"Criticism of Focusing Only on Penalty Imposition... Financial Services Commission Significantly Increased Collection Rate"

Last Year Financial Authorities' Fine Collection Rate at 65.9%
Significantly Improved from 52.5% a Year Ago

The financial authorities significantly increased the collection amount of fines imposed on financial companies last year. This is an effect of preparing alternatives in response to criticism that efforts were insufficient, focusing only on imposing fines without striving to collect them.

According to the financial authorities on the 6th, the amount of fines decided to be collected by the Financial Services Commission last year was 51.259 billion KRW. Of this, the actual collected amount was 33.794 billion KRW. The collection rate was 65.9%, with an uncollected amount of 17.465 billion KRW.

The Financial Services Commission imposes fines as monetary sanctions on financial institutions or workers who violate laws. This is to deprive economic benefits gained by breaking the law or to induce faithful fulfillment of obligations.

In 2020, the collection rate of fines by the Financial Services Commission was only 52.5%, about half. Although 44.063 billion KRW was to be collected, only 23.186 billion KRW was actually collected. Among these, the financial investment sector had the highest rate at 54% (15.198 billion KRW), followed by the insurance industry at 46% (1.834 billion KRW), and savings banks at 35% (3.713 billion KRW). In 2019 as well, only 17.670 billion KRW was collected out of 39.663 billion KRW in fines decided, resulting in a collection rate of 44.4%.

The financial authorities had acknowledged the declining collection rate but cited reasons such as manpower shortages, closure of target companies, and lack of financial resources as difficulties in collection. In response, since 2008, the National Assembly has conducted fiscal year settlement audits and ordered that "the Financial Services Commission must make efforts to improve the collection rate." When the problem was not resolved, during the 2020 settlement audit, they also demanded, "Shorten the period required for imposing fines and devise effective collection measures to track hidden assets."

Despite continued corrective action demands, the Financial Services Commission reported to the National Assembly that it would increase on-site visits and property investigations from once or twice a year to once a quarter. It also announced plans to raise the collection rate by encouraging installment payments of arrears.

A Financial Services Commission official explained, "We strengthened visits and telephone reminders targeting companies fined. There were cases of arrears in fines imposed for violations of the Capital Markets Act, which were large in scale, and collection was made in 2020, which increased the collection rate."

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