GATS/SC/48/Suppl.3/Rev.1 WORLD TRADE
ORGANIZATION18 November 1999
(99-5017)
Trade in Services
REPUBLIC OF KOREA
Schedule of Specific Commitments
Supplement 3
Revision
(This is authentic in English only)
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This text replaces document GATS/SC/48/Suppl.3 on financial services.GATS/SC/48/ Suppl.3/Rev.1
Page 2
REPUBLIC OF KOREA –  REVISED SCHEDULE OF SPECIFIC COMMITMENTS IN FINANCIAL SERVICES
Modes of supply:        (1)    Cross-border supply     (2)    Co nsumption abroad       (3)    Commercial presence      (4)    P resence of natural persons
Sector or subsector Limitations on market access Limit ations on national treatm ent Additional commitments
7. FINANCIAL SERVICES1
As described in paragraph 2(a) of the Annex on Financial Services, Korea shall not be prevented from taking prudential measures  including requirements related to
parent companies, the minimum capital requirement, or minimum operating funds requirement.
In those cases where the establishment of commercial presence by foreign companies in the financial sector is allowed, approval  by the relevant authorities is required
in accordance with related laws and regulations unless otherwise specified in any of subsectors below.
All financial services covered by
this schedule including Insurance(1),(2),(3) Korea undertakes a standstill
commitment for limitations on marketaccess, where specific commitments areundertaken, in financial services listed inthis schedule as of 31 August 1997.
Cross-border supply of financial services
and supply through consumer movementmay not be settled in Korean currency.After the establishment of a commercial
presence, financial institutions may handle
only transactions, denominated and settledin Korean currency, with residents.Approval is required for transactionsdenominated or settled in foreign currencyor transactions with non-residents.(1),(2),(3) Korea undertakes a
standstill commitment forlimitations on national treatment,where specific commitments areundertaken, in financial services
listed in this schedule as of
31 August 1997.
The management and operation of assetsof a financial institution are restricted. Afinancial institution may not ownnon-business real estate.
                                                     
1 Subsectors in financial services are classified based on the unit of business establishment.  A financial institution must be established for only one business defined in
subsectors (1) through (14), and thus cannot engage in business activities in other subsectors.GATS/SC/48/ Suppl.3/Rev.1
Page 3Modes of supply:        (1)    Cross-border supply     (2)    Co nsumption abroad       (3)    Commercial presence      (4)    P resence of natural persons
Sector or subsector Limitations on market access Limit ations on national treatm ent Additional commitments
Assets owned by branches must be kept
within the territory of Korea.  The capitalof the head office is not recognized as thebasis for determining the extent of fundingand lending activities of branches.
- Demand deposit interest rates are 
regulated.
Some new financial products, includingderivatives, are subject to approval.
- With interest rate and foreign exchange
liberalization, such products will be
more widely allowed, subject torelevant laws and regulations.
BANKING AND OTHERFINANCIAL SERVICES
(1) BANKING BUSINESSES
Following banking services:
(i) Deposit and related services2
[81115*, 81116*]
(ii) Loan and related services3
[81131*, 81132*](1) Unbound
(2) Unbound
(3) <Horizontal limitations on banking
services>(1) Unbound
(2) Unbound
(3) None
(iii) Payment and money
transmission services
including credit card services[81339*]Commercial presence is permitted only to
foreign banks. A person
4 may own up to
4 per cent of the stocks of a bank and15 per cent of the stocks of a provincialbank without the special authorization ofthe relevant authorities.
                                                     
2 Activities in which banks obtain funds from the public by receiving deposits or issuing transferable instruments or other secu rities.
3 Activities, such as loans and bill discounts, in which banks provide funds to the public in order to receive interest.
4 The definition of a "person" is in accordance with the relevant provision of the Presidential Decree of the Bank Act.GATS/SC/48/ Suppl.3/Rev.1
Page 4Modes of supply:        (1)    Cross-border supply     (2)    Co nsumption abroad       (3)    Commercial presence      (4)    P resence of natural persons
Sector or subsector Limitations on market access Limit ations on national treatm ent Additional commitments
(iv) Settlement and clearing
services5 [81339*]
(v) Foreign exchange services6
[81333*]Foreign exchange position is regulated.
The oversold position of spot foreignexchange is US$ 5 million, or 3 per centof capital (whichever is greatest).
(vi) Services auxiliary to
banking:<Limitations on Deposit and Related
Services>
- Sale of commercial bills7
[81339*]
- Sale of trade bills8
[81339*]
- Mutual instalment deposit
[81132*]
- Payment guarantees and
commitments [81339*]The maturity of CDs shall be more than
30 days.
Deposits for specific purposes, such as
housing subscription deposits, may be
handled only by designated institutions.
(vii) Trust services9 [81192*,
81193]<Limitations on loan and related services>
Foreign currency loans are restricted with
respect to ceiling and uses.
Mandatory lending to small-andmedium-sized companies are required.
<Limitations on foreign exchange
services>
                                                     
5 Settlement and clearing services on notes, bills and cheques by banks according to the Articles of KFTCI (Korea Financial Tele communications and Clearings
Institute).
6 Purchase, sale, issuance, remittance and collection of foreign exchange.
7 A commercial bill is defined as a bill accompanying commercial transactions.
8 A trade bill is defined as a bill issued by expor ters based on L/C before shipping export cargo.
9 Activities where the trustee, having been delegated the authority, manages assets of the truster for the beneficiary.GATS/SC/48/ Suppl.3/Rev.1
Page 5Modes of supply:        (1)    Cross-border supply     (2)    Co nsumption abroad       (3)    Commercial presence      (4)    P resence of natural persons
Sector or subsector Limitations on market access Limit ations on national treatm ent Additional commitments
Underlying transaction and documentation
requirements apply to foreign exchangetransactions.
Underlying documentation requirements
are exempt in the case of forward
transactions.
<Limitations on trust services>
Real estate trust business is prohibited.To handle a trust business, approval (two
types) is required from the Ministry of
Finance and Economy both for engagingin businesses other than the main bankingbusinesses and for engaging in the trustbusiness.
(4) Unbound except as indicated in ALL
SECTORS.(4) Unbound except as indicated in
ALL SECTORS.
(2) CREDIT CARD
BUSINESSES
Credit card services [81133] (1) Unbound
(2) Unbound(1) Unbound
(2) Unbound
(3) Commercial presence is permitted only to
foreign suppliers that deal with credit card
services.
Lending for credit card members through
such means as card loans is subject tolimitations.
Maximum limits are applied to various
rates such as fees and interest rates.
(4) Unbound except as indicated in ALL
SECTORS.(3) None
(4) Unbound except as indicated in
ALL SECTORS.GATS/SC/48/ Suppl.3/Rev.1
Page 6Modes of supply:        (1)    Cross-border supply     (2)    Co nsumption abroad       (3)    Commercial presence      (4)    P resence of natural persons
Sector or subsector Limitations on market access Limit ations on national treatm ent Additional commitments
(3) FINANCIAL LEASING
BUSINESSES
Financial leasing services
[81120](1) Unbound
(2) Unbound
(3) None(4) Unbound, except as indicated in ALL
SECTORS.(1) Unbound
(2) Unbound
(3) None(4) Unbound, except as indicated in
ALL SECTORS.
Top executive personnel of each
establishment must reside in Korea.
(4) SECURITIES BUSINESSES
Following services related to
securities
(i) Dealing [81199*](ii) Broking [81321*]
(iii) Underwriting [81322*]
(iv) Securities
savings[81119*](1) Unbound
(2) Unbound(3) Commercial presence is permitted only to
foreign securities companies.
Representative offices may be established
by pre-notification.(1) Unbound
(2) Unbound(3) NoneGATS/SC/48/ Suppl.3/Rev.1
Page 7Modes of supply:        (1)    Cross-border supply     (2)    Co nsumption abroad       (3)    Commercial presence      (4)    P resence of natural persons
Sector or subsector Limitations on market access Limit ations on national treatm ent Additional commitments
(v) Credit granting
[81139*]In joint ventures, which must be
established as a Chusik Hoesa (a jointstock corporation), foreign equityparticipation must be at least 40 per centbut less than 50 per cent.
Broking for foreigners is limited to
securities allowed for foreign investmentas specified in ALL SECTORS in thisschedule.
Ceilings and operating conditions are
applied to the services listed under (iv)and (v).
(4) Unbound except as indicated in ALL
SECTORS.(4) Unbound except as indicated in
ALL SECTORS.
Top executive personnel of each
establishment must reside in Korea.
(5) SECURITIES
INVESTMENT TRUSTBUSINESSES
Securities investment trust
services [81193*](1) Unbound
(2) Unbound
(3) Commercial presence is permitted only to
foreign securities investment trustcompanies. Representative offices may beestablished by pre-notification.
(4) Unbound except as indicated in ALL
SECTORS.(1) Unbound
(2) Unbound
(3) None
(4) Unbound except as indicated in
ALL SECTORS.
Top executive personnel of each
establishment must reside in Korea.GATS/SC/48/ Suppl.3/Rev.1
Page 8Modes of supply:        (1)    Cross-border supply     (2)    Co nsumption abroad       (3)    Commercial presence      (4)    P resence of natural persons
Sector or subsector Limitations on market access Limit ations on national treatm ent Additional commitments
(6) INVESTMENT ADVISORY
BUSINESSES
Investment advisory services
[81332](1) Unbound
(2) Unbound
(3) Commercial presence is permitted only to
foreign investment advisory companies.Representative offices may be establishedby pre-notification.
(4) Unbound except as indicated in ALL
SECTORS.(1) Unbound
(2) Unbound
(3) None
(4) Unbound except as indicated in
ALL SECTORS.
Top executive personnel of each
establishment must reside in Korea.
(7) CREDIT RATING
BUSINESSES
Credit rating services
[81339*](1) Unbound
(2) Unbound
(3) Credit rating companies should be
designated by the relevant authorities toassess the credit rating of companieswhich may wish to issue non-guaranteedcorporate bonds and commercial papers.
(4) Unbound except as indicated in ALL
SECTORS.(1) Unbound
(2) Unbound
(3) None
(4) Unbound except as indicated in
ALL SECTORS.GATS/SC/48/ Suppl.3/Rev.1
Page 9Modes of supply:        (1)    Cross-border supply     (2)    Co nsumption abroad       (3)    Commercial presence      (4)    P resence of natural persons
Sector or subsector Limitations on market access Limit ations on national treatm ent Additional commitments
(8) CREDIT INFORMATION
BUSINESSES
Credit Information Services
[81339*](1) Unbound
(2) Unbound
(3) Unbound except for equity participation of
less than 50 percent in existing financialinformation companies.
(4) Unbound except as indicated in ALL
SECTORS.(1) Unbound
(2) Unbound
(3) None
(4) Unbound except as indicated in ALL
SECTORS.
INSURANCE ANDINSURANCE-RELATEDSERVICES
(9) LIFE INSURANCE
BUSINESSES
Life insurance services
[81211](1) Unbound
(2) Unbound(1) Unbound
(2) Unbound
(3) Commercial presence is permitted only to
foreign life insurance companies. Theestablishment of joint ventures withKorean life insurance companies are notallowed.(3) None
The recruitment and employment of
insurance professionals, including salespersonnel, are restricted.
(4) Unbound except as indicated in ALL
SECTORS.(4) Unbound except as indicated in
ALL SECTORS.
Top executive personnel of each
establishment must reside in Korea.GATS/SC/48/ Suppl.3/Rev.1
Page 10Modes of supply:        (1)    Cross-border supply     (2)    Co nsumption abroad       (3)    Commercial presence      (4)    P resence of natural persons
Sector or subsector Limitations on market access Limit ations on national treatm ent Additional commitments
(10) NON-LIFE INSURANCE
BUSINESSES
Non-life insurance services
[8129](1) Unbound except for marine export/import
cargo and aviation insurance.
(2) Unbound
(3) Commercial presence is permitted only to
foreign non-life insurance companies. Theestablishment of joint ventures with
Korean non-life insurance companies are
not allowed.(1) Unbound
(2) Unbound
(3) None
The recruitment and employment of
insurance professionals, including salespersonnel, are restricted.
(4) Unbound except as indicated in ALL
SECTORS.(4) Unbound except as indicated in
ALL SECTORS.
Top executive personnel of each
establishment must reside in Korea.
(11) REINSURANCE AND
RETROCESSIONBUSINESSES
Reinsurance and retrocession
services [81299*](1) None
(2) None(1) None
(2) NoneGATS/SC/48/ Suppl.3/Rev.1
Page 11Modes of supply:        (1)    Cross-border supply     (2)    Co nsumption abroad       (3)    Commercial presence      (4)    P resence of natural persons
Sector or subsector Limitations on market access Limit ations on national treatm ent Additional commitments
(3) Direct insurance companies may
participate in the supply of servicessubject to the restriction in section (10)regarding non-life insurance services.
(4) Unbound except as indicated in ALL
SECTORS.(3) None
(4) Unbound except as indicated in
ALL SECTORS
Top executive personnel of each
establishment must reside in Korea
(12) INSURANCE BROKING
AND AGENCYBUSINESSES
Insurance broking and
agency services [81401*](1) Unbound
(2) Unbound(3) None for insurance agency services.
Commercial presence is permitted only to
foreign insurance brokerage companies.
(4) Unbound except as indicated in ALL
SECTORS.(1) Unbound
(2) Unbound(3) None
(4) Unbound except as indicated in
ALL SECTORS.
Top executive personnel of each
establishment must reside in Korea.GATS/SC/48/ Suppl.3/Rev.1
Page 12Modes of supply:        (1)    Cross-border supply     (2)    Co nsumption abroad       (3)    Commercial presence      (4)    P resence of natural persons
Sector or subsector Limitations on market access Limit ations on national treatm ent Additional commitments
(13) CLAIM SETTLEMENT
BUSINESSES
Claim settlement services
[81403*](1) Unbound
(2) Unbound
(3) Commercial presence is permitted only to
foreign claim settlement companies.
(4) Unbound except as indicated in ALL
SECTORS.(1) None
(2) None
(3) None
(4) Unbound except as indicated in
ALL SECTORS.
Top executive personnel of each
establishment must reside in Korea.
(14) ACTUARIAL
BUSINESSES
Actuarial services [81404] (1) Unbound
(2) Unbound
(3) Commercial presence is permitted only to
foreign actuarial companies.
(4) Unbound except as indicated in ALL
SECTORS.(1) None
(2) None(3) None
(4) Unbound except as indicated in
ALL SECTORS.
Top executive personnel of each
establishment must reside in Korea.
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