List

Payments and Transactions

The Foreign Exchange Transactions Act stipulates the procedures required for any foreign exchange transaction, in each of three areas: "transaction type", "payment and receipt", and "method of payment and receipt". Foreign exchange transactions are regulated largely in terms of the area of "payment and receipt". Nevertheless, the act also stipulates separate procedures related to "transaction type" for the cases of capital transactions which accompany movements of large amounts of funds.
So as to avoid possible overlapping of procedures for the same transactions, however, separate notification or permission is not required when a transaction has already been certified as an allowed one in terms of its "transaction type".

Transaction Type

Restrictions like the permission requirement for payments and receipts for current transactions can not be adopted unless they are unavoidable in order to faithfully fulfill international treaties and laws or contribute to international efforts to maintain international peace and security. Therefore, general current transactions do not need to receive any permission. However, several types of current transactions do require notification or confirmation for the purpose of monitoring.

The regulatory system for capital transactions is a sort of negative system, in which a person is principally free to execute any capital transaction after making notification to the authority, and certain transactions without any notification, except for the cases of transactions on the negative list specified in the Act or by Presidential Decree. Transactions on the negative list such as loans, guarantees, financial derivatives and overseas portfolio investment require advance permission in certain cases.

The Foreign Exchange Transactions Act stipulates the procedures required for any foreign exchange transaction, in each of three areas: "transaction type", "payment and receipt", and "method of payment and receipt". Foreign exchange transactions are regulated largely in terms of the area of "payment and receipt". Nevertheless, the act also stipulates separate procedures related to "transaction type" for the cases of capital transactions which accompany movements of large amounts of funds.
So as to avoid possible overlapping of procedures for the same transactions, however, separate notification or permission is not required when a transaction has already been certified as an allowed one in terms of its "transaction type".

Payment and Receipt

Payment

Payments for current transactions are freely permitted as long as documents certifying the reason for and amount of payment (evidential documents for payment) are submitted. Only some payments require prior confirmation of or notification to the Bank of Korea.

Payments for capital transactions are also possible when necessary procedures such as prior notification are completed. There are some restrictions on receiving from or making payment to terror related individuals and groups on the list adopted by the UN Security Council Committee (refer to Appendix 3).

Overseas Travel Expenses
Any overseas traveller may export overseas travel expenses by carrying up to US$ 10,000 without notification, over US$ 10,000 with notification to customs. The traveler is also allowed to pay for travel expenses abroad with credit cards. Overseas sojourners and overseas students may pay their overseas travel expenses through any foreign exchange banks.
Overseas Emigration Expenses
There is no limit on the amount of overseas emigration expenses. Expenses must be remitted within three years from the date on which the emigrant receives an overseas emigrant certificate from the Ministry of Foreign Affairs and Trade.
When the accumulated payment per household exceeds US$ 100,000, a certificate of the source of funds issued by the tax office must be submitted to the designated bank.
Donation Payment
Korean residents are allowed to remit abroad without any underlying documentation. If the total amount of payments per person exceeds US$ 10,000 in a year, this must be reported to the Korean National Tax Administration.
Payment by Foreigners or Nonresidents
Any foreigner or nonresident must pay through a designated bank when he or she remits a donation of under US$ 50,000 per year, or remits his or her income earned in Korea.

Receipt

There is no specific restriction. However, any transaction is regarded as a donation unless evidential documentation is submitted.

The Foreign Exchange Transactions Act stipulates the procedures required for any foreign exchange transaction, in each of three areas: "transaction type", "payment and receipt", and "method of payment and receipt". Foreign exchange transactions are regulated largely in terms of the area of "payment and receipt". Nevertheless, the act also stipulates separate procedures related to "transaction type" for the cases of capital transactions which accompany movements of large amounts of funds.
So as to avoid possible overlapping of procedures for the same transactions, however, separate notification or permission is not required when a transaction has already been certified as an allowed one in terms of its "transaction type".

Methods of Payment and Receipt

Most settlement methods are freely permitted without limitation. Only a few specific settlement methods such as netting, payments exceeding the periods prescribed by the MOSF, third party payments, and payments bypassing foreign exchange banks are subject to declaration to the Bank of Korea or, in certain cases, the designated foreign exchange banks. The purpose of implementing this declaration system is to permit the monitoring of foreign exchange flows and the taking of early action to prevent any severe disruption of the domestic foreign exchange market or the balance of payments.

The Foreign Exchange Transactions Act stipulates the procedures required for any foreign exchange transaction, in each of three areas: "transaction type", "payment and receipt", and "method of payment and receipt". Foreign exchange transactions are regulated largely in terms of the area of "payment and receipt". Nevertheless, the act also stipulates separate procedures related to "transaction type" for the cases of capital transactions which accompany movements of large amounts of funds.
So as to avoid possible overlapping of procedures for the same transactions, however, separate notification or permission is not required when a transaction has already been certified as an allowed one in terms of its "transaction type".

Purchases and Sales of Foreign Exchange

Foreign exchange banks must, when they purchase foreign exchange, confirm whether the acquisition of such foreign exchange by the selling customer is subject to notification or other requirements. Nonresidents who intend to sell banks foreign exchange over US$ 20,000 without documentation as to acquisition must make declaration to the Bank of Korea. In principle, banks must report any purchase of foreign exchange over US$ 20,000 per case to the National Tax Administration.
There is no ceiling on how much foreign exchange a foreign exchange bank may sell to a national resident. To a nonresident, a bank may sell up to the amount of foreign exchange the nonresident has sold since his last entrance date, or US$ 10,000 if he has no evidence of sale of foreign exchange. If nonresidents intend to purchase foreign exchange exceeding these limits, they must declare this to the Bank of Korea. Banks must notify the National Tax Administration when they sell foreign exchange in an amount over US$ 10,000 to the same person on the same day.
Money changers may also purchase foreign currency and traveler's check from residents and nonresidents, and may re-exchange to nonresidents. Limits on such deals are, in principle, the same as those on deals with banks.

The Foreign Exchange Transactions Act stipulates the procedures required for any foreign exchange transaction, in each of three areas: "transaction type", "payment and receipt", and "method of payment and receipt". Foreign exchange transactions are regulated largely in terms of the area of "payment and receipt". Nevertheless, the act also stipulates separate procedures related to "transaction type" for the cases of capital transactions which accompany movements of large amounts of funds.
So as to avoid possible overlapping of procedures for the same transactions, however, separate notification or permission is not required when a transaction has already been certified as an allowed one in terms of its "transaction type".

Exports and Imports of Means of Payment

Exports of Means of Payment

Residents may export foreign currency in the amount of US$ 10,000 or less without any restriction. Otherwise, they need the permission of the BOK except in certain cases, for example, when the currency is for travel expenses.
Upon leaving Korea, nonresidents may carry foreign currency in the amount of up to US$ 10,000 or the amount they have previously sold during their stay in Korea. For any additional amount, they need the permission of the BOK.
Exports of domestic currency in excess of the equivalent of US$ 10,000 require declaration to the customs office.

Imports of Means of Payment

Any person who hand-carries the equivalent of more than US$ 10,000 of means of payment into Korea must declare this to the customs office.

The Foreign Exchange Transactions Act stipulates the procedures required for any foreign exchange transaction, in each of three areas: "transaction type", "payment and receipt", and "method of payment and receipt". Foreign exchange transactions are regulated largely in terms of the area of "payment and receipt". Nevertheless, the act also stipulates separate procedures related to "transaction type" for the cases of capital transactions which accompany movements of large amounts of funds.
So as to avoid possible overlapping of procedures for the same transactions, however, separate notification or permission is not required when a transaction has already been certified as an allowed one in terms of its "transaction type".

Introduction to Foreign Exchange Transaction Review

1. Introduction

To minimize any inconveniences that may arise during the process of reporting of foreign exchange transactions, acceptance of reports, permissions, etc. (hereinafter referred to as ‘reporting, etc.’), the Bank of Korea provides the following foreign exchange transaction consulting services:

Information available on BOK website

You can find information about the BOK’s review of foreign exchange transactions by clicking on ‘FX & Int’l Relations‘ at the top of the BOK website (http://www.bok.or.kr/eng), and then ’FX System>Payments and Transactions.‘

Inquiries by email

If you have any questions regarding the reporting, etc. of foreign exchange transactions related to BOK’s jurisdiction, please send your inquiry by email to Foreign Exchange Review Team, International Department, Bank of Korea (bokfxrt@bok.or.kr), and we will reply as promptly and accurately as possible.

Consulting with BOK employees

If you wish to consult with BOK employees in charge of the review of reporting, etc. of foreign exchange transactions, you can visit the central bank in person (Foreign Exchange Review Team, headquarters office) or call +82-2-759-5300.

Visiting hours: 09:00 through 16:00 during working days (Korean time)
Phone services: 09:00 through 17:00 during working days (Korean time)

The Bank of Korea does its utmost to help minimize any inconveniences that may arise during the process of reporting, etc. of foreign exchange transactions.

2. Process of Reporting, etc. of Foreign Exchange Transactions

Submission of documents for reporting, etc. of foreign exchange transactions

You can visit the BOK headquarters or regional branches to submit documents for reporting, etc. of foreign exchange transactions. You can report through an agent if you submit a power of attorney delegating your authority to report.
However, you can submit via mail in cases of reporting, etc. of transactions with standardized and repetitive structures, such as reporting on methods of payment, etc. (third-party payments, netting), reporting on securities lending transactions, reporting of and requesting permission for payments to/from those related to Iran, etc., that do not necessarily have to be confirmed through submission and consultation in person (effective from May 1, 2011).
- : The Bank of Korea will examine how much the general public uses mail to report, etc., and how this affects its reviewing activities, and it plans to expand the range of transactions acceptable through mail.

Review of documents for reporting, etc.

The periods required for the Bank of Korea to review documents are as follow (the Bank strives to complete the process as promptly as possible):

Type	Time
Reporting on capital transactions (including acceptance of reports and making of ex post reports)	Within 3-5 days depending upon transaction type
Reporting on methods of payment and receipt	Within 2 days
Permission for payments to/from those subject to financial sanctions	Within 20 days

Note) Periods required for supplementation of documents, consultation with relevant agencies, etc. and holidays not counted in the time periods listed

Issuance of certificates of completion of reporting/permission

Upon the completion of document review, the Bank of Korea contacts those who requested review and issues certificates of completion of reporting/permission upon their visiting a Bank of Korea office.
Upon request, the Bank of Korea sends these certificates via registered mail.
- : If you wish to receive certificates via mail, please submit applications for mail delivery of certificates along with the other relevant documents.

3. Types of Reports, etc. Reviewed by the Bank of Korea

Types of Reports, etc. Reviewed by the Bank of Korea
Types of Reports, etc.	Foreign Exchange Transaction Regulations
Ⅰ. Capital transactions
1. Reports
(Capital transactions by foreign exchange agencies)
① Purchases and sales of foreign means of payment by foreign exchange banks	Articles 2-2 ③ and 2-3 ①
② Lending to non-residents by foreign exchange banks	Article 2-6 ①, ④, ⑤
③ Guarantee transactions by foreign exchange banks(including collateral management approvals)	Article 2-8 ②
④ Derivatives transactions* by other foreign exchange agencies	Articles 23-2
* Derivatives transactions based on credit as the underlying assets, purchases/sales of
credit-derivative-linked securities, purchases/sales of other tangible and intangible assets, etc.
(Capital transactions by those other than foreign exchange agencies)
① Domestic and overseas deposit and trust transactions	Articles 7-6 ② and 7-11 ③
② Foreign capital borrowing transactions by residents(individuals and non-profit corporations)	Article 7-14 ④
③ Lending by residents to non-residents	Article 7-16 ①
④ Guarantees of repayment of debts by residents	Article 7-19
⑤ Purchases and sales of foreign means of payment, claims, etc.	Articles 7-20 ②, 7-21 ③ and 9-43 ②
⑥ Acquisitions of securities by residents from non-residents	Articles 7-31 ② and 7-33 ③
⑦ Acquisitions of securities by non-residents from residents	Article 7-32 ③
⑧ Derivatives transactions	Article 7-40 ②
⑨ Other capital transactions between residents and non-residents*	Article 7-46 ②, ③
* lease contracts, loan for use, collaterals, insurance, partnership,
assumption of obligation, gifts, private reconciliations, global cash management, etc.
⑩ Foreign direct investment to offshore financial institutions	Article 9-15-2 ①
⑪ Acquisitions of domestic real estate by non-residents	Article 9-42 ③
2. Acceptance of reports
① Supplying operating capital to overseas non self financing branches	Article 9-19 ③
② Limited business activities of overseas branches*	Article 9-22 ①
* Real estate transactions, securities transactions, loans with maturities of more than one year
③ Acquisitions of overseas real estate by residents	Article 9-39 ④
3. Ex post reports	Article 4-2 ③
Ⅱ. Payments and Receipts ('payments, etc.')
1. Reports on Methods of Payments, etc.
① Payments, etc. made through netting	Article 5-4 ③
② Payments, etc. made over certain excessive periods	Article 5-8 ①
③ Third-party payments, etc.	Article 5-10 ①
④ Payments, etc. bypassing foreign exchange banks	Articles 5-11 ③ and 7-3 ②
2. Permission for payments to/from those subject to financial sanctions	Article 3 of the Payment and Receipt Guidelines for the fulfillment of the Obligation to maintain International Peace and Security

4. Reporting on Capital Transactions/Methods of Payment, etc.

Reporting on Capital Transactions (Article 18 of Foreign Exchange Transactions Act)

Current transactions (export/import and service transactions) do not require reporting (hereinafter including acceptance of reports) pursuant to the Foreign Exchange Transactions Act, but some capital transactions prescribed by the Foreign Exchange Transactions Act must be reported in advance to the Governor of the Bank of Korea, etc.
- : The agencies delegated authority to accept reports are the Minister of Strategy and Finance, the Governor of the Bank of Korea, and the Heads of foreign exchange banks, depending upon the type of transaction.
Among capital transactions subject to reporting, those performed by foreign exchange agencies as their foreign exchange affairs need not be reported in principle by either the foreign exchange agencies or their counterparts.
- : However, some capital transactions must be reported to the Governor of the Bank of Korea such as credit derivatives transactions.
Capital transactions must be reported prior to their being conducted. When a report is not made, payments or receipts (hereinafter referred to as ‘payments, etc.’) following the transactions concerned cannot be made.
- : However, making of payments will be possible if the violation of conducting transactions without reporting is reported to the regulatory authority (Foreign Exchange Investigation Team, Financial Supervisory Service) and an ex post report is made (to the agencies having authority to accept the relevant reports).

Reporting on Methods of Payment, etc. (Article 16 of Foreign Exchange Transactions Act)

Even ‘Methods of Payment, etc.’ entailed by approved foreign exchange transactions (transactions that do not require reporting or that have already been reported) must be separately reported if payments are made in abnormal manners prescibed under article 16 of the Foreign Exchange Transaction Act.
- : The agencies delegated authority to accept reports are the Minister of Strategy and Finance, the Governor of the Bank of Korea, and the Heads of foreign exchange banks, depending upon the type of transaction.
The abnormal methods of payment, etc. subject to reporting are netting, payments made over certain excessive periods, third-party payments and payments bypassing foreign exchange banks.

5. Reporting and Permission for Payments, etc.

Reporting and Permission for Payments, etc. (Article 15 ② of Foreign Exchange Transactions Act)

When needed for faithful fulfillment of treaties concluded by the Republic of Korea, and of generally recognized international laws and regulations, and for contributing to international endeavors for the maintenance of international peace and security, the Minister of Strategy and Finance may require those intending to make/receive payments, etc. to/from those subject to financial sanctions or those related to Iran, to either report or obtain permission to do so.
- : To this end, the Minister of Strategy and Finance has established the ‘Payment and Receipt Guidelines for the fulfillment of the Obligation to maintain International Peace and Security’, and entrusted the related reporting and permission functions to the Bank of Korea.
Following the aforementioned guidelines, those intending to make/receive payments, etc. to/from those designated as ‘subject to financial sanctions’ need to obtain permission from the Bank of Korea Governor.
Other than those under financial sanctions, those intending to make payments, etc. of 10,000 euros or more per transaction to ‘individuals residing in Iran or groups located in Iran’ must report to the Bank of Korea Governor, and those intending to make payments, etc. of 40,000 euros or more per transaction (including cases where the total of transaction of 10,000 euros or more whithin the last 12 months add up to 40,000 euros or more) must obtain permission from the Bank of Korea Governor.

6. Contact Information of Authorities Related to Foreign Exchange Transaction

Addresses and Contact Information of Head Office and Domestic Branch Offices of Bank of Korea

Addresses and Contact Information of Head Office and Domestic Branch Offices of Bank of Korea
Head Office and Domestic Branch Offices	Address	Phone Number
Head Office	67 Sejong-daero, Jung-gu, Seoul	+82-2-759-5300
Gangnam	202 Teheran-ro, Gangnam-gu, Seoul	+82-2-560-1750
Busan	25 Munhyeongeumyung-ro, Nam-gu, Busan	+82-51-240-3915, 3914, 3911
Daegu & Gyeongbuk	219 Dognduk-ro, Jung-gu, Daegu	+82-53-429-0336, 0334, 0333
Mokpo	109 Youngsan-ro, Mokpo, Jeonnam Province	+82-61-241-1134, 1132
Gwangju & jeonnam	126 Sangmujungang-ro, Seo-gu, Gwangju	+82-62-601-1127, 1126, 1121
Jeonbuk	325 Paldal-ro, Deokjin-gu, Jeonju, Jeonbuk Province	+82-63-250-4105, 4107, 4120
Daejeon & Chungnam	65 Dunsanbuk-ro, Seo-gu, Daejeon	+82-42-601-1123
Chungbuk	145 Daesung-ro, Sangdang-gu, Cheongju, Chunbuk Province	+82-43-220-0576, 0571
Gangwon	31 Jungang-ro, Chuncheon, Gangwon Province	+82-33-258-3330, 3310
Incheon	10 Inhang-ro, Jung-gu, Incheon	+82-32-880-0069, 0062, 0053
Jeju	20 Bokji-ro 1-gil, Jeju	+82-64-720-2533, 2530, 2545
Gyeonggi	217 Paldal-ro, Jangan-gu, Suwon, Gyeonggi Province	+82-31-250-0107, 0093
Gyeongnam	633 Woni-daero, Uichang-gu, Changwon, Gyeongnam Province	+82-55-260-5121, 5122, 5112
Gangneung	2063 Gyeonggang-ro, Gangneung, Gangwon Province	+82-33-640-0163, 0151, 0162
Ulsan	52 Dotjil-ro, Nam-gu, Ulsan	+82-52-259-7435, 7436, 7432
Pohang	180 Junghung-ro, Buk-gu, Pohang, Gyeongbuk Province	+82-54-289-2832, 2831

Contact Information of Related Organizations

Contact Information of Related Organizations
Related Authorities		Phone Number
Ministry of Strategy and Finance	Foreign Exchange Transaction laws	+82-44-215-4756
Ministry of Strategy and Finance	Overseas Direct Investment	+82-44-215-7632~5
Ministry of Trade, Industry and Energy	Foreign Trade Act	+82-44-203-4025
Ministry of Trade, Industry and Energy	Foreign Investment Promotion Act	+82-44-203-4074
Ministry of Foreign Affairs	Emigration	+82-2-2100-7578
National Tax Service	Tax service counseling center	+82-126
National Tax Service	Handling of foreign exchange data	+82-44-204-3653
Korea Customs Service	Foreign exchange legal system and foreign exchange analysis	+82-42-481-7931, 7914
Financial Supervisory Service	Inspection of illegal foreign exchange transactions	+82-3786-7941, 7943
Korea Federation of Banks	Foreign exchange-related activities	+82-2-3705-5388
Korea International Trade Association	Certificate issuance	+82-2-60005 +82-1566-5114
Korea Immigration Service	Immigration certificate issuance	+82-2-2110-4092
Korea Customs and Trade Development Institute	Trade performance informaiton	+82-2-3416-5115~8
Korea Trade-Investment Promotion Agency	Foreign Direct Investment	+82-2-1600-7119

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