From July, the penalty for violating 'post-reporting of capital transactions' will be reduced to 2 million won

Starting from July this year, the penalty criteria for violations of post-reporting in capital transactions will be lowered to 2 million KRW. This adjustment aligns with the penalty amount for violations of prior reporting. Additionally, violations of capital transaction reporting obligations involving amounts within 50,000 USD per case may be replaced with a warning.

The Ministry of Economy and Finance announced on the 14th that it will publicly notify the draft amendment to the Enforcement Decree of the Foreign Exchange Transactions Act containing these details. This amendment was prepared to specify the key tasks of the "Foreign Exchange System Reform Direction" announced in February this year, aimed at easing foreign exchange transaction procedures and regulations.

First, to reduce the burden on citizens and companies in foreign exchange transactions, the penalty amounts under the Foreign Exchange Transactions Act will be lowered, and the criteria for criminal penalties will be relaxed. The penalty for violations of post-reporting will be reduced from 7 million KRW to 2 million KRW, matching the penalty amount for violations of prior reporting (2 million KRW). Furthermore, the threshold amount for capital transaction reporting violations that can be replaced with a warning will be expanded from within 20,000 USD per case to within 50,000 USD per case. The threshold amount for capital transaction reporting violations subject to criminal penalties will increase from 1 billion KRW to 2 billion KRW, and the threshold for violations of reporting obligations related to atypical payments or receipts such as third-party payments will rise from 2.5 billion KRW to 5 billion KRW.

The "Foreign Exchange System Development Deliberation Committee" will also be established and operated. Before implementing suspension of foreign exchange transactions or capital transaction approvals, the committee’s prior consultation and recommendation procedures will be conducted to enhance predictability for foreign exchange transaction parties. Diverse opinions from the private sector, including industry and academia, will also be collected during the operation of the foreign exchange system and the application and interpretation of laws and regulations.

In addition, to diversify the supply channels of foreign currency liquidity for securities companies and to alleviate supply-demand imbalances in the foreign exchange swap market, participation of securities finance companies in the foreign exchange swap market under the "Capital Market and Financial Investment Business Act" will be permitted.

On the 23rd, the KOSPI index opened at 2398.27, down 18.69 points from the previous trading day. Dealers are checking major countries' exchange rates in the Hana Bank dealing room in Jung-gu, Seoul. Photo by Dongju Yoon doso7@

원본보기 아이콘

The Ministry of Economy and Finance plans to reflect items not included in this Enforcement Decree amendment, such as the undocumented overseas remittance limit, through amendments to the Foreign Exchange Transaction Regulations within the first half of this year and implement them starting in July. Accordingly, the overseas remittance limit that does not require verification documents and the exemption criteria for prior reporting of capital transactions will be expanded from 50,000 USD to 100,000 USD annually.

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.