accounts for Securities Issuance) Deleted. <Amended on Dec. 17, 2007> |
| Article 7-26 (External Accounts for Securities Issuance) Deleted. <Amended on Dec. 17, 2007> |
| (1) | Where a person who has made a declaration of securities issuance completes the relevant payments, he or she shall, without delay, submit to the Minister of Economy and Finance a report on securities issuance in Form 7-10 accompanied by the following documents: <Amended on Feb. 4, 2009> |
| 1. | A detailed statement on the terms and conditions of, and costs for, issuance; |
| 2. | Subscription details by each underwriting institution. |
| (2) | The Korea Securities Depository shall notify the head of the designated foreign exchange bank at which a foreign currency account for Korean won securities is opened under its name of the status of payment and receipt in such account each month. <Amended on Feb. 4, 2009> |
| (3) | The head of a designated foreign exchange bank shall file a report with the Governor of the Bank of Korea on the status of opening and disposal of foreign currency accounts for Korean won securities under the name of the Korea Securities Depository each month. <Amended on Feb. 4, 2009> |
| (4) | The Governor of the Bank of Korea shall compile information on the status of opening and disposal provided in paragraph (3) and file a report on such information with the Minister of Economy and Finance each month. |
| Article 7-28 (Purchase and Sale of Bonds for Overseas Sale) |
| (1) | A person who intends to sell a portion of the bonds issued in a foreign country may deposit such bonds in an internationally recognized settlement institution or a depository to purchase and sell them in a foreign country (limited to settlement in a foreign currency). |
| (2) | A person who intends to make a deposit under paragraph (1) shall make a declaration thereof to the Minister of Economy and Finance at the time when a declaration of issuance is made under Article 7-23. <Amended on Jan. 1, 2006> |
Subsection 3 Procedures for Issuance of Korean Won Securities in Foreign Countries
| Article 7-29 (Issuance of Korean Won Securities by Residents) |
| (1) | Where a resident intends to issue Korean won securities in a foreign country, he or she shall submit to the Minister of Economy and Finance a declaration of securities issuance in Form 7-5 accompanied by an issuance plan specifying the purpose of using the proceeds from such issuance. <Amended on Jan. 1, 2006> |
| (2) | Where a person who has made a declaration of the issuance of Korean won securities completes the relevant payments, he or she shall submit a report on securities issuance in Form 7-10 to the Minister of Economy and Finance without delay. <Amended on Feb. 4, 2009> |
| Article 7-30 (Issuance of Korean Won Securities by Non-Residents) |
| (1) | Where a non-resident intends to issue Korean won securities (including Korean won-linked foreign securities; hereafter in this Article, the same shall apply) in a foreign country, he or she shall submit to the Minister of Economy and Finance a declaration of securities issuance in Form 7-5 accompanied by an issuance plan specifying the purpose of using the proceeds from such issuance. <Amended on Jan. 1, 2006> |
| (2) | Where a person who has made a declaration of the issuance of Korean won securities completes the relevant payments, he or she shall submit a report on securities issuance in Form 7-10 to the Minister of Economy and Finance without delay. <Amended on Feb. 4, 2009> |
Section 6 Acquisition of Securities
Subsection 1 Common Provisions
| Article 7-31 (Acquisition of Securities by Residents) |
| (1) | Where a resident intends to acquire securities from a non-resident and falls under any of the following cases, no declaration of such acquisition shall be required; provided that where the resident intends to acquire stocks or equity interests in a foreign corporation for the purpose of participating in the management thereof, Chapter IX shall apply: <Amended on Jan. 1, 2006> |
| 1. | Where the resident invests in foreign securities pursuant to Subsection 2; |
| 2. | Where the resident acquires securities from a non-resident by inheritance, bequest, or gift; |
| 3. | Where the resident acquires securities for the purpose of redemption prior to maturity, optional redemption, etc. of the securities issued under Section 5 of this Chapter; <Proviso Deleted on Jan. 1, 2006> |
| 4. | Where the resident acquires from a non-resident stocks or equity interests in a corporation surviving or newly established after a merger in exchange for the stocks or equity interests acquired under an acknowledged transaction; <Amended on Sep. 30, 2009> |
| 5. | Where the resident acquires foreign securities from a non-resident to fulfill obligations under foreign statutes or regulations; |
| 6. | Where the resident acquires Korean won securities in the Republic of Korea from a non-resident who is a national of the Republic of Korea using the domestic currency; |
| 7. | Where the resident acquires foreign securities from a non-resident in relation to the repayment in substitutes of a loan under an acknowledged transaction or the exercise of collateral rights; |
| 8. | Where the resident acquires Korean won securities with a maturity of at least one year that a non-resident has issued in the Republic of Korea or a foreign country under Section 5 or where a domestic underwriter acquires bonds for overseas sale that a non-resident has issued for the purpose of selling such bonds to another non-resident pursuant to the Financial Investment Services and Capital Markets Act and the Enforcement Decree thereof; provided that Subsection 2 shall apply mutatis mutandis where the resident acquires underlying stocks; <Amended on Feb. 4, 2009> |
| 9. | Where a domestic company acquires stocks or equity interests in a foreign company that are valued at not more than USD50,000 to maintain or facilitate its business relationship with the foreign company in relation to its business activities; |
| 10. | Where a person who is employed by a foreign invested company (including a subsidiary in the Republic of Korea) under the Foreign Investment Promotion Act, a domestic branch of a foreign company under Section 3 of Chapter IX, or a domestic branch office or business office of a foreign bank acquires stocks or equity interests in the main office thereof (including a holding company or an affiliated corporation of such main office); <Amended on Feb. 4, 2009> |
| 11. | Where the resident acquires from a non-resident foreign securities listed or registered on a domestic securities market or acquires stocks or equity interests following the exercise of any rights conferred to the resident under an acknowledged transaction of such resident; <Amended on Jun. 18, 2021> |
| 12. | Where the resident acquires from a non-resident the securities that the non-resident has acquired under Articles 7-32 (1) 1, 2, and 11 and 7-32 (2) and (3). <Amended on Jan. 1, 2006> |
| (2) | Except in any case falling under paragraph (1), where a resident intends to acquire securities from a non-resident, he or she shall make a declaration of such acquisition to the Governor of the Bank of Korea, who shall allow the Commissioner of the National Tax Service to inspect the details of such declaration, if necessary; provided that where a resident intends to acquire securities from a non-resident in exchange for the securities owned by such resident, the resident shall substantiate the appropriateness of the price of the securities to be exchanged. <Amended on Apr. 16, 2012> |
| (3) | The Governor of the Bank of Korea shall file a report on the current status of the securities acquired and other relevant matters on a yearly basis by the last day of the second month of the immediately following year. <Amended on Jan. 1, 2006> |
| Article 7-32 (Acquisition of Securities by Non-Residents) |
| (1) | Where a non-resident intends to acquire securities from a resident and falls under any of the following cases, no declaration of such acquisition shall be required: |
| 1. | Where the non-resident acquires Korean won securities pursuant to Subsection 3; provided that where he or she deposits or disposes of foreign currency collateral in an account opened at a foreign financial institution for the purpose of an acknowledged securities lending and borrowing transaction, such deposit or disposal shall be deemed a transaction under Subsection 3; <Proviso Newly Inserted on Dec. 17, 2007> |
| 2. | Where the non-resident acquires securities from a resident for the purpose of foreign investment acknowledged under the Foreign Investment Promotion Act; |
| 3. | Where the non-resident acquires securities from a resident by inheritance or bequest; <Amended on Dec. 17, 2007> |
| 4. | Where the non-resident purchases government or public bonds to fulfill obligations under domestic statutes or regulations; |
| 5. | Where the non-resident purchases from a resident the stocks (including equity) of the main office acquired by such resident under Article 7-31 (1) 10; |
| 6. | Where the non-resident acquires foreign securities that a resident has issued in a foreign country pursuant to Articles 2-5, 2-10, and 7-22 or acquires stocks or equity following the exercise by the resident of any rights conferred under an acknowledged transaction of the resident; <Amended on Jun. 18, 2021> |
| 7. | Where the non-resident who is a national of the Republic of Korea acquires Korean won securities from a resident in the Republic of Korea; |
| 8. | Where the non-resident who has issued Korean won securities or Korean won-linked foreign securities in the Republic of Korea as prescribed in Subsection 2 of Section 5 of this Chapter acquires securities for the purpose of redemption prior to maturity, etc., as initially permitted or declared; where the non-resident acquires from a resident the stock depository receipts issued by another non-resident as provided in Subsection 2 of Section 5 of this Chapter pursuant to the Financial Investment Services and Capital Markets Act and the Enforcement Decree thereof or acquires the underlying stocks of stock depository receipts from a resident; or where the non-resident acquires bonds for overseas sale issued as specified in Subsection 2 of Section 5 of this Chapter from a domestic underwriter that has underwrote such bonds pursuant to the Financial Investment Services and Capital Markets Act and the Enforcement Decree thereof; provided that Article 7-37 shall apply mutatis mutandis where the non-resident acquires from a resident the stock depository receipts issued by a non-resident under Subsection 2 of Section 5 of this Chapter. Furthermore, Article 7-24 shall apply mutatis mutandis where the non-resident who has issued stock depository receipts pursuant to Subsection 2 of Section 5 of this Chapter acquires such stock depository receipts; <Amended on Feb. 4, 2009> |
| 9. | Where the non-resident acquires securities from a resident in relation to repayment in substitutes of a loan under an acknowledged transaction, the exercise of collateral rights, or debt-for-equity swaps (referring to the debt-for-equity swaps under the Act on the Structural Improvement of the Financial Industry, the Corporate Restructuring Promotion Act, and the Debtor Rehabilitation and Bankruptcy Act); <Amended on Dec. 19, 2013> |
| 10. | Where the non-resident acquires foreign securities listed or registered on a domestic securities market or a certificate of deposit in a foreign currency issued by a foreign exchange bank in the Republic of Korea; provided that Subsection 3 shall apply mutatis mutandis to the procedures, etc. therefor; <Amended on Dec. 19, 2013> |
| 11. | Where the non-resident acquires from a resident the securities that such resident has acquired under Articles 7-31 (1) 1 and 12 and 7-31 (2). <Amended on Jun. 2, 2008> |
| (2) | Except in any case falling under paragraph (1) 1, where a non-resident acquires from a resident any unlisted or unregistered domestic currency-denominated stocks or equity in a domestic corporation through an object of investment prescribed in the Foreign Investment Promotion Act and such acquisition does not constitute foreign investment provided in that Act, the non-resident shall make a declaration of such acquisition to the head of a foreign exchange bank. <Newly Inserted on Jul. 2, 2002> |
| (3) | Except in any case falling under paragraphs (1) and (2), where a non-resident intends to acquire securities from a resident, he or she shall make a declaration of such acquisition to the Governor of the Bank of Korea. <Amended on Jul. 2, 2002> |
Subsection 2 Foreign Securities Investment Procedures for Residents
| Article 7-33 (Objects of Investment) |
| (1) | No restrictions shall be imposed on the types of foreign securities in which a resident may invest under this Subsection. <Amended on Aug. 3, 2006> |
| (2) | No declaration shall be required where an institutional investor intends to engage in the purchase and sale of any foreign securities; provided that reporting obligations under Article 7-35 shall be complied with. <Amended on Feb. 4, 2009> |
| (3) | Notwithstanding the main clause of paragraph (2), an institutional investor who intends to engage in the purchase and sale of credit derivative-linked securities, it shall make a declaration thereof to the Governor of the Bank of Korea; provided that the procedures provided for in Chapter II shall apply to any transactions conducted by a foreign exchange agency as its foreign exchange services. <Newly Inserted on Sep. 30, 2009> |
| (4) | Where an individual investor, other than an institutional investor, intends to engage in the purchase and sale of foreign securities, such purchase and sale shall be entrusted to an investment broker; provided that if such individual investor intends to engage in the purchase and sale of foreign collective investment securities under the Financial Investment Services and Capital Markets Act, the purchase and sale thereof may be conducted with an investment trader or investment broker. <Amended on Sep. 30, 2009> |
| Article 7-34 (Investment-Only Foreign Currency Accounts for Foreign Securities) |
| (1) | Any investment broker entrusted by an individual investor with the purchase and sale of foreign securities shall remit or recover investment-related funds through an investment-only foreign currency account for foreign securities opened at a foreign exchange bank in the name of the individual investor (with the name of the investment broker added thereto) or in the name of the investment broker. <Amended on Feb. 4, 2009> |
| (2) | A resident who intends to engage in the purchase and sale of foreign securities under this Subsection, an investment trader or an investment broker shall deposit the deposits of the investors (referring to the deposits of the investors under Article 74 (1) of the Financial Investment Services and Capital Markets Act) in the investment-only account for foreign securities opened in the name of the securities finance company. <Amended on Jun. 18, 2021> |
| (1) | Any institutional investor shall file a monthly report with the Governor of the Bank of Korea by the 10th day of the immediately following month on the acquisition, purchase, sale, holding, and lending of foreign securities, and on the holdings of foreign currency deposits and performance in managing such deposits, as well as on the foreign disbursement and domestic recovery of investment funds (in the case of a corporation entrusted with the management and administration of the National Pension Fund under Article 102 (6) of the National Pension Act, the transaction results of the previous six months), classified by the source of the investment funds. <Amended on Jun. 18, 2021><Amended on Jul. 4, 2023> |
| (2) | Any investment broker and any investment trader that engages in the purchase and sale of foreign collective investment securities shall file a quarterly report with the Governor of the Bank of Korea and the Governor of the Financial Supervisory Service on the status of investment in foreign securities, purchase and sale performance thereof, etc. (hereinafter referred to as “status of investment in foreign securities”) by individual investors as provided in Article 7-33 by the 10 day of the first month of the subsequent quarter. <Amended on Feb. 4, 2009> |
| (3) | The Governor of the Bank of Korea shall compile information on the status of investment in foreign securities reported in accordance with paragraph (1) and notify the Minister of Economy and Finance thereof. |
Subsection 3 Procedures for Foreign Investors Investing in Korean Won Securities
| Article 7-36 (Scope of Application) |
| (1) | The provisions of this Subsection shall apply to cases where a non-resident (limited to those who have permanent residency in a foreign country in cases of nationals of the Republic of Korea) or a foreign resident who intends to secure a guarantee for overseas remittance of funds for securities investment (hereinafter referred to as “foreign investor”) acquires any of the following domestic Korean won securities or sells such acquired securities in the Republic of Korea or engages in a securities lending transaction as provided in subparagraph 16 of Article 7-45, and Article 7-48 (1) 6 (hereafter in this Subsection referred to as “acknowledged securities lending transaction”) or repurchase agreements as provided in subparagraph 6 of Article 5-1 of the Regulations on Financial Investment Business (hereafter in this Subsection referred to as "repurchase agreements"): <Amended on Apr. 16, 2012> |
| 1. | Securities; <Amended on Feb. 4, 2009> |
| 5. | Certificates of deposit; |
| 7. | Merchant bank-issued bills. |
| (2) | The same shall apply where a foreign investor acquires domestic Korean won securities through the exercise of rights attached to any securities acquired thereby according to paragraph (1) or as a result of acquisition by succession based on inheritance or bequest, or sells such acquired securities in the Republic of Korea. |
| Article 7-37 (Investment-Only Accounts) |
| (1) | A foreign investor may deposit and dispose of related funds in an investment-only external account and an investment-only non-resident Korean won account (hereinafter referred to as “investment-only account”) held at a foreign exchange bank in the name of the foreign investor; provided that where an international central securities depository is entrusted by a foreign investor to purchase and sell government bonds or monetary stabilization bonds under Article 69 of the Bank of Korea Act, an investment-only account may be opened in the name of the international central securities depository to deposit and dispose of related funds. <Amended on Dec. 19, 2013> |
| (2) | The amount of foreign currency funds that a foreign investor may deposit in an investment-only external account under paragraph (1) shall be limited to the following: <Amended on Dec. 17, 2007> |
| 1. | Foreign currency funds remitted or brought in person into the Republic of Korea by such foreign investor; |
| 2. | Foreign currency funds transferred from investment-only external accounts, external accounts, or non-resident foreign currency trust accounts in the name of such foreign investor; investment-only foreign currency accounts in the name of such foreign investor held by investment brokers or investment traders (hereinafter referred to as “investment brokers, etc.”); and investment-only foreign currency accounts in the name of such foreign investor held at the Korea Exchange, the Depository, securities finance companies, and clearing company; <Amended on Mar. 22, 2016> |
| 3. | Foreign currency funds purchased in exchange for the sale proceeds, dividends and interest of securities acquired under Article 7-36, and funds related to acknowledged securities lending transactions or those related to repurchase agreements; provided that notwithstanding Article 2-3, a foreign exchange bank may verify the relevant transaction within three business days from the date immediately following the sale of the foreign currency; <Amended on Dec. 19, 2013> |
| 4. | Foreign currency funds purchased in exchange for any funds deposited in an investment-only non-resident Korean won account, non-resident Korean won free transfer account, or non-resident Korean won trust account in the name of such foreign investor. <Amended on Dec. 17, 2007> |
| (3) | A foreign investor may dispose of an investment-only external account referred to in paragraph (1) only in the following cases: <Amended on Dec. 17, 2007> |
| 1. | Sale in exchange for any means of domestic payment; provided that this shall be limited to deposits in a Korean won account under paragraph (1) or transfers to a Korean won account in a foreign exchange bank, investment broker, etc., the Depository, securities finance company, merchant bank, mutual savings bank, or postal service agency for the acquisition of securities under Article 7-36 and acknowledged securities lending transactions or repurchase agreements; <Amended on Dec. 19, 2013> |
| 3. | Transfer to any other investment-only external accounts, external accounts, or non-resident foreign currency trust accounts in the name of such foreign investor; investment-only foreign currency accounts in the name of such foreign investor held by investment brokers, etc.; and investment-only foreign currency accounts in the name of such foreign investor held at the Korea Exchange, the Depository, securities finance companies, and clearing company; <Amended on Mar. 22, 2016> |
| 4. | Withdrawals of deposits into any means of foreign payment or purchase of other means of foreign payment. |
| (4) | Funds that a foreign investor may deposit in an investment-only non-resident Korean won account shall be limited to the following: <Amended on Dec. 17, 2007> |
| 1. | Sale proceeds, dividends and interest of securities acquired under Article 7-36, and funds, etc. related to acknowledged securities lending transactions and repurchase agreements under Article 7-36; provided that the transfer of funds shall be made by means of a transfer from Korean won accounts of foreign exchange banks, investment brokers, etc., the Depository, securities finance companies, merchant banks, mutual savings banks, or postal service agencies; <Amended on Dec. 19, 2013> |
| 2. | Funds transferred from other investment-only non-resident Korean won accounts, non-resident Korean won free transfer accounts, and non-resident Korean won trust accounts in the name of such foreign investor; <Amended on Dec. 17, 2007> |
| 3. | Custodial margin related to securities purchase and sale; |
| 4. | Proceeds from sale of foreign currency funds deposited in an investment-only external account in the name of such foreign investor in exchange for any means of domestic payment. <Newly Inserted on Dec. 17, 2007> |
| 5. | Funds transferred from an investment-only non-resident Korean won account in the name of an international central securities depository in the event that a foreign investor entrusts an international central securities depository with the purchase and sale of government bonds or monetary stabilization bonds pursuant to Article 69 of the Bank of Korea Act, as defined in the proviso of paragraph (1); provided that such funds shall be limited to funds deposited in the customer account in the name of the customer in the investment-only non-resident Korean won account in the name of an international central securities depository. <Newly Inserted on May 19, 2010> |
| 6. | Proceeds from the sale of foreign currency funds in the name of such foreign investor deposited in an overseas branch office or local subsidiary of a foreign exchange bank headquartered in the Republic of Korea, or in a foreign financial institution, in exchange for any means of domestic payment (provided that this shall be limited to an amount equivalent to USD20,000 or less for the same person on the same date where the payment of funds in Korean won is requested from a foreign country). <Newly Inserted on Jul. 4, 2023> |
| (5) | A foreign investor may dispose of an investment-only non-resident Korean won account only in the following cases: <Amended on Dec. 17, 2007> |
| 1. | Transfer to investment-only external accounts in the name of such foreign investor as provided in paragraph (2); <Amended on Dec. 17, 2007> |
| 2. | Transfer to Korean won accounts held by foreign exchange banks, investment brokers, etc., the Depository, securities finance companies, merchant banks, mutual savings banks, or postal service agencies for the payment of funds related to the acquisition of securities or funds related to acknowledged securities lending transactions or repurchase agreements under Article 7-36; <Amended on Dec. 19, 2013> |
| 3. | Transfer to other investment-only non-resident Korean won accounts, non-resident Korean won free transfer accounts, and non-resident Korean won trust accounts in the name of such foreign investor; <Amended on Dec. 17, 2007> |
| 4. | Withdrawal of deposits into any means of domestic payment for living expenses or purchase of daily necessities, services, etc. incidental to the stay in the Republic of Korea by such foreign investor; |
| 5. | Purchase of securities which fall under Articles 7-36 (1) 3 through 6 from a foreign exchange bank;?<Amended on Apr. 16, 2012> |
| 6. | Transfers to the customer account in the name of such foreign investor in the investment-only non-resident Korean won account in the name of the international central securities depository where such foreign investor intends to entrust the purchase and sale of government bonds or monetary stabilization bonds under Article 69 of the Bank of Korea Act to an international central securities depository pursuant to the proviso of paragraph (1); <Newly Inserted on May 19, 2010> |
| 7. | Proceeds from the sale of funds in exchange for any means of domestic payment to deposit foreign currency funds in the name of such foreign investor in an overseas branch office or local subsidiary of a foreign exchange bank headquartered in the Republic of Korea, or in a foreign financial institution. <Newly Inserted on Jul. 4, 2023> |
| (6) | Where a deposit is withdrawn into any means of domestic payment as provided in paragraph (5) 4, the withdrawal into any means of domestic payment exceeding the equivalent of USD10,000 for the same person on the same date, a notification shall be submitted to the Governor of the Financial Supervisory Service. <Amended on Aug. 3, 2006〉 |
| (7) | A foreign custodian may open an external account and a non-resident Korean won account in its name at a foreign exchange bank for the purpose of exercising rights attached to the securities in its custody including receipt of dividends (excluding purchase and sale transactions); provided that a deposit in and disposition of an external account and a Korean won account of a foreign custodian shall be made by means of mutual transfer between an investment-only external account and investment-only non-resident Korean won account of a foreign investor or transfer to the account of a foreign depository opened overseas by the foreign depository for the purpose of distributing rights to foreign investors. <Amended on Feb. 4, 2009> |
| Article 7-38 (Investment-Only Foreign Currency Accounts of Investment Brokers) |
| (1) | Notwithstanding Article 7-37, an investment broker, etc. may open an investment-only foreign currency account in the name of the investment broker, etc. at a foreign exchange bank for the acquisition and sale of domestic Korean won securities by foreign investors in accordance with Article 7-36 or acknowledged securities lending transactions or repurchase agreements. <Amended on Apr. 16, 2012> |
| (2) | Article 7-37 (2) and (3) shall respectively apply mutatis mutandis to any deposit in and disposition of investment-only foreign currency accounts as provided in paragraph (1). <Amended on Feb. 4, 2009> |
| (1) | The head of a foreign exchange bank shall submit the status of investment-only accounts as provided in Article 7-37 by the types of securities to the Governor of the Bank of Korea by the next business day. The classification of securities, the detailed reporting information shall be determined by the Governor of the Bank of Korea. <Amended on Dec. 15, 2012> |
| (2) | Investment traders and investment brokers shall submit information on the status of securities investments (including investment-only accounts as provided in Article 7-38), performance of purchase and sale, etc., classified by investor and by types of security, to the Governor of the Bank of Korea by the next business day. The Governor of the Bank of Korea shall notify the Governor of the Financial Supervisory Service with any statistical data among such submitted materials by the 10th?day of the first month of the immediately following quarter. The classification of securities, the detailed reporting information, etc. shall be determined by the Governor of the Bank of Korea. <Amended on Dec. 5, 2012> |
| (3) | The Governor of the Bank of Korea shall compile the status of investment-only accounts and the status of purchase and sale by the types of security received according to paragraphs (1) and (2) and file a report thereof with the Minister of Economy and Finance. <Amended on Dec. 5, 2012> |
| (4) | Any international central securities depository that has opened an investment-only account according to the proviso of Article 7-37 (1) shall file a monthly report on the details of transactions and holdings by each foreign investor entrusted with the investment to the Governor of the Bank of Korea by the 10th day of the immediately following month. <Amended on Dec. 17, 2007> |
Section 7 Derivative Transactions
| Article 7-40 (Procedures of Transactions) |
| (1) | No declaration shall be required with respect to derivative transactions between residents or between a resident and a non-resident conducted by a foreign exchange agency as part of foreign exchange services as provided in Chapter II. <Amended on Feb. 4, 2009> |
| (2) | Any derivative transaction between residents or between a resident and a non-resident that does not satisfy paragraph (1), or any derivative transaction that satisfies paragraph (1) and any of the following shall be declared by such resident to the Governor of the Bank of Korea who shall require the Commissioner of the National Tax Service to inspect the details of such declaration, if necessary; provided that a person who intends to engage in any of the transactions under subparagraphs 1 through 3 shall submit documents certifying the validity of the transaction recognized by the Governor of the Bank of Korea: <Amended on Apr. 16, 2012> |
| 1. | Transactions in which not less than 20/100 of the face value is settled by prepaid commissions including option premiums; |
| 2. | Transactions to modify, cancel, or terminate an executed derivative transaction, reflecting the losses incurred from the existing derivative transaction in the price of the new derivative transaction; <Amended on Feb. 4, 2009> |
| 3. | Derivative transactions conducted to evade the procedures of a declaration, etc. as provided in the Act, the Decree, and these Regulations for transactions such as inflow or outflow of funds, provision of loans in Korean won by a resident to a non-resident, and financing by a resident from a non-resident; <Amended on Feb. 4, 2009> |
| 4. | Transactions that require mandatory declaration to the Governor of the Bank of Korea. <Newly Inserted on Apr. 16, 2012> |
| Article 7-41 (Procedures of Settlement) |
The Korea Exchange shall file a monthly report of its performance of derivative transaction with the Governor of the Bank of Korea who shall compile the details of declarations and reports on derivative transactions and file a report thereof with the Minister of Economy and Finance. <Amended on Feb. 4, 2009>
| Article 7-42 (Investment-Only Foreign Currency Accounts) |
| (1) | Where a non-resident, or a foreign resident who intends to secure a guarantee for overseas remittance of investment funds, intends to invest in exchange-traded derivatives or to clear over-the-counter derivatives through the clearing company, he or she shall remit or recover investment-related funds or clearing-related funds by opening an investment-only external account and an investment-only non-resident Korean won account under Article 7-37 (1) at a foreign exchange bank in the name of such investor. In such cases, Article 7-37 shall apply mutatis mutandis to the deposit and disposition of the accounts. <Amended on Mar. 22, 2016> |
| (2) | Investment brokers or the Korea Exchange, securities finance companies, or a clearing company may open investment-only foreign currency accounts in the name of the investment brokers or investment-only foreign currency accounts in the name of the Korea Exchange, securities finance companies, or the clearing company for the purpose of investment in exchange-traded derivatives or clearing of over-the-counter derivatives under paragraph (1) by a non-resident or by a foreign resident who intends to secure a guarantee for overseas remittance of investment funds. In such cases, Article 7-38 shall apply mutatis mutandis to any deposit and disposition of investment-only foreign currency accounts. <Amended on Mar. 22, 2016> |
| (3) | An investment broker shall verify whether funds for settlement by the investor originated from an acknowledged transaction under these Regulations in the management of an account for investment in exchange-traded derivatives or clearing of over-the-counter derivatives of a nonresident. <Amended on Mar. 22, 2016> |
| (4) | With respect to paragraph (2), reports on the status of investment-only foreign currency accounts in the name of investment brokers, Korea Exchange, securities finance companies, and clearing companies, the status of investment in exchange-traded derivatives, the status of clearing of over-the-counter derivatives, and trading results shall be governed by Articles 7-39 mutatis mutandis. <Amended on Mar. 22, 2016> |
Section 8 Other Capital Transactions
Subsection 1 Other Capital Transactions Denominated in Foreign Currency between Residents
| Article 7-43 (Scope of Application) |
| (1) | The provisions of this Subsection shall apply to cases where a resident conducts any of the following transactions or acts with any other resident: <Amended on Dec. 17, 2007> |
| 1. | Transaction involving accrual of claim, etc. denominated or payable in a foreign currency between a resident and any other resident under a lease agreement, provision of collateral or guarantee, insurance (excluding insurance transactions by insurance companies under the Insurance Business Act), cooperative, rental, subrogation of debt, or other agreements similar thereto, except as provided in Article 3 (1) 19 (a) of the Act; <Amended on Feb. 4, 2009> |
| 2. | Transaction involving accrual of claim, etc. payable in a foreign currency between residents from inheritance, bequest, or gift; |
| 3. | Acquisition by a resident from any other resident of foreign securities or any rights thereto; provided that the provisions of Chapter IX shall apply where the requirements for a foreign direct investment are satisfied as a result of acquisition of such foreign securities. <Proviso Newly Inserted on Dec. 17, 2007> |
| (2) | No declaration shall be required where a resident intends to conduct a transaction or act which falls under paragraph (1), with any other resident; provided that the provisions governing debt guarantee agreements in Subsection 2 of Section 3 in this Chapter shall apply mutatis mutandis to transactions related to the accrual of claims, etc. from a collateral or guarantee agreement among the transactions provided in paragraph (1) 1. |
| (3) | Deleted. <Amended on Aug. 3, 2006> |
Subsection 2 Other Capital Transactions between Residents and Non-Residents
| Article 7-44 (Scope of Application) |
| (1) | The provisions of this Subsection shall apply to any of the following transactions or acts between a resident and a nonresident: <Amended on Dec. 17, 2007> |
| 1. | Transaction between a resident and a non-resident involving accrual of claim, etc. under a lease agreement (excluding leases of domestic real estate by non-residents), provision of collateral or guarantee, insurance (excluding insurance transactions by insurance companies under the Insurance Business Act), cooperative, subrogation of debt, reconciliation, or other agreements similar thereto, except as provided in Article 3 (1) 19 (a) of the Act; <Amended on Jun. 18, 2021> |
| 2. | Transaction between a resident and a non-resident involving accrual of claim, etc. arising from inheritance, bequest, or gift; |
| 3. | Acts related to establishment, operation, etc. of a school or hospital overseas by a resident and the receipt of funds therefor; |
| 4. | Integrated management of funds by a resident and acts related thereto. <Amended on Feb. 4, 2009> |
| (2) | The provisions governing collateral and guarantee agreements in Subsection 2 of Section 3 in this Chapter shall apply mutatis mutandis to the transactions involving accrual of claims, etc. under collateral and guarantee agreements, among the transactions as provided in paragraph (1) 1; provided that where a non-resident acquires any real estate provided as collateral, the main clause of this paragraph and Section 5 of Chapter IX shall apply mutatis mutandis. <Amended on Sep. 30, 2009> |
| (3) | Chapter IX shall apply to any transactions involving accrual of claims, etc. under cooperative agreements or other agreements similar thereto from among the transactions as provided in paragraph (1) 1, to the extent that such transactions constitute foreign direct investments. |
| Article 7-45 (Transactions Not Requiring Declarations) |
| (1) | No authorization or declaration shall be required of a person who intends to conduct any of the following transactions or acts between a resident and a non-resident: <Amended on Dec. 17, 2007> |
| 1. | Provision of collateral to a non-resident in the course of providing foreign exchange services by the Bank of Korea or a foreign exchange agency; |
| 2. | Cash advance transaction using a credit card; |
| 3. | Transfer by a resident to a non-resident of any letter of credit issued by an overseas financial institution in connection with export of goods, in accordance with the terms and conditions thereof; |
| 4. | Conclusion of an agreement denominated in a foreign currency between a domestic outbound transporter and a non-resident on the lease of a ship or aircraft (including aircraft engines, and related major components as set forth in the Guidelines on Foreign Exchange Transaction; hereafter in the Subsection the same shall apply) under a term of lease of less than one year, excluding cases where a title thereto is transferred; <Amended on Jul. 1, 2005> |
| 5. | Lease denominated in a foreign currency by a resident to a non-resident of overseas real estate the resident acquired by obtaining acceptance of an acquisition declaration thereof under Section 4 of Chapter IX within the scope recognized at the time of acceptance of such declaration; <Amended on Dec. 17, 2007> |
| 6. | Gratuitous lease of any goods other than real estate by a resident, from a non-resident; |
| 7. | Provision by a non-resident of any deposit, trust, securities, etc., the principal and interest of which may be remitted overseas under these Regulations, as collateral regarding a loan by such non-resident from a financial institution or in favor of any third party; |
| 8. | Payment by a non-resident of any deposit necessary for any legal procedures in the Republic of Korea or provision thereby of foreign securities issued by a domestic corporation in place of such deposit; |
| 9. | Conclusion of any insurance agreement denominated in a foreign currency by a domestic resident with a non-resident or a re-insurance agreement with an overseas insurance company, as recognized under the provisions of statutes or regulations on insurance; |
| 10. | Conclusion of any lease equipment agreement by a person engaging in an overseas construction and service business with a non-resident overseas in connection with such business; |
| 11. | Transaction or act under Articles 7-44 (1) 1 and 2 which is denominated and payable in the domestic currency and conducted domestically between a resident and a non-resident who is a national of the Republic of Korea; <Amended on Feb. 4, 2009> |
| 12. | Transaction in which a resident becomes a party upon accrual of claim, etc. arising from inheritance, bequest, or gift from a non-resident; |
| 13. | Provision of collateral by a resident who has membership in an international securities clearing house in connection with intra-day loan as provided in subparagraph 6 of Article 7-13; |
| 14. | Borrowing by an institutional investor of foreign securities held under an acknowledged transaction, through a foreign securities lending agent; <Amended on Dec. 17, 2007> |
| 14-1. | Where an investment trader or an investment broker whose equity capital as of the end of the immediately preceding quarter exceeds KRW1 trillion borrows or lends foreign securities; <Amended on Mar. 31, 2015> |
| 15. | Disposal of goods in a free export zone prior to expiration of a lease agreement with the permission of the officer managing such zone for any case which falls under Article 7-46 (1) 1; <Amended on Dec. 17, 2007> |
| 16. | Borrowing and lending of Korean won securities and Korean won-linked foreign securities between a resident and a non-resident through the Depository, securities finance companies, or investment traders or investment brokers engaging in brokerage of securities lending and borrowing transactions, or provision of Korean won securities, foreign securities, or monies (including foreign currency) as collateral in connection therewith; <Proviso Deleted on Mar. 22, 2016> |
| 17. | Issuance of a guarantee and provision of collateral by a resident (including an affiliated company thereof) in favor of a local subsidiary of such resident in cases where such local subsidiary issues Korean won securities in the Republic of Korea as provided in Section 5 in order to repay local financing involving the issuance of a guarantee or provision of collateral by the said resident; |
| 18. | Lease of domestic real estate by a resident from a non-resident; provided that this shall be limited to cases where payment is made in the domestic currency; <Amended on Dec. 19, 2013> |
| 19. | Conclusion of a settlement-related arrangement (including a loss-sharing arrangement) by a resident member bank with CLS Bank International in connection with a settlement through the continuous linked settlement system, and its payments and receipts under such arrangement; <Amended on Feb. 4, 2009> |
| 20. | Conclusion of a settlement-related agreement (including a loss-sharing agreement) by a foreign exchange agency with a non-resident in connection with settlement through the continuous linked settlement system, and its payments and receipts under such arrangement; <Amended on Feb. 4, 2009><Newly Inserted on Mar. 31, 2015> |
| 21. | Disbursements by religious organizations for missionary activities overseas; <Newly Inserted on Dec. 17, 2007> |
| 22. | Disbursements by a non-profit corporation for relief activities overseas; provided that such disbursements shall be consistent with the purposes of establishment of such corporation; <Newly Inserted on Dec. 17, 2007> |
| 23. | Receipt by a non-resident of any inheritance or bequest from a resident; <Newly Inserted on Dec. 17, 2007> |
| 24. | Disaster relief donation or other donation by a resident to an international organization, international group, or foreign government. <Newly Inserted on Jun. 2, 2008> |
| (2) | Notwithstanding the proviso of paragraph (1) 16, where the borrowing balance of a nonresident exceeds KRW30 billion, a report thereof shall be filed with the Governor of the Bank of Korea within three business days from the date on which such balance initially exceeded such amount; and a monthly report of the details of the changes in the borrowing balance in excess of KRW30 billion shall be filed with the Governor of the Bank of Korea by the 10th day of the immediately following month. <Amended on Mar. 22, 2016> |
| (3) | Notwithstanding paragraph (1) 14-1, an investment trader or an investment broker whose equity capital as of the end of the immediately preceding quarter exceeds KRW1 trillion, shall file a report of the details of foreign securities borrowing and lending transactions (including details of the lending under paragraph (1) 4) with the Governor of the Bank of Korea and the Governor of the Financial Supervisory Service by the 10th day of the immediately following month for each month. <Newly Inserted on Mar. 31, 2015> |
| Article 7-46 (Declarations) |
| (1) | A resident who intends to conduct any of the following transactions or acts with a non-resident shall file a report thereof with the head of the foreign exchange bank within one month from the date of occurrence of the transaction or act: <Amended on Apr. 16, 2012><Amended on Jul. 4, 2023> |
| 1. | Conclusion of an agreement between a resident and a non-resident on the lease of any goods other than real property (including cases where the title thereto is transferred) in the amount of not more than USD30 million per agreement; |
| 2. | Conclusion of an agreement denominated in a foreign currency between a domestic outbound transporter and a non-resident on the lease of a ship or aircraft under a term of lease of not less than one year, excluding cases where the title thereto is transferred. |
| (2) | Except as provided in paragraph (1) and Article 7-45, where any transaction or act between a resident and a non-resident falls under Article 7-44, the resident shall make a declaration to the Governor of the Bank of Korea. <Proviso Deleted on Mar. 22, 2016> |
| (3) | A person who intends to engage in integrated fund management in accordance with paragraph (2) shall make a declaration of corporations participating in the integrated fund management, the loan borrowing limits, etc. to the Governor of the Bank of Korea through the designated foreign exchange bank prior to commencement of such integrated fund management, and the person who has made a declaration of the integrated fund management shall file a report of the status of operation thereof with the Governor of the Bank of Korea by the 20th day of the immediately following month for each quarter. <Amended on Mar. 22, 2016> |
| (4) | A resident who has made a declaration to the Governor of the Bank of Korea in accordance with paragraph (2) for the purposes of any act related to establishment, operation, etc. of a school or hospital overseas and any payment and receipt of funds in connection therewith, shall file a report of the status of management of such funds and other relevant matters in relation to establishment, operation, etc. of the school or hospital with the Governor of the Bank of Korea by the 20th day of the first month of the immediately following year. <Amended on Feb. 4, 2009> |
| (5) | Deleted. <Amended on Mar. 22, 2016> |
| (6) | A person who makes a declaration of any transactions involving accrual of claims, etc. under a reconciliation agreement or other agreements similar thereto, among transactions under Article 7-44 (1) 1, shall submit documents to prove the validity of the reasonableness of the relevant agreement as required by the Governor of the Bank of Korea at the time of such declaration and shall submit materials related to the actual agreement and other details of payment, etc. within one month from the date of payment. <Newly Inserted on Apr. 16, 2012> |
Subsection 3 Domestic Currency-Denominated Capital Transactions Between Non-Residents
| Article 7-47 (Scope of Application) |
The provisions of this Subsection shall apply to cases where a non-resident engages with any other non-resident in any of the following transactions or acts:
| 1. | Transaction between non-residents involving accrual of claim, etc. denominated or payable in the domestic currency; |
| 2. | Acquisition by a non-resident from any other non-resident of Korean won securities or any rights thereto. |
| Article 7-48 (Declarations) |
| (1) | No declaration shall be required where a non-resident intends to engage with any other non-resident in any of the following transactions or acts: <Amended on Dec. 17, 2007> |
| 1. | Domestic currency-denominated transactions conducted by an overseas branch office of a foreign exchange bank and a local subsidiary of a foreign exchange bank with a non-resident (limited to purchase and sale of the domestic currency, Korean won-denominated traveler's checks, and Korean won-denominated cashier's checks with non-residents); <Amended on Jun. 29, 2017> |
| 2. | Domestic currency-denominated transactions conducted in the Republic of Korea between non-residents who are nationals of the Republic of Korea (including capital transactions); |
| 3. | Domestic currency-denominated transactions conducted by a non-resident with any other non-resident in connection with living expenses, the purchase of goods or services, etc. incidental to the stay in the Republic of Korea by the former, or a domestic currency-denominated transaction conducted by a non-resident with any other non-resident in connection with conducting business activities permissible in the country by the former; |
| 4. | Acquisition by a non-resident of Korean won securities acquired through an acknowledged transaction from any other nonresident; |
| 5. | Domestic currency-denominated deposit transactions conducted by a non-resident with an overseas financial institution; |
| 6. | Borrowing and lending of Korean won securities between non-residents through the Depository, securities finance companies, or investment traders or investment brokers engaging in brokerage of securities lending and borrowing transactions acknowledged under the Enforcement Decree of the Financial Investment Services and Capital Markets Act, or provision of Korean won securities or monies (including foreign currencies) as collateral in connection therewith; <Amended on Feb. 4, 2009> |
| 7. | Provision of any securities acquired under the Foreign Investment Promotion Act or Subsection 3 of Section 6 of Chapter VII by a foreign investor as collateral to a non-resident; |
| 8. | Purchase and sale of the domestic currency, Korean won-denominated traveler's checks and Korean won-denominated cashier's checks by a foreign financial institution or an overseas currency exchange operator with non-residents; <Amended on Dec. 17, 2007> |
| 9. | Transactions involving accrual of claim, etc. denominated or payable in the domestic currency between non-residents under inheritance or bequest; <Newly Inserted on Nov. 6, 2001> |
| 10. | Domestic currency-denominated derivative transactions conducted between non-residents overseas and of which the net settlement is paid in a foreign currency; <Amended on Feb. 4, 2009> |
| 11. | Any of the following transactions denominated in Korean won between a non-resident and any other non-resident in connection with settlement through the continuous linked settlement system: |
| (a) | Settlement-related arrangement between CLS Bank International and a non-resident member bank of the foreign exchange simultaneous settlement system or between a non-resident member bank and any other non-resident; |
| (b) | Transaction in which a non-resident member bank of the foreign exchange simultaneous settlement system obtains from CLS Bank International a short position in Korean won with specified limits determined by CLS Bank International, or a non-resident customer receives intra-day or over-night credit in Korean won from a non-resident member bank; |
| (c) | In/out swap transaction or any other transaction similar thereto between non-resident member banks of the continuous linked settlement system for the purpose of reducing settlement liquidity; <Amended on Jan. 1, 2006> |
| (d) | Spot, forward, or swap transactions between CLS Bank International and a non-resident (liquidity provider) under a liquidity supply agreement; |
| (e) | Receipt by a non-resident participant of the continuous linked settlement system from CLS Bank International or a member bank in a currency other than the currency of the original commitment; <Amended on Feb. 4, 2009> |
| (f) | Conclusion of a loss sharing agreement between CLS Bank International and a non-resident member bank of the continuous linked settlement system; |
| (g) | Loss sharing agreement between a non-resident member bank of the continuous linked settlement system and a non-resident customer thereof; <Newly Inserted on Jul. 1, 2005> |
| 12. | Provision of collateral by a non-resident to any other non-resident of deposits and trusts in Korean won the principal and interest of which may be freely remitted overseas; <Newly Inserted on Dec. 17, 2007> |
| 13. | Conclusion of domestic currency-denominated cash loan agreement between non-residents using funds for currency swaps between the Bank of Korea and a foreign central bank; <Newly Inserted on Dec. 5, 2012> |
| 14. | Purchase and sale between currencies, derivative transactions, and domestic currency-denominated lending transactions in the foreign exchange market of a country, for which a clearing bank is designated, between the clearing bank and a foreign financial institution (provided that such financial institution shall be limited to financial institutions satisfying subparagraph 1 of Article 14 of the Decree) with a domestic currency account at the clearing bank; <Newly Inserted on Jun. 8, 2018> |
| 15. | Trade-related derivatives transactions or domestic currency-denominated loan transactions (trade finance) in the foreign exchange market of a country, for which a clearing bank is designated, between a foreign financial institution (provided that such foreign financial institution shall be limited to financial institutions satisfying subparagraph 1 of Article 14 of the Decree) with a domestic currency account at such clearing bank and a non-resident person domiciled or resident in the designated country (provided that such transaction shall be limited to the extent of the confirmed trade transaction amount). <Newly Inserted on Jun. 8, 2016> |
| (2) | Except as provided in paragraph (1), where a non-resident intends to conduct any transaction or act, which falls under Article 7-47, with any other non-resident, a declaration thereof shall be made to the Governor of the Bank of Korea. <Amended on Dec. 24, 2018> |
CHAPTER IX DIRECT INVESTMENT AND REAL ESTATE ACQUISITION
| Article 9-1 (Declaration) |
| (1) | A resident or non-resident who intends to make a direct investment, establish a branch, or acquire real estate (hereinafter in this Article referred to as “direct investment, etc.”) shall make a declaration, etc. as provided in this Chapter; provided that Chapter VII shall apply where a non-resident intends to make a direct investment in the Republic of Korea under the Foreign Investment Promotion Act. |
| (2) | Notwithstanding the main clause of paragraph (1), a resident who intends to make a direct investment, etc. in a foreign country may make a payment not exceeding USD50,000 prior to fulfilling the procedures of a declaration, etc. as provided in the Sections of this Chapter. In such cases, the procedures of a declaration, etc. under this Chapter shall be fulfilled within one year from the date on which a contract for the relevant transaction is duly effected. <Amended on Jul. 4, 2023> |
| (3) | A person, who has made a declaration of any direct investment, etc. or obtained acceptance of such declaration under this Chapter and intends to change any declared matter, shall submit a declaration thereof to the relevant declaration receipt (acceptance) agency, along with the details of change; provided that changes in the information on the existing declarant, agent, and the other party to transaction or changes in the contents of foreign direct investment notification pursuant to Article 9-5 may be reported ex post facto. <Amended on Aug. 4, 2020><Amended on Jul. 4, 2023> |
| (4) | Matters pertaining to foreign direct investment under Section 1 of this Chapter and the establishment of an overseas branch under Section 2 of this Chapter by financial institutions (referring to financial companies, etc. defined in Article 3 (1) 17 of the Act) shall be determined by the Financial Services Commission. <Amended on Dec. 19, 2013> |
| (5) | The Financial Services Commission in receipt of declarations under paragraph (4) shall submit the details thereof to the Minister of Economy and Finance on a quarterly basis. <Newly Inserted on Jul. 25, 2008> |
| (6) | Documents for declaration, etc. under paragraph (1) may be submitted through electronic means upon real-name verification. <Newly Inserted on Aug. 4, 2020> |
Section 1 Foreign Direct Investment
Subsection 1 Common Provisions
| Article 9-1-2 (Foreign Direct Investment Mechanisms) |
The mechanisms of foreign direct investments shall be any of the following: <Amended on Jun. 2, 2008>
| 2. | Retained earnings and capital surpluses of local subsidiaries; <Amended on Dec. 17, 2007> |
| 3. | Capital goods (referring to capital goods defined in Article 2 (1) 9 of the Foreign Investment Promotion Act); <Amended on Apr. 16, 2012> |
| 4. | Industrial property rights or other technologies equivalent thereto, and any rights to the use thereof; |
| 5. | Residual property in the event of liquidation of overseas corporations, overseas branch offices, or overseas business offices; |
| 6. | External liabilities; <Amended on Jun. 29, 2017> |
| 7. | Stocks; <Amended on Dec. 17, 2007> |
| 8. | Other assets whose value and amount can be substantiated and proven to be reasonable. <Newly Inserted on Jun. 2, 2008> |
| Article 9-2 (Examination of Investment Business) Deleted. <Amended on Jul. 25, 2008> |
| Article 9-2-2 (Obligation of the Chairperson and President of the Export-Import Bank of Korea to Submit Reports) |
The Chairperson and President of the Export-Import Bank of Korea shall comprehensively manage any and all statistics and reports submitted by foreign direct investors or the notification receipt agency, and prepare the following reports and submit them to the Minister of Economy and Finance within the period provided in any of the following subparagraphs:
| 1. | A foreign direct investment notification and investment performance (monthly report): By the last day of the immediately following month; <Amended on Feb. 4, 2009> |
| 2. | Analysis of foreign direct investment trends (quarterly and annual report): By the 10th day of the second month of each quarter and by March of the immediately following year; <Amended on Feb. 4, 2009> |
| 3. | Foreign direct investment management analysis report: By October of the immediately following year. <Newly Inserted on Feb. 26, 2007><Amended on Feb. 4, 2009> |
| Article 9-3 (Support for Foreign Direct Investment) |
The Minister of Economy and Finance may restrict or grant preferential treatment to foreign direct investments and related support, based on the type, category of business, region, etc. of such investments, with consideration to the impact of such investments on the domestic industry, international balance of payments, foreign relations, etc.
| Article 9-4 (Repatriation of Investment) |
| (1) | Any foreign direct investor shall repatriate the principal of and proceeds from his or her investment to the Republic of Korea in accordance with the details of the relevant declaration. <Amended on Jul. 25, 2008> |
| (2) | Notwithstanding paragraph (1), this shall not apply to cases where any person intends to engage in acknowledged capital transactions. <Amended on Dec. 17, 2007> |
Subsection 2 Foreign Direct Investment by Residents Other Than Financial Institutions
| Article 9-5 (Foreign Direct Investment Notification) |
| (1) | A resident (excluding any individual or sole proprietor who is in the process of emigrating overseas or intends to make payments for the purpose of obtaining permanent residency, etc.) who intends to make any foreign direct investment (including an incremental investment) shall file a notification thereon with the head of a foreign exchange bank as provided in any of the following subparagraphs: <Amended on Aug. 4, 2020> <Amended on Jul. 4, 2023> |
| 1. | In cases of a resident that is an enterprise in the main debtor group: The main creditor bank of such entity; |
| 2. | In cases of a resident that is not an enterprise in the main debtor group: The bank providing the largest loan; |
| 3. | In cases of a resident who does not fall under subparagraph 1 or 2: The bank designated by the resident. |
| (2) | Notwithstanding paragraph (1), a resident who intends to make any of the following foreign direct investments may file a post-facto report within three months from the date of transaction: <Amended on Aug. 4, 2020><Amended on Jun. 18, 2021><Amended on Dec. 29, 2021><Amended on Jul. 4, 2023> |
| 1. | Where a resident intends to make a foreign direct investment by acquiring the relevant stocks or equity from a resident who has made a foreign direct investment; |
| 2. | Where a foreign corporation which has already invested makes an incremental investment using retained earnings or capital surplus; |
| 3. | Investments with a cumulative investment amount not exceeding USD500,000. |
| (3) | A person who intends to make a foreign direct investment shall submit a foreign direct investment notification in Form 9-1 to the relevant agency or notification receipt agency, along with the following documents. The same shall apply to post-facto reports under paragraph (2); provided that documents already submitted under paragraph (4) need not be submitted: <Amended on Jul. 25, 2008><Amended on Jul. 4, 2023> |
| 1. | A business plan (including a financing and fund operation plan); <Proviso Deleted on Feb. 26, 2007> |
| 4. | Documents evidencing that the person intending to make a foreign direct investment is not registered with a general credit information collection agency as a person who failed to repay obligations within an agreed due date in commercial transactions, including financial transactions under the Use and Protection of Credit Information Act; provided that this shall not apply if a company undergoing reorganization under the Company Reorganization Act or the Composition Act invests by using existing idle facilities or technologies or in accordance with a decision made by a court or a credit management team as provided in relevant statutes or regulations; <Amended on Sep. 30, 2009> |
| 5. | Documents evidencing the absence of defaulted tax obligations; <Newly Inserted on Sep. 30, 2009> |
| 6. | Other documents deemed necessary by the head of the notification receipt agency. <Amended on Sep. 30, 2009> |
| (4) | Notwithstanding Articles 4-2 and 4-3, for investments with a cumulative investment amount not exceeding USD500,000 under the proviso of paragraph (1), the investment may be remitted in advance by submitting the documents under paragraph (3) 4 and 5. <Amended on Dec. 24, 2018> |
| (5) | Where a resident fails to file a foreign direct investment notification or makes foreign direct investment contrary to the submitted notification thereon, the relevant violation may be reported to the head of the sanctioning agency and a post-facto notification on the relevant investment may be submitted to the head of the notification receipt agency. <Amended on Apr. 16, 2012> |
| (6) | Where a private investor acquires permanent residency or citizenship, Articles 9-4 and 9-6 through 9-9 shall not apply; provided that this shall not apply if a private investor who has acquired permanent residency subsequently stays in the Republic of Korea and becomes a resident. <Amended on Dec. 19, 2013> |
| Article 9-6 (Liquidation of Foreign Direct Investment Business) |
| (1) | Upon liquidating his or her investment business, a foreign direct investor shall promptly repatriate the distributed residual property to the Republic of Korea according to Article 9-4 and submit liquidation-related documents to the notification receipt agency. |
| (2) | Notwithstanding paragraph (1), a foreign direct investor who intends to engage in any acknowledged capital transaction overseas after filing of a report on liquidation need not repatriate liquidation fund to the Republic of Korea. |
| Article 9-7 (Post Management by Notification Receipt Agencies) Deleted. <Amended on Dec. 19, 2013> |
| Article 9-8 (Investigation Request to the Heads of Local Diplomatic Missions) |
| (1) | Deleted. <Amended on Dec. 19, 2013> |
| (2) | Deleted. <Amended on Dec. 19, 2013> |
| (3) | The Minister of Economy and Finance may request the head of a local diplomatic mission to investigate into an investment environment, and require him or her to report foreign investment-related measures implemented by the government of the foreign country and changes in the investment environment. <Amended on Dec. 19, 2013> |
| Article 9-9 (Post Management) |
| (1) | Any foreign direct investor shall submit to the head of the notification receipt agency any of the following reports or documents by the deadline provided in any of the following; provided that where the head of the notification receipt agency deems it impossible for a foreign direct investor or a local subsidiary invested thereby to submit such reports or documents due to the its temporary or permanent business closure or other unavoidable reasons such as disaster, such reports or documents provided in any of the following subparagraphs need not be submitted until the relevant unavoidable reason ceases to exist: <Amended on Dec. 19, 2013><Amended on Dec. 29, 2021> |
| 1. | A report on the acquisition of foreign currency securities (bonds) (including a report on the establishment of a corporation or sole proprietorship): Within six months from the date of payment of investment funds or provision of a loan; provided that the obligation to submit a report on the acquisition of foreign currency securities (bonds) shall be waived for any investment which constitutes an overseas resources development business or infrastructure development project under Article 8 (2) 3 of the Decree and does not take the form of a corporation; <Amended on Feb. 4, 2009> |
| 2. | Deleted; <Amended on Feb. 26, 2007> |
| 3. | Deleted; <Amended on Feb. 26, 2007> |
| 4. | A remittance (investment) report: Immediately after remittance or investment (at the time of investment in cases the investment amount is procured through local financing); |
| 5. | An annual business performance report (excluding any overseas resources development business and infrastructure development project not an investment in the form of a corporation): Within five months from the end of an accounting period. The head of the notification receipt agency may waive submission of an annual business performance report for any investment, other than investment in a real estate-related business where the total amount of investment does not exceed USD2 million in total, and may permit submission of a local subsidiary investment status table in lieu of such report for a total investment amount not exceeding USD3 million in total; <Amended on Dec. 24, 2018><Amended on Dec. 29, 2021> |
| 6. | A liquidation statement (including details on recovery of principal and interest in cases of a cash loan): Immediately upon receipt of liquidation fund or recovery of principal and interest; <Amended on Feb. 4, 2009> |
| 7. | Deleted; <Amended on Feb. 26, 2007> |
| 8. | A resident who intends to modify matters notified or reported under Article 9-5 (1) of these Regulations (including changes and liquidation of establishment and investment amount of a subsidiary of a local subsidiary, which meets the requirements under Article 8 (1) of the Decree, or a second-tier subsidiary of a subsidiary, which meets the requirements under Article 8 (1) of the Decree, or where a loan is taken out under Article 8 (1) 4 of the Foreign Exchange Transactions Act but repaid within one year): Within five months from the end of the accounting period in which the cause of modification arises; <Amended on Feb. 26, 2007><Amended on Jul. 4, 2023> |
| 9. | A resident who has made a foreign direct investment sells the relevant stocks or equity to another resident: Within three months from the date the cause of such modification arises; <Newly Inserted on Jul. 4, 2023> |
| 10. | Other documents requested by the head of the notification receipt agency as deemed necessary for post management of foreign direct investments. <Newly Inserted on Jul. 4, 2023> |
| (2) | The head of the notification receipt agency shall prepare a foreign direct investment ledger for the post management of foreign direct investment projects which have been notified pursuant to this Section, and submit such ledger to the Chairperson and President of the Export-Import Bank of Korea within the period provided in any of the following subparagraphs; provided that this shall not apply where it is deemed impossible for the head of the notification receipt agency to receive related reports or documents from a foreign direct investor and a local subsidiary invested thereby. In such cases, the head of the notification receipt agency shall submit a report on circumstances that make it impossible to receive relevant reports or documents with the Chairperson and President of the Export-Import Bank of Korea: <Amended on Dec. 19, 2013><Amended on Dec. 29, 2021> |
| 1. | A copy of a foreign direct investment notification (including a report on any modification thereof), and a foreign direct investment notification and investment performance (monthly report): By the 15th day of the immediately following month; <Amended on Dec. 28, 2017> |
| 2. | An annual business performance report (a local subsidiary investment status table): Immediately after submission thereof by a foreign direct investor; <Amended on Feb. 26, 2007> |
| 3. | Other documents necessary for statistics or post management such as a comprehensive post management summary. <Amended on, Feb. 26, 2007> |
| (3) | The head of the notification receipt agency shall be deemed to have submitted the documents pursuant to paragraph (2) where the details of declarations, remittances, post management (recovery, sale of shares, liquidation, etc.), and business performance have been entered into the foreign direct investment statistics system of the Export-Import Bank of Korea; provided that paragraph (2) shall apply mutatis mutandis to the deadline for entries provided in the main clause. <Amended on Dec. 17, 2007> |
| (4) | Deleted. <Amended on Dec. 19, 2013> |
| (5) | The Chairperson and President of the Export-Import Bank of Korea shall prepare an annual report on the status of foreign direct investees, and send it to the Minister of Economy and Finance and the heads of overseas diplomatic missions. In such cases, the Minister of Economy and Finance may request additional materials and conduct fact-finding investigations, etc. |
| (6) | Deleted. <Amended on May 3, 2019><Amended on Dec. 29, 2021> |
| (7) | The head of the notification receipt agency shall notify the Commissioner of the National Tax Service, the Commissioner of the Korea Customs Service, and the Governor of the Financial Supervisory Service, through the Export-Import Bank of Korea, of the following reports on investment by an individual, sole proprietor, or corporation, investment in the real estate-related business, and investment in stocks by the deadline provided in any of the following: <Amended on, Dec. 19, 2013> |
| 1. | Details of a foreign direct investment notification, details of a report on remittance (investment), details of a report on the liquidation of a foreign direct investment project and the collection of loans, the temporary or permanent business closure of a foreign direct investor or its local subsidiary which has been invested in, unaccounted for, and acquisition of citizenship, etc.: Within the 25th day of the following month for each month; |
| 2. | An annual business report under paragraph (2) 2: Within the end of September of the immediately following year for each year. |
| (8) | Reports or documents under paragraph (1) may be submitted through electronic means upon real-name verification. <Newly Inserted on Jun. 18, 2021> |
Subsection 3 Foreign Direct Investment in Financial/Insurance Business
| Article 9-10 (Foreign Direct Investment in Financial/Insurance Business by Financial Institutions) Deleted. <Amended on Jul. 25, 2008> |
| Article 9-11 (Foreign Direct Investment in Financial/Insurance Business by Residents Other Than Financial Institutions) Deleted. <Amended on Jul. 25, 2008> |
| Article 9-11-2 (Foreign Direct Investment in Financial/Insurance Business through Local Subsidiaries Engaging in Non-Financial/Insurance Business) Deleted. <Amended on Jul. 25, 2008> |
| Article 9-12 (Foreign Direct Investment of Local Subsidiary Financial Institutions in Other Companies) Deleted. <Amended on Jul. 25, 2008> |
| Article 9-13 (Procedures of Business Discontinuation by Local Subsidiary Financial Institutions) Deleted. <Amended on Jul. 25, 2008> |
| Article 9-14 (Procedures for Changing Details of Declaration by Local Subsidiary Financial Institutions) Deleted. <Amended on Jul. 25, 2008> |
| Article 9-15 (Reports of Local Subsidiary Financial Institutions) Deleted. <Amended on Jul. 25, 2008> |
| Article 9-15-2 (Foreign Direct Investment in Offshore Financial Companies) |
| (1) | Notwithstanding Article 9-5, a resident (excluding individuals and sole proprietors; hereafter in this Article the same shall apply) who intends to make a foreign direct investment in an offshore financial company, etc. shall file a notification thereon with the Governor of the Bank of Korea, as stipulated in this Article. <Amended on Jul. 25, 2008> |
| (2) | A resident (a person with the highest investment ratio in cases of joint investment in an offshore financial company, etc.) who intends to make any of the following foreign direct investments in an offshore financial company, etc. shall file with the Governor of the Bank of Korea a notification on investment in an offshore financial company (local subsidiary financial institution) in Form 9-2: <Amended on Feb. 4, 2009> |
| 1. | Investments equivalent to those provided in Article 8 (1) of the Decree; <Amended on Feb. 4, 2009> |
| 2. | Investments in which the total amount of investment (referring to purchase of debt securities, and provision of a loan, guarantee, or collateral through the procedures stipulated in Chapter VII) in an offshore financial company including the amount of such investment as provided in subparagraph 1 is not less than 10/100 of the total assets of such offshore financial company (excluding transactions conducted by a foreign exchange agency for non-investment business affairs); |
| 3. | Investments falling under subparagraph 2 in a foreign financial institution for the purpose of making an investment in an offshore financial company (referring to cases equivalent to those provided in subparagraph 1 or 2); |
| 4. | Investments falling under subparagraphs 1 through 3, in a fund management unit in an offshore financial company or foreign financial institution. |
| (3) | A local subsidiary of a resident (including offshore financial companies), or a subsidiary or lower-tier subsidiary thereof, or overseas branch office who intends to make an investment which falls under any subparagraph of paragraph (2) shall submit a report on establishment of a branch office (subsidiary/ lower-tier subsidiary) of an offshore financial company (local subsidiary financial institution) in Form 9-3 to the Governor of the Bank of Korea under Article 20 (1) of the Act. <Amended on Dec. 28, 2017> |
| (4) | A person, who has submitted a foreign direct investment notification with respect to an offshore financial company, etc., and intends to change the details of notification or close down an offshore financial company, etc., shall submit a report on modification (closure) of an offshore financial company (local subsidiary financial institution), etc. in Form 9-4 under Article 20 (1) of the Act to the Governor of the Bank of Korea; provided that if a resident who has made a foreign direct investment in an offshore financial company, etc. sells the relevant stocks or equity to another resident, he or she shall submit a report on modification (closure) with the Governor of the Bank of Korea immediately upon the occurrence of the cause for modification (closure). <Amended on Dec. 28, 2017> |
| (5) | Any person, who has submitted a foreign direct investment notification with respect to an offshore financial company, etc. under paragraphs (2) and (3), shall submit a semiannual report on the establishment and operation, etc. of such offshore financial company, etc. to the Governor of the Bank of Korea by the end of the first month of the immediately following semi-annual period. The Governor of the Bank of Korea shall compile copies of such notifications (accepted) on offshore financial companies, the status on the establishment and operation thereof, etc. and shall submit a report thereon to the Minister of Economy and Finance and notify the Commissioner of the National Tax Service and the Governor of the Financial Supervisory Service thereof by the end of the second month of the immediately following semi-annual period (by the 10th day of the immediately following month for copies (accepted) of notifications on offshore financial companies). <Amended on Dec. 28, 2017><Amended on Dec. 29, 2021> |
| (6) | Where the amount of investment by a resident in an offshore financial company, etc. for a year after his or her filing of a foreign direct investment notification thereof (or the amount of investment for a period of six months after reporting a change in foreign direct investment) is less than 10/100 of the total equity or total assets of the offshore financial company, a notification of a foreign direct investment in the overseas financial company shall be deemed to constitute a declaration under Article 7-31 (2). <Amended on Dec. 28, 2017> |
| (7) | Where an offshore financial company continues to exist for six months with impaired capital or after full recovery of the investment therein, the Governor of the Bank of Korea may recommend the relevant resident to submit a report on the closure of such offshore financial company; provided that an offshore financial company that does not disclose an intention to continue investing within one month from such recommendation by the Governor of the Bank of Korea, a report on closure thereof shall be deemed to have been submitted. <Amended on Dec. 28, 2017> |
| (8) | Where a resident recovers his or her investment in an offshore financial company, etc., a report on the details thereof shall be submitted to the Governor of the Bank of Korea within one month from the date of such recovery; provided that this shall not apply where a report on modification (closure) of an offshore finance company is submitted under paragraph (4). <Amended on Dec. 28, 2017> |
Section 2 Overseas Branches of Domestic Companies
Subsection 1 Common Provisions
| Article 9-16 (Scope of Application) |
The provisions of this Section shall apply where a resident intends to establish and operate a branch or office of the resident in a foreign country (hereinafter referred to as an "overseas branch"), and to perform acts and receive funds pursuant to the provisions of Article 3 (1) (19) (e) of the Act and Article 9 (1) and 9 (2) 6 of the Decree. <Amended on Feb. 4, 2009>
| Article 9-17 (Classification of Overseas Branches) |
An overseas branch shall be classified as follows:
| 1. | ”Overseas branch office in a foreign country” established for the purpose of engaging in business activities overseas subject to the self-supporting accounting system in principle; |
| 2. | “Overseas business office” established for the purpose of performing non-business functions overseas, such as liaison, market surveys, research and development activities, without engaging in any business activities or established by non-profit organizations (including religious organizations) for the purpose of performing activities overseas in conformity with the purpose of establishment thereof. |
| (2) | Deleted. <Amended on Jul. 25, 2008> |
Subsection 2 Overseas Branches of Non-Financial Institutions
| Article 9-18 (Declaration on Establishment) |
| (1) | A non-financial institution falling under any item of subparagraphs 1 and 2, who intends to establish a branch in a foreign country, shall make a declaration thereof to the head of a designated foreign exchange bank: <Amended on Jul. 25, 2008> |
| 1. | For the establishment of an overseas branch office: |
| (a) | Person whose foreign currency acquisition track record for the most recent one year is equal to or more than USD1 million; |
| (b) | Other persons whose establishment of an overseas branch office is deemed necessary by the competent Minister, the Minister of SMEs and Startups, or the head of the Korea International Trade Association in consideration of the prospects for foreign currency acquisitions, etc.; <Amended on Dec. 24, 2018> |
| 2. | For the establishment of an overseas business office: |
| (a) | A public institution; <Amended on Feb. 4, 2009> |
| (b) | The Financial Supervisory Service; |
| (c) | A person whose foreign currency acquisition track record for the most recent one year is equal to or more than USD300,000; |
| (d) | An international travel agent that attracted not less than 8,000 tourists for the most recent one year; |
| (e) | Two or more persons who intend to jointly establish an overseas business office collectively meeting requirements under item (c) or (d); <Amended on Dec. 19, 2013> |
| (f) | A corporation such as an association or partnership comprised of foreign currency acquisition companies or producers of exported goods or military supplies; |
| (g) | The Korea Federation of Small and Medium Business; |
| (h) | A domestic newspaper company, news agency, or broadcasting company; |
| (i) | A person whose establishment of an affiliated research institute in a foreign country is deemed necessary by the Minister of Trade, Industry and Energy under statutes or regulations designed to promote the innovation of industrial technologies; <Amended on Dec. 19, 2013> |
| (j) | A corporation engages in trade business as defined under the Foreign Trade Act, which was established at least one year ago; |
| (k) | Other persons (including non-profit organizations) whose establishment of an overseas business office is deemed inevitable by the competent Minister, the Minister of SMEs and Startups, or the head of the Korea International Trade Association. <Amended on Dec. 24, 2018> |
| (2) | Deleted. <Amended on Feb. 4, 2009> |
| Article 9-19 (Operating Funds of Overseas Branch Offices in Foreign Countries) |
| (1) | If a person who has established an overseas branch office intends to pay such overseas branch office any operating funds (including funds to cover establishment costs and maintenance costs thereof as well as working capital to finance the business activities thereof, but excluding locally financed funds; hereinafter the same shall apply) within the scope as previously declared at the time of making a declaration of establishment of the overseas branch office, the payment shall be made through a designated foreign exchange bank. |
| (2) | Any person who intends to remit operating funds in excess of the amount thereof previously declared at the time of making a declaration of establishment of a branch office in a foreign country shall submit a report thereon to the head of a designated foreign exchange bank within one month after the date of payment. <Amended on Jul. 4, 2023> |
| (3) | The self-supporting accounting system shall not apply to overseas branch offices of any of the following persons. In such cases, operating funds (excluding establishment costs and maintenance costs under Article 9-20) shall not be paid thereto; provided that a self-supporting accounting system may be used if the Governor of the Bank of Korea accepted a declaration thereof under unavoidable circumstances, and quarterly reports on the details of remittance from overseas branch offices shall be filed with the Governor of the Bank of Korea: <Amended on Apr. 16, 2012> |
| 1. | Outbound transporters and deep-sea fishers; |
| 2. | Persons engaging in the business of overseas construction and services. |
| Article 9-20 (Expenses of Overseas Business Offices) |
| (1) | Establishment costs and maintenance costs of overseas business offices shall be disbursed through a designated foreign exchange bank. |
| (2) | For disbursement of expenses arising from the expansion of an overseas business office, a report thereof shall be submitted to the head of a designated foreign exchange bank within one month from the date of payment. <Amended on Jul. 4, 2023> |
| (3) | Deleted. <Amended on Aug. 4, 2020> |
| (4) | The head of a designated foreign exchange bank may allocate any remaining balance resulting from the settlement of establishment costs to maintenance costs where such balance remains unused. The dedicated amount for this purpose shall be consolidated with the total disbursement amount for maintenance costs of the respective business office. |
| Article 9-21 (Operating Costs of Overseas Branch Offices of Domestic Airline or Shipping Companies) |
| (1) | Notwithstanding Articles 4-5 and 9-20, a domestic airline or a shipping company providing services on an overseas route may directly pay the remuneration for stationed staff, establishment costs, and maintenance costs of its overseas branch office within the scope of 30/100 of the total annual revenue of all overseas branch offices thereof for the relevant year. <Amended on Dec. 17, 2007> |
| (2) | A domestic airline or a shipping company shall annually submit to the head of a designated foreign exchange bank a detailed report on local revenue of each of its overseas branch offices and a detailed report on the use of local revenue as provided in paragraph (1) within two months from the end of the relevant year, and subject itself to post management. |
| Article 9-22 (Business Activities of Overseas Branch Offices) |
| (1) | An overseas branch office that intends to engage in any of the following transactions or acts shall make a declaration thereof to the Governor of the Bank of Korea and obtain acceptance of such declaration thereby: |
| 1. | Transaction or act related to real estate; provided that this shall not apply to any real estate transaction conducted in connection with the acquisition, etc. of overseas real estate necessary for overseas business activities, such as real estate, etc. for office space and residential properties for stationed staff, within the scope of the operating funds and retained earnings of the overseas branch office (in cases of an overseas branch office in a foreign country which is an exception to the self-supporting accounting system, within the scope of acknowledged establishment costs and maintenance costs); |
| 2. | Transaction or act related to securities; provided that this shall not apply to any transaction or act conducted to perform obligations under the statutes or regulations of the relevant host country, in connection with business activities of the overseas branch office and to any transaction of redeemable and marketable securities issued by a government agency or financial institution in the host country; |
| 3. | Loans to a non-resident with a repayment period exceeding one year; provided that cases of local financing falling under Article 8-2 shall be excluded. <Amended on Jul. 4, 2023> |
| (2) | The Governor of the Bank of Korea shall apply Section 4 of Chapter IX mutatis mutandis to the acceptance of a declaration of any transaction or act related to real estate as provided in paragraph (1) 1. <Amended on Dec. 17, 2007> |
| Article 9-23 (Disposition of Net Income Upon Settlement of Accounts of Overseas Branch Offices) |
| (1) | A resident who has established overseas branch offices subject to the self-supporting accounting system shall submit to the head of the designated foreign exchange bank the financial statements, accompanying documents, and details of the disposal of net income upon settlement of accounts for each overseas branch office during the respective accounting period of the resident within five months after the expiration of the accounting period. <Amended on Dec. 19, 2013> |
| (2) | Disposal of net income upon settlement of accounts as stipulated in paragraph (1) shall be conducted by any of the following methods: |
| 1. | Offsetting of loss carried forward from the previous fiscal year; |
| 2. | Repatriation of the net profits to the Republic of Korea, and the subsequent sale thereof to a foreign exchange bank in exchange for any means of domestic payment, or deposit thereof in a resident account; |
| 3. | Application of net profits to operating funds of the relevant overseas branch office. |
| Article 9-24 (Closure of Overseas Branches) |
| (1) | Any person who intends to change the name or location of an overseas branch thereof shall submit a post-facto report thereof to the head of a designated foreign exchange bank. <Amended on Apr. 16, 2012><Amended on Dec. 29, 2021> |
| (2) | Any person who closes an overseas branch shall immediately repatriate the residual property to the Republic of Korea and submit the relevant property inventory, balance sheet, property disposal report, and foreign exchange sale certificate of the overseas branch to a designated foreign exchange bank; provided that such property need not be repatriated to the Republic of Korea where such person conducts any acknowledged capital transaction overseas. |
| Article 9-25 (Post-Management of Overseas Branches) |
| (1) | Any person who has declared the establishment of an overseas branch shall file a report on the completion of such establishment with the head of a designated foreign exchange bank, to whom he or she declared, within six months from the date of such declaration, with documents confirming establishment of such overseas branch, such as a certificate of registration under local statutes attached thereto. |
| (2) | Where an overseas branch acquires or disposes of any real property pursuant to Articles 9-19, 9-20, and 9-22, it shall report the details of such acquisition or disposition with the head of a designated foreign exchange bank within six months from the date of such acquisition or disposition. |
| (3) | Any person who has established an overseas branch office (excluding an overseas branch office not subject to self-supporting accounting system) shall submit a report on the status of annual business activities of such overseas branch office (including a detailed statement on its borrowing and lending of foreign currency funds) to the head of a designated foreign exchange bank within five months after the expiration of the accounting period; provided that if the head of the declaration receipt agency acknowledges that it is impossible for a person who has established an overseas branch office to submit a report due to temporary or permanent business closure, he or she need not submit a report during the period of such temporary or permanent business closure. <Amended on Dec. 19, 2013> |
| (4) | Operating funds, establishment costs and maintenance costs shall be disbursed through a designated foreign exchange bank to which establishment of an overseas branch was declared. Such designated foreign exchange bank shall electronically conduct post-management thereof by preparing and keeping available a comprehensive management sheet for an overseas branch with respect to acquisition and disposition of real property, account closing, borrowing and lending of funds, etc. <Amended on Aug. 4, 2020> |
| (5) | The head of a designated foreign exchange bank shall prepare each of the following reports or documents (including matters declared to the Governor of the Bank of Korea), and notify the Governor of the Bank of Korea and the Commissioner of the National Tax Service, and the Commissioner of the Korea Customs Service thereof via the Export-Import Bank of Korea within the period provided in each of the following; provided that this shall not apply to cases where it is deemed impossible for the head of the declaration receipt agency to receive a report from a person who has established an overseas branch due to temporary or permanent business closure. In such cases, the head of the declaration receipt agency shall report such temporary or permanent business closure to the President of the Export-Import Bank of Korea: <Amended on Apr. 16, 2012> |
| 1. | A copy of declaration (acceptance) on establishment (modification termination) of an overseas branch, and report on establishment/status of an overseas branch (quarterly report): By the 10th day of the second following month of each quarter; <Amended on Feb. 4, 2009> |
| 2. | A report on annual business activities (excluding overseas business offices and overseas branch offices not subject to the self-supporting accounting system): Within the end of September of every following year; <Amended on Dec. 19, 2013> |
| 3. | Other documents necessary for statistics or post-management, such as comprehensive details on post-management (including the status of disbursement of operating funds and maintenance costs of each overseas branch and the status of real property acquisition and disposition thereby). <Amended on Dec. 17, 2007> |
| (6) | Where the head of a designated foreign exchange bank enters the details of declarations (acceptance), remittances, post-management (retrieval, liquidation, closure, etc.) and business performance in the foreign direct investment statistics system of the Export-Import Bank of Korea, the documents as provided in the main clause of paragraph (5) shall be deemed submitted; provided that the provisions of paragraph (5) shall apply mutatis mutandis to the period for entries provided for in the main clause of this paragraph. <Amended on Sep. 30, 2009> |
Subsection 3 Overseas Branch of Financial Institutions Deleted.
| Article 9-26 (Declaration of Establishment) Deleted. <Amended on Jul. 25, 2008> |
| Article 9-27 (Procedures of Closure) Deleted. <Amended on Jul. 25, 2008> |
| Article 9-28 (Operating Funds of Overseas Branch Offices) Deleted. <Amended on Jul. 25, 2008> |
| Article 9-29 (Transactions with Overseas Branch Offices of Foreign Exchange Bank) Deleted. <Amended on Jul. 25, 2008> |
| Article 9-30 (Business Activities of Overseas Branch Offices) Deleted. <Amended on Jul. 25, 2008> |
| Article 9-31 (Provisions Applicable Mutatis Mutandis) Deleted. <Amended on Jul. 25, 2008> |
Section 3 Domestic Branches of Foreign Companies
| Article 9-32 (Scope of Application and Classification) |
| (1) | The provisions of this section shall apply to cases where a non-resident intends to receive any funds as provided in Article 3 (1) 19 (e) and Article 15 of the Act in order to establish and operate a branch office and business office in the Republic of Korea (hereinafter in this section referred to as “domestic branch”); provided that the provisions of Chapter II shall apply to domestic branch offices and business offices of a foreign bank. <Amended on Feb. 4, 2009> |
| (2) | Domestic branches of a non-resident shall be classified as follows: |
| 1. | “Branch office” engaging in business activities generating revenues in the Republic of Korea; |
| 2. | “Business offices” performing non-business functions, such as liaison, market surveys, research and development activities, without engaging in any business activities generating revenues in the Republic of Korea. |
| Article 9-33 (Declaration of Establishment and Modification) |
| (1) | Any non-resident who intends to establish a domestic branch shall declare it to the head of a designated foreign exchange bank. <Amended on Dec. 17, 2007> |
| (2) | Notwithstanding the provisions of paragraph (1), if a non-resident intends to establish a domestic branch the purpose of which is to engage in any of the following business affairs or any other business affairs related thereto, he or she shall declare it to the Minister of Economy and Finance: |
| 1. | Financial business affairs, other than the banking business, including lending, arrangement and brokerage of overseas financing, card business and installment finance; |
| 2. | Business affairs related with the securities and insurance business; |
| 3. | Business affairs not permitted under other statutes including the Foreign Investment Promotion Act. |
| (3) | Any person who intends to declare as provided in paragraphs (1) and (2), shall submit to the Minister of Economy and Finance or the head of a designated foreign exchange bank declaration on establishment of a domestic branch of a foreign company using Form 9-8, with each of the following documents attached thereto: <Amended on Dec. 17, 2007> |
| 1. | Documents evidencing the name, location and major business affairs of a foreign corporation that is the head office; |
| 2. | A copy of related evidentiary documents if permission, etc. of such establishment is required under other statutes or regulations; |
| 3. | Detailed statement on the details and scope of business affairs to be pursued in the Republic of Korea. |
| (4) | Where a person who has declared the establishment of a domestic branch, intends to modify any declared matter, he or she shall submit declaration on modification of a domestic branch of a foreign company in Form 9-9 to the party to whom he or she made the former declaration, with each of the following documents attached thereto: |
| 1. | Documents evidencing such modification; |
| 2. | Business plan (in cases of modification of such branch's business affairs). |
| Article 9-34 (Introduction of Operating Funds) |
| (1) | Where a domestic branch intends to introduce operating funds from its head office overseas, it shall introduce such funds through a designated foreign exchange bank. <Amended on Apr. 16, 2012> |
| (2) | The head of the designated foreign exchange bank of a domestic branch shall file annual statements on operating funds introduced according to paragraph (1) with the Governor of the Bank of Korea by the end of February of the immediately following year. The Governor of the Bank of Korea shall give notice thereof to the Governor of the Financial Supervisory Service. <Amended on Apr. 16, 2012> |
| Article 9-35 (Overseas Remittance of Net Income upon Account Closing) |
| (1) | If a branch office the establishment of which was declared pursuant to Article 9-33 intends to remit its net income upon account closing to a foreign country, it shall make such remittance through a designated foreign exchange bank. <Amended on Dec. 17, 2007> |
| (2) | Any person who intends to make a remittance pursuant to paragraph (1) shall file with the head of a designated foreign exchange bank an application for remittance of net income of a domestic branch of a foreign company upon account closing using Form 9-10, with each of the following documents attached thereto; provided that with respect to any branch office the establishment of which was declared to the Minister of Economy and Finance pursuant to Article 9-33 (2), such application may be replaced by a written permit, etc. under applicable statutes or regulations pertaining to overseas disposition of net income upon account closing: <Amended on Dec. 17, 2007> |
| 1. | Balance sheet and income statement of the relevant branch office; |
| 2. | Documents evidencing tax payment; |
| 3. | Auditor's report issued by a certified public accountant if the ratio of net income to operating funds introduced during the relevant accounting period is not less than 100/100 or if the amount of net income exceeds 100 million won. <Amended on Apr. 16, 2012> |
| Article 9-36 (Disbursement of Surplus Funds Arising from Operating Fund Reduction) |
Where a branch office (limited to financial institutions) the establishment of which was declared as provided in Articles 2-11 and 9-33 intends to remit overseas any surplus funds arising from reduction of operating funds pursuant to the procedures set forth in applicable statutes or regulations, Article 9-35 (2) shall apply thereto mutatis mutandis. <Amended on Apr. 16, 2012>
| Article 9-37 (Closure of Domestic Branch) |
| (1) | Where a person who declared the establishment of a domestic branch under this Section intends to close down such domestic branch, he or she shall submit declaration on closure of a domestic branch of a foreign company in Form 9-11 to the party to whom he or she made a declaration of establishment thereof. <Amended on Dec. 17, 2007> |
| (2) | Where a person who has declared closure as provided in paragraph (1) intends to remit overseas any proceeds from disposition of his or her domestic property, he or she shall submit to the head of a designated foreign exchange bank documents evidencing tax payment issued by the head of the competent tax office with jurisdiction over the relevant domestic branch. |
Section 4 Acquisition of Overseas Real Property by Residents
| Article 9-38 (Review of Requirements for Acceptance of Declaration) |
Where there is declaration of a resident's acquisition of overseas real property or any rights thereto in a foreign country, the Governor of the Bank of Korea or the head of a designated foreign exchange bank shall decide on whether to accept any declaration by reviewing each of the following: <Amended on Dec. 17, 2007>
| 1. | Whether a person who intends to acquire overseas real property, or any real rights or tenant rights thereto or other rights similar thereto (hereinafter in this subsection referred to as “rights”) falls under any of the following: |
| (a) | A person registered with a general credit information collection agency as a person who failed to repay any debts by the agreed due date thereof in commercial transactions such as financial transactions under the Use and Protection of Credit Information Act; |
| (b) | A person who has any defaulted tax obligations; |
| (c) | A natural person or independent business owner in the course of overseas emigration; |
| 2. | Whether the amount of such real property acquisition is at a level deemed appropriate by local financial institutions, appraisers, etc.; |
| 3. | Whether such real property acquisition is suitable for the actual purpose thereof such as overseas business activities and residential purposes. <Amended on Aug. 3, 2006> |
| Article 9-39 (Procedures for Acceptance of Declaration) |
| (1) | If a resident intends to acquire overseas real property or any rights thereto in a foreign country, no declaration thereof is required in any of the following cases: <Amended on Dec. 17, 2007> |
| 1. | Acquisition by a foreign exchange agency of any title or tenancy rights to real property directly necessary for establishment and operation of an overseas branch (including acquisition thereof as a result of enforcement of security rights for the purpose of recovery of loans to such overseas branch office); <Amended on Dec. 17, 2007> |
| 2. | Acquisition of any rights to real property by a resident from a non-resident as a result of inheritance, bequest or gift; |
| 3. | Acquisition of real property or any rights thereto by the government from an overseas non-resident; |
| 4. | Acquisition of overseas real property or any rights thereto by a foreign resident and a resident, who falls under the proviso of Article 3 (1) 15 of the Act, through a transaction other than those transactions subject to the Act or Decree; <Amended on Feb. 4, 2009> |
| 5. | Acquisition of overseas real property as security, by a foreign exchange agency in engaging in foreign exchange service; |
| 6. | Acquisition of overseas real property or any rights thereto by a real property investment company under the Real Estate Investment Company Act or a financial investment business entity under the Financial Investment Services and Capital Markets Act as provided in the corresponding statutes or regulations; <Amended on Feb. 4, 2009> |
| 7. | Acquisition of real property or any rights thereto by a corporation that manages and operates any statutorily established fund or a juristic person entrusted with management and operation of the National Pension Fund under Article 102 (5) of the National Pension Act for the purpose of purchase and sale or leasing of such real property as part of overseas asset management under the corresponding statutes or regulations; <Amended on Sep. 30, 2009> |
| 8. | Acquisition of overseas real property or any rights thereto by a person falling under any of the following, within the scope provided for in each of the following for the purpose of purchase and sale or leasing of such real property as part of overseas asset management: |
| (a) | Banks, insurance companies and merchant banks: Within the scope provided for in any statutes or regulations, etc. applicable to the institution concerned; <Amended on Feb. 4, 2009> |
| (b) | Deleted; <Amended on Apr. 16, 2012> |
| 9. | Where a person staying overseas or student studying overseas leases real property in a foreign country for his or her residential purposes; <Newly Inserted on Dec. 19, 2013> |
| 10. | Where a resident rents any real estate in a foreign country (limited to where a security deposit for lease is not more than USD10,000). <Newly Inserted on Dec. 24, 2018> |
| (2) | Excluding cases which fall under paragraph (1), where a resident intends to acquire real estate located in a foreign country or rights related thereto falling under any of the following subparagraphs, he or she shall prepare a (request for acceptance of) declaration on real property acquisition in Form 9-12, and declare it to the head of a designated foreign exchange bank and obtain acceptance thereof: <Proviso Deleted on Jun. 2, 2008> |
| 1. | Where a resident acquires real estate in a foreign country for purposes other than residence; <Amended on Apr. 16, 2012> |
| 2. | Where a resident or his or her spouse acquires a residential house for the purpose of staying abroad (including acquisition of a spouse's name); <Amended on Dec. 24, 2018> |
| 3. | Where a real estate deposited in a foreign country is leased (limited to where a security deposit for lease exceeds 10,000 USD). <Amended on Dec. 24, 2018> |
| (3) | Notwithstanding paragraph (2), where a resident has obtained an acceptance of provisional declaration from the head of a designated foreign exchange bank before a contract for sale of foreign real estate is finalized, the resident may pay the acquisition price of foreign real estate within the limit of 10/100 of the estimated acquisition amount. In such cases, it shall be accepted after receiving declaration under paragraph (2) within three months from the date of acceptance of the provisional declaration or shall recover the paid funds into the Republic of Korea. <Amended on May 3, 2019> |
| (4) | Excluding cases provided for in paragraphs (1) and (2), if a resident intends to acquire overseas real property or any rights thereto, he or she shall prepare a (request for acceptance of) declaration of real property acquisition in Form 9-12 and obtain acceptance thereof from the Governor of the Bank of Korea by making it thereto. <Amended on Dec. 17, 2007> |
| (5) | Except as provided in this Section, Articles 9-4 and 9-6 shall apply mutatis mutandis to the acquisition of real estate under this Section or a right thereto. <Amended on Dec. 17, 2007> |
| (6) | Notwithstanding paragraph (5), Articles 9-4, 9-6, and 9-40 shall not apply where a private investor has acquired the right of permanent residence or citizenship; provided that this shall not apply where a private investor who acquired the right of permanent residency has continued to stay in Korea as a resident. |
| Article 9-40 (Post-Management) |
| (1) | The Governor of the Bank of Korea or the head of a designated foreign exchange bank shall notify the Commissioner of the National Tax Service, the Commissioner of the Korea Customs Service and the Governor of the Financial Supervisory Service of the details of acceptance of residents' declaration on acquisition of overseas real property or any rights thereto under Articles 9-39 (2) and 9-39 (4) by the 20th day of the immediately following month. <Amended on Dec. 19, 2013> |
| (2) | Any person who has acquired overseas real property or any rights thereto by obtaining acceptance of a declaration thereon pursuant to Articles 9-39 (2) and 9-39 (4) shall submit the following reports to the Governor of the Bank of Korea or the head of a designated foreign exchange bank. The Governor of the Bank of Korea or the head of a designated foreign exchange bank shall submit the reports as provided in subparagraphs 1 and 2 to the Commissioner of the National Tax Service, the Commissioner of the Korea Customs Service and the Governor of the Financial Supervisory Service by the last day of the month immediately following the month on which the date of such reports falls; provided that where the Governor of the Bank of Korea or the head of a designated foreign exchange bank deems that a person who acquired real estate or a right thereto is unable to submit a report due to a local disaster or any other unavoidable cause, he or she need not submit the following reports or documents until the cause thereof is resolved; and in such cases, the Governor of the Bank of Korea or the head of the designated foreign exchange bank shall notify the Commissioner of the National Tax Service, the Commissioner of the Korea Customs Service and the Governor of the Financial Supervisory Service of such fact: <Amended on Dec. 19, 2013><Amended on Dec. 29, 2021> |
| 1. | A report on acquisition of overseas real property: Within three months after remitting the price for acquisition of real property; <Amended on Apr. 16, 2012> |
| 2. | A report on disposition (modification) of overseas real property: Within three months from disposition (modification) of real property; provided that where the price of a disposition is received within three months, the time of receipt of such price; <Proviso Newly Inserted on Apr. 16, 2012> |
| 3. | An occasional report: Upon request from the Governor of the Bank of Korea or the head of a designated foreign exchange bank as deemed necessary for post- management, such as verification of continued possession of the acquired real property. <Amended on Feb. 4, 2009> |
| (3) | Reports or documents under paragraph (2) may be submitted after being verified by electronic means. <Newly Inserted on Jun. 18, 2021> |
| Article 9-41 (Sale of Overseas Housing) Deleted. <Amended on Jun. 2, 2008> |
Section 5 Acquisition of Domestic Real Property by Non-Residents
| Article 9-42 (Procedures for Declaration) |
| (1) | If a non-resident intends to acquire any real property in the Republic of Korea, or real rights or tenancy rights thereto or any other rights similar thereto (hereinafter in this subsection referred to as “rights”), no declaration thereof is required in any of the following cases: |
| 1. | Where a non-resident mining concession right holder acquires any real estate or rights thereto in Korea under the conditions as recognized by the Submarine Mineral Resources Development Act; |
| 2. | Where a nonresident leases real estate in Korea to domicile himself or herself, his or her relative or an employee; |
| 3. | Where a national nonresident acquires real estate or any right thereto in the Republic of Korea; |
| 4. | Where a nonresident acquires real estate other than land or a right thereto from a nonresident who is in Korea; |
| 5. | Where a foreign nonresident acquires real property or any rights thereto in the Republic of Korea by inheritance or bequest. <Newly Inserted on Nov. 6, 2001> |
| (2) | Except as provided in paragraph (1), where a nonresident intends to acquire domestic real estate or any right thereto, he or she shall make a declaration to the head of a foreign exchange bank of acquisition of real property in Form 9-12, together with a document verifying the acquisition of the relevant real property or a document evidencing the acquisition of collateral: <Amended on Dec. 17, 2007> |
| 1. | Where a nonresident acquires funds with personal effects or remittance (including funds deposited in foreign accounts) from a foreign country; |
| 2. | Where it acquires a security right through any recognized transaction with a resident; <Amended on Dec. 17, 2007> |
| 3. | Where a real property or any right thereto is acquired from a non-resident who has acquired the real property or any related right using such funds as provided in subparagraph 1 (including cases of direct settlement in a foreign country) or by the method prescribed in paragraph (1) or subparagraph 2. <Amended on Jan. 1, 2006> |
| (3) | Where a nonresident intends to acquire real estate in Korea or any right thereto except in cases under paragraphs (1) and (2), he or she shall declare it to the Governor of the Bank of Korea. |
| Article 9-43 (Payment of Proceeds from Sale) |
| (1) | Where a non-resident intends to pay overseas proceeds from the sale of real property in the Republic of Korea or any rights thereto acquired thereby by any of the following methods, he or she shall submit documents evidencing acquisition and sale of such real property or any rights thereto to the head of a foreign exchange bank; provided that Article 4-7 shall apply to cases where overseas Koreans export any domestic property overseas: <Amended on Dec. 17, 2007> |
| 1. | Where a non-resident acquires any real property or any right thereto in Korea as prescribed in Article 9-42 (1) 1 through 4 with the funds under Article 9-42 (2) 1; <Amended on Dec. 17, 2007> |
| 2. | Where a resident acquires any real property in the Republic of Korea or any rights thereto under Article 9-42 (2); provided that cases where domestic real estate or a right thereto is acquired pursuant to subparagraph 4 of Article 7-13 shall be excluded herefrom; <Amended on Dec. 17, 2007> |
| 3. | Where a resident acquires any real estate in Korea or any rights thereto pursuant to Articles 9-42 (1) 5 and 9-42 (3). <Amended on Dec. 17, 2007> |
| (2) | Except as provided in the main clause of paragraph (1), if a non-resident purchases any means of foreign payment in order to pay the proceeds from sale of real property in the Republic of Korea or any rights thereto to a foreign country, he or she shall declare it to the Governor of the Bank of Korea by preparing declaration on purchase and sale of the means of foreign payment in Form 7-4 pursuant to Article 7-21 (3). <Amended on Jan. 1, 2006> |
| (3) | Deleted. <Amended on Dec. 17, 2007> |
CHAPTER X SUPPLEMENTARY PROVISIONS
| Article 10-1 (Reporting by the Head of a Foreign Exchange Agency) |
The head of a foreign exchange agency shall submit reports provided herein to the Minister of Economy and Finance.
| Article 10-2 (Reporting by the Governor of the Bank of Korea) |
The Governor of the Bank of Korea shall submit each of the following reports to the Minister of Economy and Finance in addition to the declarations set forth in other Chapters: <Amended on Jan. 1, 2006>
| (a) | Major foreign exchange indicators (by wire communication); |
| (a) | Foreign exchange position; |
| (b) | Overall status of foreign currency funds (with the status of foreign currency assets attached thereto); |
| (c) | Status of exports and imports (with the details by item and by settlement method attached thereto); |
| (d) | Status of management of foreign currency assets held; |
| (e) | Status of non-trade receipts and payment; |
| (f) | Status of foreign currency loans; |
| (g) | Status of advance receipts regarding exports; |
| (h) | Monthly and annual balance of payments; |
| (i) | Status of payments and receipts of any consideration for technology introduction; <Amended on Feb. 4, 2009> |
| (j) | Status of dividend remittance and investment retrieval by foreign investors; |
| (k) | Status of external liabilities and external debts; |
| (l) | Deleted; <Amended on Jul. 2, 2002> |
| (m) | Status of acceptance of declarations by the Governor of the Bank of Korea; <Amended on Dec. 17, 2007> |
| (n) | Performance of derivative transactions; <Amended on Feb. 4, 2009> |
| (a) | Status of foreign exchange purchase and sale (including forward exchange transactions, financial futures transactions and swap transactions); |
| (b) | Status of export-related offshore loans; |
| (c) | Status of foreign currency fund withdrawals and repayments; |
| (a) | Status of operating syndicated loan limit by bank; |
| (b) | Deleted; <Amended on Dec. 17, 2007> |
| (c) | Status of local financing and repayments; <Newly Inserted on Sep. 30, 2009> |
| (a) | Status of the balance of overseas deposits and trusts; <Amended on Dec. 17, 2007> |
| (b) | Deleted. <Amended on Sep. 30, 2009> |
| Article 10-3 (Collection of Reports by the Governor of the Bank of Korea) |
| (1) | In any of the following cases, the Governor of the Bank of Korea may require the head of an administrative agency concerned, the head of a foreign exchange agency, currency exchanger, or any party to a foreign exchange transaction or any person related thereto (hereinafter in this section referred to as “reporting parties”) to submit related materials or information, or may make inquiries thereto: <Amended on Jun. 29, 2017> |
| 1. | Where it is necessary for preparing a report to be submitted to the Minister of Economy and Finance; |
| 2. | Where it is necessary to prepare an international balance, a balance sheet (including external liabilities and external debts) and foreign exchange statistics; <Amended on Mar. 31, 2015> |
| 3. | Where it is necessary for the Governor of the Bank of Korea to perform other business affairs entrusted thereto. |
| (2) | Any of the following residents determined by the Governor of the Bank of Korea shall submit information on the status of his or her external liabilities and external debts receivable from or payable to a non-resident, which exceed USD50,000 as of the end of the corresponding six-month period, to the Governor of the Bank of Korea by the last day of the third month of the immediately following six-month period: |
| 1. | Listed corporations provided for in the Financial Investment Services and Capital Markets Act; <Amended on Feb. 4, 2009> |
| 2. | 30 largest interlinked business groups, among business entities belonging to the main debtor groups, which do not fall under subparagraph 1. |
| Article 10-4 (Deadline for Submission of Report) |
| (1) | Except as otherwise provided in another Chapter, the deadlines for submission of reports by the reporting parties to the Minister of Economy and Finance or the Governor of the Bank of Korea shall be as follows; provided that if it is deemed practically difficult for the reporting parties to prepare such reports by the said deadlines, the Minister of Economy and Finance or the Governor of the Bank of Korea may determine a separate deadline for each report: <Proviso Newly Inserted on Jan. 1, 2006> |
| 1. | Annual report: By February of the immediately following year; |
| 2. | Semi-annual report: By the last day of the first month of the immediately following six-month period; |
| 3. | Quarterly report: By the 20th day of the first month of the immediately following quarter; |
| 4. | Monthly report: By the 15th day of the immediately following month; |
| 5. | Semi-monthly report: By the seventh day of the immediately following semi-monthly period; |
| 6. | 10-day report: By the immediately following day; |
| 7. | Daily report: In two days; |
| 8. | Other reports: By the period determined by the Minister of Economy and Finance or the Governor of the Bank of Korea upon request for submission thereof. |
| (2) | Paragraph (1) shall apply mutatis mutandis to the deadline for submission of reports by the Governor of the Bank of Korea to the Minister of Economy and Finance; provided that this shall not apply to cases where submission of any related data by the reporting parties is necessary for the Governor of the Bank of Korea to prepare his or her report to be submitted to the Minister of Economy and Finance. In such cases, the Governor of the Bank of Korea shall declare to the Minister of Economy and Finance, without delay, upon submission of such related data by the reporting parties. |
| (3) | Notwithstanding the provisions of paragraphs (1) and (2), the Minister of Economy and Finance or the Governor of the Bank of Korea may request submission of reports prior to the deadline therefor. |
Except as otherwise provided for in other Chapters, applications, reports and other forms hereunder (hereinafter referred to as “forms, etc.”) shall be determined separately; provided that the forms of declarations, etc. to the Governor of the Bank of Korea and the forms of declaration to a foreign exchange information concentration agency shall be determined by the Governor of the Bank of Korea, and the forms, etc. of declarations, etc. to the heads of foreign exchange agencies shall be determined by the heads of such foreign exchange agencies based on mutual consultation thereby.
| Article 10-6 (Report on Credit Cards) |
| (1) | Any person who performs, in the Republic of Korea, direct or vicarious issuance of credit cards, etc. to be used for foreign payments or who engages in the business of direct or vicarious payments of the bills of credit cards, etc. issued overseas (hereinafter referred to as “issuer of credit cards, etc.”), shall submit reports, etc. on each of the following to the Chairperson of the Credit Finance Association of Korea (hereinafter referred to as “Chairperson of the CFA”) on a quarterly basis. The Chairperson of the CFA shall compile such reports containing information on foreign payments by credit cards, etc. (including overseas foreign currency withdrawals) of each natural and juristic person, and declare it to the Governor of the Bank of Korea by the 10th day of the second month of the immediately following quarter. The Governor of the Bank of Korea shall declare it to the Minister of Economy and Finance by 20th day of the second month of the immediately following quarter: <Amended on Dec. 17, 2007> |
| 1. | Foreign payment for credit cards, etc. by residents and withdrawal performance of foreign currency in a foreign country (monthly); <Amended on Dec. 17, 2007> |
| 2. | Performance of use of credit card, etc. by non-residents in the Republic of Korea (monthly). |
| (2) | Monthly performance as provided in paragraph (1) shall cover the performance during the period from the starting day to the ending day of the month of use. |
| (3) | Any issuer of credit cards, etc. shall notify the Chairperson of the CFA of details of annual foreign payments and foreign currency withdrawals in foreign countries for each individual and corporation. Where the amount of foreign payments by credit cards, etc. (including foreign currency withdrawals in foreign countries) of each individual and corporation exceeds USD10,000 a year, the Chairperson of the CFA shall notify the Commissioner of the National Tax Service and the Commissioner of the Korea Customs Service of such fact by the 20th day of the second month of the following year. <Amended on Dec. 19, 2013> |
| (4) | Any person who has issued or sold traveler's cards shall submit each of the following reports to the Governor of the Bank of Korea by the 20th day of the first month of the immediately following quarter, and the Governor of the Bank of Korea shall file such reports with the Minister of Economy and Finance: |
| 1. | Sales and settlement performance of traveler's cards (monthly); |
| 2. | Traveler's cards settlement (exceeding USD5,000) of each individual and each corporation (monthly). <Amended on May 3, 2019> |
| (5) | Where any person's combined amount of overseas travel expenses under Article 4-5(2), foreign payments using a credit card, etc. (including overseas foreign currency withdrawals) under paragraph (1), and travelers card under paragraph (4) exceeds USD100,000 a year, the Governor of the Bank of Korea shall notify the Commissioner of the National Tax Service thereof by the last day of March of the immediately following year. <Newly Inserted on Dec. 17, 2007> |
| Article 10-7 (Scope of Inspection Objects) |
The Governor of the Bank of Korea, the Governor of the Financial Supervisory Service, and the Commissioner of the Korea Customs Service shall conduct inspections provided for in Article 20 (3) of the Act and Article 35 of the Decree pursuant to classifications under subparagraphs of Article 35 (4) of the Decree. <Amended on Jun. 29, 2017>
| (2) | Deleted. <Amended on Jun. 29, 2017 > |
| (3) | Deleted. <Amended on Jun. 29, 2017> |
| Article 10-8 (Establishment of Inspection Standards) |
| (1) | Where inspectors under Article 10-7 establish or amend inspection standards, methods or procedures, disciplinary action, etc., they shall without delay notify the Minister of Economy and Finance thereof. |
| (2) | Where inspectors under paragraph (1) determine that any violation detected from such inspections constitutes a material violation related to foreign exchange or financial policies, they shall notify the relevant authorities including the Minister of Economy and Finance and the Governor of the Bank of Korea, etc., thereof. |
| (3) | Deleted. <Amended on Mar. 22, 2016> |
| (4) | Where inspectors under paragraph (1) take any measures including disciplinary action based on such inspections, they shall notify each other thereof. |
Section 3 Post-Management of Foreign Exchange Transactions
| Article 10-9 (Procedures of Post-Management) |
| (1) | The Governor of the Bank of Korea or the head of a foreign exchange bank with authority entrusted under Article 37 of the Decree who has received declarations, etc. of or reports on a foreign exchange transaction shall conduct post-management on whether the foreign exchange transactions made by the relevant foreign exchange parties have been performed pursuant to the statutes or regulations to an extent as provided in the Act, the Decree, and these Regulations; provided that if such parties have a foreign exchange bank designated or if the Governor of the Bank of Korea has a bank in charge of post-management designated, the head of such designated bank shall perform post-management. <Amended on Feb. 4, 2009><Amended on Jul. 4, 2023> |
| (2) | Where the Governor of the Bank of Korea declares (accepts) any foreign exchange transaction or act, he or she shall forward copies of such declaration (acceptance), contract, etc. to the consideration-paying bank or the post-management bank designated by the person who requested (for declaration or acceptance) such report. <Amended on Dec. 17, 2007> |
| (3) | Where the findings of post-management reveal that any party to a foreign exchange transaction failed to comply with the conditions of declaration, etc., the head of a foreign exchange bank shall urge such party to comply with such conditions within 30 days from the date of expiration of the period therefor. Where such party fails to perform its obligations within the said 30-day period or falls under any subparagraph of Article 19 (1) of the Act, the head of a foreign exchange bank shall report it to the Governor of the Financial Supervisory Service. <Amended on Apr. 16, 2012> |
| (4) | In order to ensure effectiveness of post-management as provided in this Chapter, the Governor of the Bank of Korea may determine the standards, procedures, etc. for handling related affairs. |
| Article 10-10 (Submission of Data) |
| (1) | Parties to foreign exchange transactions shall submit data for post-management to the Governor of the Bank of Korea, the head of a designated foreign exchange bank, the head of a post-management bank designated by the Governor of the Bank of Korea, or the head of a foreign exchange bank which make a declaration, etc. of such transactions, as determined by persons who conduct post-management provided in this Chapter (hereinafter referred to as “post-managers”). |
| (2) | The head of a foreign exchange bank who conducts post-management of parties to foreign exchange transactions may request such parties to submit data necessary for such post-management, when deemed necessary. |
| (3) | Where any party to a foreign exchange transaction has to submit a report to the Governor of the Bank of Korea or the head of a foreign exchange bank as provided in these Regulations, he or she shall submit it to the head of a business place designated by the Governor of the Bank of Korea as a post-management bank, or the head of a business office appointed by such party as a designated foreign exchange bank. The head of a foreign exchange bank who has received such report shall without delay forward the declaration to the Governor of the Bank of Korea if such submission is required. |
| Article 10-11 (Designation of Foreign Exchange Banks) |
| (1) | A party to a transaction falling under any of the following shall designate a foreign exchange bank for declaration and post management of foreign exchange transactions: |
| 1. | Persons engaged in currency exchange services according to Article 2-28 (1); |
| 2. | Persons who intend to make a payment according to Article 4-3 (1) 1; <Amended on Dec. 17, 2007> |
| 3. | Persons who intend to make a payment according to Article 4-4 (1) 3 and (2); <Newly Inserted on Dec. 17, 2007> |
| 4. | Persons who intend to pay overseas travel expenses according to Article 4-5 (2) and (6); <Amended on Jun. 2, 2008> |
| 5. | Deleted; <Amended on Aug. 4, 2020> |
| 6. | Persons who intend to pay overseas relocation costs according to Article 4-6; <Amended on Dec. 17, 2007> |
| 7. | Persons who intend to apply for property transference according to Article 4-7; <Amended on Dec. 17, 2007> |
| 8. | Persons who intend to conduct mutual settlement according to Article 5-5; <Amended on Dec. 17, 2007> |
| 9. | Persons who intend to make an overseas deposit according to Article 7-11 (2); <Amended on Dec. 17, 2007> |
| 10. | Persons who intend to conduct integrated fund management according to subparagraph 6 of Article 7-2; <Amended on Dec. 17, 2007> |
| 11. | Persons who intend to make a receipt according to subparagraph 9 of Article 7-2; <Amended on Feb. 4, 2009> |
| 12. | Persons who intend to borrow funds (excluding local finance) according to Articles 7-14 and 7-15; <Amended on Dec. 17, 2007><Amended on Jul. 4, 2023> |
| 13. | Persons who intend to enter into a guarantee or collateral contract according to Article 7-18 (3); <Amended on Dec. 17, 2007><Amended on Jul. 4, 2023> |
| 14. | Persons who intend to issue securities according to Subsections 1 and 2 of Section 5 of Chapter VII; <Amended on Dec. 17, 2007> |
| 15. | Persons who intend to acquire overseas real estate according to Article 9-39 (2); <Amended on Dec. 17, 2007> |
| 16. | Persons who intend to establish and operate a domestic branch according to Section 3 of Chapter IX; <Amended on Dec. 17, 2007> |
| 17. | Persons who intend to conduct local financing according to Articles 7-14 and 7-14-2 or persons who intend to enter into a guarantee or collateral contract related to local finance according to Article 7-18 (1); <Amended on Dec. 17, 2007><Amended on Jul. 4, 2023> |
| 18. | Persons who intend to make foreign direct investment according to Article 9-5 (1) and (2); <Amended on Dec. 17, 2007> |
| 19. | Persons who intend to establish and operate an overseas branch according to Section 2 of Chapter IX; <Amended on Dec. 17, 2007> |
| 20. | Other persons deemed necessary by the Governor of the Bank of Korea. <Amended on Dec. 17, 2007> |
| (2) | Any foreign exchange bank in receipt of an application for appointment as a designated foreign exchange bank according to paragraph (1) shall confirm its designation as such and file for registration thereof in the designation register. |
| (3) | The head of a foreign exchange bank designated as a foreign exchange bank according to paragraph (1) shall file a report thereof to the head of a foreign exchange information aggregation agency within the period determined by the head of such agency. |
| (4) | In the event of any declaration or payment request concerning matters which require appointment of a designated foreign exchange bank as provided in paragraph (1), the head of a foreign exchange bank shall receive or accept such declaration, or comply with such payment request after confirming whether the bank has been registered as a designated foreign exchange bank according to paragraph (2), and shall conduct post management of such declared matter. |
| (5) | If a person who has designated a foreign exchange bank intends to change the designated foreign exchange bank, the new designated bank shall be confirmed by the current designated foreign exchange bank, and the new designated foreign exchange bank shall report the change to the head of the foreign exchange information aggregation agency. |
| Article 10-12 (Notification to the Commissioner of the National Tax Service) |
| (1) | The Governor of the Bank of Korea, the head of a foreign exchange agency, the Chairperson of the CFA and a professional foreign exchange dealer shall, in accordance with these Regulations, notify the Commissioner of the National Tax Service of a transaction at the time as following or allow the Commissioner to inspect a transaction at the time as following; provided that in the case of a transaction falling under subparagraph 3, the Commissioner of National Taxes may only read the documents for declaration submitted to the declaration receipt agency as necessary to confirm the suspicion of tax evasion: <Amended on Jun. 29, 2017> |
| 1. | Transactions requiring notification: Payments, etc. or transactions (including details by person and transaction) as provided in Articles 2-2, 2-3, 2-24, 2-29, 2-31, 2-39, 4-8 (1), 5-4, 5-5, 5-8, 5-10, 5-11, 6-2, 7-12, 7-16, 7-21, 8-4, 9-9, 9-15-2, 9-25, 9-40, and 10-6; <Amended on Jun. 29, 2017> |
| 2. | Notification period: Within 10 days of the following month for each month; provided that if the Regulations stipulate otherwise, it shall be in accordance with the Regulations; |
| 3. | Transactions subject to inspection: Articles 2-6 (1), 2-8, 7-14, 7-19, 7-31 and 7-40. <Amended on Dec. 19, 2013> |
| (2) | The Governor of the Bank of Korea, the head of a foreign exchange agency, the Chairperson of the CFA and a specialized foreign exchange dealer shall, in accordance with these Regulations, notify the Commissioner of the Korea Customs Service of a transaction at the time as following: <Amended on Jan. 1, 2006> |
| 1. | Transactions requiring notification: Payments, etc. or transactions (including details by person and transaction) as provided in Articles 2-2, 2-3, 2-29, 2-31, 2-39, 4-8 (2), 5-4, 5-5, 5-8, 5-10, 5-11, 7-12, 7-21, 9-9, 9-25, 9-40, 9-42, and 10-6; <Amended on Jun. 18, 2021> |
| 2. | Notification period: Within 10 days of the following month for each month; provided that if the Regulations stipulate otherwise, it shall be in accordance with the Regulations. <Amended on Jan. 1, 2006> |
| (3) | The Governor of the Bank of Korea, the head of a foreign exchange agency, and a professional foreign exchange dealer shall, in accordance with these Regulations, notify the Governor of the Financial Supervisory Service of a transaction at the time as following: <Amended on Jun. 29, 2017> |
| 1. | Transactions requiring notification: Payments, etc. or transactions as provided in Articles 2-9-2 (5), 2-31, 2-39, 4-8 (3), 5-4, 5-5, 5-10, 7-21, 7-37, 8-4 (2), 9-9, 9-34, 9-40, and 10-11 and derivative transactions as provided in Article 2-10-2 (2) (including details by person and transaction); <Amended on Aug. 4, 2020> |
| 2. | Notification period: Within 10 days of the following month for each month; provided that if the Regulations stipulate otherwise, it shall be in accordance therewith. |
| (4) | The Commissioner of the National Tax Service, the Commissioner of the Korea Customs Service and the Governor of the Financial Supervisory Service shall use materials submitted pursuant to these Regulations within the necessary scope of delegated and entrusted activities from the Minister of Economy and Finance as specified in Article 23 of the Act and Article 37 of the Decree. <Amended on Feb. 4, 2009> |
| Article 10-13 (Standards and Procedures for Handling Entrusted Business) |
| (1) | A foreign exchange bank that has been entrusted a portion of the authority of the Minister of Economy and Finance pursuant to Article 37 (5) of the Decree may establish the standards, procedures, etc. for management of entrusted business (hereinafter referred to as “Guidelines on Foreign Exchange Transaction”). <Amended on Feb. 4, 2009> |
| (2) | For uniformity in the management of entrusted business under paragraph (1), one foreign exchange bank may be designated as the supervisory foreign exchange bank, and the Korea Federation of Banks may be used as a consensus body. <Newly Inserted on Dec. 17, 2007> |
| (3) | The head of a supervisory foreign exchange bank as provided in paragraph (2) shall submit the Guidelines on Foreign Exchange Transaction to the Minister of Economy and Finance, Governor of the Bank of Korea and the Governor of the Financial Supervisory Service, and the Governor of the Bank of Korea may recommend changes to the Minister of Economy and Finance; where deemed necessary for the proper performance of entrusted services business by foreign exchange banks. <Amended on Dec. 17, 2007> |
| Article 10-14 (Designation of Foreign Exchange Information Aggregation Agency) |
| (1) | The Bank of Korea shall be the foreign exchange information aggregation agency and the Korea Center for International Finance shall be the foreign exchange information analysis agency according to Article 39 of the Decree. <Amended on Feb. 4, 2009> |
| (2) | The head of the foreign exchange information aggregation agency may establish detailed operational standards necessary for the operation of the foreign exchange information aggregation agency, and may require the parties to foreign exchange transactions and relevant institutions including foreign exchange agencies to report necessary information to the foreign exchange information aggregation agency, or submit relevant materials or information. |
| (3) | In cases where parties to foreign exchange transactions or persons related thereto, including foreign exchange agencies submit a report with the Minister of Economy and Finance, the Governor of the Bank of Korea, the Governor of the Financial Supervisory Service, the Commissioner of the National Tax Service or the Commissioner of the Korea Customs Service, etc. as provided herein, such report shall be filed through the foreign exchange information aggregation agency unless specifically determined by the Governor of the Bank of Korea or unless such report is submitted through the foreign investment management system managed by the Financial Supervisory Service. |
| (4) | The head of the foreign exchange information analysis agency may receive any of the following information from the foreign exchange information aggregation agency as provided in the business standards of the foreign exchange information aggregation agency: <Amended on Feb. 4, 2009> |
| 1. | Materials on investment in securities of institutional investors; |
| 2. | Materials on foreign currency liquidity of financial institutions; |
| 3. | Materials on domestic securities investments by nonresidents; |
| 4. | Materials on exchange rates, foreign exchange transactions and derivative transactions; |
| 5. | Other information deemed necessary by the Minister of Economy and Finance for analysis of foreign exchange information. |
| Article 10-15 (Supplemental Provisions) |
In the event that the Minister of Economy and Finance establishes supplemental provisions within the scope of authority conferred by the Act and Decree pertaining to matters provided or not provided in these Regulations, such provisions shall prevail over these Regulations. <Amended on Dec. 19, 2013>
| Article 10-15-2 (Re-Examination Period) |
The Minister of Economy and Finance shall, with reference to Articles 2-28, 2-29 (4), 7-33, 7-35, 7-39, 7-40, 9-18, 9-33, 9-34, 10-2, 10-6, 10-9, and 10-14, review the amendments to the statutes or regulations or changes in the real-life circumstances after the promulgation of these Regulations and take appropriate measures for the improvement and the like every three years as of 1 January 1, 2018 (referring to the prior day of the same date in the year when every three years elapse since the reference date). <Amended on Jun. 18, 2021>
Section 5 Foreign Currency Soundness Council
| Article 10-16 (Convening Foreign Currency Soundness Council) |
| (1) | The Foreign Currency Soundness Council (hereinafter referred to as the "Council") shall convene at least quarterly in principle, however the Chairperson may call for a meeting of the Council whenever deemed necessary. <Newly Inserted on Jun. 18, 2021> |
| (2) | The Council shall meet in person, but may substitute a written meeting for an in-person meeting if the agenda is of a minor nature or if the Chairperson certifies that there is insufficient time to convene an in-person meeting. |
| (3) | The Chairperson may, if necessary, have officials of relevant administrative agencies and employees of relevant institutions and research organizations attend the Council to hear their opinions. |
| (4) | Where a member specified in Article 20-3 (3) of the Decree is unable to attend a meeting due to extenuating circumstances, the person in any of his or her subordinate positions may attend the meeting on behalf of the member to perform his or her duties. |
| Article 10-17 (Presentation of Agenda to Council) |
| (1) | The Chairperson of the Committee shall select matters to be deliberated upon by the Council and request the members under the subparagraphs of Article 20-3 (3) of the Decree to present agenda items. <Newly Inserted on Jun. 18, 2021> |
| (2) | Any member of the Council specified in the subparagraphs of Article 20-3 (3) of the Decree may request the Council to discuss the specific matter with the Chairperson. |
| (3) | Any member who presents an agenda item to the Council shall in principle submit an agenda item no later than two days prior to the commencement of the Council; provided that this shall not apply in cases of urgency. |
| (4) | The Chairperson may establish a working committee to efficiently deliberate on agenda items presented to the Council. |
| Article 10-18 (Submission of Materials to Council) |
| (1) | The Minister of Economy and Finance may request the head of a relevant agency governed by this Act to submit materials or information related to any of the following matters for discussion at the Council: <Newly Inserted on Jun. 18, 2021> |
| 1. | The current status of the supervision over foreign exchange agencies, etc. under Article 11 (1) of the Act or the operational restriction on them under Article 11 (2) conducted or imposed by the Financial Services Commission, the Governor of the Bank of Korea, the Governor of the Financial Supervisory Service, etc., as delegated or entrusted by the Minister of Economy and Finance pursuant to Article 37 of the Decree; |
| 2. | Results of inspection conducted by the Governor of the Bank of Korea or the Governor of the Financial Supervisory Service entrusted by the Minister of Economy and Finance pursuant to Article 35 (4) of the Decree; provided that the scope of submission shall be limited to matters to be discussed under the subparagraphs of Article 20-3 (2) of the Decree and information on financial transactions of customers, etc. may be excluded; |
| 3. | Information or data stipulated in these Regulations that the Financial Services Commission, Commissioner of the Korea Customs Service, Governor of the Bank of Korea, Governor of the Financial Supervisory Service, etc. are required to report, notify, or submit to the Minister of Economy and Finance; |
| 4. | Matters necessary for discussion at the Council among the contents of a report on the current status of foreign exchange services submitted by a foreign exchange agency to the Governor of the Financial Supervisory Service pursuant to the Regulations on Supervision of Banking Business, the Regulations on Financial Investment Business, the Regulations on Supervision of Insurance Business, etc.; |
| 5. | Standards and result of crisis analysis of foreign currency liquidity of a foreign exchange agency, etc.; |
| 6. | Other data or information deemed necessary by the Council for discussion, including the amount of foreign currency financing and requirements of a foreign exchange agency, etc., the ratio of net foreign currency assets, the maturity status foreign currency procurement and operation, etc. |
| (2) | Data or information referred to in paragraph (1) shall be submitted in compliance with the methods requested by the Minister of Economy and Finance, such as agenda items, reference materials, etc. |
| Article 10-19 (Advisory Organization for International Financial Policy) |
The Minister of Economy and Finance may establish an advisory organization composed of experts in the field of foreign exchange and international finance to monitor the foreign exchange and international financial markets and formulate policies under Article 25 (1) of the Act. <Newly Inserted on Dec. 19, 2013>
| Article 10-20 (Selection of Foreign Exchange Agency for Facilitating Foreign Exchange Transactions) |
The Minister of Economy and Finance may require the Bank of Korea to select a foreign exchange agency that performs the role for facilitating foreign exchange transactions as a market maker for the spot exchange transactions market in KRW/CNY or as a leading bank for the spot exchange transactions market in KRW/USD pursuant to Article 21-4 (2) 2 of the Enforcement Decree of the Foreign Exchange Transactions Act. <Amended on Apr. 11, 2022>
| Article 10-21 (Liquidation) |
| (1) | The Minister of Economy and Finance may require the Governor of the Bank of Korea to designate a specific foreign exchange bank, an overseas branch office of a foreign exchange bank, a local subsidiary of a foreign exchange bank as a liquidation bank to perform the role of settlement and the provision of liquidity for the efficient transaction of the Korean won and a specific foreign currency. <Newly Inserted on Mar. 22, 2016> |
| (2) | A foreign exchange bank, an overseas branch office of a foreign exchange bank, or a local subsidiary of a foreign exchange bank, designated as a liquidation bank pursuant to paragraph (1) shall account separately from other funds for funds related to the operation that serves to settle funds and provide liquidity of the relevant currency as follows: |
| 1. | Creation of an account and deposit in a liquidation bank for the settlement of funds and the provision of liquidity of the corresponding currency by a financial company (hereinafter referred to as "participating financial company") conducting transactions with the corresponding currency account in the name of the person in question; provided that deposits with a maturity of more than three months shall be excluded; |
| 2. | Position adjustment transactions of participating financial companies; |
| 3. | Call transactions with participating financial companies; |
| 4. | Bond transactions for operating funds of participating financial companies. |
| (3) | The Minister of Economy and Finance may require the Governor of the Bank of Korea to receive reports on materials related to transactions in foreign exchange markets from the Governor of the Bank of Korea. |
| (4) | Notwithstanding Articles 2-6 and 7-15, an overseas branch office of a foreign exchange bank or a local subsidiary of a foreign exchange bank designated as a liquidation bank that intends to lend or borrow an amount exceeding KRW3 trillion (including lending or borrowing with other foreign exchange banks) to a foreign exchange bank for which a non-resident holding account in the name of the liquidation bank is opened pursuant to paragraph (1). In addition, the relevant liquidation bank shall file a report to the Governor of the Bank of Korea. In addition, the relevant liquidation bank shall, with regard to the foregoing, report to the Governor of the Bank of Korea on the details of the Korean won-denominated transactions in the relevant month of borrowing and lending in Korean won to the Governor of the Bank of Korea by the end of every immediately following month. <Newly Inserted on Jun. 8, 2016> |
| Article 10-22 (Seoul Foreign Exchange Committee) |
| (1) | The Minister of Economy and Finance may constitute and operate the Seoul Foreign Exchange Operation Committee (hereafter in this Article referred to as the "Committee"), which is an autonomous council of foreign exchange market participants. <This Article Newly Inserted on Mar. 22, 2016> |
| (2) | The Committee may establish participating agencies, composition, and code of conduct for the foreign exchange market for the sound development of the foreign exchange market to maintain business order among foreign exchange market participants and ensure the sound development of the foreign exchange market by establishing fair trade practices. |
| Article 10-23 (Deliberative Committee for Foreign Exchange System Development) |
| (1) | Deliberative Committee for Foreign Exchange System Development (hereinafter referred to as the "Deliberative Committee") shall be established under the jurisdiction of the Minister of Economy and Finance to deliberate on matters concerning the foreign exchange system. <Newly Inserted on Jul. 4, 2023> |
| (2) | The Deliberative Committee shall examine the following matters: |
| 1. | Matters concerning the formulation of major policies on the foreign exchange transaction system; |
| 2. | Matters concerning the enactment, amendment, or interpretation of statutes related to foreign exchange transactions; |
| 3. | Other matters brought to a meeting by the Chairperson of the Deliberative Committee as deemed necessary. |
| (3) | The Deliberative Committee shall be comprised of not more than 10 members including one chairperson. |
| (4) | The Chairperson of the Deliberative Committee shall be appointed by the Minister of Economy and Finance from among public officials in general service belonging to the Senior Executive Service of the Ministry of Economy and Finance, and the members shall be the persons who satisfy any of the following: |
| 1. | A person designated by the head of the relevant agency from among public officials of Grade III or IV in the Ministry of Economy and Finance, the Financial Services Commission, and the Korea Customs Service; |
| 2. | A person commissioned by the Minister of Economy and Finance from among the following persons: |
| (a) | Persons recommended by the Governor of the Bank of Korea; |
| (b) | Persons recommended by the Governor of the Financial Supervisory Service; |
| (c) | Persons who meet the qualifications prescribed and publicly notified by the Minister of Economy and Finance. |
| (5) | Each member commissioned under paragraph (4) 2 shall hold office for a term of two years and may be eligible for only one consecutive term. |
| (6) | The Committee shall meet semi-annually in person, in principle, but may convene from time to time or substitute for a written meeting as deemed necessary by the Chairperson. |
ADDENDA <No. 2002-12, Jul. 2, 2002>
Article 1 (Enforcement Date)
This Regulation shall enter into force on July 2, 2002.
Article 2 (Transitional Measures)
| (1) | With respect to subparagraph 6 of Article 1-2, the previous provisions shall apply until July 31, 2002. |
| (2) | After May 31, 2002, the 30 largest affiliated companies may report their 2001 export performance to the Governor of the Bank of Korea for adjustment of the limit on guarantees, etc. |
| (3) | The limit for guarantees, etc. and other guarantees of the 30 largest affiliated companies based on export performance shall not be reduced even in the annual export performance following the limit is adjusted by the Governor of the Bank of Korea. |
Article 3 (Repeal Notes)
The following notes are repealed:
| 1. | The note for improvement of the local finance system (Foreign Exchange Policy Div. 41271-46, Mar. 30, 2002); |
| 2. | The note for the scope of foreign exchange services permitted to merged securities companies and improvement of the local finance system (Foreign Exchange Policy Div. 41271-77, May 31, 2002). |
ADDENDA <No. 2005-13, Jul. 1, 2005>
Article 1 (Enforcement Date)
These Regulations shall enter into force on July 1, 2005.
Article 2 (Transitional Measures)
Notwithstanding Article 7-42, foreign investors may deposit and dispose of related funds through securities investment-only external accounts and securities investment-only Korean won accounts for the purpose of any payment, etc. related to stock index futures or options trading until January 31, 2004.
Article 3 (Repeal Notes)
The following notes are repealed:
| 1. | The note for improvement of the foreign exchange transaction system (Foreign Exchange Policy Div. 41271-7, Jan. 6, 2003); |
| 2. | The note for improvement of the foreign exchange transaction system (Foreign Exchange Policy Div.-82, Nov. 8, 2003); |
| 3. | The note for improvement of foreign currency check import procedures (Foreign Exchange Policy Div.-107, Nov. 25, 2003); |
| 4. | The note for transfer of stock index futures and options transactions to the futures exchange (Foreign Exchange Policy Div.-166, Dec. 26, 2003); |
| 5. | The note for allowable limits on foreign exchange positions (Foreign Currency Fund Div.-10, Jan. 14, 2004); |
| 6. | The note for allowable limits on foreign exchange positions (Foreign Currency Fund Div.-13, Jan. 19, 2004); |
| 7. | The note for improvement of the procedures of applying for foreign exchange brokerage authorization (Foreign Currency Fund Div.-24, Jan. 30, 2004); |
| 8. | The note for allowable limits on foreign exchange positions (Foreign Currency Fund Div.-62, Feb. 18, 2004); |
| 9. | The note for allowable limits on foreign exchange positions (Foreign Currency Fund Div.-103, Mar. 19, 2004); |
| 10. | The note for allowable limits on foreign exchange positions (Foreign Currency Fund Div.-143, Apr. 19, 2004); |
| 11. | The note for improvement of the foreign exchange transaction system (Foreign Exchange Policy Div.-280, Jul. 16, 2004); |
| 12. | The note for improvement of the foreign exchange transaction system (Foreign Exchange Policy Div.-342, Sep. 1, 2004). |
ADDENDA <No. 2005-25, Jan. 1, 2006>
Article 1 (Enforcement Date)
These Regulations shall enter into force on January 1, 2006.
Article 2 (Repeal Notes)
The following notes are repealed:
| 1. | The note for improvement of the foreign exchange transaction system (Foreign Exchange Regulation Innovation Team-102, Jul. 1, 2005); |
| 2. | The note for improvement of the foreign exchange transaction system (Foreign Exchange Regulation Innovation Team-119, Jul. 15, 2005). |
Article 3 (Applicability to Obligation to Recover Claims)
The amendments to Articles 1-3 shall also apply to claims that, at the time of the entry into force of these Regulations, have not yet expired one year and six months after the maturity date or the date of fulfillment of the conditions, or have received an extension of the redemption period pursuant to the provisions of Article 1-3 (3). <Note>
Article 4 (Applicability to Recovery of Funds from Sale of Overseas Housing)
The amended provisions of Article 7-44-3 shall also apply to persons who have acquired a house referred to in subparagraph 3 (f) of Article 7-44 in accordance with a recognized transaction before these Regulations enter into force. <Note>
ADDENDA <No. 2006-26, Aug. 3, 2006>
Article 1 (Enforcement Date)
These Regulations shall enter into force on August 3, 2006.
Article 2 (Repeal Notes)
The following notes are repealed:
| 1. | Enforcement of the note for improvement of the foreign exchange transaction system (Foreign Exchange Regulation Innovation Team-2, Jan. 6, 2006); |
| 2. | Enforcement of the note for improvement of the system of allowable limits on foreign exchange positions (Foreign Exchange Regulation Innovation Team-61, Jan. 26, 2006); |
| 3. | Enforcement of the note for improvement of the foreign exchange transaction system (Foreign Exchange Regulation Innovation Team-111, Mar. 2, 2006); |
| 4. | Enforcement of the note for improvement of the foreign exchange transaction system (Foreign Exchange Regulation Innovation Team-177, Mar. 31, 2006); |
| 5. | Enforcement of the note for improvement of the foreign exchange transaction system (Foreign Exchange Regulation Innovation Team-320, May 19, 2006); |
| 6. | Enforcement of the note for improvement of the foreign exchange transaction system (Foreign Exchange Regulation Innovation Team-323, May 19, 2006). |
Article 3 (Transitional Measures concerning Acquisition of Overseas Real Estate by Residents)
Any person who acquired overseas real estate under the previous provisions before a repealed note (Foreign Exchange Regulation Innovation Team-323, May 19, 2006) enters into force (May 22, 2006) shall be deemed to have acquired such overseas real estate under these Regulations.
Article 4 (Applicability to Obligation to Recover Claims)
The provisions of Article 1-3 shall apply to claims regarding which less than one year and six months have elapsed from the due date of, or the date of satisfaction of set conditions for, such claims or regarding which the due date has not arrived yet owing to extension of the period for recovery thereof under Article 1-3 (3) as of the date a repealed note (Foreign Exchange Regulation Innovation Team-111, Mar. 2, 2006) enters into force (March 2, 2006).
ADDENDA <No. 2007-13, Feb. 26, 2007>
Article 1 (Enforcement Date)
These Regulations shall enter into force on February 26, 2007.
Article 2 (Transitional Measures concerning Acquisition of Overseas Real Estate by Residents)
Any person who acquired overseas real estate or any rights thereto under the previous provisions before these Regulations enter into force shall be deemed to have acquired such overseas real estate under these Regulations.
Article 3 (Transitional Measures concerning Foreign Direct Investment by Residents)
Any person who made a foreign direct investment under the previous provisions before these Regulations enter into force shall be deemed to have made such investment under these Regulations.
ADDENDA <No. 2007-62, Dec. 17, 2007>
Article 1 (Enforcement Date)
These Regulations shall enter into force on January 1, 2008; provided that the provisions of Articles 1-2, 2-4-2, 2-6, 2-10-2, 2-12 (excluding paragraph (2) 7), 2-13, 4-3 (1) 5, 4-5 (1) and (6), 5-4 (2), 5-10, 6-3, 7-8 (5) 2, 7-9 (5) 2, 7-23-2, 7-37 (2) 3 and (3) 1, 7-40, 7-45 (1) 16 and (2), 8-2, 9-1, 9-1-2, 9-2, 9-5, 9-10, 9-11, 9-12, 9-14, 9-17, 9-26, 9-27, and 9-39 shall enter into force on the date of the public announcement.
Article 2 (Retroactive Application)
The provisions of Article 9-1 (2) shall retroactively apply to any transactions made before these Regulations enter into force.
Article 3 (Repeal Note)
The note for improvement of the foreign exchange transaction system (Foreign Exchange Regulation Innovation Team-131, Mar. 9, 2007) is repealed.
ADDENDUM <No. 2008-6, Jun. 2, 2008>
Article 1 (Enforcement Date)
These Regulations shall enter into force on June 2, 2008.
ADDENDA <No. 2008-11, Jul. 25, 2008>
Article 1 (Enforcement Date)
These Regulations shall enter into force on July 25, 2008; provided that the provisions of Articles 9-1, 9-2, 9-2-2, 9-4, 9-5, 9-10 through 9-15-2, 9-17, 9-18, and 9-26 through 9-31 shall enter into force on September 1, 2008.
Article 2 (Terminology)
The Minister of Finance and Economy under these Regulations shall be deemed the Minister of Economy and Finance.
ADDENDA <No. 2009-2, Feb. 3, 2009>
Article 1 (Enforcement Date)
These Regulations shall enter into force on February 4, 2009.
Article 2 (Repeal Note)
The note for allowable limits on foreign exchange positions (Foreign Currency Fund Div.-309, Sep. 8, 2008) is repealed.
Article 3 (Transitional Provisions)
Any institution that registered as foreign exchange agency as a securities company, futures company, or asset management company prior to February 4, 2009, shall be deemed to have registered as foreign exchange agency under these Regulations to the extent that it was authorized and registered as a financial investment business pursuant to the Financial Investment Services and Capital Markets Act until February 4, 2009.
ADDENDUM <No. 2009-18, Sep. 30, 2009>
Article 1 (Enforcement Date)
These Regulations shall enter into force on September 30, 2009.
ADDENDA <No. 2010-10, May 19, 2010>
Article 1 (Enforcement Date)
These Regulations shall enter into force on May 19, 2010.
Article 2 (Repeal Notes)
The following notes are repealed:
| 1. | The note for improvement of the foreign exchange transaction system (Foreign Exchange Policy Div.-736, Dec. 24, 2009); |
| 2. | The note for improvement of the foreign exchange transaction system (Foreign Exchange Policy Div.-47, Feb. 3, 2010). |
ADDENDA <No. 2010-14, Jul. 9, 2010>
| (1) | (Enforcement Date) These amended provisions shall enter into force on Oct. 9, 2010. |
| (2) | (Transitional Measures) In cases of a foreign exchange bank whose forward exchange position is the same as or exceeding the limit prescribed in Article 2-9-2 (2) on the date of the immediately preceding transaction, the forward exchange position ratio to its equity capital as of the date of the immediately preceding month until the enforcement date shall not exceed the percentage of forward exchange position to its equity capital as of the date. |
| (3) | (Transitional Measures) In cases of a foreign exchange bank whose forward exchange position is lower than the limit provided in Article 2-9-2 (2) on the immediately preceding trading day of the date of public notification, the forward exchange position to the enforcement date shall not exceed the limit provided in Article 2-9-2 (2). |
ADDENDUM <No. 2010-17, Aug. 20, 2010>
Article 1 (Enforcement Date)
These Regulations shall enter into force on August 20, 2010.
ADDENDUM <No. 2012-5, Apr. 16, 2012>
Article 1 (Enforcement Date)
These Regulations shall enter into force on April 30, 2012.
ADDENDUM <No. 2012-16, Dec. 5, 2012>
Article 1 (Enforcement Date)
These Regulations shall enter into force on the date of their public notification; provided that the amended provisions of Article 7-39 shall enter into force on April 1, 2013.
ADDENDA <No. 2013-21, Dec. 19, 2013>
Article 1 (Enforcement Date)
These Regulations shall enter into force on January 1, 2014.
Article 2 (Applicability to Foreign Direct Investment by Permanent Residents)
The amended provision of Article 9-5 (5) shall apply to foreign direct investment declarations which have been submitted or for the acquisition of permanent residency occurring after these Regulations enter into force.
Article 3 (Repeal Note)
The following notes are repealed:
| 1. | The note for the collection of charges for foreign exchange soundness (Foreign Exchange System Department-448, Jul. 27, 2011); |
| 2. | The note for the improvement of the foreign exchange transactions system (Foreign Exchange System Department- 99, Feb. 27, 2013); |
| 3. | The note for the improvement of the foreign exchange transactions system (Foreign Exchange System Department- 346, Jun. 27, 2013). |
ADDENDA <No. 2014-18, Oct. 31, 2014>
Article 1 (Enforcement Date)
These Regulations shall enter into force on January 1, 2015; provided that the amended provisions of subparagraph 4 of Article 1-2, Articles 2-1 (2), 2-9-2 (1) 1, and 7-8 (5) 13, 7-9 (5) 16, subparagraph 5 (c) of Article 7-17, Articles 9-33 (4), 9-37 (1), 10-6 (1), and 10-15-2 shall enter into force on the date of public announcement.
Article 2 (Applicability to Payment Method Exceeding a Period Set by the Minister of Economy and Finance)
The amended provisions of the proviso of Article 5-8 (1) 2 (b) shall apply to the payment of import proceeds under an import contract concluded after these Regulations enter into force.
Article 3 (Applicability to Foreign Direct Investment Post-Facto Reporting)
Pursuant to the amended provisions of Article 9-5 (1), the calculation of the investment amount with the cumulative limit of USD500,000 shall commences from the first foreign direct investments made after these Regulations enter into force.
Article 4 (Applicability to Foreign Direct Investment by Persons with Permanent Residency and Acquisition of Overseas Real Estate)
The amended provisions of Articles 9-5 (6) and 9-39 (6) shall begin to apply to declarations submitted for foreign direct investment or acquisition of overseas real property and the acquisition of permanent residency occurring after these Regulations enter into force.
Article 5 (Repeal Note)
The note for the opening of the gold spot market (Foreign Exchange System Department-95, Mar. 4, 2014) is repealed.
ADDENDA <No. 2015-7, Mar. 31, 2015>
Article 1 (Enforcement Date)
These Regulations shall enter into force on the date of public announcement.
Article 2 (Repeal Notes)
The following notes are repealed:
| 1. | Note for the collection of charges for foreign exchange soundness (Foreign Exchange System Department-532, Nov. 3, 2014); |
| 2. | Note for making declaration of payment, etc. to a third party (Foreign Exchange System Department-674; Dec. 24, 2014). |
ADDENDUM <No. 2015-12, Jun. 29, 2015>
Article 1 (Enforcement Date)
These Regulations shall enter into force July 1, 2015.
ADDENDA <No. 2016-6, Mar. 22, 2016>
Article 1 (Enforcement Date)
These Regulations shall enter into force on the date of public notice; provided that the amended provisions of Articles 3-1, 3-2, 10-7 and 10-8 shall enter into force on April 1, 2016.
Article 2 (Applicability)
The submission of a copy of the currency exchange ledger (including electronic documents) under Article 3-2 (1) shall begin to apply from the details of transactions conducted on or after April 1, 2016.
Article 3 (Transitional Measures concerning Supervision of Foreign Exchange Operators by Governor of the Bank of Korea)
Any supervision conducted or necessary orders issued by the Governor of the Bank of Korea regarding foreign exchange operators under Article 11 (1) of the Act before these Regulations enter into force shall be deemed to have been conducted or issued by the Commissioner of the Korea Customs Service after these Regulations enter into force; provided that the reporting of the foreign exchange services status, as required to be reported by the end of the month, shall be reported by the 10th day of the immediately following month for each quarter.
Article 4 (Repeal Note)
Note for CNY trading rate (Foreign Exchange Regulation Innovation Team-687, Dec. 18, 2015) is repealed.
ADDENDUM <No. 2016-26, Oct. 5, 2016>
Article 1 (Effective Period)
The proviso of Article 9-33 (4) shall be effective for one year from the date of enforcement.
ADDENDUM <No. 2017-19, Jun. 29, 2017>
Article 1 (Enforcement Decree)
These Regulations shall enter into force on July 18, 2017.
ADDENDA <No. 2017-40, Dec. 28, 2017>
Article 1 (Enforcement Date)
These Regulations shall enter into force on January 1, 2018.
Article 2 (Applicability to Reporting on Changes to Foreign Direct Investment)
The amended provisions of Articles 9-5 (2), 9-15-2 (3) and (4) shall begin to apply to persons for whom a reason for modification arises after these Regulations enter into force.
ADDENDUM <No. 2018-12, May 1, 2018>
Article 1 (Enforcement Date)
These Regulations shall enter into force on the date of public announcement.
ADDENDUM <No. 2018-16, Jul. 1, 2018>
Article 1 (Enforcement Date)
These Regulations shall enter into force on the date of public announcement.
ADDENDUM <No. 2018-28, Dec. 24, 2018>
Article 1 (Enforcement Date)
These Regulations shall enter into force on January 1, 2019.
ADDENDUM <No. 2019-12, May 3, 2019>
Article 1 (Enforcement Date)
These Regulations shall enter into force on May 3, 2019.
ADDENDUM <No. 2019-13, May 28, 2019>
Article 1 (Enforcement Date)
These Regulations shall enter into force on May 28, 2019.
ADDENDUM <No. 2019-20, Oct. 8, 2019>
Article 1 (Enforcement Date)
These Regulations shall enter into force on October 8, 2019.
ADDENDUM <No. 2020-30, Oct. 30, 2020>
Article 1 (Enforcement Date)
These Regulations shall enter into force on October 30, 2020.
ADDENDUM <No. 2021-11, Jun. 18, 2021>
Article 1 (Enforcement Date)
These Regulations shall enter into force on the date of public notice; provided that the amended provision of Article 7-34 (2) shall enter into force six months after the date of public announcement.
ADDENDUM <No. 2021-22, Sep. 9, 2021>
Article 1 (Enforcement Date)
These Regulations shall enter into force on September 16, 2021.
ADDENDUM <No. 2021-37, Dec. 29, 2021>
Article 1 (Enforcement Date)
These Regulations shall enter into force on January 3, 2022; provided that the amended provision of subparagraph 1 of Article 5-2 shall enter into force three months after the date of public announcement.
ADDENDUM <No. 2022-11, Apr. 11, 2022>
Article 1 (Transitional Measures)
Notwithstanding the amended provisions of Articles 2-11-2 (2) through (5) and 2-24, the former provisions shall apply to the imposition of foreign currency soundness charge during the business year 2021.
ADDENDUM <No. 2022-11, Apr. 11, 2022>
Article 1 (Transitional Measures)
Notwithstanding the amended provisions of Articles 2-11-2 (2) through (5) and 2-24, the former provisions shall apply to the imposition of foreign currency soundness charge during the business year 2021.