Financial Services Commission Opens Temporary Payment Line for Russian Financial Sanctions... Also Supports Emergency Living Expense Loans

[Asia Economy Reporter Song Hwajeong] The government is promoting support for rapid payment through the establishment of temporary payment lines and emergency livelihood loans to assist families of Russian residents in Korea with funds, in order to resolve difficulties related to payment and remittance caused by financial sanctions against Russia.

On the 18th, the Financial Services Commission announced that, due to difficulties in payment settlements and personal remittances for export-import companies caused by financial sanctions against Russia, it has checked major issues and prepared countermeasures through consultations with banks and related institutions.

As a result of checking the main difficulties, it was found that even in transactions involving non-sanctioned banks and non-sanctioned items, delays and refusals are occurring due to global intermediary banks avoiding transactions related to Russia. Additionally, concerns have been raised that personal remittances from Russia to Korea may be restricted due to Russian sanctions, potentially disrupting livelihood remittances to families of Russian residents in Korea.

Accordingly, to enable rapid payment, the government plans to support the establishment of temporary payment lines that minimize the use of intermediary banks by utilizing local branches of domestic banks. When local branches of domestic banks such as Hana Bank and Woori Bank conduct payment transactions, prepayment will be made to accounts opened in the name of the local branch at the Korean headquarters, and offsetting will be used when payment for export-import transactions with Russia is necessary. A Financial Services Commission official explained, "Using this method can minimize intermediary bank involvement during payment, enabling faster transactions," adding, "However, this method is limited to trade involving non-sanctioned banks and non-sanctioned items, excluding personal non-trade remittances, and if sanctions against Russia expand in the future, transactions using this method may also be suspended, so caution is needed."

The financial authorities and banking sector plan to establish the temporary payment line by the end of March after reviewing relevant laws and preparing practical measures.

In addition, funds will be provided to families in Korea of Russian residents. The banking sector will prepare joint guidelines for financial transactions of overseas residents and support emergency livelihood loans for families of Russian residents in Korea.

Until now, some banks faced difficulties in handling loans for overseas residents due to insufficient regulations on verifying overseas income documents. Therefore, the banking sector plans to support financial transactions of overseas residents by jointly preparing guidelines on overseas income verification and confirmation of proxy authority for overseas residents. After revising internal regulations by each bank, the guidelines are expected to be implemented from late March to early April.

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