[Exclusive] NIPA Faces Potential 25 Billion Won Violation of Foreign Exchange Act... Claims 10 Years of Unawareness

Unreported Establishment of Singapore IT Support Center
NIPA: "Administrative Error... No Further Violations Since"

The National IT Industry Promotion Agency (NIPA) was found to have remitted 10.6 billion won over a 10-year period for maintenance and operational expenses without reporting the establishment of its overseas office in Singapore. The total amount potentially in violation of the Foreign Exchange Transactions Act is estimated to reach 25 billion won.

According to data submitted to Assemblyman Han Minsoo of the Democratic Party of Korea by NIPA on September 30, NIPA transferred approximately 10.6 billion won over 10 years for installation and maintenance expenses to the Singapore IT Support Center without filing the required establishment report.

Under the Foreign Exchange Transaction Regulations, non-financial institutions must report to the head of their designated foreign exchange bank when establishing an overseas branch, and all necessary funds must be remitted through the designated bank. Violation of these regulations may result in a fine of up to 100 million won under Article 32 of the Foreign Exchange Transactions Act.

NIPA reportedly failed to recognize that it had not reported the Singapore center for 10 years. In July 2014, NIPA took over overseas office operations from KISA as part of a public institution restructuring in the information sector and established the Singapore IT Center the following month.

It is known that NIPA became aware of the violation in October 2023 through consultations with its main bank and the institution, after which it submitted a voluntary report and an explanation to the bank. Currently, the Financial Supervisory Service is conducting a review of the matter.

Additionally, NIPA was found to have directly remitted approximately 14.3 billion won-amounts exceeding 10,000 dollars per transaction-to accounts of local service contractors and employees, rather than to the accounts of its four overseas offices in operation. According to the Foreign Exchange Transaction Regulations, remittances exceeding 10,000 dollars must be reported to the Governor of the Bank of Korea.

A NIPA official stated, "There was an administrative error during the transfer of work," and added, "After voluntarily reporting the issue, we have taken corrective action and provided training to the relevant departments." The official further noted, "There have been no additional violations since then."

Assemblyman Han said, "As a public institution, NIPA is obligated to ensure that all transactions are transparent and legal, and must demonstrate a commitment to compliance. The fact that such a significant gap in work management was exposed over 10 years cannot be simply excused by claiming ignorance."

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