Maximum Fine of 20 Million KRW for Illegal Exchange of Local Love Gift Certificates

Enforcement Decree of the Act on Promotion of Local Love Gift Certificates Passed at the Cabinet Meeting
Up to 5 Million KRW Fine for Refusal or Obstruction of Violation Investigations

[Asia Economy Reporter Jo In-kyung] From now on, various illegal currency exchange activities that disrupt the distribution order of local love gift certificates, commonly known as 'Kkang,' will be subject to fines of up to 20 million KRW. Until now, only administrative measures such as cancellation of merchant registration were possible according to local government ordinances.

The Ministry of the Interior and Safety announced on the 30th that the "Enforcement Decree of the Act on the Promotion of Use of Local Love Gift Certificates" passed the Cabinet meeting on the 30th and will be enforced simultaneously with the parent law, the Local Love Gift Certificate Act, starting from the 2nd of next month.

The enforcement decree stipulates the amount of fines to be imposed for each violation, such as illegal currency exchange, to establish a sound distribution order for local love gift certificates.

The head of the local government will impose fines of up to 10 million KRW for the first violation, 15 million KRW for the second violation, and up to 20 million KRW for the third or subsequent violations for illegal currency exchange activities that disrupt the distribution order of local love gift certificates. For acts of refusal or obstruction of investigations into violations of the law, fines of up to 2 million KRW for the first violation, 3 million KRW for the second violation, and up to 5 million KRW for the third or subsequent violations will be imposed.

To prevent recurrence of violations, fines will be increased based on the number of violations of the same act within the past two years. However, in certain cases where mitigation is deemed necessary considering the degree, motive, and results of the violation, the fine amount may be reduced by up to half.

The ratio of the refund amount (used amount / face value) allowing users of local love gift certificates to receive cash refunds for remaining balances when using the certificates will be set by ordinance within the range of 60% to 80%.

The enforcement decree also allows the state to support local governments with necessary matters for operation, such as establishing operational guidelines for local love gift certificates, conducting public contests for activation, promotion, and proper distribution management. Special cities, metropolitan cities, and provinces may also provide administrative support within their jurisdiction to cities, counties, and districts, as well as support costs related to issuance, discount, sale, exchange, and promotion of local love gift certificates within budget limits.

Additionally, for integrated and systematic management of local love gift certificates, local government heads are required to submit notification forms to the Minister of the Interior and Safety when issuing or abolishing issuance of gift certificates, and submit issuance performance reports every half year.

Meanwhile, local love gift certificates recorded sales of 1.3957 trillion KRW in May alone, with a total of 4.2 trillion KRW sold from January to May this year. This means that 70% of the annual issuance support scale of 6 trillion KRW, expanded through the first supplementary budget, has been sold.

The Ministry of the Interior and Safety has submitted a request to increase the issuance support scale to 9 trillion KRW this year in the third supplementary budget and to raise the discount rate to 10% for the additional 3 trillion KRW to revitalize the local economy, which has been depressed due to the novel coronavirus infection (COVID-19).

This content was produced with the assistance of AI translation services.