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STATUTES

THE REPUBLIC OF KOREA

Volume

ELECTRONIC FINANCIAL TRANSACTIONS ACT

Act No. 7929, Apr. 28, 2006

Amended by Act No. 8387, Apr. 27, 2007

Act No. 8863, Feb. 29, 2008

Act No. 9325, Dec. 31, 2008

Act No. 10303, May 17, 2010

Act No. 11407, Mar. 21, 2012

Act No. 11087, Nov. 14, 2011

Act No. 11461, Jun. 1, 2012

Act No. 11814, May 22, 2013

CHAPTER I GENERAL PROVISIONS

Article 1 (Purpose)

The purpose of this Act is to contribute to ensuring the security and reliability of electronic financial transactions by clarifying their legal relations and to promoting financial conveniences for people and developing the national economy by creating a foundation for the sound development of electronic financial industry.

Article 2 (Definitions)

Article 1 ~ 2

The definitions of terms used in this Act shall be as follows: <Amended by Act No. 8387, Apr. 27, 2007; Act No. 8863, Feb. 29, 2008; Act No. 11407, Mar. 21, 2012; Act No. 11461, Jun. 1, 2012; Act No. 11814, May 22, 2013>

1. The term "electronic financial transaction" means any transaction whereby a financial company or an electronic financial business operator provides financial products and services through electronic apparatuses (hereinafter referred to as "electronic financial business") and users use them in a non-facing and automated manner without any direct contact with employees of the financial company or electronic financial business operator;

2. The term "electronic payment transaction" means any electronic financial transaction whereby a person providing a payment (hereinafter referred to as "payer") requires a financial company or an electronic financial business operator to transfer money to another person receiving the payment (hereinafter referred to as "payee") by electronic payment means;

3. The term "financial company" means any of the following institutions, organizations or business operators:

(a) An institution referred to in subparagraphs 1 through 5, 7 and 8 of Article 38 of the Act on the Establishment, etc. of Financial Services Commission;

Article 2

(b) A specialized credit financial company established under the Specialized Credit Finance Business Act;

(d) A community credit cooperative and Korean Federation of Community Credit Cooperatives established under the Community Credit Cooperatives Act;

(e) Any other institution, organization or business operator that carries on relevant financial business and other related business pursuant to Acts, as prescribed by Presidential Decree;

4. The term "electronic financial business operator" means any person who obtains permission or whose business is registered (excluding any financial company) pursuant to Article 28;

5. The term "subsidiary electronic financial business operator" means any person prescribed by the Financial Services Commission pursuant to Article 3 of the Act on the Establishment, etc. of Financial Services Commission (hereinafter referred to as the "Financial Services Commission") who assists in conducting electronic financial transactions or performs part thereof on behalf of a financial company or electronic financial business operator or any operator of

Article 2

a payment gateway system;

6. The term "payment gateway system" means any financial data processing system that deals with business affairs relating to the settlement of accounts and payments by transmitting electronic financial transaction information between a financial company and an electronic financial business operator;

7. The term "user" means any person who conducts an electronic financial transaction under a contract concluded with a financial company or an electronic financial business operator for facilitating electronic financial transactions (hereinafter referred to as "electronic financial transaction contract");

8. The term "electronic apparatus" means any apparatus used to transmit or process electronic financial transaction information through electronic means, such as a cash dispenser, automatic teller machine, debit terminal, computer, telephone, or other devices that transmit or process information through electronic means;

9. The term "electronic document" means any information prepared, transmitted, received or stored pursuant to subparagraph 1 of Article 2 of the Framework Act on Electronic Documents and Transactions;

10. The term "means of access" means any of the following means or information which is used to issue a transaction request in

Article 2

electroic fiacial trasactios or to secure the authenticity and accuracy of users and the details of such transaction:

(a) An electronic card or other electronic information equivalent thereto;

(b) An electronic signature creating key as defined in subparagraph 4 of Article 2 of the Digital Signature Act and a certificate as defined in subparagraph 7 of said Article;

(d) Biological information of users;

(e) A password required to use the means or information referred to in item (a) or (b);

11. The term "electronic payment means" means an electronic funds transfer, electronic debit payment instrument, electronic prepayment means, electronic currency, a credit card, an electronic bond or other means of payment through electronic means;

12. The term "electronic funds transfer" means any transfer of funds made by any of the following methods from an account opened with a financial company or electronic financial business operator (limited to any account linked to a financial

Article 2

company; hereinafter the same shall apply) to another account through an electronic apparatus for the purpose of transferring funds between a payer and a payee:

(a) A payment request made by a payer to a financial company or electronic financial business operator;

(b) A collection request made by a payee (hereinafter referred to as the "collection transfer") to a financial company or electronic financial business operator;

13. The term "electronic debit payment means" means any certificate (excluding any certificate available for loans), or information on such certificate, issued by a financial company or electronic financial business operator to simultaneously offer goods or services and pay the prices thereof by the method of transferring funds from the account of a financial company between a user and a chain store in an electronic form;

14. The term "electronic prepayment means" means any certificate, or information on such certificate, of transferable monetary values stored and issued in the electronic form, which meets all of the following requirements: Provided, That this shall not include any electronic currency:

(a) To be

Article 2

usd to purchas goods or srvics from a third prson other than the issuer (including specially related persons prescribed by Presidential Decree) and pay the prices thereof;

(b) To be used to purchase goods or services included in at least two business categories (referring to mid-classification business categories in the Korean Standard Industrial Classification published by the Commissioner of the National Statistical Office pursuant to Article 22 (1) of the Statistics Act; hereafter the same shall apply in this Article);

15. The term "electronic currency" means any certificate, or information on such certificate, of transferable monetary values stored and issued in an electronic form, which meets all of the following requirements:

(a) To be used within the areas and by the chain stores which meet the standards prescribed by Presidential Decree;

(b) To meet the requirements of subparagraph 14 (a);

(c) To be used to purchase goods or services included in at least five business categories prescribed by Presidential Decree;

(d) To be issued in exchange for the same value of cash or deposits;

Article 2

(e) To be exchanged for cash or deposits under guarantee of the issuer;

16. The term "electronic bond" means any creditor's monetary bond stated in an electronic document meeting the following requirements:

(a) For the debtor to designate the creditor;

(b) To include the contents of debts in the electronic bond;

(d) To be registered with an electronic bond management agency under Article 29 (1) (hereinafter referred to as "electronic bond management agency") via a financial company;

(e) For the debtor to transmit an electronic document meeting all requirements of items (a) through (c) to the creditor pursuant to Article 6 (1) of the Framework Act on Electronic Documents and Transactions and for the creditor to receive it in accordance with Article 6 (2) of said Act;

17. The term

Article 2

"transaction request" means any request whereby a user asks a financial company or an electronic financial business operator to process electronic financial transactions pursuant to the electronic financial transaction contract;

18. The term "error" means any case where an electronic financial transaction fails to be effected pursuant to the electronic financial transaction contract or the user's transaction request neither intentionally nor with gross negligence;

19. The term "electronic payment settlement agency service" means any service rendered to transmit or receive payment settlement information in purchasing goods or using services in an electronic form or to execute as an agent or mediate the settlement of prices thereof;

20. The term "chain store" means any person, other than a financial company or an electronic financial business operator, who offers goods or services to users in transactions conducted by using an electronic debit payment means, electronic prepayment means or electronic currency under a contract concluded with a financial company or an electronic financial business operator;

21. The term "electronic financial infrastructure" means any information processing system used in electronic financial transactions and information and communication network as defined in Article 2 (1) 1 of the Act on Promotion of Information

Article 2

and Communications Network Utilization and Information Protection, etc.;

22. The term “electronic infringement” means any attack of electronic financial infrastructure by means of hacking, computer virus, logic bomb, mail bomb, denial of service, high-powered electromagnetic wave, etc.

Article 3 (Scope of Application)

(1) Except as otherwise expressly provided for in other Acts, this Act shall apply to all electronic financial transactions: Provided, That this Act shall not apply to the electronic financial transactions determined by Presidential Decree among those conducted under a separate contract concluded between a financial company and an electronic financial business operator. <Amended by Act No. 11814, May 22, 2013>

(2) The provisions of Chapter V shall not apply to the financial companies referred to in subparagraph 3 (c) and (d) of Article 2. <Amended by Act No. 11814, May 22, 2013>

(3) The following shall not apply to a financial company prescribed by Presidential Decree, considering the frequency of electronic financial transactions, size of company, etc. among financial companies: <Newly Inserted by Act No. 11814, May 22, 2013>

1. Meeting the standards set by the Financial Services Commission for the information technology sector, in terms of human resources, facilities, electronic apparatuses, etc. and electronic

Article 3

financial business under Article 21 (2);

2. Establishing and submitting plans for the information technology sector under Article 21 (4);

3. Appointing the chief information security officer under Article 21-2;

4. Analyzing and assessing the vulnerability of electronic financial infrastructure under Article 21-3.

Article 4 (Reciprocity)

This Act shall also apply to a foreigner or foreign corporation: Provided, That with respect to any foreigner or foreign corporation of the State which fails to bestow any protective benefits corresponding to this Act for any national or corporation of the Republic of Korea, such protective benefits under this Act or the treaties acceded to or concluded by the Republic of Korea may be restricted commensurately therewith.

CHAPTER II RIGHTS AND DUTIES OF PARTIES TO ELECTRONIC FINANCIAL TRANSACTIONS

SECTION 1 Common Provisions

Article 5 (Use of Electronic Documents)

Article 4 ~ 5

(1) Articles 4 through 7, 9 and 10 of the Framework Act on Electronic Documents and Transactions shall apply to electronic documents used for electronic financial transactions. <Amended by Act No. 11461, Jun. 1, 2012>

(2) Each electronic document received by a financial company or an electronic financial business operator in relation to a transaction request shall be deemed independent, respectively: Provided, That where the financial company or electronic financial business operator and a user undergoes the procedures of confirmation on an electronic financial transaction contract concluded among them, such procedures shall prevail. <Amended by Act No. 11814, May 22, 2013>

Article 6 (Selection, Use and Management of Means of Access)

(1) A financial company or electronic financial business operator shall select, use and manage the means of access necessary for electronic financial transactions and confirm the identity and authority of a user, the details of a transaction request, etc. <Amended by Act No. 11814, May 22, 2013>

(2) A financial company or an electronic financial business operator shall issue the means of access only if an application is made by the user after verifying the identity of such user: Provided, That it may be also issued without the user's application nor the verification of the user's identity in any of the following cases: <Amended by Act No. 11814, May 22, 2013>

1. In case of

Article 6

an electronic prepayment means or electronic currency referred to in the proviso to Article 16 (1);

2. Where user consent is obtained for the renewal, replacement, etc. of the means of access, as prescribed by Presidential Decree.

(3) No one shall commit any of the following offences unless otherwise expressly provided for in other Acts with respect to the use and management of a means of access: Provided, That the same shall not apply where an electronic prepayment means under Article 18 or electronic currencies shall be transferred or offered as security: <Amended by Act No. 9325, Dec. 31, 2008>

1. To acquire or transfer a means of access;

2. To borrow or lend a means of access with compensation;

3. To provide a means of access subject to a right of pledge;

4. To assist such acts prescribed in subparagraphs 1 through 3.

Article 7 (Confirmation of Transaction Details)

(1) Any financial company or electronic financial business operator shall ensure that a user can confirm the transaction details through an electronic apparatus (including an electronic apparatus, if any, stipulated in advance between the financial company

Article 7

or electronic financial business operator and the user) used for electronic financial transactions. <Amended by Act No. 11814, May 22, 2013>

(2) Any financial company or electronic financial business operator shall, upon a user's request to deliver relevant transaction details in writing (excluding any electronic document; hereinafter the same shall apply), deliver to him/her a document stating the details of his/her transaction within two weeks after receipt of such request. <Amended by Act No. 11814, May 22, 2013>

(3) Matters concerning the coverage period, kinds and scope of the details of transaction offered pursuant to paragraphs (1) and (2) and other matters shall be prescribed by Presidential Decree.

Article 8 (Correction, etc. of Errors)

(1) When a user recognizes the existence of any error in the electronic financial transaction, he/she may request the relevant financial company or electronic financial business operator to correct such error. <Amended by Act No. 11814, May 22, 2013>

(2) Upon receipt of a request to correct an error under paragraph (1), any financial company or electronic financial business operator shall immediately investigate and effect appropriate corrections to the processed transaction, and inform the user of the causes of the error and the results of correction in a method prescribed by Presidential Decree within two weeks after receipt

Article 8

of such request. <Amended by Act No. 9325, Dec. 31, 2008; Act No. 11814, May 22, 2032>

(3) When any financial company or electronic financial business operator recognizes the existence of any error in the electronic financial transaction, it or he/she shall immediately investigate and effect appropriate corrections to the processed transaction, and inform the user of the causes of the error and the results of correction in a method prescribed by Presidential Decree within two weeks after recognizing such error. <Amended by Act No. 9325, Dec. 31, 2008; Act No. 11814, May 22, 2013>

Article 9 (Liability of Financial Companies or Electronic Financial Business Operators)

(1) When a user suffers any loss due to any of the following incidents, the relevant financial company or electronic financial business operator shall be liable for indemnifying him/her for the loss: <Amended by Act No. 11814, May 22, 2013>

1. An incident caused by the forgery or alteration of the means of access;

2. An incident caused in the course of electronically transmitting or processing the conclusion of a contract or a transaction request;

3. An incident caused by the use of a means of access acquired by fraudulent

Article 9

or other illegal means by invading the electronic apparatus for electronic financial transactions or an information and communication network as defined in Article 2 (1) 1 of the Act on Promotion of Information and Communications Network Utilization and Information Protection, etc.

(2) Notwithstanding paragraph (1), a financial company or electronic financial business operator may require a user to fully or partially bear the liability for any loss in any of the following cases: <Amended by Act No. 11814, May 22, 2013>

1. Where, with respect to any incident caused by the intention or gross negligence of the user, a prior agreement is made with the user to the effect that all or part of the loss may be borne by the user;

2. Where a corporate user (excluding any small enterprise as defined in Article 2 (2) of the Framework Act on Small and Medium Enterprises) suffers any loss although the financial company or electronic financial business operator fulfills the duty of due care reasonably required to prevent incidents, such as the establishment and strict observance of security procedures.

(3) The intention or gross negligence of the user referred to in paragraph (2) 1 shall be limited to that stipulated in the terms and conditions of electronic financial transactions (hereinafter referred to as "terms and conditions") within the limits set forth

Article 9

by Presidential Decree.

(4) Every financial company or electronic financial business operator shall take measures necessary to discharge the liability provided for in paragraph (1), such as purchasing insurance, joining a mutual aid society or accumulating reserves, pursuant to the standards determined by the Financial Services Commission. <Amended by Act No. 8863, Feb. 29, 2008; Act No. 11814, May 22, 2013>

Article 10 (Liability for Loss or Theft of Means of Access)

(1) Upon receipt of a user's notification of the loss or theft of the means of access, the relevant financial company or electronic financial business operator shall be liable for compensating the user for any loss he/she might suffer due to the use of such means of access by a third party from the time such notification is received: Provided, That the same shall not apply to any damage caused by the loss, theft, etc. of electronic prepayment means or electronic currency as prescribed by Presidential Decree. <Amended by Act No. 11814, May 22, 2032>

(2) Notwithstanding paragraph (1) of this Article and Article 9, if there provisions of other Acts and subordinate statutes applicable favorably to the user, the specific provisions of such Acts and subordinate statutes shall prevail.

Article 11 (Status of Subsidiary Electronic Financial Business Operators)

Article 10 ~ 11

(1) The intention or negligence of a subsidiary electronic financial business operator (including any electronic bond management agency; hereafter the same shall apply in this Chapter) in relation to electronic financial transactions shall be deemed the intention or negligence of the relevant financial company or electronic financial business operator. <Amended by Act No. 11814, May 22, 2013>

(2) When any financial company or electronic financial business operator compensates the user for any loss caused by the intention or negligence of its or his/her subsidiary electronic financial business operator, it or he/she may exercise the right of indemnity over the subsidiary electronic financial business operator. <Amended by Act No. 11814, May 22, 2013>

(3) Any user may give various notifications he/she is obligated to give to a financial company or an electronic financial business operator to its or his/her subsidiary electronic financial business operator pursuant to an agreement made with the financial company or electronic financial business operator. In such cases, a notification given to the subsidiary electronic financial business operator shall be deemed to have been given to the relevant financial company or electronic financial business operator. <Amended by Act No. 11814, May 22, 2013>

SECTION 2 Electronic Payment Transactions, etc.

Article 11

Article 12 (Validity of Electronic Payment Transaction Contracts)

(1) Any financial company or electronic financial business operator shall ensure the payment is made by transmitting the amount requested by a payer or payee on a transaction request to the payee or his/her financial company or electronic financial business operator, pursuant to an agreement made with the payer or payee to facilitate electronic payment transactions. <Amended by Act No. 11814, May 22, 2013>

(2) When any financial company or electronic financial business operator becomes unable to transmit the amount requested pursuant to paragraph (1), it or he/she shall return to the payer the amount received for electronic payment transactions. In such cases, when the failure to transmit the amount is caused by the negligence of the payer, the expenses incurred in relation to such transmission may be deducted. <Amended by Act No. 11814, May 22, 2013>

Article 13 (Time when Payment Takes Effect)

Where a payment is made by means of an electronic payment instrument, such payment shall take effect at the time set forth in the following: <Amended by Act No. 11814, May 22, 2013>

1. For electronic funds transfers: When the information on the amount transferred on a transaction request is completely recorded on the ledger of the account of a financial company or electronic financial business operator with which the payee's

Article 12 ~ 13

account is opened;

2. For withdrawal of cash directly from an electronic apparatus: When the payee receives such cash;

3. For payments made by an electronic prepayment means or electronic currency: When the information on the amount requested on a transaction request gets to the electronic apparatus designated by the payee; and

4. For payments made by other electronic payment means: When the information on the amount requested on a transaction request is completely input in the electronic apparatus of a financial company or electronic financial business operator with which the payee's account is opened.

Article 14 (Withdrawal of Transaction Requests)

(1) Any user may withdraw his/her transaction request before the payment takes effect pursuant to each subparagraph of Article 13.

(2) Notwithstanding paragraph (1), a financial company or an electronic financial business operator and a user may, pursuant to a prior agreement, determine differently the timing for withdrawing a transaction request with respect to any batch transaction, reserved transaction, etc. <Amended by Act No. 11814, May 22, 2013>

(3) Any financial company or electronic financial business operator shall include in its or his/her terms and conditions the matters relating

Article 14

to the methods and procedures for withdrawing a transaction request under paragraph (1) and the prior agreement under paragraph (2). <Amended by Act No. 11814, May 22, 2013>

Article 15 (Consent to Withdraw Deposits by Transfer)

(1) Any financial company or electronic financial business operator shall obtain consent from the payer in advance to the withdrawal of deposits to effect a collection transfer, as prescribed by Presidential Decree. <Amended by Act No. 11814, May 22, 2013>

(2) Any payer may request a financial company or electronic financial business operator to revoke his/her consent on withdrawal under paragraph (1) before the withdrawal of deposits is completely recorded on the ledger of the payer's account pursuant to a transaction request of the payee. <Amended by Act No. 11814, May 22, 2013>

(3) Notwithstanding paragraph (2), a financial company or an electronic financial business operator may, pursuant to a prior agreement made with the payer, determine differently the timing for revoking the consent with respect to any batch transaction, reserved transaction, etc. <Amended by Act No. 11814, May 22, 2013>

(4) Any financial company or electronic financial business operator shall include in its or his/her terms and conditions the matters relating to the methods and procedures for revoking the consent and the prior agreement under paragraphs (2) and (3). <Amended

Article 15

by Act No. 11814, May 22, 2013>

Article 16 (Issuance, Use and Exchange of Electronic Currencies)

(1) Any financial company or electronic financial business operator that issues an electronic currency (hereinafter referred to as "electronic currency issuer") shall, in issuing the electronic currency, assign the identifiable number to the means of access and manage it by linking to the user's real name (hereinafter referred to as "real name") as defined in subparagraph 4 of Article 2 of the Act on Real Name Financial Transactions and Confidentiality or deposit account: Provided, That the same shall not apply to any electronic currency, the upper limit of whose face value does not exceed the amount determined by Presidential Decree. <Amended by Act No. 11814, May 22, 2013>

(2) The electronic currency issuer shall issue the electronic currency in exchange for the same value of cash or deposits.

(3) The electronic currency issuer shall take necessary measures to keep and use the issued electronic currency for facilitating the use of its holders.

(4) The electronic currency issuer shall, upon a request by its holder, have the duty to exchange such electronic currency for cash or deposits.

(5) The methods and procedures for the issuance and exchange of electronic currency under paragraphs (1) through (4) shall be prescribed by Presidential Decree.

Article 16

Article 17 (Validity of Payment by Electronic Currencies)

When an electronic currency holder pays the prices of goods or services by electronic currency pursuant to an agreement with the payee, the duty to pay such prices shall be deemed fulfilled.

Article 18 (Transferability of Electronic Currencies, etc.)

(1) The holder of an electronic prepayment means or electronic currency may transfer it to a third party or offer it as a security pursuant to an agreement with its issuer.

(2) When an electronic prepayment means or electronic currency is transferred to a third party or offered as a security under paragraph (1), it shall be necessarily done via the issuer's central computer system: Provided, That the same shall not apply to any electronic prepayment means whose real name is not confirmed or the electronic currency referred to in the proviso to Article 16 (1).

Article 19 (Refund of Electronic Prepayment Means)

(1) Any financial company or electronic financial business operator that issues an electronic prepayment means shall, upon a request by its holder, refund the balance recorded on such electronic prepayment means pursuant to a prior agreement. <Amended by Act No. 11814, May 22, 2013>

(2) Any financial company or electronic financial business operator shall enter,

Article 17 ~ 19

in the terms and conditions, the agreement on the refund under paragraph (1) and the fact that it or he/she will fully pay the balance recorded on the electronic prepayment means in any of the following cases: <Amended by Act No. 11814, May 22, 2013>

1. Where the electronic prepayment means becomes unavailable because it is impracticable for a chain store to offer goods or services due to any natural disaster, etc.;

2. Where a chain store cannot offer goods or services due to any defect in the electronic prepayment means;

3. Where the balance recorded on the electronic prepayment means falls below a fixed rate. In such cases, the fixed rate shall be at least 20 percent.

Article 20 (Requisite for Setting Up Transfer of Electronic Bonds)

(1) The transfer of electronic bonds shall be deemed to satisfy the requisite for setting up against the obligor referred to in Article 450 (1) of the Civil Act when meeting all the following requirements:

1. The notice made by the transferor to transfer the electronic bonds or the obligor's consent thereto shall be given through an electronic document bearing the certified digital signature provided for in subparagraph 3 of Article 2 of the Digital Signature Act; and

Article 20

2. The electronic document stating the notice or consent referred to in subparagraph 1 shall be registered with an electronic bond management agency.

(2) The electronic document stating the notice or consent referred to in paragraph (1) shall be deemed to satisfy the requisite for setting up against the obligor referred to in Article 450 (2) of the Civil Act when completing the time-stamp stipulated in Article 20 of the Digital Signature Act and meeting all the requirements of paragraph (1).

CHAPTER III ENSURING SAFETY OF ELECTRONIC FINANCIAL TRANSACTIONS AND PROTECTION OF USERS

Article 21 (Duty to Ensure Safety)

(1) A financial company or electronic financial business operator and its or his/her subsidiary electronic financial business operator (hereinafter referred to as "financial company, etc.") shall fulfill the duty of good manager to ensure the safe processing of electronic financial transactions. <Amended by Act No. 11814, May 22, 2013>

(2) A financial company, etc. shall meet the standards set by the Financial Services Commission for the information technology sector, in terms of human resources, facilities, electronic apparatuses,

Article 21

expense, etc. necessary for electronic transmission or processing and electronic financial business to ensure the safety and reliability of electronic financial transactions. <Amended by Act No. 8863, Feb. 29, 2008; Act No. 11814, May 22, 2013>

(3) The Financial Services Commission may determine the standards necessary for the use and other authorization methods of the authorized certificates as defined in subparagraph 8 of Article 2 of the Digital Signature Act to ensure the safety and reliability of electronic financial transactions. <Amended by Act No. 8863, Feb. 29, 2008>

(4) For safe electronic financial transactions, a financial company or electronic financial business operator prescribed by Presidential Decree shall annually establish a plan for the information technology sector, as prescribed by Presidential Decree, obtain verification and signature of its or his/her representative and submit it to the Financial Services Commission. <Newly Inserted by Act No. 11814, May 22, 2013>

Article 21-2 (Appointment of Chief Information Security Officers)

(1) Any financial company or electronic financial business operator shall appoint a chief information security officer to be responsible for managing electronic financial business and information technology security which forms the basis of electronic financial business. <Amended by Act No. 11814, May 22, 2013>

(2) A financial company

Article 21-2

or electronic financial business operator prescribed by Presidential Decree in consideration of the total equity and number of employees shall appoint one of the executives (including any person prescribed in Article 401-2 (1) 3 of the Commercial Act) as a chief information security officer. <Amended by Act No. 11814, May 22, 2013>

(3) A chief information security officer appointed under paragraph (1) shall perform the following duties:

1. Establishment of strategies and plans for ensuring the security of electronic financial transactions and the protection of users;

2. Protection and management of the information technology sector;

3. Personnel management and budget compilation, as necessary for ensuring information technology security;

4. Prevention of, and measures for, financial transaction-related incidents;

5. Other matters prescribed by Presidential Decree for ensuring the security of electronic financial transactions.

(4) Matters necessary in relation to qualifications, etc. for a chief information security officer shall be prescribed by Presidential Decree.

Article 21-2

[This Article Newly Inserted by Act No. 11087, Nov. 14, 2011]

Article 21-3 (Analyzing and Assessing Vulnerability of Electronic Financial Infrastructure)

(1) To ensure the safety and reliability of electronic financial transactions, a financial company and an electronic financial business operator shall analyze and assess the following matters with respect to its or his/her electronic financial infrastructure and report the findings therefrom (referring to the findings from analysis and assessment of vulnerability, where conducted under Article 9 of the Act on the Protection of Information and Communications Infrastructure) to the Financial Services Commission:

1. Matters relating to the organization, facilities and internal control of the information technology sector;

2. Matters relating to electronic apparatuses and the means of access of the information technology sector;

3. Matters relating to measures to respond to infringements in order to maintain electronic financial transactions;

4. Other matters prescribed by Presidential Decree.

(2) A financial company and an electronic financial business operator shall establish and implement a plan to take necessary complementary measures according to the findings from analysis and assessment

Article 21-3

of vulnerability in the electronic financial infrastructure under paragraph (1).

(3) The Financial Services Commission may require subordinate public officials to inspect the findings from analysis and assessment of vulnerability under paragraph (1) and the actual status of implementing complementary measures pursuant to paragraph (2).

(4) Details and procedures of analysis and assessment of vulnerability in the electronic financial infrastructure under paragraph (1) and the establishment and implementation of the plan under paragraph (2) and other necessary matters shall be prescribed by Presidential Decree.

[This Article Newly Inserted by Act No. 11814, May 22, 2013]

Article 21-4 (Prohibition against Electronic Infringement Incidents, etc.)

No person shall commit any of the following offences:

1. For anyone without access authority to access electronic financial infrastructure, or for anyone with access authority to fabricate, destroy, hide or lose the stored data beyond his/her authority;

2. Installing programs, such as computer virus, logic bomb or mail bomb for the purpose of destroying data of electronic financial infrastructure or obstructing the operation of electronic

Article 21-4

financial infrastructure;

3. Causing errors or hindrance to electronic financial infrastructure by the methods, such as sending mass signal, high-powered electromagnetic wave or data simultaneously or having fraudulent commands be processed, etc. for the purpose of obstructing the stable operation of electronic financial infrastructure.

[This Article Newly Inserted by Act No. 11814, May 22, 2013]

Article 21-5 (Notification, etc. of Infringement Incidents)

(1) If an incident, such as disturbance or paralysis of electronic financial infrastructure, occurs due to an electronic infringement (hereinafter referred to as “infringement incident”), the relevant financial company and electronic financial business operator shall, without delay, inform the Financial Services Commission thereof.

(2) If an infringement incident occurs, the relevant financial company and electronic financial business operator shall analyze the causes thereof and take necessary measures to prevent the spread of damage.

[This Article Newly Inserted by Act No. 11814, May 22, 2013]

Article 21-6 (Response to Infringement Incidents)

(1) The Financial Services Commission shall perform the following affairs to respond to infringement incidents:

Article 21-5 ~ 21-6

1. Collecting and disseminating information relating to infringement incidents;

2. Issuing preannouncements and warnings about infringement incidents;

3. Taking emergency measures against infringement incidents;

4. Other matters prescribed by Presidential Decree for responding to infringement incidents.

(2) Procedures and methods necessary for performing the affairs referred to in paragraph (1) and other matters shall be prescribed by Presidential Decree.

[This Article Newly Inserted by Act No. 11814, May 22, 2013]

Article 22 (Creating and Keeping Electronic Financial Transaction Records)

(1) A financial company, etc. shall create the records necessary to trace and search the details of electronic financial transactions or to verify or correct any error in such details and keep them for a period determined by Presidential Decree within up to five years. <Amended by Act No. 11814, May 22, 2032>

(2) The kind of records to be kept by a financial company, etc. and the methods

Article 22

of keeping such records under paragraph (1) shall be prescribed by Presidential Decree. <Amended by Act No. 11814, May 22, 2013>

Article 23 (Issuance and Limit of Use of Electronic Payment Means, etc.)

(1) The Financial Services Commission may require a financial company or an electronic financial business operator to set the following limits or take other necessary measures, in consideration of the characteristics of electronic payment means, as prescribed by Presidential Decree: <Amended by Act No. 8863, Feb. 29, 2008; Act No. 11814, May 22, 2013>

1. The upper limit of the face value of an electronic currency and electronic prepayment means to be issued;

2. The limit of use of electronic funds transfer;

3. The limit of use of electronic debit payment means.

(2) The Financial Services Commission may require a financial company or an electronic financial business operator to set the upper limit of cash withdrawal from electronic apparatuses or take other necessary measures, as prescribed by Presidential Decree. <Newly Inserted by Act No. 11814, May 22, 2013>

Article 24 (Clarification of Terms and Conditions and Notification of Alterations thereof)

Article 23 ~ 24

(1) Any financial company or electronic financial business operator shall clarify the terms and conditions in concluding a contract for electronic financial transactions with a user, and, at the request of a user, deliver a copy of the terms and conditions to the user with an explanation, as prescribed by the Financial Services Commission. <Amended by Act No. 8863, Feb. 29, 2008; Act No. 11814, May 22, 2013>

(2) No financial company or electronic financial business operator shall, if it or he/she has concluded a contract in violation of paragraph (1), assert that the details of the terms and conditions are included in the relevant contract. <Amended by Act No. 11814, May 22, 2013>

(3) Any financial company or electronic financial business operator shall, if it or he/she has altered the terms and conditions, publish the altered terms and conditions and inform the users thereof by one month prior to the enforcement of the altered terms and conditions, in the manner prescribed by the Financial Services Commission: Provided, That if the terms and conditions are urgently altered due to any amendment of Acts and subordinate statutes, it or he/she shall without delay publish the terms and conditions so altered and inform the users thereof in such manner as prescribed by the Financial Services Commission. <Amended by Act No. 8863, Feb. 29, 2008; Act No. 11814, May 22, 2013>

(4) Any user may terminate a contract for electronic financial transactions by no later than the business day immediately preceding the enforcement

Article 24

date of the altered terms and conditions after the details of the altered terms and conditions are published or informed pursuant to paragraph (3). When the user fails to raise an objection against the details of the altered terms and conditions within the period referred to in the first sentence, he/she shall be deemed to have approved the altered terms and conditions.

Article 25 (Preparation and Alteration of Terms and Conditions)

(1) When a financial company or electronic financial business operator intends to prepare or alter the terms and conditions for electronic financial transactions, it or he/she shall in advance report thereon to the Financial Services Commission: Provided, That in cases determined by the Financial Services Commission which do not adversely affect the rights, interests or duties of users, a report may be file to the Financial Services Commission within ten days after the terms and conditions is prepared or altered. <Amended by Act No. 8863, Feb. 29, 2008; Act No. 11814, May 22, 2013>

(2) The Financial Services Commission may recommend a financial company or electronic financial business operator to alter the terms and conditions under paragraph (1) if necessary to maintain orderly electronic financial transactions. <Amended by Act No. 8863, Feb. 29, 2008; Act No. 11814, May 22, 2013>

(3) The Financial Services Commission may determine the period and procedures of reporting the preparation or alteration of the terms and conditions under paragraph (1) and other necessary matters.

Article 25

(4) Paragraphs (1) through (3) shall not apply to financial companies as defined in subparagraph 3 (c) and (d) of Article 2. <Amended by Act No. 11814, May 22, 2013>

Article 26 (Providing, etc. of Electronic Financial Transaction Information)

None who recognizes the existence of any of the following matters in the course of conducting the business affairs relating to electronic financial transactions shall provide or disclose such information to any third party or use it for any purpose other than his/her business without the consent of the relevant user: Provided, That the same shall not apply to cases provided for in the proviso to Article 4 (1) of the Act on Real Name Financial Transactions and Guarantee of Secrecy or in any other Acts:

1. The matters relating to the identity of the user; and

2. The information or materials relating to the accounts, the means of access, and the details and results of electronic financial transactions of the user.

Article 27 (Settlement and Mediation of Disputes)

(1) Any financial company or electronic financial business operator shall prepare procedures to reflect reasonable opinions or complaints

Article 26 ~ 27

presented by users in relation to electronic financial transactions and to compensate for any loss sustained by users in the course of conducting electronic financial transactions, as prescribed by Presidential Decree. <Amended by Act No. 11814, May 22, 2013>

(2) When a user has an objection to the processing of electronic financial transactions, he/she may demand the settlement of dispute, such as compensation for losses pursuant to the procedures determined under paragraph (1) or file an application for mediation of dispute with the Financial Supervisory Service, the Korea Consumer Agency, etc. <Amended by Act No. 11814, May 22, 2013>

(3) Detailed procedures and methods for the settlement of disputes and the application for mediation of disputes under paragraphs (1) and (2) and other matters shall be prescribed by Presidential Decree.

(4) Any financial company or electronic financial business operator shall clarify the procedures referred to in paragraphs (1) through (3) in concluding a contract for electronic financial transactions. <Amended by Act No. 11814, May 22, 2013>

CHAPTER IV PERMISSION, REGISTRATION AND FUNCTIONS OF ELECTRONIC FINANCIAL BUSINESS

Article 27

Article 28 (Permission and Registration of Electronic Financial Business)

(1) Any person who intends to engage in a business issuing and managing electronic currencies shall obtain permission therefor from the Financial Services Commission: Provided, That the same shall not apply to banks as provided for in the Banking Act and other financial companies determined by Presidential Decree. <Amended by Act No. 8863, Feb. 29, 2008; Act No. 10303, May 17, 2010; Act No. 11814, May 22, 2013>

(2) Any person who intends to provide any of the following services shall register himself/herself with the Financial Services Commission: Provided, That the same shall not apply to banks as provided for in the Banking Act and other financial companies determined by Presidential Decree: <Amended by Act No. 8863, Feb. 29, 2008; Act No. 10303, May 17, 2010; Act No. 11814, May 22, 2013>

1. Electronic funds transfer services;

2. Issuance and management of electronic debit payment means;

3. Issuance and management of electronic prepayment means;

4. Electronic payment settlement agency services;

5. Other electronic financial services determined by Presidential Decree.

Article 28

(3) Notwithstanding paragraph (2), any of the following persons may provide the services referred to in each subparagraph of said paragraph without registering himself/herself with the Financial Services Commission: <Amended by Act No. 8863, Feb. 29, 2008>

1. Any person who issues an electronic prepayment means in the following cases:

(a) Where it is only used at chain stores meeting the standards prescribed by Presidential Decree, such as the chain stores located within specially designated buildings;

(b) Where the total balance of its issued amount does not exceed the amount determined by Presidential Decree;

(c) Where it is an electronic prepayment means, the price of which has not been pre-paid directly by a user and is subject to the refund guarantee insurance, etc. as prescribed by Presidential Decree to discharge the liability for monetary values stored by the user;

2. Any person who performs the electronic payment settlement agency services determined by Presidential Decree, such as the transmission of information only for the electronic processing

Article 28

of electronic payment transactions without direct involvement in the transfer of funds.

(4) Article 4, Chapters II (excluding Article 19) and III (excluding Articles 21 (4), 21-2, 21-3, 23 and 25), and Articles 37, 38, 39 (1) and (6), 41 (1), 43 (2) and (3), 46, and 47 concerning electronic financial business operators shall apply mutatis mutandis to the persons who issue electronic prepayment means exempted from registration under paragraph (3) 1 (c): Provided, That Articles 25, 39 (2) through (5) and 40 (2) and (3) shall apply mutatis mutandis where an financial incident determined by Presidential Decree occurs, such as insolvency due to any illegal or unjust act committed by the relevant employees or officers. <Amended by Act No. 11814, May 22, 2013>

(5) The Financial Services Commission may attach a condition to the permission granted under paragraph (1). <Amended by Act No. 8863, Feb. 29, 2008>

Article 29 (Registration of Electronic Bond Management Agencies)

(1) Any person who intends to engage in a business registering and managing electronic bonds shall register himself/herself with the Financial Services Commission. <Amended by Act No. 8863, Feb. 29, 2008>

(2) Articles 21, 22, 39, 41 and 43 shall apply mutatis mutandis to the electronic bond management agencies which are registered to carry out the business of registering and managing electronic bonds pursuant to paragraph (1).

Article 29

(3) The procedures and methods for the registration of electronic bonds by electronic bond management agencies and other necessary matters shall be prescribed by Presidential Decree.

Article 30 (Capital)

(1) Any person who intends to obtain permission pursuant to Article 28 (1) shall be a stock company with the capital of at least five billion won.

(2) Either of the following entities is eligible for registration pursuant to Article 28 (2) 1 through 3, and its capital or total investment shall exceed the amount prescribed by Presidential Decree, which is at least two billion won for each category of business: <Amended by Act No. 11814, May 22, 2013>

1. A company as provided for in Article 170 of the Commercial Act;

2. A corporation incorporated under a special Act (limited to the issuance and management of electronic prepayment means under Article 28 (2) 3 to perform the affairs provided for in the relevant Act).

(3) An entity eligible for registration pursuant to Article 28 (2) 4 and 5 and Article 29 shall be a company as provided for in Article 170 of the Commercial Act or a corporation stipulated in Article 32 of the Civil Act, the capital, total investment amount or fundamental property of which exceeds the amount prescribed

Article 30

by Presidential Decree, which is at least five hundred million won for each category of business.

Article 31 (Requirements for Permission and Registration)

(1) Any person who intends to obtain permission or file for registration pursuant to Articles 28 and 29 shall meet all of the following requirements. Subparagraphs 4 and 5 shall only apply to permission:

1. To hold the capital or fundamental property referred to in Article 30;

2. To be equipped with specialized manpower and physical installations, such as computer equipment, sufficient to protect users and carry out the intended business;

3. To meet the standards of financial soundness prescribed by Presidential Decree;

4. To have a proper and sound plan necessary to execute the business concerned; and

5. To secure the major investors with sufficient investment capability, sound financial state and social credit as determined by Presidential Decree.

(2) The matters necessary concerning the detailed requirements for permission and registration under paragraph (1) shall be determined by the Financial Services Commission. <Amended by Act No. 8863, Feb. 29, 2008>

Article 31

Article 32 (Disqualification for Permission and Registration)

None of the following persons are entitled to permission or registration under Articles 28 and 29: <Amended by Act No. 8863, Feb. 29, 2008>

1. A corporation for which one year has not yet passed since its registration was cancelled pursuant to Article 34, and a person who was a large stockholder (referring to any such investor as determined by Presidential Decree; hereinafter the same shall apply) of the corporation at the time of cancellation of such registration and for whom one year has not yet passed since the registration was cancelled;

2. A corporation for which three years have not yet passed since its permission or registration was revoked pursuant to Article 43 (1), and a person who was a large stockholder of the corporation at the time of such revocation and for whom three years have not yet passed since such revocation;

3. A company which is in process of the rehabilitation procedure pursuant to the Debtor Rehabilitation and Bankruptcy Act and the large stockholders of such company;

4. Any person who has failed to pay a debt within an agreed period in financial transactions and other commercial transactions, as determined by the Financial Services Commission;

Article 32

5. Any person who has been punished by a fine or heavier punishment for a violation of the finance-related Acts or subordinate statutes determined by Presidential Decree within the three years preceding the date of application for permission or registration; and

6. A corporation whose large stockholder falls under any of subparagraphs 1 through 5.

Article 33 (Applications, etc. for Permission, Registration and Authorization)

(1) Any person who intends to obtain permission or authorization or file for registration pursuant to Article 28, 29 or 45 shall submit an application therefor to the Financial Services Commission, as prescribed by Presidential Decree. <Amended by Act No. 8863, Feb. 29, 2008; Act No. 11814, May 22, 2013>

(2) Upon receipt of an application under paragraph (1), the Financial Services Commission shall grant permission, registration or authorization and notify the applicant of the results, as prescribed by Presidential Decree. <Amended by Act No. 8863, Feb. 29, 2008; Act No. 11814, May 22, 2013>

(3) When the Financial Services Commission grants permission, registration or authorization pursuant to Articles 28, 29 and 45, it shall without delay publish the details thereof in the Official Gazette and inform the general public thereof through computer

Article 33

communications, etc. <Amended by Act No. 8863, Feb. 29, 2008; Act No. 11814, May 22, 2013>

Article 33-2 (Preliminary Permission)

(1) Any person who intends to obtain permission under Article 28 (1) (hereafter referred to as “final permission” in this Article) may, in advance, file an application for preliminary permission with the Financial Services Commission.

(2) When the Financial Services Commission decides whether to grant preliminary permission under paragraph (1), it shall verify that the person who intends to obtain preliminary permission meets all requirements for final permission.

(3) The Financial Services Commission may attach a condition to preliminary permission under paragraph (2).

(4) When any person who obtained preliminary permission files an application for final permission, the Financial Services Commission shall verify whether he/she has fulfilled the condition to preliminary permission under paragraph (3) and has met all requirements for final permission, before it decides whether to grant final permission.

(5) Article 33 (1) and (2) shall apply mutatis mutandis to preliminary permission.

[This Article Newly Inserted by Act No. 11814, May 22, 2013]

Article 34 (Cancellation of Registration Subject to Application)

Article 33-2 ~ 34

(1) Any person who has been granted registration pursuant to Articles 28 (2) and 29 may file an application for the cancellation of such registration, as prescribed by Presidential Decree.

(2) The Financial Services Commission shall, upon receipt of an application under paragraph (1), cancel the registration without delay. <Amended by Act No. 8863, Feb. 29, 2008>

(3) When the Financial Services Commission has cancelled registration pursuant to paragraph (2), it shall without delay publish the details thereof in the Official Gazette and inform the general public thereof through computer communications, etc. <Amended by Act No. 8863, Feb. 29, 2008>

Article 35 (Restriction on Concurrent Businesses)

(1) Any electronic financial business operator who has obtained permission pursuant to Article 28 (1) shall be prohibited from concurrently engaging in any business other than the following:

1. Services provided for in the subparagraphs of Article 28 (2) (limited to registered ones);

2. Business permitted pursuant to Article 28 (1) and other business prescribed by Presidential Decree and necessary to provide the services of subparagraph 1.

(2) Notwithstanding paragraph (1), any electronic financial business operator

Article 35

who has obtained permission pursuant to Article 28 (1) may engage in the business other than those referred to in the subparagraphs of paragraph (1), subject to payment guarantee by the financial company determined by Presidential Decree or purchase of refund guarantee insurance for all of the non-refunded portions of electronic currency. <Amended by Act No. 11814, May 22, 2013>

Article 36 (Prohibition against Use of Similar Names)

(1) The name of the ‘electronic currency' shall be used only for the electronic currency referred to in subparagraph 15 of Article 2.

(2) Any person who has failed to obtain permission pursuant to Article 28 (1) may not use the phrase ‘electronic currency' in his/her trade name.

Article 37 (Matters to be Observed by Chain Stores)

(1) No chain store shall refuse to provide goods or services, or treat any user unfavorably, on the grounds of transactions by electronic debit payment means, electronic prepayment means or electronic currency (hereinafter referred to as the "electronic currency, etc.").

(2) No chain store shall charge users a membership fee to be borne by such store.

(3) No chain store shall commit any of the following offences:

1. Pretending

Article 36 ~ 37

transactions by electronic currency, etc. without providing goods or services;

2. Conducting transactions by electronic currency, etc. in excess of actual turnover;

3. Performing transactions by electronic currency, etc. under the name of another chain store;

4. Lending the name of the chain store to a third party;

5. Conducting, as an agent, transactions by electronic currency, etc.

(4) A person other than a chain store shall not perform any transactions by electronic currency, etc. under the name of a chain store.

Article 38 (Recruitment, etc. of Chain Stores)

(1) In recruiting a chain store, any financial company or electronic financial business operator shall confirm whether the store which seeks membership actually carries on its own business: Provided, That the same shall not apply to a chain store which is already confirmed pursuant to Article 16-2 of the Specialized Credit Finance Business Act. <Amended by Act No. 11814, May 22, 2013>

(2) No financial company or electronic financial business operator shall have its or his/her chain store bear a loss incurred by either of the following transactions: Provided, That the same shall

Article 38

not apply where a financial company or electronic financial business operator concludes a contract with its or his/her chain store to the effect that such loss shall be fully or partially borne by the chain store when the financial company or electronic financial business operator proves the intention or gross negligence of the chain store in connection with the transaction: <Amended by Act No. 11814, May 22, 2013>

1. A transaction conducted using a lost or stolen electronic currency, etc.;

2. A transaction conducted using a forged or altered electronic currency, etc.

(3) Any financial company or electronic financial business operator shall inform its or his/her chain stores of the following matters, in the manner prescribed by the Financial Services Commission: <Amended by Act No. 8863, Feb. 29, 2008; Act No. 11814, May 22, 2013>

1. A membership fee to be borne by chain stores;

2. Liability for chain stores under paragraph (2);

3. Matters to be observed by chain stores under Article 37.

(4) When a chain store is sentenced to a punishment for a violation of Article 37 or receives a written notification of such violation from the relevant administrative agency, and thus falls under

Article 38

the gounds pescibed by Pesidential Decee, the elevant financial company or electronic financial business operator shall without delay terminate the contract with said chain store unless any special ground exists to the contrary. <Amended by Act No. 11814, May 22, 2013>

CHAPTER V SUPERVISION OF ELECTRONIC FINANCIAL BUSINESS

Article 39 (Supervision and Inspection)

(1) The Financial Supervisory Service (referring to the Financial Supervisory Service established Article 24 (1) of the Act on the Establishment, etc. of Financial Services Commission; hereinafter the same shall apply) shall supervise whether financial companies and electronic financial business operators abide by this Act or orders issued under this Act, following instructions from the Financial Services Commission. <Amended by Act No. 8863, Feb. 29, 2008; Act No. 11814, May 22, 2013>

(2) The Governor of the Financial Supervisory Service (referring to the Governor of the Financial Supervisory Service under Article 29 (1) of the Act on the Establishment, etc. of Financial Services Commission; hereinafter the same shall apply) may require a financial company or an electronic financial business operator to report on its or his/her business operations and financial conditions if necessary to conduct supervision under paragraph (1). <Amended by Act No. 8863, Feb. 29, 2008;

Article 39

Act No. 11814, May 22, 2013>

(3) The Governor of the Financial Supervisory Service may inspect the electronic financial business and other related financial conditions of a financial company and an electronic financial business operator and, if deemed necessary to conduct such inspection, ask the financial company and the electronic financial business operator to submit data relating to its or his/her business operations and financial conditions or to order the attendance of all relevant persons. <Amended by Act No. 11814, May 22, 2013>

(4) Any person who conducts an inspection pursuant to paragraph (3) shall carry a certificate of identification indicating his/her authority and present it to relevant persons.

(5) Upon conducting an inspection pursuant to paragraph (3), the Governor of the Financial Supervisory Service shall report the findings therefrom to the Financial Services Commission, as determined by the Financial Services Commission. <Amended by Act No. 8863, Feb. 29, 2008>

(6) When a financial company or an electronic financial business operator is deemed likely to undermine the sound operation of the financial company or electronic financial business operator in violation of any provision of this Act or any order issued under this Act, the Financial Services Commission may, upon recommendation of the Governor of the Financial Supervisory Service, take any of the following measures or authorize the Governor of the Financial Supervisory Service to take any measure

Article 39

referred to in subparagraphs 1 through 3: <Amended by Act No. 8863, Feb. 29, 2008; Act No. 11814, May 22, 2013>

1. An order to correct the relevant offence;

2. Caution or warning against a financial company or an electronic financial business operator;

3. Demand for caution, warning or reprimand against an officer or an employee;

4. Recommendation for dismissal of an officer or demand for suspending an officer from performing his/her duties.

Article 40 (Supervision and Inspection over Outside Orders, etc.)

(1) Where a financial company or an electronic financial business operator concludes or alters a contract with its or his/her subsidiary electronic financial business operator for affiliation, entrustment or outside orders (hereafter referred to as “outside order, etc.” in this Article) in relation to electronic financial transactions (including where a subsidiary electronic financial business operator concludes or alters a contract with another subsidiary electronic financial business operator for outside orders, etc.), it or he/she shall meet the standards determined by the Financial Services Commission to ensure the safety and reliability of electronic financial transactions and the soundness of the financial company and electronic financial business operator. <Amended by Act No. 8863, Feb. 29, 2008; Act No. 11814, May 22, 2013>

Article 40

(2) Where the contents of a contract under paragraph (1) are deemed likely to undermine the operational soundness of a financial company or an electronic financial business operator and the rights and interests of users, the Financial Services Commission may direct the financial company or electronic financial business operator to correct or supplement the relevant contents of the contract. <Amended by Act No. 8863, Feb. 29, 2008; Act No. 11814, May 22, 2013>

(3) When the Governor of the Financial Supervisory Service conducts an inspection of a financial company or an electronic financial business operator in relation to outside orders, etc. under paragraph (1), he/she may request its or his/her subsidiary electronic financial business operator to submit data pursuant to the standards determined by the Financial Services Commission. <Amended by Act No. 8863, Feb. 29. 2008; Act No. 11814, May 22, 2013>

(4) When a subsidiary electronic financial business operator fails to submit data under paragraph (3) or submit insufficient data, the Governor of the Financial Supervisory Service may investigate the relevant subsidiary electronic financial business operator. <Newly Inserted by Act No. 11814, May 22, 2013>

(5) The Governor of the Financial Supervisory Service may request the following from a subsidiary electronic financial business operator, if deemed necessary for conducting an investigation under paragraph

Article 40

(4): <Newly Inserted by Act No. 11814, May 22, 2013>

1. Submitting a written statement relating to matters subject to such investigation;

2. Submitting a ledger, document or other articles necessary for such investigation;

3. Attendance of a relevant person.

(6) Article 39 (4) shall apply mutatis mutandis to an investigation conducted under paragraph (4). <Newly Inserted by Act No. 11814, May 22, 2013>

Article 41 (Requests, etc. for Submission of Data by Bank of Korea)

(1) When the Monetary Policy Committee deems it necessary for implementing monetary credit policies and facilitating the smooth operation of payment and settlement systems in relation to electronic payment transactions, the Bank of Korea may request a financial company or an electronic financial business operator to submit data. In such cases, the scope of data so requested shall be limited to the minimum extent necessary in consideration of the work burden of the relevant financial company and electronic financial business operator. <Amended by Act No. 11814, May 22, 2013>

(2) When the Monetary Policy Committee deems it necessary for implementing

Article 41

monetary credit policies, the Bank of Korea may request the Financial Supervisory Service to inspect the electronic currency issuer and the financial company and electronic financial business operator registered to provide the service referred to in Article 28 (2) 1 or to conduct a joint inspection thereof with the Bank of Korea. <Amended by Act No. 11814, May 22, 2013>

(3) Articles 87 and 88 of the Bank of Korea Act and Article 62 of the Act on the Establishment, etc. of Financial Services Commission shall apply mutatis mutandis to the methods and procedures for making requests under paragraphs (1) and (2). <Amended by Act No. 8863, Feb. 29, 2008>

Article 42 (Keeping Separate Accounts and Guidance for Sound Management)

(1) A financial company and an electronic financial business operator shall keep separate accounts by the category of business provided for in Article 28 (1) and (2) to analyze the performance of business relating to fund management and electronic financial transactions, and prepare a report on the business relating to electronic financial transactions and the outcomes of management and submit it to the Financial Services Commission, as determined by the Financial Services Commission. <Amended by Act No. 8863, Feb. 29, 2008; Act No. 11814, May 22, 2013>

(2) The Financial Services Commission may set the standards for management guidance for the following matters to direct the sound management

Article 42

of a financial company or electronic financial business operator that performs the business relating to electronic financial transactions and to prevent electronic financial incidents, as prescribed by Presidential Decree: <Amended by Act No. 8863, Feb. 29, 2008; Act No. 11814, May 22, 2013>

1. Matters relating to the appropriateness of capital;

2. Matters relating to the soundness of assets;

3. Matters relating to liquidity;

4. Other matters necessary to ensure the soundness of management.

(3) Where any financial company or electronic financial business operator that has obtained permission under Article 28 (1) is deemed likely to severely undermine the soundness of its or his/her own management, such as failing to meet the standards for management guidance under paragraph (2), the Financial Services Commission may request it or him/her to take necessary measures to improve its or his/her own management, such as an increase in capital and restrictions on distribution of profits. <Amended by Act No. 8863, Feb. 29, 2008; Act No. 11814, May 22, 2013>

(4) Articles 10, 11 (1), (4) and (5), 13-2, 14, 14-2 through 14-4, 14-7, 15 through 19, 27, and 28 of the Act on the Structural Improvement of the Financial Industry shall apply mutatis mutandis

Article 42

to the measures, etc. to be taken when the financial standing of the financial company or electronic financial business operator that has obtained permission under Article 28 (1) falls short of the standards for management guidance under paragraph (2) or is evidently deemed to fall short of said standards due to any serious financial incident or insolvency claims. <Amended by Act No. 11814, May 22, 2013>

Article 43 (Revocation, etc. of Permission or Registration)

(1) When a financial company or an electronic financial business operator falls under any of the following cases, the Financial Services Commission may revoke permission or registration under Article 28: <Amended by Act No. 8863, Feb. 29, 2008; Act No. 11814, May 22, 2013>

1. When it or he/she has obtained permission or registration under Article 28 by fraudulent or other illegal means;

2. When it or he/she falls under any of subparagraphs 1 through 5 of Article 32;

3. When it or he/she has violated an order to suspend business issued under paragraph (2);

4. When it or he/she has failed to run a business for one or more consecutive years without any just grounds;

5. When it or he/she has virtually closed its or his/her business due to the merger, bankruptcy or business closure of the relevant

Article 43

corporation or on other grounds.

(2) When a financial company or an electronic financial business operator falls under any of the following cases, the Financial Services Commission may order it or him/her to wholly or partially suspend the relevant business concerned with a given period of up to six months: <Amended by Act No. 8863, Feb. 29, 2008; Act No. 11814, May 22, 2013>

1. When it or he/she has violated Article 6 (1) or (2), 16 (1) through (4), 19 (1), 21 (1) or (2), 21-5 (2), 35, 36, or 38 (3) or (4);

2. When it or he/she has failed to investigate an error and effect appropriate corrections, in violation of Article 8 (2) and (3);

3. When it or he/she has failed to comply with any measure, direction or order taken or issued by the Financial Services Commission under Article 23, 39 (6), 40 (2) or 42 (3).

(3) A financial company or an electronic financial business operator, whose business is wholly or partially suspended or permission or registration is revoked under paragraphs (1) and (2), may even so continue to perform the payment and settlement business of electronic financial transactions conducted prior to such disposition. <Amended by Act No. 11814, May 22, 2013>

(4) When the Financial

Article 43

Services Commission revokes permission or registration under paragraph (1), it shall, without delay, publish the details thereof in the Official Gazette and inform the general public thereof through computer communications, etc. <Amended by Act No. 8863, Feb. 29, 2008>

Article 44 (Hearings)

When the Financial Services Commission intends to revoke permission or registration under Article 43 (1), it shall hold a hearing thereon. <Amended by Act No. 8863, Feb. 29, 2008>

Article 45 (Authorization of Merger, Dissolution, Business Closure, etc.)

(1) When any electronic financial business operator who has obtained permission pursuant to Article 28 (1) intends to engage in any of the following activities, he/she shall obtain authorization therefor from the Financial Services Commission, as prescribed by Presidential Decree: <Amended by Act No. 8863, Feb. 29, 2008; Act No. 11814, May 22, 2013>

1. A merger with another financial company or electronic financial business operator;

2. Dissolution or the closure of electronic financial business;

3. Transfer and acquisition of all or part of business.

Article 44 ~ 45

(2) The Financial Services Commission may attach a condition to authorization under paragraph (1). <Amended by Act No. 8863, Feb. 29, 2008>

Article 45-2 (Preliminary Authorization)

(1) Any person who intends to obtain authorization under Article 45 (1) (hereafter referred to as “final authorization” in this Article) may, in advance, file an application for preliminary authorization with the Financial Services Commission.

(2) When the Financial Services Commission decides whether to grant preliminary authorization under paragraph (1), it shall verify whether the person who intends to obtain preliminary authorization meets all requirements for final authorization.

(3) The Financial Services Commission may attach a condition to preliminary authorization under paragraph (2).

(4) When any person who got preliminary authorization files an application for final authorization, the Financial Services Commission shall decide whether he/she has fulfilled the condition to preliminary authorization under paragraph (3) and has met all requirements for final authorization before it decides whether to grant final authorization to him/her.

(5) Article 33 (1) and (2) shall apply mutatis mutandis to preliminary authorization.

[This Article Newly

Article 45-2

Inserted by Act No. 11814, May 22, 2013]

Article 46 (Penalty Surcharges)

(1) When a financial company or an electronic financial business operator falls under any subparagraph of Article 43 (2), the Financial Services Commission may impose a penalty surcharge not exceeding 50 million won in lieu of an order for suspension of business, as prescribed by Presidential Decree. <Amended by Act No. 8863, Feb. 29, 2008; Act No. 11814, May 22, 2013>

(2) The amount of a penalty surcharge for each type, severity, etc. of offence subject to the penalty surcharge under paragraph (1) and other necessary matters shall be prescribed by Presidential Decree.

(3) Unless the penalty surcharge under paragraph (1) is paid by the due date, the Financial Services Commission shall collect it in the same manner as delinquent national taxes are collected. <Amended by Act No. 8863, Feb. 29, 2008>

(4) The Financial Services Commission may entrust the business affairs relating to the collection of penalty surcharges and dispositions on default to the Commissioner of the National Tax Service, as prescribed by Presidential Decree. <Amended by Act No. 8863, Feb. 29, 2008>

Article 46-2 (Refund of Overpayments or Erroneous Payments)

(1) Where a person obliged to pay a penalty surcharge requests a refund of

Article 46 ~ 46-2

the overpaid or erroneously paid penalty surcharge on grounds of adjudication on the objection or a court ruling, the Financial Services Commission shall, without delay, make a refund thereof, and shall refund the overpaid or erroneously paid penalty surcharge confirmed by the Financial Services Commission, even without a request of the person obliged to pay such penalty surcharge.

(2) If a person entitled to a refund has to pay other penalty surcharges to the Financial Services Commission, the Financial Services Commission may appropriate the refund for such penalty surcharges when making a refund of overpayments or erroneous payments under paragraph (1).

(3) When making a refund of overpayments or erroneous payments under paragraph (1), the Financial Services Commission shall refund additional money calculated by applying the interest rate on additional money prescribed by Presidential Decree, for the period from the day following the payment date of the penalty surcharge to the date of refund.

[This Article Newly Inserted by Act No. 11814, May 22, 2013]

CHAPTER VI SUPPLEMENTARY PROVISIONS

Article 47 (Statistical Surveys on Electronic Financial Transactions)

(1) The Bank of Korea may conduct a statistical survey on electronic financial businesses and electronic financial transactions to apprehend

Article 47

the current status of electronic financial transactions and to establish and implement effective monetary credit policies. In such cases, it may request necessary data from a government agency, financial company, etc., and a corporation and organization related to electronic financial transactions. <Amended by Act No. 11814, May 22, 2013>

(2) Upon receipt of a request for data under paragraph (1), a government agency, financial company, etc., and a corporation and organization related to electronic financial transactions shall comply with such request unless any just ground exists to the contrary. <Amended by Act No. 11814, May 22, 2013>

(3) Matters necessary in relation to the subject matter, methods and procedures of the statistical survey under paragraph (1) shall be prescribed by Presidential Decree.

Article 48 (Entrustment of Powers)

The Financial Services Commission may entrust the Governor of the Financial Supervisory Service with part of its powers under this Act, as prescribed by Presidential Decree. <Amended by Act No. 8863, Feb. 29, 2008>

CHAPTER VII PENAL PROVISIONS

Article 49 (Penal Provisions)

(1) Any of the following persons shall be punished by imprisonment of up to seven

Article 48 ~ 49

years, or by a fine not exceeding 50 million won: <Amended by Act No. 11814, May 22, 2013>

1. Any person who forges or alters any means of access;

2. Any person who intermediates the sale of, sells, exports, imports or uses any forged or altered means of access;

3. Any person who intermediates the sale of, sells, exports, imports or uses any lost or stolen means of access;

4. Any person who acquires any means of access by fraudulent or illegal means by intruding into the electronic financial infrastructure or the electronic apparatus for electronic financial transactions, or conducts electronic financial transactions using the means of access so acquired;

5. Any person who intermediates the sale of, sells, exports, imports or uses any means of access acquired by force or embezzlement or by deceiving or blackmailing another person;

6. Any person who commits an electronic infringement, in violation of Article 21-4.

(2) Electronic currencies shall be deemed the securities for purposes of Articles 214 through 217 of the Criminal Act, and accordingly a crime committed in connection with such electronic currencies shall be subject to the punishment prescribed in said Articles.

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(3) Any person who offers, divulges, or uses for any purpose other than the conduct of business, electronic financial transaction information (including any person who has issued an electronic prepayment means applicable mutatis mutandis pursuant to Article 28 (4)), in violation of Article 26, shall be punished by imprisonment of up to five years, or by a fine not exceeding 30 million won.

(4) Any of the following persons shall be punished by imprisonment of up to three years, or by a fine not exceeding 20 million won: <Amended by Act No. 9325, Dec. 31, 2008>

1. Any person who acquires or transfers a means of access in violation of Article 6 (3) 1;

2. Any person who borrows or lends a means of access in violation of Article 6 (3) 2;

3. Any pledger or pledgee who violates Article 6 (3) 3;

4. Any person who assists in any offence in violation of Article 6 (3) 4.

5. Any person who performs the business affairs without permission or registration under Article 28 or 29;

6. Any person who obtains permission or registration under Article 28 or 29 by fraudulent or other illegal manner;

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7. Any person who conducts a transaction by electronic currency, etc. under the name of another chain store in violation of Article 37 (3) 3;

8. Any person who has conducted as an agent transactions by electronic currency, etc. in violation of Article 37 (3) 5;

9. Any person who conducts a transaction by electronic currency, etc. under the name of another chain store in violation of Article 37 (4); and

10. Any person who peruses or is provided with electronic financial transaction information by fraudulent or other illegal means.

(5) Any of the following persons shall be punished by imprisonment of up to one year, or by a fine not exceeding ten million won:

1. Deleted; <by Act No. 9325, Dec. 31, 2008>

2. Deleted; <by Act No. 11814, May 22, 2013>

3. Any person who refuses to provide goods or services, or treats any user unfavorably, on grounds of transaction by electronic currency, etc. in violation of Article 37 (1);

4. Any person

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who charges a user a membership fee to be borne by the relevant chain store in violation of Article 37 (2);

5. Any person who lend the name of a chain store to a third party in violation of Article 37 (3) 4;

6. Any person who engages in an activity falling under any subparagraph of Article 45 (1) without authorization under Article 45 (1).

(6) An attempted offender of paragraph (1) 1, 2, 4 or 6 shall be punishable. <Amended by Act No. 11814, May 22, 2013>

(7) The imprisonment and a fine referred to in paragraphs (1) through (6) may be concurrently imposed.

Article 50 (Joint Penal Provisions)

(1) If the representative of a corporation, or the agent, employee or any other servant of a corporation or individual has committed any offence falling under Article 49 (1), (2), (limited where any person is subject to punishment prescribed in Article 216 of the Criminal Act) and (3) through (6) in connection with the affairs of such corporation or individual, not only shall such actor be punished, but also such corporation or individual shall be punished by a fine prescribed in the relevant Article: Provided, That where such corporation or individual has not been negligent in giving due attention and supervision concerning the relevant affairs to prevent such offense, this shall not apply.

Article 50

(2) If the representative of a corporation, or the agent, employee or any other servant of a corporation or individual has committed any offense falling under Article 49 (2) (limited where any person is subject to punishment prescribed in Article 214, 215, or 217 of the Criminal Act) in connection with the affairs of such corporation or individual, not only shall such actor be punished, but also such corporation or individual shall be punished by a fine not exceeding 50 million won: Provided, That where such corporation or individual has not been negligent in giving due attention and supervision concerning the relevant affairs to prevent such offense, this shall not apply.

[This Article Wholly Amended by Act No. 11087, Nov. 14, 2011]

Article 51 (Fines for Negligence)

(1) Any person who uses a name that includes the words ''electronic currency'' in violation of Article 36 shall be punished by a fine for negligence not exceeding 50 million won.

(2) Any of the following persons (including any person who has issued an electronic prepayment means applicable mutatis mutandis pursuant to Article 28 (4), in cases falling under subparagraph 2) shall be punished by a fine for negligence not exceeding 20 million won:

1. Any person who fails to analyze and assess the vulnerability of electronic financial infrastructure, in violation of Article 21-3 (1);

Article 51

2. Any person who fails to establish and implement a plan to take complementary measures, in violation of Article 21-3 (2).

(3) Any of the following persons (including any person who has issued an electronic prepayment means applicable mutatis mutandis pursuant to Article 28 (4), in cases falling under subparagraphs 1, 6 through 8, 10 and 11) shall be punished by a fine for negligence not exceeding ten million won:

1. Any person who fails to deliver a document stating the details of a transaction, in violation of Article 7 (2);

2. Any person who fails to inform the relevant user of the causes of an error and results of correction, in violation of Article 8 (2) and (3);

3. Any person who transfers an electronic prepayment means or electronic currency to a third party or provides it as a security, in violation of Article 18 (2);

4. Any person who fails to submit a plan for the information technology sector, in violation of Article 21 (4);

5. Any person who fails to report the findings from analysis and assessment of vulnerability in electronic financial infrastructure, in violation of Article 21-3 (1);

6. Any person who fails to inform the Financial Services Commission of an

Article 51

infringement incident, in violation of Article 21-5 (1);

7. Any person who fails to create or keep records in violation of Article 22 (1) (including where it is applicable mutatis mutandis under Article 29 (2));

8. Any person who fails to clarify, explain, deliver, publish or notify the terms and conditions, in violation of Article 24 (1) or (3);

9. Any person who fails to report to the Financial Services Commission, in violation of Article 25 (1);

10. Any person who fails to prepare the procedures for the settlement of disputes, in violation of Article 27 (1);

11. Any person who refuses, obstructs or evades an inspection, the submission of data or an investigation under Article 39 (3) (including where it is applicable mutatis mutandis under Article 29 (2)) and, 40 (3) and (4);

12. Any person who fails to keep separate accounts or submit a report, or submits a false report, in violation of Article 42 (1).

(4) Fines for negligence under paragraphs (1) to (3) shall be imposed and collected by the Financial Services Commission.

[This Article Wholly Amended by Act No. 11814, May 22, 2013]

Article 51

ADDENDA

Article 1 (Enforcement Date)

This Act shall enter into force on January 1, 2007.

Article 2 (Transitional Measures concerning Means of Access, etc.)

The means of access and electronic payment means issued at the time of the entry into force of this Act shall be deemed to have been issued pursuant to this Act.

Article 3 (Transitional Measures concerning Permission and Registration)

(1) Any person who is engaged in issuing or managing electronic currency at the time of the entry into force of this Act shall obtain permission therefor from the Financial Supervisory Commission pursuant to Article 28 (1) within three months from the date when this Act takes effect.

(2) Any person who is engaged in performing electronic funds transfer services, the issuance and management business of electronic debit payment means or electronic prepayment means or electronic payment settlement agency services, etc. at the time of the entry into force of this Act shall file a registration with the Financial Supervisory Commission pursuant to Article 28 (2)

Addenda

within six months from the date when this Act takes effect.

(3) Any person who is engaged in the business of electronic bond management agency at the time of the entry into force of this Act shall file a registration with the Financial Supervisory Commission pursuant to Article 29 within three months from the date when this Act takes effect.

Article 4 Omitted.

ADDENDA <Act No. 8387, Apr. 27, 2007>

Article 1 (Enforcement Date)

This Act shall enter into force six months after the date of its promulgation.

Articles 2 through 9 Omitted.

ADDENDA <Act No. 8863, Feb. 29, 2008>

Article 1 (Enforcement Date)

This Act shall enter into force on the date of its promulgation.

Articles 2 though 5 Omitted.

ADDENDUM <Act No. 9325, Dec. 31, 2008>

This Act shall enter into force three months after the date of its promulg

Addenda

ation.

ADDENDA <Act No. 10303, May 17, 2010>

Article 1 (Enforcement Date)

This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)

Articles 2 though 10 Omitted.

ADDENDUM <Act No. 11087, Nov. 14, 2011>

This Act shall enter into force six months after the date of its promulgation.

ADDENDA <Act No. 11407, Mar. 21, 2012>

Article 1 (Enforcement Date)

This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)

Articles 2 and 3 Omitted.

ADDENDA <Act No. 11461, Jun. 1, 2012>

Article 1 (Enforcement Date)

This Act shall enter into force three months after the date of its promulgation.

Articles 2 through 10 Omitted.

Addenda

ADDENDA <Act No. 11814, May 22, 2013>

Article 1 (Enforcement Date)

This Act shall enter into force six months after the date of its promulgation.

Article 2 (Applicability to Submission of Plans for Information Technology Sector)

The submission of a plan for the information technology sector under the amended provisions of Article 21 (4) shall begin to apply from the business year beginning after this Act enters into force.

Article 3 (Transitional Measures concerning Penal Provisions and Fines for Negligence)

The application of penal provisions and the imposition of a fine for negligence for violations committed before this Act enters into force shall be governed by the former provisions.

Addenda