S. Korea to ease penalty on foreign exchange transaction violations

By Kang Yoon-seung

SEJONG, June 27 (Yonhap) — South Korea’s Cabinet passed a revised enforcement decree of the Foreign Exchange Transactions Act on Tuesday, reducing regulations and easing penalties for violations in line with efforts to alleviate corporate burdens.

Under the revised enforcement decree, the fine imposed on “violation of an obligation to report” as stated under the act will be lowered to 2 million won (US$1,530) from 7 million won, the Ministry of Economy and Finance said.

The country will also give warnings for such violations for transactions worth below $50,000, compared with the current ceiling of $20,000.

The threshold above which reporting obligation violations for foreign currencies will become punishable under criminal law has also been raised to 2 billion won, compared with the current 1 billion won.

The revision also paves the way for securities finance companies to participate in the foreign exchange swap market.

The revised enforcement decree will take effect on July 4.

The finance ministry said it is currently aiming to allow people to transfer up to $100,000 without documents, doubling the current limit of $50,000.

The adjustment came as the South Korean economy has grown significantly since 1999 when the policy was first made.

To further ease regulations, South Korea will require local firms to notify the finance ministry and the Bank of Korea for foreign currency loans of $50 million or higher, compared with the current ceiling of $30 million.