Enforcement Decree Of The Introduction And Management Of Public Loans Act


Published: 2009-05-29

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CHAPTER Ⅰ GENERAL PROVISIONS
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 Article 1 (Purpose)   print
The purpose of this Decree is to prescribe matters delegated in the Introduction and Management of Public Loans Act and matters necessary for its enforcement.
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 Article 2 (International Cooperation Organization and so on)   print
(1) The term "international cooperation organization as prescribed by Presidential Decree" in subparagraph 1 of Article 2 of the Introduction and Management of Public Loans Act (hereinafter referred to as the "Act") shall mean an entity which falls under any of the following subparagraphs:
1. An institution which performs the overseas economic cooperation duties of a foreign government on its behalf;
2. The International Bank for Reconstruction and Development, the Asian Development Bank, and other international organizations which deal with duties concerning development financing;
3. A foreign financial institution which is financed by the foreign government concerned and which provides loans on terms equivalent to those of loans of international organizations as prescribed in subparagraph 2; and
4. A foreign financial institution which provides loans in collaboration with any institution or organization as prescribed in subparagraphs 1 through 3.
(2) The term "Korean juristic person as prescribed by Presidential Decree" in subparagraph 6 of Article 2 of the Act shall mean an entity which falls under any of the following subparagraphs:<Amended by Presidential Decree No. 18207, Dec. 30, 2003>
1. A local government;
2. A government-invested institution as prescribed in Article 2 of the Framework Act on the Management of Government-Invested Institutions;
3. A government-financed institution; and
4. A government-contributed institution (limited to the Korea Rail Net- work Authority and the Seoul Metropolitan Area New Airport Costruction Corporation).
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 Article 3 (Overseas Remittance)   print
(1) If a borrower of public loans intends to make overseas remittances under Article 4 of the Act, the head of a bank which deals with foreign exchange shall confirm the said overseas remittances.
(2) If the head of a bank which deals with foreign exchange intends to confirm overseas remittances under paragraph (1), he shall confirm whether the said overseas remittances are justifiable.
CHAPTER Ⅱ INTRODUCTION OF PUBLIC LOANS
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 Article 4 (Application for Introduction of Public Loans)   print
(1) A person who intends to introduce public loans under Article 6 (1) of the Act shall make an application for the introduction of public loans to the Minister of Strategy and Finance via the competent Minister. In this case, for any business which meets the criteria as determined by the Minister of Strategy and Finance, he shall make an application after prior consultation with the head of the agency concerned. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
(2) If the Minister of Strategy and Finance intends to decide whether to promote the introduction of public loans under Article 6 (2) of the Act, he shall examine the following matters with respect to the business concerned. In this case, the Minister of Strategy and Finance may, if necessary, hear the opinions of the head of the agency concerned: <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
1. Economic and technological validity;
2. Appropriateness of the amount of funds required and the possibility of raising them;
3. Conditions of location and a plan for construction work;
4. Capability of repayment of principal and interest;
5. Appropriateness of comprehensive measures to raise and manage public loans; and
6. Other matters as deemed necessary by the Minister of Strategy and Finance.
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 Article 5 (Consultation)   print
(1) If the head of the agency concerned intends to draw up or transmit a written agreement and an attendant memorandum concerning the contents of the convention concerned and the conduct of any public loan business with the prospective lenders or existent lenders in order to promote the said business, he shall consult with the Minister of Strategy and Finance in advance. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
(2) If the Minister of Strategy and Finance intends to conclude a public loan convention under Article 7 of the Act, he shall, in advance, consult with the head of the agency concerned on the contents thereof: Provided, That if it is urgent to promote the public loan business concerned, this shall not apply. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
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 Article 6 (Scope of Related Contracts)   print
The term "contract which has a direct effect on the conclusion of the public loan convention concerned" in Article 7 (2) of the Act shall mean a contract for introduction of equipment or raw materials and a contract for technology or services which are related to the conclusion of the public loan convention concerned, and other contracts equivalent thereto.
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 Article 7 (Decision of Introduction of Public Loans)   print
(1) In deciding whether to promote the introduction of public loans for which a Korean juristic person applies under Article 6 of the Act, the Minister of Strategy and Finance shall confirm matters in the following subparagraphs: <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
1. Whether it falls under a business for which it is difficult for a financial institution to guarantee payment; and
2. Whether the capability to secure public loans is reliable (excluding cases of the exemption from the provision of securities under the proviso of Article 10 of the Act).
(2) If the Minister of Strategy and Finance has decided whether to promote the introduction of public loans under paragraph (1), he shall, without delay, notify the Korean juristic person concerned (hereinafter "government-guaranteed juristic person"). In this case, if he decides not to promote the introduction of public loans, he shall specify the reasons not to do so. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
(3) If the Minister of Strategy and Finance has approved the conclusion of a public loan convention under Article 7 (2) of the Act, he may collect guarantee fees from the government-guaranteed juristic person. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
CHAPTER Ⅲ MANAGEMENT OF PUBLIC LOANS
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 Article 8 (Sublease of Public Loans)   print
(1) If the Minister of Strategy and Finance subleases public loans under Article 9 of the Act, he shall make a sublease contract (hereinafter "sublease contract") with a sublessee. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
(2) A sublessee may newly sublease public loans which have been subleased to an end user with the approval of the Minister of Strategy and Finance. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
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 Article 9 (Provision and Management of Securities)   print
(1) A government-guaranteed juristic person and a sublessee who makes a sublease contract under Article 8 (1) above (excluding a person who is exempted from the provision of securities under the proviso of Article 10 of the Act) shall provide the objects of securities within thirty days after they receive the notification of the approval concerned or conclude the sublease contract. In this case, if owners of the objects of securities are not the government-guaranteed juristic persons or sublessees concerned, such owners shall provide the objects of securities.
(2) The Minister of Strategy and Finance may have a government- guaranteed juristic person or sublessee offer capital goods, introduced under the public loan convention or sublease contract which causes the payment guarantee by the Government, as part of the objects of securities under paragraph (1), or have them offer factories and other facilities constructed with them as security. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
(3) If the Minister of Strategy and Finance is provided with securities under paragraph (1) or (2), he shall, without delay, take measures necessary for ensuring rights thereto.<Amended by Presidential Decree No. 20720, Feb. 29, 2008>
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 Article 10 (Institution Exempted from Securities)   print
(1) The term "government-invested institution" in the proviso of Article 10 of the Act shall mean that as prescribed in Article 2 of the Framework Act on the Management of Government-Invested Institutions (hereinafter "government-invested institution").
(2) The term "person as prescribed by Presidential Decree" in the proviso of Article 10 of the Act shall mean any of the following: <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
1. A juristic person the capital of which is wholly invested by a government- invested institution;
2. A juristic person operated with contributions which the Government allows under the relevant Acts;
3. An institution which deals with the affairs concerning development financing with long-term development funds borrowed from the Government;
4. The National Agricultural Cooperatives Federation, the National Federation of Fisheries Cooperatives, the National Livestock Cooperatives Federation, and the National Forestry Cooperatives Federation;
5. A juristic person the whole capital of which is jointly invested by a government-invested institution and a juristic person under subparagraph 2;
6. A juristic person which is financed by the Government;
7. A juristic person which is financed under subparagraph 6;
8. A juristic person which is financed by a local government; and
9. A school juristic person and other public juristic persons acknowledged by the Minister of Strategy and Finance.
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 Article 11 (Procedure for Compulsory Disposition)   print
(1) If the Government has repaid all or part of debts which cause a payment guarantee on behalf of a government-guaranteed juristic person, the Minister of Strategy and Finance shall, without delay, file a claim for reimbursement for the amount which the Government has repaid. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
(2) If the Minister of Strategy and Finance deems that his claim cannot be realized by a claim for reimbursement under paragraph (1), he shall dispose of securities under Article 11 of the Act. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
(3) If the Minister of Strategy and Finance deems that a government- guaranteed juristic person is able to repay its debts within a reasonable period or able to repay all debts by the final repayment date determined in a repayment plan, he may suspend the disposition of securities for a prescribed period. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
(4) If the Minister of Strategy and Finance has disposed of securities under paragraph (2), he shall refund residual amounts to the government- guaranteed juristic person concerned after deducting expenses required for such disposition, the amounts repaid by the Government on behalf of the government-guaranteed juristic person and interest therefor, and the outstanding principal from the proceeds of the disposition. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
(5) The provisions of paragraphs (2) through (4) shall apply mutatis mutandis where a sublessee fails to repay all or part of his debts.
CHAPTER Ⅳ SUPPLEMENTARY PROVISIONS
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 Article 12 (Use of Public Loans)   print
Public loans shall be used pursuant to the contents of any public loan convention concluded under Article 7 of the Act, and if any person intends to use them differently from such contents, he shall obtain prior approval from the Minister of Strategy and Finance. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
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 Article 13 (Reporter of Introduction of Public Loans)   print
The term "head of any institution related to the introduction and management of public loans as prescribed by Presidential Decree and other interested persons" in Article 16 (2) of the Act shall mean a person who falls under any of the following subparagraphs:<Amended by Presidential Decree No. 21518, May. 29, 2009>
1. President of the Bank of Korea;
2. President of the Korea Development Bank;
2-2. President of the Korea Finance Corporation;
3. Head of an entity which falls under any subparagraph of Article 2 (2) of this Decree.
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 Article 14 (Disposition of Public Loans)   print
(1) If the head of the customs house concerned intends to sell public loans under Article 18 (2) of the Act, he shall submit a list of the said public loans to the Minister of Strategy and Finance via the Administrator of the Korea Customs Service. In this case, the Minister of Strategy and Finance may require the head of the customs house to withhold the sale of the public loans after consulting with the head of the agency concerned within twenty days from the day when he receives the list of the public loans. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
(2) If there exists no requisition of withholding within the period under paragraph (1) above, the head of the customs house concerned shall sell the public loans concerned under Article 18 (2) of the Act and report to the Minister of Strategy and Finance. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
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 Article 15 (Entrustment of Authority)   print
(1) If it is necessary that the public loan business concerned is concluded quickly, the Minister of Strategy and Finance may, pursuant to Article 21 (2) of the Act, entrust his authority to negotiate for the introductionof public loans and to conclude a public loan convention under Article 7 (1) of the Act to the head of the central administrative agency concerned. In this case, the Minister of Strategy and Finance shall give notice of the contents of such entrustment. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
(2) If it is necessary that the public loan business concerned is concluded quickly, the Minister of Strategy and Finance may, pursuant to Article 21 (3) 1 of the Act, entrust his authority to negotiate for the introduction of public loans under Article 7 (1) of the Act to any of the following. In this case, the Minister of Strategy and Finance shall publish the contents of such entrustment: <Amended by Presidential Decree No. 18207, Dec. 30, 2003; Presidential Decree No. 20720, Feb. 29, 2008>
1. A local government;
2. A government-invested institution;
3. A government-financed institution;
4. A government-contributed institution (limited to the Korea Rail Network Authority and the Seoul Metropolitan Area New Airport Construction Corporation).
(3) The Minister of Strategy and Finance shall entrust his authority as prescribed in any of the following subparagraphs to the Chairman of the Korea Development Bank or the President of the Korea Finance Corporation under Article 21 (3) of the Act: <Amended by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21518, May. 29, 2009>
1. Acquirement and management of securities as prescribed in Article 10 of the Act and Article 9 of this Decree;
2. Disposition of securities as prescribed in Article 11 of the Act and Article 11 of this Decree.
(4) The Minister of Strategy and Finance shall, pursuant to Article 21 (3) of the Act, entrust his authority to receive a report under Article 16 of the Act to the President of the Bank of Korea. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
(5) An entity entrusted under paragraphs (1) through (4) shall announce or report on the performance of entrusted duties to the Minister of Strategy and Finance. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
(6) The Minister of Strategy and Finance may determine detailed mat- ters necessary for the performance of duties entrusted under paragraphs (1) through (4). <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
graphs (1) through (4). <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
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 Article 16 (Expenses Resulting from Performance of Entrusted Duties)   print
(1) If the Chairman of the Korea Development Bank or the President of the Korea Finance Corporation performs the duties of acquirement and management of securities entrusted under Article 15 (3), he may require the Minister of Strategy and Finance to pay expenses necessary for the performance of such duties. <Amended by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21518, May. 29, 2009>
(2) If the Chairman of the Korea Development Bank or thePresident of the Korea Finance Corporation bears expenses in connection with the performance of entrusted duties under paragraph (1), he shall require the government-guaranteed juristic person or sublessee concerned to reimburse the said expenses, and may require the Minister of Strategy and Finance to pay the expenses if he is not reimbursed by the government-guaranteed juristic person or sublessee. <Amended by Presidential Decree No. 20720, Feb. 29, 2008; Presidential Decree No. 21518, May. 29, 2009>
(3) If the Minister of Strategy and Finance is required to pay expenses under paragraph (1) or (2), he shall pay them within the limit of budgetary appropriation. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
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 Article 17 (Procedure for Imposition and Collection of Fine for Negligence)   print
(1) If the Minister of Strategy and Finance intends to impose a fine for negligence under Article 26 (2) of the Act, he shall notify the person who is subject to the fine for negligence of the payment thereof with the fact of a violation and the amount of the fine for negligence specified in writing after investigating and confirming the said violation. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
(2) If the Minister of Strategy and Finance intends to impose a fine for negligence under paragraph (1), he shall give the person who is subject to the fine for negligence any opportunity to state his opinion orally or in writing (including electronic documents) for a prescribed period of not less than ten days. In this case, when the said person fails to state his opinion by the prescribed date, he shall be deemed to have no opinion. <Amended by Presidential Decree No. 18312, Mar. 17, 2004; Presidential Decree No. 20720, Feb. 29, 2008>
(3) In determining the amount of a fine for negligence, the Minister of Strategy and Finance shall consider the motive and consequence of the violations in question. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
(4) The procedure for collecting a fine for negligence shall be determined by the Ordinance of the Ministry of Strategy and Finance. <Amended by Presidential Decree No. 20720, Feb. 29, 2008>
ADDENDUM
This Decree shall enter into force on November 17, 1998.
ADDENDA<Presidential Decree No. 18207, Dec. 30, 2003>
Article 1 (Enforcement Date)
This Decree shall enter into force on January 1, 2004.
Articles 2 through 6 Omitted.
ADDENDUM<Presidential Decree No. 18312, Mar. 17, 2004>
This Decree shall enter into force on the date of its promulgation.
ADDENDA<Presidential Decree No. 20720, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 8 Omitted.
ADDENDA<Presidential Decree No. 21518, May. 29, 2009>
Article 1 (Enforcement Date)
This Decree shall enter into force on June 1, 2009.
Articles 2 and 3 Omitted.