# Foreign Exchange Transaction Act of the Republic of Korea

[Enforcement Date 31. Jul, 2009.] [Act No.9374, 30. Jan, 2009., Other Laws and Regulations Amended]
CHAPTER Ⅰ GENERAL PROVISIONS
Article 1 (Purpose)
The purpose of this Act is to contribute to the development of the national economy by striving to facilitate foreign transactions, to maintain a balance of international payments and to stabilize the value of currency by ensuring the liberalization of foreign exchange transactions and of other foreign transactions and by revitalizing market functionality.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 2 (Objects of Application)(1) This Act shall apply to any of the following matters:
1. Foreign exchange in the Republic of Korea, foreign exchange transactions performed in the Republic of Korea, or other acts related thereto;
2. Transactions, payment or receipts between the Republic of Korea and a foreign country, or other acts related thereto (including those which are performed in a foreign country and which have an effect in the Republic of Korea);
3. Transactions by a private person having domicile or residence in a foreign country and a juristic person having its main office in a foreign country, which are denominated in the currency of the Republic of Korea or in which payment is able to be made in such currency, or other acts related thereto;
4. Acts conducted by a private person having domicile or residence in the Republic of Korea, or his/her agents, employees or other employed persons in connection with his/her assets or business in a foreign country; or
5. Acts conducted by the representative, agents, employees or other employed persons of a juristic person having its main office in the Republic of Korea in connection with the assets or business of the juristic person in a foreign country.
(2) The scope of “other acts related thereto” referred to in paragraph (1) 1 through 3 shall be prescribed by Presidential Decree.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 3 (Definitions)(1) The definition of the terms used in this Act shall be as follows:
1. The term “domestic currency” means Won currency, which is the legal currency of the Republic of Korea;
2. The term “foreign currency” means any currency other than domestic currency;
3. The term “means of payment” means those falling under any of the following items:
(a) Government notes, bank notes, coins, checks, postal money orders, or letters of credit;
(b) Bills of exchange, promissory notes and other payment orders as prescribed by Presidential Decree;
(c) Vouchers, plastic cards or other Articles in which the asset value is embedded by electronic or magnetic means and which many unspecified persons are able to use for payment in lieu of currency, which are prescribed by Presidential Decree;
4. The term “foreign means of payment” means a mode of payment denominated in foreign currency, or other modes of payment which can be used in a foreign country regardless of the denominating currency;
5. The term “domestic means of payment” means any modes of payment other than foreign means of payment;
6. The term “precious metals” means gold or ingots intermixed with gold, non-negotiable gold coins, or other products and processed Articles which are chiefly made of gold;
7. The term “securities” means securities under Article 4 of the Financial Investment Services and Capital Markets Act and those prescribed by Presidential Decree, which do not fall under subparagraph 3;
8. The term “foreign currency securities” means securities denominated in foreign currency, or those which are able to be paid for in a foreign country;
9. The term “derivatives” means derivatives under Article 5 of the Financial Investment Services and Capital Markets Act and others prescribed by Presidential Decree;
10. The term “foreign currency derivatives” means derivatives denominated in foreign currency or those which are able to be paid for in a foreign country;
11. The term “claims” means rights to request for the payment of money accruing from all kinds of deposits, trusts, guarantees, lending and borrowing and which do not fall under subparagraphs 1 through 10;
12. The term “foreign currency claims” means claims denominated in foreign currency or those which are able to be paid for in a foreign country;
13. The term “foreign exchange” means foreign means of payment, foreign currency securities, foreign currency derivatives and foreign currency claims;
14. The term “resident” means any private person who has domicile or residence in the Republic of Korea, and any juristic person whose main office is located in the Republic of Korea;
15. The term “non-resident” means any private person and any juristic person other than residents. Provided, that branch offices, local offices or other offices of non-residents located in the Republic of Korea, shall be deemed residents regardless of whether or not such offices have an authority of an agent under the law;
16. The term “foreign exchange affairs” means those referred to in any of the following items:
(a) Issuance or purchase and sale of foreign exchange;
(b) Payment, collection and receipt between the Republic of Korea and a foreign country;
(c) Deposits, lending and borrowing of money, or guarantee with residents which is denominated in or paid for with foreign currency;
(d) Deposits, lending and borrowing of money or guarantee with nonresidents; and
(e) Other affairs which are similar to the provisions of items (a) through (d) and which are prescribed by Presidential Decree;
17. The term “financial institutions” means institutions referred to in Article 38 (excluding subparagraphs 14 and 15) of the Establishment of Financial Services Commission Act, and other persons who conduct financial business and affairs related to finance and who are prescribed by Presidential Decree;
18.The term “overseas direct investment” means any transactions, acts or payments by residents, which fall under any of the following items:
(a) Transactions or acts which are performed in order to establish continuous economic relations with a juristic person organized under the acts and subordinate statutes of a foreign country (including a juristic person in the process of its incorporation) through acquiring securities issued by such juristic person or lending money to such juristic person, and which are prescribed by Presidential Decree; and
(b) Disbursement of funds necessary to establish, expand or operate business offices in a foreign country or to conduct overseas business activities and which is prescribed by Presidential Decree;
19. The term “capital transactions” means any transactions or acts falling under any of the following items:
(a) Transactions (limited to cases relating to foreign exchange for a transaction between residents) related to the generation, alteration or extinction of claims due to contracts for deposits, trust, lending and borrowing of money, guarantee of repayment of debts, or purchase and sale of foreign means of payment, and claims (excluding transactions as referred to in item (c));
(b) Issuance of, subscription to securities, and acquisition of securities or rights (excluding cases falling under item (c), and limited to cases relating to foreign exchange for a transaction between residents);
(c) Transactions of derivatives (limited to cases relating to foreign exchange for a transaction of derivatives between residents);
(d) Acquisition of real estate in a foreign country or any rights related thereto by residents, or acquisition of real estate in the Republic of Korea or any rights related thereto by non-residents;
(e) Giving and receiving of funds necessary for the establishment, expansion or operation of offices, between the head office, branch offices, local offices or other offices of a juristic person which are located in the Republic of Korea (hereafter referred to as the “offices” in this item) and offices located in a foreign country, with the exception of cases referred to in item (a) (excluding giving and receiving of funds which are related to expenses necessary for the maintenance of offices and ordinary transactions and which are prescribed by Presidential Decree); and
(f) Other transactions or acts which are similar to those referred to in items (a) through (e) and which are prescribed by Presidential Decree.
(2) Where the distinction between a resident and non-resident as referred to in paragraph (1) 14 and 15 is unclear, it shall be subject to Presidential Decree.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 4 (Striving for Facilitation of Foreign Transactions)(1) The Minister of Strategy and Finance shall strive to facilitate foreign exchange transactions and other foreign transactions by imposing restrictions as referred to in this Act only within the minimum extent necessary.
(2) The Minister of Strategy and Finance shall endeavor to create a foundation for stable supply and demand of foreign exchange and to stabilize the foreign exchange market, and shall devise policies therefor.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 5 (Exchange Rates)(1) The Minister of Strategy and Finance may determine the basic exchange rate, rate of purchase and sale of foreign exchange, and arbitrated exchange rate (hereinafter referred to as the “basic exchange rate”) in foreign exchange transactions, if it is necessary to do so for harmonious and orderly foreign exchange transactions.
(2) If the Minister of Strategy and Finance determines the basic exchange rate pursuant to paragraph (1), residents and non-residents shall perform transactions in conformity with such basic exchange rate.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 6 (Suspension of Foreign Exchange Transactions)(1) The Minister of Strategy and Finance may, pursuant to Presidential Decree, take measures as provided for in any of the following subparagraphs, if such measures are deemed inevitable on account of outbreak of natural calamities, war, conflicts of arms, grave and sudden changes in domestic and foreign economic conditions, or other situations equivalent thereto:
1. Temporary suspension of payment, receipt, or the whole or a part of transactions to which this Act applies; and
2. Imposition of obligations to safe keep, deposit or sell means of payment or precious metals in or to the Bank of Korea, government agencies, the foreign exchange equalization fund, or financial institutions.
(2) In cases where it is deemed to fall under any of the following subparagraphs, the Minister of Strategy and Finance may, pursuant to Presidential Decree, take measures to place any person who intends to perform capital transactions under an obligation to obtain permission or any person who performs capital transactions under an obligation to deposit part of means of payment acquired in such transactions in the Bank of Korea, the foreign exchange equalization fund or other financial institutions:
1. In cases where international payments and international finance are confronted or are liable to be confronted with serious difficulty;
2. In cases where the movement of capital between the Republic of Korea and a foreign country creates or is liable to create serious obstacles in carrying out currency policies, exchange rate policies and other macroeconomic policies.
(3) Measures provided for in paragraphs (1) and (2) may be taken for not more than six months unless there exist special grounds to the contrary, and if the grounds of such measures cease to exist, such measures shall be cancelled without delay.
(4) Measures provided for in paragraphs (1) through (3), shall not apply to foreign investment as provided for in Article 2 (1) 4 of the Foreign Investment Promotion Act. <Amended by Act No. 9374, Jan. 30, 2009>
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 7 (Order of Recovery of Claims)(1) The Minister of Strategy and Finance may require residents holding claims against non-residents to collect such claims and to repatriate them to the Republic of Korea for the stabilization of the foreign exchange market and the soundness of foreign exchange transactions.
(2) The scope and collection period of claims to be collected under paragraph (1) and other matters necessary therefor shall be determined by Presidential Decree.
[This Article Wholly Amended by Act No. 9351, Jan. 30, 2009]
CHAPTER Ⅱ FOREIGN EXCHANGE AGENCIES
Article 8 (Registration of Foreign Exchange Business)(1) Any person who intends to operate a foreign exchange business shall prepare capital, facilities and professional human resources sufficient to conduct such business, and register the said business with the Minister of Strategy and Finance in advance asprescribed by Presidential Decree. Provided, that this shall not apply to any financial institution which the Minister of Strategy and Finance deems such registration unnecessary taking into account the details of such business, and which is prescribed by Presidential Decree.
(2) Only financial institutions are entitled to engage in a foreign exchange business, and a financial institution engaging in a foreign exchange business may conduct such business in so far as it is directly related to the business of the financial institution as prescribed by Presidential Decree.
(3) Any person who intends to engage in the business falling under any of the following subparagraphs (hereinafter referred to as the “money exchange business”), notwithstanding the provisions of paragraph (1), shall prepare facilities necessary for conducting such money exchange business and register the said business with the Minister of Strategy and Finance in advance as prescribed by Presidential Decree: 1. Purchase and sale of foreign currency; and2. Purchase of a traveler’s check issued in a foreign country.
(4) If any financial institution which has registered its foreign exchange business pursuant to the main sentence of paragraph (1) and any person who has registered its money exchange business pursuant to paragraph (3) (hereinafter referred to as the “money exchanger”) intend to modify any of the registered matters that are prescribed by Presidential Decree or to cease the foreign exchange business or the money exchange business, they shall report such modification or cessation in advance to the Minister of Strategy and Finance pursuant to Presidential Decree.
(5) Any financial institution which has registered its foreign exchange business pursuant to paragraph (1) (including any financial institution pursuant to the proviso to paragraph (1); hereinafter referred to as the “foreign exchange agency”), shall obtain authorization of the Minister of Strategy and Finance in entering a contract with foreign financial institutions concerning businesses to which this Act applies, provided such authorization is deemed necessary for the sound development of the national economy and maintenance of international peace and security, and is prescribed by Presidential Decree.
(6) Matters necessary to conduct the business of foreign exchange agency and money exchanger shall be prescribed by Presidential Decree.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 9 (Foreign Exchange Brokerage)(1) Any person who intends to engage in a business in the following subparagraphs (hereinafter referred to as the “foreign exchange brokerage”) shall prepare capital, facilities and professional human resources as prescribed by Presidential Decree and shall obtain authorization of the Minister of Strategy and Finance. In such cases, when such person intends to modify important matters prescribed by Presidential Decree, he/she shall report thereon to the Minister of Strategy and Finance:
1. Brokerage of purchase, sale, exchange and lending of foreign currencies;
2. Brokerage of derivative transactions based on foreign currencies; and
3. Other businesses relating to subparagraphs 1 and 2.
(2) The counterpart with whom the person authorized to conduct foreign exchange brokerage under paragraph (1) (hereinafter referred to as the “foreign exchange brokerage company”) may conduct foreign exchange brokerage business shall be a person prescribed by Presidential Decree, such as financial institution having expertise in transactions of foreign exchange.
(3) Where a foreign exchange brokerage company intends to conduct any act falling under any of the following subparagraphs, it shall obtain authorization of the Minister of Strategy and Finance according to the classification prescribed by Presidential Decree or file a report to the Minister of Strategy and Finance:
1. Merger or dissolution; and
2. Cessation, transfer or takeover of all or part of its business.
(4) For the purpose of the faithful performance of foreign exchange brokerage business, the Minister of Strategy and Finance may, pursuant to Presidential Decree, require each foreign exchange brokerage company to deposit a guaranty bond in an institution designated by him/her.
(5) If foreign exchange brokerage companies intend to conduct foreign exchange brokerage business in a foreign country, they shall obtain authorization of the Minister of Strategy and Finance pursuant to Presidential Decree.
(6) The Financial Investment Services and Capital Markets Act shall not apply to foreign exchange brokerage business under this Act. Provided, that the same Act may apply mutatis mutandis to Articles 37, 39, 44 and 54, and to other cases for the protection of investors as prescribed by Presidential Decree. In such cases, “financial investment trader” shall be deemed “foreign exchange brokerage company”, and “financial investment business” shall be deemed “foreign exchange brokerage”.
(7) Matters concerning the foreign exchange brokerage companies and their business, other than those prescribed in paragraphs (1) through (6), shall be prescribed by Presidential Decree.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 10 (Obligation of Confirmation in Performing Duties)
A foreign exchange agency, a money exchanger, and a foreign exchange brokerage company (hereinafter referred to as the “foreign exchange agency”) in performing transactions shall confirm whether or not transactions with or payment to their customers are permitted or reported under this Act. Provided, that this shall not apply to minor transactions which are determined and announced by the Minister of Strategy and Finance.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 11 (Supervision of Business and Regulation of Soundness)(1) The Minister of Strategy and Finance may supervise the business of a foreign exchange agency, (including its business office located in a foreign country; hereafter the same shall apply in this Article), and may issue an order necessary for such supervision.
(2) Where it is recognized as necessary for maintaining stability in the foreign exchange market and soundness of foreign exchange agencies, the Minister of Strategy and Finance may impose necessary restrictions on the raising and operation of foreign currency, such as determining the asset-liability ratio of foreign currency of foreign exchange agencies. In such cases, detailed standards for such restrictions shall be prescribed by Presidential Decree.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 12 (Revocation of Authorization)(1) Where a foreign exchange agency falls under any of the following subparagraphs, the Minister of Strategy and Finance may revoke a registration or authorization prescribed in Articles 8 and 9, limit the business of foreign exchange agency (including their business offices) for up to six months, or suspend all or part of the business thereof:
1. Where the agency has registered or obtained authorization by fraudulent or other illegal means;
2. Where the agency has conducted business during the period wherein its business is restricted or suspended;
3. Where the agency has violated the details or terms of registration or authorization;
4. Where the agency has conducted foreign exchange business in violation of Article 8 (2);
5. Where the agency has failed to obtain authorization or to file a report prescribed in Article 8 (4) or 9 (3), or has filed a fraudulent report;
6. Where the agency has conducted a transaction in violation of Article 9 (2) or has not complied with an order to deposit a guaranty bond under paragraph (4) of the same Article;
7. Where the agency has violated its obligation of confirmation prescribed in Article 10;
8. Where the agency has violated a supervisory order prescribed in Article 11 (1) or restrictions on business prescribed in paragraph (2) of the same Article;
9. Where the agency has failed to file a report or to submit data or information prescribed in Article 20 (1) or (2), or has filed a fraudulent report, or submitted fraudulent data or information;
10. Where the agency has failed to comply with the inspection prescribed in Article 20 (3) or (6) or has refused, obstructed or evaded such inspection;
11. Where the agency has refused to submit data prescribed in Article 20 (4) or (6) or has submitted fraudulent data;
12. Where the agency has not complied with an order of correction under Article 20 (5) or (6);
13. Where the agency has failed to notify or provide information in violation of an order of the Minister of Strategy and Finance under Article 21, or has fraudulently notified or provided information;
14. Where the agency has failed to make a statement, application or report, and has failed to make notification and presentation of material by means of electronic document in violation of an order of the Minister of Strategy and Finance under Article 24 (2).
(2) Where any foreign exchange agency has violated paragraph (1) 4 through 9 or 12 by mistake or negligence, the Minister of Strategy and Finance may issue a warning to such agency.
(3) The Minister of Strategy and Finance shall, when he/she intends to revoke any registration or authorization pursuant to paragraph (1), hold a hearing.
(4) Detailed standards for dispositions under paragraph (1) shall be prescribed by Presidential Decree.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 12-2 (Penalty Surcharges)(1) When the Minister of Strategy and Finance restricts or suspends all or part of the business of a person who has committed a violation falling under any of the subparagraphs of Article 12 (1), he/she may impose a penalty surcharge within the extent of the interest gained from the violation.
(2) When a penalty surcharge is imposed as prescribed in paragraph (1), matters in the following subparagraphs shall be considered according to the standards prescribed by Presidential Decree: 1. Details and degree of violation; 2. Period and frequency of violation; 3. Scale of interest gained from violation.
(3) Imposition of penalty surcharges, extension of deadline for the payment of penalty surcharges, payments in installments, guarantees, and other matters necessary for the collection of penalty surcharges shall be prescribed by Presidential Decree.
(4) Where a person who is obliged to pay a penalty surcharge fails to pay on time, the Minister of Strategy and Finance may collect it pursuant to the precedents of disposition of national taxes in arrears.
[This Article Is Newly Inserted by Act No. 9351, Jan. 30, 2009]
CHAPTER Ⅲ FOREIGN EXCHANGE EQUALIZATION FUND
Article 13 (Foreign Exchange Equalization Fund)(1) In order to facilitate foreign exchange transactions, a foreign exchange equalization fund shall be established as a fund under Article 5 of the State Finance Act.
(2) The foreign exchange equalization fund shall be provided with the financial resources listed in the following subparagraphs:
1. Contributions and prereceipts from the Government;
2. Money raised by issuing foreign exchange equalization fund bonds;
3. Prereceipts or temporary loans from any foreign government, any foreign central bank, or other residents or non-residents;
4. Prereceipts provided for in Article 6 (1) 2 and (2);
5. Other funds necessary to facilitate foreign exchange transactions as prescribed by Presidential Decree.
(3) The foreign exchange equalization fund shall be operated by the methods listed in the following subparagraphs:
1. Purchase and sale of foreign exchange;
2. Deposit in or lending to the Bank of Korea, any foreign government, any foreign central bank, or domestic or foreign financial institution;
3. Payment temporarily made on behalf of the State before payments are made with reserve funds or revised supplementary budgets for the purpose of the redemption of foreign currency debts of a foreign exchange agency guaranteed by the State;
4. Other methods deemed necessary to facilitate foreign exchange transactions and which are prescribed by Presidential Decree.
(4) If debts are paid by the foreign exchange equalization fund on behalf of the State pursuant to paragraph (3) 3, the Government shall take measures to replenish for such payment.
(5) The creation and operation of the foreign exchange equalization fund as provided for in paragraphs (2) and (3), may be made with either domestic or foreign means of payment.
(6) The foreign exchange equalization fund shall be operated and managed by the Minister of Strategy and Finance.
(7) The Minister of Strategy and Finance may issue foreign exchange equalization fund bonds.
(8) All matters concerning the operation and management of the foreign exchange equalization fund, the amount of interest to be paid for prereceipts, and the issuance of foreign exchange equalization fund bonds shall be prescribed by Presidential Decree.
(9) The Minister of Strategy and Finance may, pursuant to Presidential Decree, issue a certificate of deposit for the funds deposited in the foreign exchange equalization fund under paragraph (2). In such cases, the Minister of Strategy and Finance may determine the purpose for which such a certificate of deposit may be used.
(10) Where foreign exchange equalization fund bonds are issued as prescribed in paragraph (2) 2, Article 4 of the State Bond Act shall not be applicable.
(11) Where the extent of change in the amount of issuance of foreign exchange equalization fund bonds denominated in foreign currency exceeds 2/100 of the amount of issuance of foreign exchange equalization fund bonds denominated in foreign currency according to the management plan of the foreign exchange equalization fund for the fiscal year concerned, the Minister of Strategy and Finance shall submit details of such change to the competent Standing Committee and the Special Committee on Budget and Accounts of the National Assembly. In such cases, such details of change shall contain the detail of issuance and redemption of foreign exchange equalization fund bonds, and the reasons for the change.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 14 (Redemption of Principal and Interest of Foreign Exchange Equalization Fund Bonds)(1) The principal and interest accruing from the issuance of foreign exchange equalization fund bonds may be redeemed with the net surplus budget of the general accounts in accordance with the procedures prescribed in Article 90 (6) of the State Finance Act.
(2) The amount redeemable with the net surplus budget of the general accounts under paragraph (1) shall be an amount calculated by adding or subtracting any profit and loss caused by the operation of the foreign exchange equalization fund, other than the interest accruing from foreign exchange equalization fund bonds, to or from such interest.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
CHAPTER Ⅳ PAYMENTS AND TRANSACTIONS
Article 15 (Procedures for Payment)(1) The Minister of Strategy and Finance may prescribe matters necessary for the payments or receipts to which this Act applies, such as procedures for money exchange, remittance and withdrawal of property.
(2) Where it is deemed to fall under any of the following subparagraphs, the Minister of Strategy and Finance may require residents and nonresidents who intend to make payment from Korea to a foreign country, or residents who intend to make payment to non-residents or to receive payment from non-residents, obtain permission as prescribed by Presidential Decree when they pay or receive as such:
1. Where it is inevitable for the faithful fulfillment of treaties concluded by the Republic of Korea, and of generally recognized international laws and regulations;
2. Where it is necessary for especially contributing to international endeavor for the maintenance of international peace and security.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 16 (Reporting on Methods of Payment or Receipt)
Where a resident falls under any of the following subparagraphs in settling any claim or liability arising from transactions or acts between residents, between a resident and a non-resident or between non-residents (excluding cases where a person who has made a report under Article 18 pays or receives money in conformity with the method reported), he/she shall report in advance on the method of such payment or receipt to the Minister of Strategy and Finance as prescribed by Presidential Decree. Provided, that where the amount is negligible or it is an ordinary transaction which is prescribed by Presidential Decree, an ex post facto report may be made or a report may not be made:
1. Where he/she makes any settlement through extinguishment of a claim or liability by balancing or offsetting such claim or liability;
2. Where he/she makes any settlement after the deadline set by the Minister of Strategy and Finance;
3. Where he/she pays or receives money to or from a person who is not a party to the transaction in question, or a resident who is not a party to the transaction in question pays or receives money to or from a non-resident who is a party thereto; or
4. Where he/she pays or receives money not through a foreign exchange agency.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 17 (Reporting on Expatriation or Bringing-in of Means of Payment)
In cases where filing a report is deemed necessary by Presidential Decree to ensure the effectiveness of this Act, the Minister of Strategy and Finance may require a resident or non-resident who intends to expatriate or bring in means of payment or securities to file a report as prescribed by Presidential Decree when he/she expatriates or brings in such means of payment or securities.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 18 (Reporting on Capital Transactions)(1) Any person who intends to perform capital transactions shall submit a report on such capital transactions to the Minister of Strategy and Finance pursuant to Presidential Decree. Provided, that where it is a trivial or standardized capital transaction prescribed by Presidential Decree, an ex post report may be made or no report may be made.
(2) The report under paragraph (1) and the acceptance of report under paragraph (3) shall be completed before the procedures under Article 15 (1).
(3) From among the matters to be reported under paragraph (1), with respect to overseas direct investment, acquisition of overseas real estate or any right thereto by a resident, the Minister of Strategy and Finance may examine its appropriateness, such as whether or not the investor is qualified and the amount of investment is appropriate, and determine whether or not to accept such report.
(4) With respect to each report prescribed in paragraph (3), the Minister of Strategy and Finance shall make a determination of matters falling under any of the following subparagraphs and notify the person who has submitted the report of such determination within the period of handling a report prescribed by Presidential Decree:
1. Acceptance of reports;
2. Refusal of the acceptance of report; and3. Recommendation of any modification of the details of transactions.
(5) Where the Minister of Strategy and Finance made a determination under paragraph (4) 2, the resident who has submitted the relevant report shall not conduct the transaction in question.
(6) Where a person, who has received a notice of recommendation under paragraph (4) 3, accepts the recommendation, he/she may conduct the transaction in question as he/she has accepted it, and shall not conduct the transaction in question in cases where he/she has not accepted it.
(7) If no notice is made by the Minister of Strategy and Finance within the period of handling a report under paragraph (4), the report in question shall be deemed to have been accepted on the date the period expires.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
CHAPTER Ⅴ SUPPLEMENTARY PROVISIONS
Article 19 (Warnings and Suspension of Transactions)(1) In cases where a person who is subject to the application of this Act falls under any of the following subparagraphs, the Minister of Strategy and Finance may issue him/her a warning:
1. Where the person has conducted a transaction or an act after the deadline set in the terms of permission or report in cases where he/she was permitted or he/she filed a report under the provisions of Articles 15 through 18;
2. Where the person has conducted a transaction or an act in violation of the obligation to conform with the procedures, or of the obligation regarding permission or report (hereinafter referred to as the “report, etc.”) under the provisions of Articles 15 through 18, which is a transaction or an act with an amount not more than the amount (which may be set differently according to the type of transaction or act) prescribed by Presidential Decree.
(2) In cases where a transaction or an act of a person who is subject to the application of this Act has violated the obligation to report under the provisions of Articles 15 through 18 on two or more occasions in the last two years, the Minister of Strategy and Finance may restrict or suspend any transaction or act in foreign exchange made by such person within the extent of one year, or revoke his/her permission.
(3) In cases where the Minister of Strategy and Finance takes administrative measures under paragraph (2), he/she shall conduct a hearing.
(4) All matters necessary for administrative measures in paragraph (1) or (2) shall be prescribed by Presidential Decree.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 20 (Reporting and Inspections)(1) The Minister of Strategy and Finance may have the transaction parties or interested persons make a necessary report to secure the effectiveness of this Act and may have the residents holding claims against nonresidents make a report on the present condition of such claim in possession as prescribed by Presidential Decree.
(2) The Minister of Strategy and Finance may request the heads of administrative agencies concerned to whom this Act is applicable, such as the Bank of Korea, the Financial Supervisory Service, and a foreign exchange agency, to submit pertinent data or information in cases where it is deemed necessary for the enforcement of this Act. In such cases, the heads of administrative agencies concerned shall comply with such request unless there is a special reason to the contrary.
(3) The Minister of Strategy and Finance may have public officials under his/her control inspect businesses of a foreign exchange agency and the parties or other persons concerned in connection with transactions to which this Act applies, if it is deemed necessary for the enforcement of this Act.
(4) The Minister of Strategy and Finance may require a foreign exchange agency and the parties or other persons concerned to submit data related to their business and assets in connection with transactions to which this Act applies, if it is deemed necessary for the efficient inspection.
(5) If an illegal act is uncovered as a result of inspection under paragraph (3), the Minister of Strategy and Finance may order such illegal act be rectified, or may take other necessary measures.
(6) The Minister of Strategy and Finance may, pursuant to Presidential Decree, entrust the Governor of the Bank of Korea, the Governor of the Financial Supervisory Service or other persons prescribed by Presidential Decree with such business provided for in paragraphs (3) through (5). Any staff member under their control may also conduct such business, if it deemed necessary.
(7) Any person who performs inspections under paragraphs (3) through (6), shall carry a certificate indicating his/her competence and show it to persons concerned.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 21 (Notification to Commissioner of National Tax Service)(1) Notwithstanding other Acts, the Minister of Strategy and Finance may directly notify the Commissioner of the National Tax Service, the Commissioner of the Korea Customs Service, the Governor of the Financial Supervisory Service or the President of the Export-Import Bank of Korea of the data on transaction, payment, receipt, and movement of funds to which this Act applies, or may have the Governor of the Bank of Korea, heads of foreign exchange agencies, heads of customs houses or other persons prescribed by Presidential Decree notify the Commissioner of the National Tax Service, the Commissioner of the Korea Customs Service, the Governor of the Financial Supervisory Service or the President of the Export-Import Bank of Korea thereof.
(2) The Minister of Strategy and Finance may have persons prescribed by Presidential Decree provide data on the transaction, payment, receipt, and movement of funds to which this Act applies to credit information concentration agencies under Article 17 of the Use and Protection of Credit Information.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 22 (Confidentiality of Foreign Exchange Transactions)
No person engaged in a business related to the permission, authorization, registration, report, notification, brokerage, relay, concentration, and interchange prescribed in this Act, shall use any information which he/she has obtained in connection with such business for purposes other than those prescribed in this Act, or divulge such information to other persons, except as otherwise prescribed in Article 4 of the Real Name Financial Transactions and Guarantee of Secrecy Act.
[This Article Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 23 (Delegation and Entrustment of Authority)(1) The Minister of Strategy and Finance may, pursuant to Presidential Decree, delegate or entrust part of his/her authority under this Act to the Financial Services Commission, the Securities Futures Commission, the heads of the administrative agencies concerned, the Governor of the Bank of Korea, the Governor of the Financial Supervisory Service, the heads of foreign exchange agencies or other persons prescribed by Presidential Decree.
(2) Any person in charge of the business prescribed in paragraph (1) and Article 20 (6), and an officer or staff member under his/her control (excluding a public official, and a person who is deemed to be a public official by other Acts), shall be deemed a public official in the application of the penal provisions under the Criminal Act or other acts.
[This Article Wholly Is Amended by Act No. 9351, Jan. 30, 2009]
Article 24 (Permission by Means of Electronic Documents)(1) The Minister of Strategy and Finance may, pursuant to Presidential Decree, grant such permission, authorization, or notification under this Act by means of electronic documents (including presentation of data by means of computer networks or electronic data processing system; hereafter the same shall apply in this Article).
(2) The Minister of Strategy and Finance may order a foreign exchange agency, other transaction parties or interested parties to whom this Act applies, to make a report or an application, to provide information, or to make a notification and presentation of relevant data by means of electronic documents, if it is deemed necessary for ensuring the effectiveness of this Act.
[This Article Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 25 (Management of Business)(1) The Minister of Strategy and Finance may determine procedures for the management of business, payments or receipts, and other necessary matters, if it is deemed necessary for ensuring the efficient operation and effectiveness of this Act.
(2) The Minister of Strategy and Finance may designate one or more juristic person or organization which is related to or specializes in the foreign exchange business, as an institution to relay, concentrate, interchange or analyze data on foreign exchange transactions, payments or receipts.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 26 (Relations with Other Acts)
Articles 20, 23, 24 and 25 (2) shall apply in preference over Article 4 of the Act on Real Name Financial Transactions and Guarantee of Secrecy.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
CHAPTER Ⅵ PENAL PROVISIONS
Article 27 (Penal Provisions)(1) Any person who falls under any of the following subparagraphs shall be punished by imprisonment for not more than three years or by a fine not exceeding Three Hundred Million Won. Provided, that if the triple value of the object related to the violation exceeds Three Hundred Million Won, the fine shall be not more than the triple value of such object:
1. Any person who has conducted transactions out of line with the basic exchange rate in violation of Article 5 (2);
2. Any person who has paid or received money, or has made transactions in violation of measures prescribed in Article 6 (1) 1;
3. Any person who has violated the obligation of safekeeping, deposit or sale according to measures prescribed in Article 6 (1) 2;
4. Any person who has conducted capital transactions without obtaining permission according to the measures prescribed in the main sentence of Article 6 (2) or after obtaining permission by fraudulent or other illegal means, or who has violated the obligation of deposit;
5. Any person who has conducted foreign exchange business without making a registration prescribed in the main sentence of Article 8 (1) or after making such registration by fraudulent or other illegal means (including any person who has conducted foreign exchange business after making a report of closure prescribed in Article 8 (4) fraudulently and a person who has conducted foreign exchange businesses in violation of the disposition taken pursuant to the provisions of Article 12 (1));
6. Any person who has conducted money exchange business without making the registration prescribed in Article 8 (3) or after making such registration by fraudulent or other illegal means (including any person who has conducted money change business after making a report of closure prescribed in Article 8 (4) fraudulently and a person who has conducted money exchange business in violation of the disposition taken pursuant to the provisions of Article 12 (1));
7. Any person who has conducted foreign exchange brokerage business without obtaining authorization prescribed in the former part of Article 9 (1), or Article 9 (3) and (5), or after obtaining such authorization by fraudulent or other illegal means (including any person who has conducted foreign exchange brokerage business after making a report prescribed in Article 9 (3) fraudulently and a person who has conducted foreign exchange brokerage business in violation of the disposition taken pursuant to Article 12 (1));
8. Any person who has paid or received money without obtaining permission prescribed in Article 15 (2) or after obtaining such permission by fraudulent or other illegal means.
(2) Imprisonment and fines prescribed in paragraph (1) may be imposed concurrently.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 28 (Penal Provisions)(1) Any person who has used information other than those prescribed in this Act, or has divulged such information to another person in violation of Article 22 shall be punished by imprisonment of two years or less, or by a fine of Two Hundred Million Won or less.
(2) Imprisonment and fines prescribed in paragraph (1) may be imposed concurrently.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 29 (Penal Provisions)(1) Any person who falls under any of the following subparagraphs shall be punished by imprisonment for not more than one year or by a fine not exceeding One Hundred Million Won. Provided, that if the triple value of the object related to the violation exceeds One Hundred Million Won, the fine shall be not more than the triple value of such object:
1. Any person who has failed to repatriate claims back to Korea in violation of the obligation to retrieve under Article 7;
2. Any person who has not filed a report of change under Article 8 (4) or has conducted business of foreign exchange or money exchange after filing a report in a fraudulent manner;
3. Any person who has signed a contract without obtaining authorization under Article 8 (5) or after obtaining authorization by false or unjust means;
4. Any person who has conducted foreign exchange brokerage without filing a report of change under the latter part of Article 9 (1) or after filing a report of change in a fraudulent manner, or a person who has made a transaction in violation of paragraph (2) of the same Article;
5. Any person who has not confirmed in violation of Article 10;
6. Any person whose amount of violation of duty to report under Article 16 or 18 has exceeded the amount prescribed by Presidential Decree within the extent of not less than Five Hundred Million Won;
7. Any person who has expatriated or brought in means of payment or securities without filing a report under Article 17 or after filing a report fraudulently;
8. Any person who has conducted a transaction or an act in violation of the suspension or restriction on transaction or act under Article 19 (2);
9. Any person who had been issued a disposition of fine for negligence under Article 32 (1) in the last two years wherein he has re-offended against the same paragraph.
(2) Any attempt to commit a violation prescribed in paragraph (1) 7 shall be punished.
(3) Imprisonment and fines prescribed in paragraph (1) may be imposed concurrently.
[This Article Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 30 (Confiscation and Collection in Lieu of Confiscation)
Foreign exchange and other securities, precious metals, real estate and domestic means of payment acquired by a person who falls under any of the subparagraphs of Article 27 (1) or 29 (1) through such acts as prescribed therein shall be confiscated, and where it is impossible to confiscate them, the value thereof shall be collected in lieu of such confiscation.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 31 (Joint Penal Provisions)
If the representative of a juristic person, or an agent, employee or other workers of a juristic person or individual commits a violation falling under any of Articles 27 through 29 in connection with the assets or business of the juristic person or individual, not only shall such violators be punished but the juristic person or individual shall also be punished by a fine prescribed in the relevant Article. Provided, that if the juristic person or individual has not been negligent of due attention and supervision regarding the relevant assets or business in order to prevent such violation, this shall not apply.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 32 (Fines for Negligence)(1) Any person who falls under any of the following subparagraphs shall be punished by a fine for negligence not exceeding Fifty Million Won. Provided, that if he/she falls under Article 29, this shall not apply:
1. Any person who has paid, received or moved funds in violation of the procedures for payment under Article 15 (1);
2. Any person who has paid or received funds without filing a report under Article 16 or after filing a false report;
3. Any person who has transacted capital without filing a report under Article 18 (1) or has filed a false report;
4. Any person who has transacted capital falling under such report even if it violates Article 18 (5);
5. Any person who has transacted capital differently from the details of recommendation under Article 18 (4) 3 in violation of paragraph (6) of the same Article.
(2) Any person who falls under any of the following subparagraphs shall be punished by a fine for negligence not exceeding Ten Million Won:
1. Any person who has failed to submit a report of closure prescribed in Article 8 (4);
2. Any person who has failed to file a report prescribed in Article 9 (3);
3. Any person who has failed to file an ex post facto report or has replaced a report in violation of Article 16 or 18, or has filed an ex post facto report in a fraudulent manner;
4. Any person who has committed a violation subject to warning within two years from the date when he/she received a warning under Article 19 (1);
5. Any person who has failed to submit a report or data in violation of Article 20 (1) or (2), or has submitted a false report or data;
6. Any person who has failed to comply with an inspection prescribed in Article 20 (3) or (6), or has refused, obstructed or evaded such inspection;
7. Any person who has failed to present data prescribed in Article 20 (4) or (6), or has presented false data;
8. Any person who has failed to comply with an order for rectification prescribed in Article 20 (5) or (6);
9. Any person who has failed to notify or supply in violation of an order of the Minister of Strategy and Finance prescribed in Article 21, or has notified or supplied in a fraudulent manner;
10. Any person who has failed to file a return, apply, report, notify data or submit data by means of electronic documents in violation of any order of the Minister of Strategy and Finance prescribed in Article 24 (2).
(3) Fines for negligence under paragraphs (1) and (2) shall be imposed and collected by the Minister of Strategy and Finance as prescribed by Presidential Decree.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
ADDENDA <Act No. 9374, Jan. 30, 2009>
This Act shall take effect one year and six months after the date of its promulgation. (Proviso Omitted.)
FOREIGN EXCHANGE TRANSACTIONS ACT
[Enforcement Date 31. Jul, 2009.] [Act No.9374, 30. Jan, 2009., Other Laws and Regulations Amended]
CHAPTER Ⅰ GENERAL PROVISIONS
Article 1 (Purpose)
The purpose of this Act is to contribute to the development of the national economy by striving to facilitate foreign transactions, to maintain a balance of international payments and to stabilize the value of currency by ensuring the liberalization of foreign exchange transactions and of other foreign transactions and by revitalizing market functionality.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 2 (Objects of Application)(1) This Act shall apply to any of the following matters:
1. Foreign exchange in the Republic of Korea, foreign exchange transactions performed in the Republic of Korea, or other acts related thereto;
2. Transactions, payment or receipts between the Republic of Korea and a foreign country, or other acts related thereto (including those which are performed in a foreign country and which have an effect in the Republic of Korea);
3. Transactions by a private person having domicile or residence in a foreign country and a juristic person having its main office in a foreign country, which are denominated in the currency of the Republic of Korea or in which payment is able to be made in such currency, or other acts related thereto;
4. Acts conducted by a private person having domicile or residence in the Republic of Korea, or his/her agents, employees or other employed persons in connection with his/her assets or business in a foreign country; or
5. Acts conducted by the representative, agents, employees or other employed persons of a juristic person having its main office in the Republic of Korea in connection with the assets or business of the juristic person in a foreign country.
(2) The scope of “other acts related thereto” referred to in paragraph (1) 1 through 3 shall be prescribed by Presidential Decree.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 3 (Definitions)(1) The definition of the terms used in this Act shall be as follows:
1. The term “domestic currency” means Won currency, which is the legal currency of the Republic of Korea;
2. The term “foreign currency” means any currency other than domestic currency;
3. The term “means of payment” means those falling under any of the following items:
(a) Government notes, bank notes, coins, checks, postal money orders, or letters of credit;
(b) Bills of exchange, promissory notes and other payment orders as prescribed by Presidential Decree;
(c) Vouchers, plastic cards or other Articles in which the asset value is embedded by electronic or magnetic means and which many unspecified persons are able to use for payment in lieu of currency, which are prescribed by Presidential Decree;
4. The term “foreign means of payment” means a mode of payment denominated in foreign currency, or other modes of payment which can be used in a foreign country regardless of the denominating currency;
5. The term “domestic means of payment” means any modes of payment other than foreign means of payment;
6. The term “precious metals” means gold or ingots intermixed with gold, non-negotiable gold coins, or other products and processed Articles which are chiefly made of gold;
7. The term “securities” means securities under Article 4 of the Financial Investment Services and Capital Markets Act and those prescribed by Presidential Decree, which do not fall under subparagraph 3;
8. The term “foreign currency securities” means securities denominated in foreign currency, or those which are able to be paid for in a foreign country;
9. The term “derivatives” means derivatives under Article 5 of the Financial Investment Services and Capital Markets Act and others prescribed by Presidential Decree;
10. The term “foreign currency derivatives” means derivatives denominated in foreign currency or those which are able to be paid for in a foreign country;
11. The term “claims” means rights to request for the payment of money accruing from all kinds of deposits, trusts, guarantees, lending and borrowing and which do not fall under subparagraphs 1 through 10;
12. The term “foreign currency claims” means claims denominated in foreign currency or those which are able to be paid for in a foreign country;
13. The term “foreign exchange” means foreign means of payment, foreign currency securities, foreign currency derivatives and foreign currency claims;
14. The term “resident” means any private person who has domicile or residence in the Republic of Korea, and any juristic person whose main office is located in the Republic of Korea;
15. The term “non-resident” means any private person and any juristic person other than residents. Provided, that branch offices, local offices or other offices of non-residents located in the Republic of Korea, shall be deemed residents regardless of whether or not such offices have an authority of an agent under the law;
16. The term “foreign exchange affairs” means those referred to in any of the following items:
(a) Issuance or purchase and sale of foreign exchange;
(b) Payment, collection and receipt between the Republic of Korea and a foreign country;
(c) Deposits, lending and borrowing of money, or guarantee with residents which is denominated in or paid for with foreign currency;
(d) Deposits, lending and borrowing of money or guarantee with nonresidents; and
(e) Other affairs which are similar to the provisions of items (a) through (d) and which are prescribed by Presidential Decree;
17. The term “financial institutions” means institutions referred to in Article 38 (excluding subparagraphs 14 and 15) of the Establishment of Financial Services Commission Act, and other persons who conduct financial business and affairs related to finance and who are prescribed by Presidential Decree;
18.The term “overseas direct investment” means any transactions, acts or payments by residents, which fall under any of the following items:
(a) Transactions or acts which are performed in order to establish continuous economic relations with a juristic person organized under the acts and subordinate statutes of a foreign country (including a juristic person in the process of its incorporation) through acquiring securities issued by such juristic person or lending money to such juristic person, and which are prescribed by Presidential Decree; and
(b) Disbursement of funds necessary to establish, expand or operate business offices in a foreign country or to conduct overseas business activities and which is prescribed by Presidential Decree;
19. The term “capital transactions” means any transactions or acts falling under any of the following items:
(a) Transactions (limited to cases relating to foreign exchange for a transaction between residents) related to the generation, alteration or extinction of claims due to contracts for deposits, trust, lending and borrowing of money, guarantee of repayment of debts, or purchase and sale of foreign means of payment, and claims (excluding transactions as referred to in item (c));
(b) Issuance of, subscription to securities, and acquisition of securities or rights (excluding cases falling under item (c), and limited to cases relating to foreign exchange for a transaction between residents);
(c) Transactions of derivatives (limited to cases relating to foreign exchange for a transaction of derivatives between residents);
(d) Acquisition of real estate in a foreign country or any rights related thereto by residents, or acquisition of real estate in the Republic of Korea or any rights related thereto by non-residents;
(e) Giving and receiving of funds necessary for the establishment, expansion or operation of offices, between the head office, branch offices, local offices or other offices of a juristic person which are located in the Republic of Korea (hereafter referred to as the “offices” in this item) and offices located in a foreign country, with the exception of cases referred to in item (a) (excluding giving and receiving of funds which are related to expenses necessary for the maintenance of offices and ordinary transactions and which are prescribed by Presidential Decree); and
(f) Other transactions or acts which are similar to those referred to in items (a) through (e) and which are prescribed by Presidential Decree.
(2) Where the distinction between a resident and non-resident as referred to in paragraph (1) 14 and 15 is unclear, it shall be subject to Presidential Decree.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 4 (Striving for Facilitation of Foreign Transactions)(1) The Minister of Strategy and Finance shall strive to facilitate foreign exchange transactions and other foreign transactions by imposing restrictions as referred to in this Act only within the minimum extent necessary.
(2) The Minister of Strategy and Finance shall endeavor to create a foundation for stable supply and demand of foreign exchange and to stabilize the foreign exchange market, and shall devise policies therefor.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 5 (Exchange Rates)(1) The Minister of Strategy and Finance may determine the basic exchange rate, rate of purchase and sale of foreign exchange, and arbitrated exchange rate (hereinafter referred to as the “basic exchange rate”) in foreign exchange transactions, if it is necessary to do so for harmonious and orderly foreign exchange transactions.
(2) If the Minister of Strategy and Finance determines the basic exchange rate pursuant to paragraph (1), residents and non-residents shall perform transactions in conformity with such basic exchange rate.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 6 (Suspension of Foreign Exchange Transactions)(1) The Minister of Strategy and Finance may, pursuant to Presidential Decree, take measures as provided for in any of the following subparagraphs, if such measures are deemed inevitable on account of outbreak of natural calamities, war, conflicts of arms, grave and sudden changes in domestic and foreign economic conditions, or other situations equivalent thereto:
1. Temporary suspension of payment, receipt, or the whole or a part of transactions to which this Act applies; and
2. Imposition of obligations to safe keep, deposit or sell means of payment or precious metals in or to the Bank of Korea, government agencies, the foreign exchange equalization fund, or financial institutions.
(2) In cases where it is deemed to fall under any of the following subparagraphs, the Minister of Strategy and Finance may, pursuant to Presidential Decree, take measures to place any person who intends to perform capital transactions under an obligation to obtain permission or any person who performs capital transactions under an obligation to deposit part of means of payment acquired in such transactions in the Bank of Korea, the foreign exchange equalization fund or other financial institutions:
1. In cases where international payments and international finance are confronted or are liable to be confronted with serious difficulty;
2. In cases where the movement of capital between the Republic of Korea and a foreign country creates or is liable to create serious obstacles in carrying out currency policies, exchange rate policies and other macroeconomic policies.
(3) Measures provided for in paragraphs (1) and (2) may be taken for not more than six months unless there exist special grounds to the contrary, and if the grounds of such measures cease to exist, such measures shall be cancelled without delay.
(4) Measures provided for in paragraphs (1) through (3), shall not apply to foreign investment as provided for in Article 2 (1) 4 of the Foreign Investment Promotion Act. <Amended by Act No. 9374, Jan. 30, 2009>
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 7 (Order of Recovery of Claims)(1) The Minister of Strategy and Finance may require residents holding claims against non-residents to collect such claims and to repatriate them to the Republic of Korea for the stabilization of the foreign exchange market and the soundness of foreign exchange transactions.
(2) The scope and collection period of claims to be collected under paragraph (1) and other matters necessary therefor shall be determined by Presidential Decree.
[This Article Wholly Amended by Act No. 9351, Jan. 30, 2009]
CHAPTER Ⅱ FOREIGN EXCHANGE AGENCIES
Article 8 (Registration of Foreign Exchange Business)(1) Any person who intends to operate a foreign exchange business shall prepare capital, facilities and professional human resources sufficient to conduct such business, and register the said business with the Minister of Strategy and Finance in advance asprescribed by Presidential Decree. Provided, that this shall not apply to any financial institution which the Minister of Strategy and Finance deems such registration unnecessary taking into account the details of such business, and which is prescribed by Presidential Decree.
(2) Only financial institutions are entitled to engage in a foreign exchange business, and a financial institution engaging in a foreign exchange business may conduct such business in so far as it is directly related to the business of the financial institution as prescribed by Presidential Decree.
(3) Any person who intends to engage in the business falling under any of the following subparagraphs (hereinafter referred to as the “money exchange business”), notwithstanding the provisions of paragraph (1), shall prepare facilities necessary for conducting such money exchange business and register the said business with the Minister of Strategy and Finance in advance as prescribed by Presidential Decree: 1. Purchase and sale of foreign currency; and2. Purchase of a traveler’s check issued in a foreign country.
(4) If any financial institution which has registered its foreign exchange business pursuant to the main sentence of paragraph (1) and any person who has registered its money exchange business pursuant to paragraph (3) (hereinafter referred to as the “money exchanger”) intend to modify any of the registered matters that are prescribed by Presidential Decree or to cease the foreign exchange business or the money exchange business, they shall report such modification or cessation in advance to the Minister of Strategy and Finance pursuant to Presidential Decree.
(5) Any financial institution which has registered its foreign exchange business pursuant to paragraph (1) (including any financial institution pursuant to the proviso to paragraph (1); hereinafter referred to as the “foreign exchange agency”), shall obtain authorization of the Minister of Strategy and Finance in entering a contract with foreign financial institutions concerning businesses to which this Act applies, provided such authorization is deemed necessary for the sound development of the national economy and maintenance of international peace and security, and is prescribed by Presidential Decree.
(6) Matters necessary to conduct the business of foreign exchange agency and money exchanger shall be prescribed by Presidential Decree.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 9 (Foreign Exchange Brokerage)(1) Any person who intends to engage in a business in the following subparagraphs (hereinafter referred to as the “foreign exchange brokerage”) shall prepare capital, facilities and professional human resources as prescribed by Presidential Decree and shall obtain authorization of the Minister of Strategy and Finance. In such cases, when such person intends to modify important matters prescribed by Presidential Decree, he/she shall report thereon to the Minister of Strategy and Finance:
1. Brokerage of purchase, sale, exchange and lending of foreign currencies;
2. Brokerage of derivative transactions based on foreign currencies; and
3. Other businesses relating to subparagraphs 1 and 2.
(2) The counterpart with whom the person authorized to conduct foreign exchange brokerage under paragraph (1) (hereinafter referred to as the “foreign exchange brokerage company”) may conduct foreign exchange brokerage business shall be a person prescribed by Presidential Decree, such as financial institution having expertise in transactions of foreign exchange.
(3) Where a foreign exchange brokerage company intends to conduct any act falling under any of the following subparagraphs, it shall obtain authorization of the Minister of Strategy and Finance according to the classification prescribed by Presidential Decree or file a report to the Minister of Strategy and Finance:
1. Merger or dissolution; and
2. Cessation, transfer or takeover of all or part of its business.
(4) For the purpose of the faithful performance of foreign exchange brokerage business, the Minister of Strategy and Finance may, pursuant to Presidential Decree, require each foreign exchange brokerage company to deposit a guaranty bond in an institution designated by him/her.
(5) If foreign exchange brokerage companies intend to conduct foreign exchange brokerage business in a foreign country, they shall obtain authorization of the Minister of Strategy and Finance pursuant to Presidential Decree.
(6) The Financial Investment Services and Capital Markets Act shall not apply to foreign exchange brokerage business under this Act. Provided, that the same Act may apply mutatis mutandis to Articles 37, 39, 44 and 54, and to other cases for the protection of investors as prescribed by Presidential Decree. In such cases, “financial investment trader” shall be deemed “foreign exchange brokerage company”, and “financial investment business” shall be deemed “foreign exchange brokerage”.
(7) Matters concerning the foreign exchange brokerage companies and their business, other than those prescribed in paragraphs (1) through (6), shall be prescribed by Presidential Decree.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 10 (Obligation of Confirmation in Performing Duties)
A foreign exchange agency, a money exchanger, and a foreign exchange brokerage company (hereinafter referred to as the “foreign exchange agency”) in performing transactions shall confirm whether or not transactions with or payment to their customers are permitted or reported under this Act. Provided, that this shall not apply to minor transactions which are determined and announced by the Minister of Strategy and Finance.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 11 (Supervision of Business and Regulation of Soundness)(1) The Minister of Strategy and Finance may supervise the business of a foreign exchange agency, (including its business office located in a foreign country; hereafter the same shall apply in this Article), and may issue an order necessary for such supervision.
(2) Where it is recognized as necessary for maintaining stability in the foreign exchange market and soundness of foreign exchange agencies, the Minister of Strategy and Finance may impose necessary restrictions on the raising and operation of foreign currency, such as determining the asset-liability ratio of foreign currency of foreign exchange agencies. In such cases, detailed standards for such restrictions shall be prescribed by Presidential Decree.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 12 (Revocation of Authorization)(1) Where a foreign exchange agency falls under any of the following subparagraphs, the Minister of Strategy and Finance may revoke a registration or authorization prescribed in Articles 8 and 9, limit the business of foreign exchange agency (including their business offices) for up to six months, or suspend all or part of the business thereof:
1. Where the agency has registered or obtained authorization by fraudulent or other illegal means;
2. Where the agency has conducted business during the period wherein its business is restricted or suspended;
3. Where the agency has violated the details or terms of registration or authorization;
4. Where the agency has conducted foreign exchange business in violation of Article 8 (2);
5. Where the agency has failed to obtain authorization or to file a report prescribed in Article 8 (4) or 9 (3), or has filed a fraudulent report;
6. Where the agency has conducted a transaction in violation of Article 9 (2) or has not complied with an order to deposit a guaranty bond under paragraph (4) of the same Article;
7. Where the agency has violated its obligation of confirmation prescribed in Article 10;
8. Where the agency has violated a supervisory order prescribed in Article 11 (1) or restrictions on business prescribed in paragraph (2) of the same Article;
9. Where the agency has failed to file a report or to submit data or information prescribed in Article 20 (1) or (2), or has filed a fraudulent report, or submitted fraudulent data or information;
10. Where the agency has failed to comply with the inspection prescribed in Article 20 (3) or (6) or has refused, obstructed or evaded such inspection;
11. Where the agency has refused to submit data prescribed in Article 20 (4) or (6) or has submitted fraudulent data;
12. Where the agency has not complied with an order of correction under Article 20 (5) or (6);
13. Where the agency has failed to notify or provide information in violation of an order of the Minister of Strategy and Finance under Article 21, or has fraudulently notified or provided information;
14. Where the agency has failed to make a statement, application or report, and has failed to make notification and presentation of material by means of electronic document in violation of an order of the Minister of Strategy and Finance under Article 24 (2).
(2) Where any foreign exchange agency has violated paragraph (1) 4 through 9 or 12 by mistake or negligence, the Minister of Strategy and Finance may issue a warning to such agency.
(3) The Minister of Strategy and Finance shall, when he/she intends to revoke any registration or authorization pursuant to paragraph (1), hold a hearing.
(4) Detailed standards for dispositions under paragraph (1) shall be prescribed by Presidential Decree.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 12-2 (Penalty Surcharges)(1) When the Minister of Strategy and Finance restricts or suspends all or part of the business of a person who has committed a violation falling under any of the subparagraphs of Article 12 (1), he/she may impose a penalty surcharge within the extent of the interest gained from the violation.
(2) When a penalty surcharge is imposed as prescribed in paragraph (1), matters in the following subparagraphs shall be considered according to the standards prescribed by Presidential Decree: 1. Details and degree of violation; 2. Period and frequency of violation; 3. Scale of interest gained from violation.
(3) Imposition of penalty surcharges, extension of deadline for the payment of penalty surcharges, payments in installments, guarantees, and other matters necessary for the collection of penalty surcharges shall be prescribed by Presidential Decree.
(4) Where a person who is obliged to pay a penalty surcharge fails to pay on time, the Minister of Strategy and Finance may collect it pursuant to the precedents of disposition of national taxes in arrears.
[This Article Is Newly Inserted by Act No. 9351, Jan. 30, 2009]
CHAPTER Ⅲ FOREIGN EXCHANGE EQUALIZATION FUND
Article 13 (Foreign Exchange Equalization Fund)(1) In order to facilitate foreign exchange transactions, a foreign exchange equalization fund shall be established as a fund under Article 5 of the State Finance Act.
(2) The foreign exchange equalization fund shall be provided with the financial resources listed in the following subparagraphs:
1. Contributions and prereceipts from the Government;
2. Money raised by issuing foreign exchange equalization fund bonds;
3. Prereceipts or temporary loans from any foreign government, any foreign central bank, or other residents or non-residents;
4. Prereceipts provided for in Article 6 (1) 2 and (2);
5. Other funds necessary to facilitate foreign exchange transactions as prescribed by Presidential Decree.
(3) The foreign exchange equalization fund shall be operated by the methods listed in the following subparagraphs:
1. Purchase and sale of foreign exchange;
2. Deposit in or lending to the Bank of Korea, any foreign government, any foreign central bank, or domestic or foreign financial institution;
3. Payment temporarily made on behalf of the State before payments are made with reserve funds or revised supplementary budgets for the purpose of the redemption of foreign currency debts of a foreign exchange agency guaranteed by the State;
4. Other methods deemed necessary to facilitate foreign exchange transactions and which are prescribed by Presidential Decree.
(4) If debts are paid by the foreign exchange equalization fund on behalf of the State pursuant to paragraph (3) 3, the Government shall take measures to replenish for such payment.
(5) The creation and operation of the foreign exchange equalization fund as provided for in paragraphs (2) and (3), may be made with either domestic or foreign means of payment.
(6) The foreign exchange equalization fund shall be operated and managed by the Minister of Strategy and Finance.
(7) The Minister of Strategy and Finance may issue foreign exchange equalization fund bonds.
(8) All matters concerning the operation and management of the foreign exchange equalization fund, the amount of interest to be paid for prereceipts, and the issuance of foreign exchange equalization fund bonds shall be prescribed by Presidential Decree.
(9) The Minister of Strategy and Finance may, pursuant to Presidential Decree, issue a certificate of deposit for the funds deposited in the foreign exchange equalization fund under paragraph (2). In such cases, the Minister of Strategy and Finance may determine the purpose for which such a certificate of deposit may be used.
(10) Where foreign exchange equalization fund bonds are issued as prescribed in paragraph (2) 2, Article 4 of the State Bond Act shall not be applicable.
(11) Where the extent of change in the amount of issuance of foreign exchange equalization fund bonds denominated in foreign currency exceeds 2/100 of the amount of issuance of foreign exchange equalization fund bonds denominated in foreign currency according to the management plan of the foreign exchange equalization fund for the fiscal year concerned, the Minister of Strategy and Finance shall submit details of such change to the competent Standing Committee and the Special Committee on Budget and Accounts of the National Assembly. In such cases, such details of change shall contain the detail of issuance and redemption of foreign exchange equalization fund bonds, and the reasons for the change.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 14 (Redemption of Principal and Interest of Foreign Exchange Equalization Fund Bonds)(1) The principal and interest accruing from the issuance of foreign exchange equalization fund bonds may be redeemed with the net surplus budget of the general accounts in accordance with the procedures prescribed in Article 90 (6) of the State Finance Act.
(2) The amount redeemable with the net surplus budget of the general accounts under paragraph (1) shall be an amount calculated by adding or subtracting any profit and loss caused by the operation of the foreign exchange equalization fund, other than the interest accruing from foreign exchange equalization fund bonds, to or from such interest.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
CHAPTER Ⅳ PAYMENTS AND TRANSACTIONS
Article 15 (Procedures for Payment)(1) The Minister of Strategy and Finance may prescribe matters necessary for the payments or receipts to which this Act applies, such as procedures for money exchange, remittance and withdrawal of property.
(2) Where it is deemed to fall under any of the following subparagraphs, the Minister of Strategy and Finance may require residents and nonresidents who intend to make payment from Korea to a foreign country, or residents who intend to make payment to non-residents or to receive payment from non-residents, obtain permission as prescribed by Presidential Decree when they pay or receive as such:
1. Where it is inevitable for the faithful fulfillment of treaties concluded by the Republic of Korea, and of generally recognized international laws and regulations;
2. Where it is necessary for especially contributing to international endeavor for the maintenance of international peace and security.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 16 (Reporting on Methods of Payment or Receipt)
Where a resident falls under any of the following subparagraphs in settling any claim or liability arising from transactions or acts between residents, between a resident and a non-resident or between non-residents (excluding cases where a person who has made a report under Article 18 pays or receives money in conformity with the method reported), he/she shall report in advance on the method of such payment or receipt to the Minister of Strategy and Finance as prescribed by Presidential Decree. Provided, that where the amount is negligible or it is an ordinary transaction which is prescribed by Presidential Decree, an ex post facto report may be made or a report may not be made:
1. Where he/she makes any settlement through extinguishment of a claim or liability by balancing or offsetting such claim or liability;
2. Where he/she makes any settlement after the deadline set by the Minister of Strategy and Finance;
3. Where he/she pays or receives money to or from a person who is not a party to the transaction in question, or a resident who is not a party to the transaction in question pays or receives money to or from a non-resident who is a party thereto; or
4. Where he/she pays or receives money not through a foreign exchange agency.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 17 (Reporting on Expatriation or Bringing-in of Means of Payment)
In cases where filing a report is deemed necessary by Presidential Decree to ensure the effectiveness of this Act, the Minister of Strategy and Finance may require a resident or non-resident who intends to expatriate or bring in means of payment or securities to file a report as prescribed by Presidential Decree when he/she expatriates or brings in such means of payment or securities.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 18 (Reporting on Capital Transactions)(1) Any person who intends to perform capital transactions shall submit a report on such capital transactions to the Minister of Strategy and Finance pursuant to Presidential Decree. Provided, that where it is a trivial or standardized capital transaction prescribed by Presidential Decree, an ex post report may be made or no report may be made.
(2) The report under paragraph (1) and the acceptance of report under paragraph (3) shall be completed before the procedures under Article 15 (1).
(3) From among the matters to be reported under paragraph (1), with respect to overseas direct investment, acquisition of overseas real estate or any right thereto by a resident, the Minister of Strategy and Finance may examine its appropriateness, such as whether or not the investor is qualified and the amount of investment is appropriate, and determine whether or not to accept such report.
(4) With respect to each report prescribed in paragraph (3), the Minister of Strategy and Finance shall make a determination of matters falling under any of the following subparagraphs and notify the person who has submitted the report of such determination within the period of handling a report prescribed by Presidential Decree:
1. Acceptance of reports;
2. Refusal of the acceptance of report; and3. Recommendation of any modification of the details of transactions.
(5) Where the Minister of Strategy and Finance made a determination under paragraph (4) 2, the resident who has submitted the relevant report shall not conduct the transaction in question.
(6) Where a person, who has received a notice of recommendation under paragraph (4) 3, accepts the recommendation, he/she may conduct the transaction in question as he/she has accepted it, and shall not conduct the transaction in question in cases where he/she has not accepted it.
(7) If no notice is made by the Minister of Strategy and Finance within the period of handling a report under paragraph (4), the report in question shall be deemed to have been accepted on the date the period expires.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
CHAPTER Ⅴ SUPPLEMENTARY PROVISIONS
Article 19 (Warnings and Suspension of Transactions)(1) In cases where a person who is subject to the application of this Act falls under any of the following subparagraphs, the Minister of Strategy and Finance may issue him/her a warning:
1. Where the person has conducted a transaction or an act after the deadline set in the terms of permission or report in cases where he/she was permitted or he/she filed a report under the provisions of Articles 15 through 18;
2. Where the person has conducted a transaction or an act in violation of the obligation to conform with the procedures, or of the obligation regarding permission or report (hereinafter referred to as the “report, etc.”) under the provisions of Articles 15 through 18, which is a transaction or an act with an amount not more than the amount (which may be set differently according to the type of transaction or act) prescribed by Presidential Decree.
(2) In cases where a transaction or an act of a person who is subject to the application of this Act has violated the obligation to report under the provisions of Articles 15 through 18 on two or more occasions in the last two years, the Minister of Strategy and Finance may restrict or suspend any transaction or act in foreign exchange made by such person within the extent of one year, or revoke his/her permission.
(3) In cases where the Minister of Strategy and Finance takes administrative measures under paragraph (2), he/she shall conduct a hearing.
(4) All matters necessary for administrative measures in paragraph (1) or (2) shall be prescribed by Presidential Decree.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 20 (Reporting and Inspections)(1) The Minister of Strategy and Finance may have the transaction parties or interested persons make a necessary report to secure the effectiveness of this Act and may have the residents holding claims against nonresidents make a report on the present condition of such claim in possession as prescribed by Presidential Decree.
(2) The Minister of Strategy and Finance may request the heads of administrative agencies concerned to whom this Act is applicable, such as the Bank of Korea, the Financial Supervisory Service, and a foreign exchange agency, to submit pertinent data or information in cases where it is deemed necessary for the enforcement of this Act. In such cases, the heads of administrative agencies concerned shall comply with such request unless there is a special reason to the contrary.
(3) The Minister of Strategy and Finance may have public officials under his/her control inspect businesses of a foreign exchange agency and the parties or other persons concerned in connection with transactions to which this Act applies, if it is deemed necessary for the enforcement of this Act.
(4) The Minister of Strategy and Finance may require a foreign exchange agency and the parties or other persons concerned to submit data related to their business and assets in connection with transactions to which this Act applies, if it is deemed necessary for the efficient inspection.
(5) If an illegal act is uncovered as a result of inspection under paragraph (3), the Minister of Strategy and Finance may order such illegal act be rectified, or may take other necessary measures.
(6) The Minister of Strategy and Finance may, pursuant to Presidential Decree, entrust the Governor of the Bank of Korea, the Governor of the Financial Supervisory Service or other persons prescribed by Presidential Decree with such business provided for in paragraphs (3) through (5). Any staff member under their control may also conduct such business, if it deemed necessary.
(7) Any person who performs inspections under paragraphs (3) through (6), shall carry a certificate indicating his/her competence and show it to persons concerned.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 21 (Notification to Commissioner of National Tax Service)(1) Notwithstanding other Acts, the Minister of Strategy and Finance may directly notify the Commissioner of the National Tax Service, the Commissioner of the Korea Customs Service, the Governor of the Financial Supervisory Service or the President of the Export-Import Bank of Korea of the data on transaction, payment, receipt, and movement of funds to which this Act applies, or may have the Governor of the Bank of Korea, heads of foreign exchange agencies, heads of customs houses or other persons prescribed by Presidential Decree notify the Commissioner of the National Tax Service, the Commissioner of the Korea Customs Service, the Governor of the Financial Supervisory Service or the President of the Export-Import Bank of Korea thereof.
(2) The Minister of Strategy and Finance may have persons prescribed by Presidential Decree provide data on the transaction, payment, receipt, and movement of funds to which this Act applies to credit information concentration agencies under Article 17 of the Use and Protection of Credit Information.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 22 (Confidentiality of Foreign Exchange Transactions)
No person engaged in a business related to the permission, authorization, registration, report, notification, brokerage, relay, concentration, and interchange prescribed in this Act, shall use any information which he/she has obtained in connection with such business for purposes other than those prescribed in this Act, or divulge such information to other persons, except as otherwise prescribed in Article 4 of the Real Name Financial Transactions and Guarantee of Secrecy Act.
[This Article Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 23 (Delegation and Entrustment of Authority)(1) The Minister of Strategy and Finance may, pursuant to Presidential Decree, delegate or entrust part of his/her authority under this Act to the Financial Services Commission, the Securities Futures Commission, the heads of the administrative agencies concerned, the Governor of the Bank of Korea, the Governor of the Financial Supervisory Service, the heads of foreign exchange agencies or other persons prescribed by Presidential Decree.
(2) Any person in charge of the business prescribed in paragraph (1) and Article 20 (6), and an officer or staff member under his/her control (excluding a public official, and a person who is deemed to be a public official by other Acts), shall be deemed a public official in the application of the penal provisions under the Criminal Act or other acts.
[This Article Wholly Is Amended by Act No. 9351, Jan. 30, 2009]
Article 24 (Permission by Means of Electronic Documents)(1) The Minister of Strategy and Finance may, pursuant to Presidential Decree, grant such permission, authorization, or notification under this Act by means of electronic documents (including presentation of data by means of computer networks or electronic data processing system; hereafter the same shall apply in this Article).
(2) The Minister of Strategy and Finance may order a foreign exchange agency, other transaction parties or interested parties to whom this Act applies, to make a report or an application, to provide information, or to make a notification and presentation of relevant data by means of electronic documents, if it is deemed necessary for ensuring the effectiveness of this Act.
[This Article Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 25 (Management of Business)(1) The Minister of Strategy and Finance may determine procedures for the management of business, payments or receipts, and other necessary matters, if it is deemed necessary for ensuring the efficient operation and effectiveness of this Act.
(2) The Minister of Strategy and Finance may designate one or more juristic person or organization which is related to or specializes in the foreign exchange business, as an institution to relay, concentrate, interchange or analyze data on foreign exchange transactions, payments or receipts.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 26 (Relations with Other Acts)
Articles 20, 23, 24 and 25 (2) shall apply in preference over Article 4 of the Act on Real Name Financial Transactions and Guarantee of Secrecy.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
CHAPTER Ⅵ PENAL PROVISIONS
Article 27 (Penal Provisions)(1) Any person who falls under any of the following subparagraphs shall be punished by imprisonment for not more than three years or by a fine not exceeding Three Hundred Million Won. Provided, that if the triple value of the object related to the violation exceeds Three Hundred Million Won, the fine shall be not more than the triple value of such object:
1. Any person who has conducted transactions out of line with the basic exchange rate in violation of Article 5 (2);
2. Any person who has paid or received money, or has made transactions in violation of measures prescribed in Article 6 (1) 1;
3. Any person who has violated the obligation of safekeeping, deposit or sale according to measures prescribed in Article 6 (1) 2;
4. Any person who has conducted capital transactions without obtaining permission according to the measures prescribed in the main sentence of Article 6 (2) or after obtaining permission by fraudulent or other illegal means, or who has violated the obligation of deposit;
5. Any person who has conducted foreign exchange business without making a registration prescribed in the main sentence of Article 8 (1) or after making such registration by fraudulent or other illegal means (including any person who has conducted foreign exchange business after making a report of closure prescribed in Article 8 (4) fraudulently and a person who has conducted foreign exchange businesses in violation of the disposition taken pursuant to the provisions of Article 12 (1));
6. Any person who has conducted money exchange business without making the registration prescribed in Article 8 (3) or after making such registration by fraudulent or other illegal means (including any person who has conducted money change business after making a report of closure prescribed in Article 8 (4) fraudulently and a person who has conducted money exchange business in violation of the disposition taken pursuant to the provisions of Article 12 (1));
7. Any person who has conducted foreign exchange brokerage business without obtaining authorization prescribed in the former part of Article 9 (1), or Article 9 (3) and (5), or after obtaining such authorization by fraudulent or other illegal means (including any person who has conducted foreign exchange brokerage business after making a report prescribed in Article 9 (3) fraudulently and a person who has conducted foreign exchange brokerage business in violation of the disposition taken pursuant to Article 12 (1));
8. Any person who has paid or received money without obtaining permission prescribed in Article 15 (2) or after obtaining such permission by fraudulent or other illegal means.
(2) Imprisonment and fines prescribed in paragraph (1) may be imposed concurrently.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 28 (Penal Provisions)(1) Any person who has used information other than those prescribed in this Act, or has divulged such information to another person in violation of Article 22 shall be punished by imprisonment of two years or less, or by a fine of Two Hundred Million Won or less.
(2) Imprisonment and fines prescribed in paragraph (1) may be imposed concurrently.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 29 (Penal Provisions)(1) Any person who falls under any of the following subparagraphs shall be punished by imprisonment for not more than one year or by a fine not exceeding One Hundred Million Won. Provided, that if the triple value of the object related to the violation exceeds One Hundred Million Won, the fine shall be not more than the triple value of such object:
1. Any person who has failed to repatriate claims back to Korea in violation of the obligation to retrieve under Article 7;
2. Any person who has not filed a report of change under Article 8 (4) or has conducted business of foreign exchange or money exchange after filing a report in a fraudulent manner;
3. Any person who has signed a contract without obtaining authorization under Article 8 (5) or after obtaining authorization by false or unjust means;
4. Any person who has conducted foreign exchange brokerage without filing a report of change under the latter part of Article 9 (1) or after filing a report of change in a fraudulent manner, or a person who has made a transaction in violation of paragraph (2) of the same Article;
5. Any person who has not confirmed in violation of Article 10;
6. Any person whose amount of violation of duty to report under Article 16 or 18 has exceeded the amount prescribed by Presidential Decree within the extent of not less than Five Hundred Million Won;
7. Any person who has expatriated or brought in means of payment or securities without filing a report under Article 17 or after filing a report fraudulently;
8. Any person who has conducted a transaction or an act in violation of the suspension or restriction on transaction or act under Article 19 (2);
9. Any person who had been issued a disposition of fine for negligence under Article 32 (1) in the last two years wherein he has re-offended against the same paragraph.
(2) Any attempt to commit a violation prescribed in paragraph (1) 7 shall be punished.
(3) Imprisonment and fines prescribed in paragraph (1) may be imposed concurrently.
[This Article Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 30 (Confiscation and Collection in Lieu of Confiscation)
Foreign exchange and other securities, precious metals, real estate and domestic means of payment acquired by a person who falls under any of the subparagraphs of Article 27 (1) or 29 (1) through such acts as prescribed therein shall be confiscated, and where it is impossible to confiscate them, the value thereof shall be collected in lieu of such confiscation.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 31 (Joint Penal Provisions)
If the representative of a juristic person, or an agent, employee or other workers of a juristic person or individual commits a violation falling under any of Articles 27 through 29 in connection with the assets or business of the juristic person or individual, not only shall such violators be punished but the juristic person or individual shall also be punished by a fine prescribed in the relevant Article. Provided, that if the juristic person or individual has not been negligent of due attention and supervision regarding the relevant assets or business in order to prevent such violation, this shall not apply.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
Article 32 (Fines for Negligence)(1) Any person who falls under any of the following subparagraphs shall be punished by a fine for negligence not exceeding Fifty Million Won. Provided, that if he/she falls under Article 29, this shall not apply:
1. Any person who has paid, received or moved funds in violation of the procedures for payment under Article 15 (1);
2. Any person who has paid or received funds without filing a report under Article 16 or after filing a false report;
3. Any person who has transacted capital without filing a report under Article 18 (1) or has filed a false report;
4. Any person who has transacted capital falling under such report even if it violates Article 18 (5);
5. Any person who has transacted capital differently from the details of recommendation under Article 18 (4) 3 in violation of paragraph (6) of the same Article.
(2) Any person who falls under any of the following subparagraphs shall be punished by a fine for negligence not exceeding Ten Million Won:
1. Any person who has failed to submit a report of closure prescribed in Article 8 (4);
2. Any person who has failed to file a report prescribed in Article 9 (3);
3. Any person who has failed to file an ex post facto report or has replaced a report in violation of Article 16 or 18, or has filed an ex post facto report in a fraudulent manner;
4. Any person who has committed a violation subject to warning within two years from the date when he/she received a warning under Article 19 (1);
5. Any person who has failed to submit a report or data in violation of Article 20 (1) or (2), or has submitted a false report or data;
6. Any person who has failed to comply with an inspection prescribed in Article 20 (3) or (6), or has refused, obstructed or evaded such inspection;
7. Any person who has failed to present data prescribed in Article 20 (4) or (6), or has presented false data;
8. Any person who has failed to comply with an order for rectification prescribed in Article 20 (5) or (6);
9. Any person who has failed to notify or supply in violation of an order of the Minister of Strategy and Finance prescribed in Article 21, or has notified or supplied in a fraudulent manner;
10. Any person who has failed to file a return, apply, report, notify data or submit data by means of electronic documents in violation of any order of the Minister of Strategy and Finance prescribed in Article 24 (2).
(3) Fines for negligence under paragraphs (1) and (2) shall be imposed and collected by the Minister of Strategy and Finance as prescribed by Presidential Decree.
[This Article Is Wholly Amended by Act No. 9351, Jan. 30, 2009]
ADDENDA <Act No. 9374, Jan. 30, 2009>
This Act shall take effect one year and six months after the date of its promulgation. (Proviso Omitted.)

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