CHAPTER I GENERAL PROVISIONS
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| Article 1 (Purpose) |
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The purpose of this Act is to provide for matters necessary to ensure the efficient use of public funds as well as to minimize citizens' burden, by enhancing fairness, expertism, and transparency in raising, administering and managing the public funds.
[This Article Wholly Amended by Act No.10681, May 19, 2011]
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| Article 2 (Definitions) |
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The terms used in this Act shall be defined as follows:
| 1. |
The term "public funds" means funds provided for the restructuring of financial companies, etc. or enterprises from the following funds, property, etc.: |
| (a) |
The Fund for Redemption of Deposit Insurance Fund Bonds and the Deposit Insurance Fund established under the Depositor Protection Act: Provided, That in cases of the Deposit Insurance Fund, the scope of public funds shall be limited to those with revenue from any of the following financial resources: |
| (i) |
The Government's contribution; |
| (e) |
Capital the Bank of Korea established under the Bank of Korea Act invests in financial companies, etc.; |
| 2. |
The term "financial company, etc." means any of the following institutions: |
| (b) |
An insured financial institution referred to in the Depositor Protection Act (hereinafter referred to as "insured financial institution"); |
[This Article Wholly Amended by Act No.10681, May 19, 2011]
CHAPTER II ESTABLISHMENT OF COMMITTEE FOR MANAGEMENT OF PUBLIC FUNDS, ETC.
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| Article 3 (Establishment and Functions, etc. of Public Funds Oversight Committee) |
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| (1) |
The Public Funds Oversight Committee (hereinafter referred to as the "Committee") shall be established under the Financial Services Commission to comprehensively deliberate on and coordinate matters concerning the operation, etc. of public funds. |
| (2) |
The Committee shall deliberate on and coordinate the following matters: |
| 1. |
Matters concerning the general administration of, and the planning for the operation of public funds, such as use of, and re-use after recovery of public funds; |
| 2. |
Matters concerning principles for selecting financial companies, etc. or enterprises eligible for public funds; |
| 3. |
Matters concerning principles by which public funds can be provided, such as self-rescue efforts and loss-sharing by financial companies, etc. eligible for public funds; |
| 4. |
Matters concerning the periodic review of track record of providing public funds; |
| 5. |
Matters concerning principles and systems for the follow-up management of financial companies, etc. to which public funds have been allocated; |
| 6. |
Matters concerning the periodic review on the follow-up management status of financial companies, etc. to which public funds have been provided; |
| 7. |
Matters concerning the recovery of public funds, such as sale, etc. of assets including stocks, etc. held by the following institutions: |
| (b) |
The Korea Deposit Insurance Corporation under the Depositor Protection Act (hereinafter referred to as the "Korea Deposit Insurance Corporation"); |
| 8. |
Matters concerning the enactment and amendments of Acts and subordinate statutes, or regulations governing public funds; |
| 9. |
Other matters prescribed by Presidential Decree for enhancing the efficiency of public funds, such as the use, follow-up management, etc. of public funds. |
| (3) |
Institutions related to public funds, such as the Government, the Financial Services Commission, the Korea Deposit Insurance Corporation, the Korea Asset Management Corporation, the Korea Finance Corporation, etc. shall report to the Committee matters related to functions of the Committee, including but not limited to the creation, operation, and follow-up management of public funds, for deliberation. |
[This Article Wholly Amended by Act No.10681, May 19, 2011]
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| Article 4 (Composition, etc. of Committee) |
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| (1) |
The Committee shall be comprised of the following members: |
| 1. |
The Chairperson of the Financial Services Commission; |
| 2. |
The Vice Minister of Strategy and Finance; |
| 3. |
Two economic experts recommended by the competent Standing Committee of the National Assembly and commissioned by the Chairperson of the Financial Services Commission; |
| 4. |
One legal expert recommended by the Minister of the National Court Administration and commissioned by the Chairperson of the Financial Services Commission; |
| 5. |
One accounting expert recommended by the President of the Korean Institute of Certified Public Accountants established under the Certified Public Accountant Act and commissioned by the Chairperson of the Financial Services Commission; |
| 6. |
One financial expert recommended by the Chairperson of the incorporated association, the Korea Federation of Banks and commissioned by the Chairperson of the Financial Services Commission; |
| 7. |
One economic expert recommended by the Chairperson of the Korea Chamber of Commerce and Industry established upon obtaining authorization from the Minister of Knowledge Economy pursuant to the Chambers of Commerce and Industry Act, as commissioned by the Chairperson of the Financial Services Commission. |
| (2) |
Requirements for qualifications required of committee members under paragraph (1) 3 through 7 shall be prescribed by Presidential Decree. |
| (3) |
The President of the Korea Deposit Insurance Corporation, the President of the Korea Asset Management Corporation, and the President of the Korea Finance Corporation shall attend meetings of the Committee and may have a say in the affairs under their jurisdiction. |
[This Article Wholly Amended by Act No.10681, May 19, 2011]
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| Article 5 (Chairpersons) |
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| (1) |
The following persons shall jointly take the chair of the Committee: |
| 1. |
The Chairperson of the Financial Services Commission; |
| 2. |
One person elected among committee members referred to in Article 4 (1) 3 through 7. |
| (2) |
Respective Chairpersons shall represent the Committee and have overall control over all affairs, including convening meetings of the Committee. |
| (3) |
If all Chairpersons are unable to perform their duties due to unavoidable circumstances, a committee member designated by the Committee in advance shall act for the Chairpersons. |
[This Article Wholly Amended by Act No. 10681, May 19, 2011]
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| Article 6 (Term of Office of Committee Members, etc.) |
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| (1) |
The term of office of the committee members under Article 4 (1) 3 through 7 (hereinafter referred to as "non-governmental members") shall be two years and may be consecutively renewed only once. |
| (2) |
In the event of a vacancy in the position of a non-governmental member, a qualified person shall be newly commissioned to fill the vacancy and the term of office of the new committee member commissioned shall begin from the date on which he/she is so commissioned. |
[This Article Wholly Amended by Act No. 10681, May 19, 2011]
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| Article 7 (Grounds for Disqualification of Committee Members) |
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No person falling under any of the following cases may become a non-governmental committee member:
| 1. |
A person who is not a national of the Republic of Korea; |
| 3. |
A person in whose case five years have not passed since he/she was sentenced to a fine pursuant to this Act, the Banking Act or any finance-related Act prescribed by Presidential Decree (including finance-related Acts of any foreign country corresponding thereto); |
| 4. |
A person in whose case five years have not passed since he/she was dismissed or removed from his/her office pursuant to this Act, the Banking Act or any finance-related Act prescribed by Presidential Decree (including finance-related Acts of any foreign country corresponding thereto). |
[This Article Wholly Amended by Act No. 10681, May 19, 2011]
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| Article 8 (Guarantee of Status of Committee Members, etc.) |
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| (1) |
No committee member shall be removed or dismissed from his/her office against his/her will, except for any of the following cases: |
| 1. |
Where a committee member falls under any subparagraph of Article 7; |
| 2. |
Where a committee member is unable to perform his/her duties due to mental or physical disabilities. |
| (2) |
Where a committee member is dismissed on any ground falling under paragraph (1), no act performed by a committee member before he/she is dismissed shall remain effective. |
[This Article Wholly Amended by Act No. 10681, May 19, 2011]
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| Article 9 (Quorum for Resolution) |
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Each meeting of the Committee shall adopt resolutions with the affirmative vote of a majority of Committee members present.
[This Article Newly Inserted by Act No. 9742, May 27, 2009]
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| Article 10 (Establishment, etc. of Secretariat) |
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| (1) |
A secretariat shall be established under the Financial Services Commission to assist in affairs of the Committee and carry out administrative affairs. |
| (2) |
Necessary matters concerning the organization and operation of the secretariat shall be prescribed by Presidential Decree. |
[This Article Wholly Amended by Act No. 10681, May 19, 2011]
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| Article 11 (Request for Data, etc.) |
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The Committee shall take the following measures, if deemed necessary to carry out the functions described in Article 3:
| 1. |
Request for the submission of reports, data, or documents to relevant institutions, including the Financial Services Commission, the Korea Deposit Insurance Corporation, the Korea Asset Management Corporation, and the Korea Finance Corporation; |
| 2. |
Request for the attendance and submission of opinions to interested parties, reference witnesses, or appropriate public officials; |
| 3. |
On-the-spot investigation of a relevant institution. |
[This Article Wholly Amended by Act No. 10681, May 19, 2011]
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| Article 12 (Establishment, etc. of Subcommittees) |
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| (1) |
Subcommittees may be established, if necessary to efficiently carry out the functions of the Committee. |
| (2) |
Necessary matters concerning the operation of the Committee and the composition and operation of subcommittees shall be prescribed by Presidential Decree. |
[This Article Wholly Amended by Act No. 10681, May 19, 2011]
CHAPTER III MANAGEMENT, ETC. OF PUBLIC FUNDS
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| Article 13 (Minimum Cost Principle) |
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| (1) |
The Government, the Korea Deposit Insurance Corporation, the Korea Asset Management Corporation, and the Korea Finance Corporation shall provide public funds in a manner that minimizes the costs incurred in injecting public funds and maximizes the efficiency thereof. |
| (2) |
When the Financial Services Commission requests the Government or the Korea Deposit Insurance Corporation (hereinafter referred to as the "Government, etc.") to invest in insolvent financial institutions or to purchase securities pursuant to Article 12 of the Act on the Structural Improvement of the Financial Industry, it shall submit to the Government, etc. materials verifying the compliance with the minimum cost principle under paragraph (1) and investigation materials on assets and liabilities of those financial institutions, as prescribed by Presidential Decree. |
| (3) |
The Government, the Korea Deposit Insurance Corporation, and the Korea Asset Management Corporation shall prepare and keep materials verifying that public funds have been provided in compliance with the minimum cost principle under paragraph (1). |
| (4) |
Standards and procedures for the minimum cost principle under paragraphs (1) through (3) and other details shall be prescribed by Presidential Decree. |
[This Article Wholly Amended by Act No. 10681, May 19, 2011]
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| Article 14 (Fair Loss Sharing Principle, etc.) |
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| (1) |
In providing public funds, the Government, etc. shall do so based on the premise that persons liable for insolvency of financial companies, etc. eligible for public funds should bear any loss on a fair basis. |
| (2) |
In providing public funds, the Government, etc. shall do so in two or more installments: Provided, That this shall not apply to vicarious payment of deposits and other cases prescribed by Presidential Decree. |
| (3) |
The Government, etc. shall provide public funds based on the premise that financial companies, etc. eligible for public funds should strive for their own restructuring. |
| (4) |
If there are persons responsible for the management and supervision of insolvent financial institutions, the Government, etc. shall, without delay, have the persons take such responsibility as request for compensation for damages, under the relevant Acts and subordinate statutes. |
| (5) |
Standards and procedures for provision and other details under paragraphs (1) through (4) shall be prescribed by Presidential Decree. |
[This Article Wholly Amended by Act No. 10681, May 19, 2011]
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| Article 15 (Reporting, etc. to National Assembly) |
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| (1) |
The Financial Services Commission shall, at least once per quarter, prepare a report on the administration, etc. of public funds, such as the use and reuse after recovery of public funds and submit it to the National Assembly: Provided, That a report on the management status of assets acquired by using or reusing pubic funds after its recovery shall be submitted by not later than March 31 of each year. |
| (2) |
The Chairperson of the Public Funds Oversight Committee shall appear and answer questions, upon the request from the National Assembly to appear in connection with a report submitted pursuant to paragraph (1). |
[This Article Wholly Amended by Act No. 10681, May 19, 2011]
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| Article 16 (Audit, etc. by Board of Audit and Inspection) |
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The Board of Audit and Inspection shall conduct an audit relating to public funds in accordance with the Board of Audit and Inspection Act and submit a report on such audit to the National Assembly.
[This Article Wholly Amended by Act No. 10681, May 19, 2011]
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| Article 17 (Conclusion, etc. of Implementation Arrangement with Financial Companies, etc.) |
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| (1) |
Where the Government, etc. intends to provide public funds, it shall conclude a written arrangement for implementing a plan for management normalization (hereafter referred to as "arrangement" in this Article) with the relevant financial company, etc., as prescribed by Presidential Decree. |
| (2) |
The arrangement shall include the following matters for normalizing the management of the financial company, etc. in question: |
| 1. |
Target level of the relevant financial company, etc. with respect to the standards for financial soundness prescribed by Presidential Decree, including the equity capital ratio; |
| 2. |
Target level of the relevant financial company, etc. with respect to the standards for profitability prescribed by PresidentialDecree, including return on assets; |
| 3. |
Target level of the relevant financial company, etc. with respect to the standards for asset soundness prescribed by PresidentialDecree, including bad loan ratio; |
| 4. |
Detailed implementation plan including a restructuring plan, such as the staff, organization and adjustment of wages of the relevant financial company, etc., and a financing plan necessary for achieving the target levels referred to in subparagraphs 1 through 3; |
| 5. |
A written consent to matters which are provided for in subparagraph 4 and require the consent of a labor union of the relevant financial company, etc.; |
| 6. |
Additional implementation plan, including a freeze of the total personnel expenses, which shall be carried out by the relevant financial company, etc., if it fails to achieve the target levels referred to in subparagraphs 1 through 3; |
| 7. |
Other matters prescribed by Presidential Decree. |
| (3) |
The Government, etc. shall disclose an arrangement in electronic form, etc.: Provided, That matters which are likely to have a significant influence on the management of the relevant financial company, etc. and which are provided for by Presidential Decree may be excluded herefrom. |
| (4) |
The Government, etc. shall review the results of implementing the arrangements on a quarterly basis and report them to the Financial Services Commission. |
| (5) |
In order to review the results of implementation under paragraph (4), the Government, etc. may request financial companies, etc. that received public funds to report on their business or property, to submit materials and to have relevant persons present themselves and give their opinions. |
| (6) |
Where an executive or employee of a financial company, etc. that received public funds falls under any of the following cases, the Government, etc. may request the head of such company to take corrective measures or to remove the executive from his/her office, suspend his/her duties or issue a warning or caution to him/her, or to take any disciplinary action against or issue any caution to the employee: |
| 1. |
Where the said executive or employee violates this Act or regulations, orders or directions under this Act; |
| 2. |
Where the said executive or employee fails to implement an arrangement; |
| 3. |
Where the said executive or employee prepares a false report or materials requested by the Korea Deposit Insurance Corporation under this Act or an arrangement or neglects the submission thereof; |
| 4. |
Where the said executive or employee refuses, interferes with or evades activities carried out by the Korea Deposit Insurance Corporation under this Act or an arrangement; |
| 5. |
Where the said executive or employee neglects implementing corrective orders issued or disciplinary actions takenby the Korea Deposit Insurance Corporation. |
| (7) |
Where the Korea Finance Corporation provides public funds to a financial company, etc., it shall conclude an arrangement with the financial company, etc. on the implementation of a plan for improving soundness in the management of the relevant financial company, etc. and financial intermediary function. |
[This Article Wholly Amended by Act No. 10681, May 19, 2011]
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| Article 18 (Conclusion, etc. of Arrangements with Insolvent Enterprises) |
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| (1) |
Where a financial company, etc. that received public funds under Article 17 (1) intends to provide an insolvent enterprise prescribed by Presidential Decree with new funds, it shall conclude with such enterprise a written arrangement, including a written consent of interested parties in the restructuring of such enterprise and other matters provided for by Presidential Decree. |
| (2) |
Detailed matters concerning the conclusion of an arrangement, etc. under paragraph (1) shall be prescribed by Presidential Decree. |
| (3) |
A financial company, etc. which concludes an arrangement under paragraph (1) may not provide the relevant insolvent enterprise with additional funds if the arrangement is not implemented or is deemed unlikely to be implemented. |
[This Article Wholly Amended by Act No. 10681, May 19, 2011]
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| Article 19 (Sale of Assets, etc.) |
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The Government, the Korea Deposit Insurance Corporation, the Korea Asset Management Corporation, and the Korea Finance Corporation shall endeavor to minimize citizens' burden by selling, at a reasonable price, stocks, etc. of a financial company, etc. and other assets acquired by using public funds.
[This Article Wholly Amended by Act No. 10681, May 19, 2011]
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| Article 20 (Special Cases concerning Bankruptcy Procedures) |
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| (1) |
If an insured financial institution that received public funds including the payment of insurance benefits under the Depositor Protection Act (including insured financial institutions for which a decision on contract transfer is made under the Act on the Structural Improvement of the Financial Industry) is dissolved or bankrupt, a court of competent jurisdiction shall, when the efficient recovery of such public funds is required, appoint the Korea Deposit Insurance Corporation or its executive or employee as a liquidator or a trustee in bankruptcy, notwithstanding Article 531 of the Commercial Act, Article 355 of the Debtor Rehabilitation and Bankruptcy Act, and Acts related to the appointment of liquidators or trustees in bankruptcy. |
[This Article Wholly Amended by Act No. 10681, May 19, 2011]
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| Article 21 (Publication of White Book) |
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The Committee shall publish a white book on the operation status of public funds by not later than August 31 of each year, as prescribed by Presidential Decree.
[This Article Wholly Amended by Act No. 10681, May 19, 2011]
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| Article 21-2 (Period for Preservation of Records) |
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The following records that are related to the Committee and the Committee for the Management of Public Funds established pursuant to the Special Act on the Management of Public Funds (Act No. 6281; hereafter referred to as "each Committee" in this Article) shall be permanently preserved:
| 1. |
Records related to deliberation on and coordination by each Committee; |
| 2. |
Records of reports deliberated on by each Committee after having received from institutions related to public funds, such as the Government, the Financial Services Commission, the Financial Supervisory Commission (referring to the Financial Supervisory Commission established pursuant to the previous Act on the Establishment, etc. of Financial Supervisory Organizations: hereafter the same shall apply in this Article), the Korea Deposit Insurance Corporation, the Korea Asset Management Corporation, and the Korea Finance Corporation; |
| 3. |
Records related to materials, etc, submitted in compliance with the following measures taken by each Committee: |
| (a) |
Request for the submission of reports, data, documents, etc. to related institutions, such as the Financial Services Commission, the Financial Supervisory Commission, the Korea Deposit Insurance Corporation, the Korea Asset Management Corporation, and the Korea Finance Corporation; |
| (b) |
Request for the attendance of and submission of opinions to interested parties, reference witnesses, or appropriate public officials; |
| (c) |
On-the-spot survey on a relevant institution. |
[This Article Wholly Amended by Act No. 10681, May 19, 2011]
CHAPTER IV SUPPLEMENTARY PROVISIONS
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| Article 22 (Gathering Public Opinion) |
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| (1) |
The Committee may gather public opinion on public funds by holding a public hearing, seminar, or similar event, if deemed necessary to do so. |
| (2) |
Expenses incurred in gathering public opinion under paragraph (1) may be reimbursed within budgetary limits. |
[This Article Wholly Amended by Act No. 10681, May 19, 2011]
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| Article 23 (Reimbursement of Expenses) |
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Allowances, travel expenses, and other expenses incurred by or to non-governmental committee members may be reimbursed within budgetary limits.
[This Article Wholly Amended by Act No. 10681, May 19, 2011]
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| Article 24 (Legal Fiction as Public Official in Application of Penal Provisions) |
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Non-governmental committee members shall be deemed public officials in the application of penal provisions under the Criminal Act or any other Act.
[This Article Wholly Amended by Act No. 10681, May 19, 2011]
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Article 2 (Period during Which Bankruptcy Procedures in Certain Cases Apply)
The bankruptcy procedures in certain cases under Article 20 shall remain in force for a period of five years after this Act enters into force: Provided, That liquidators or trustees in bankruptcy appointed by a court of competent jurisdiction under Article 20 shall remain effective until procedures for liquidation or bankruptcy of the relevant foundation expire.
Article 3 (Transitional Provisions on Bankruptcy Procedures, etc. in Certain Cases)
If the efficient recovery of public funds is required, a court of competent jurisdiction shall, within three months after the enforcement date of this Act, appoint additionally the Korea Deposit Insurance Corporation or its executive or employee as a liquidator or a trustee in bankruptcy of an insured financial institution whose liquidation or bankruptcy procedures are in progress at the time this Act enters into force.
ADDENDA<Act No. 6807, Dec. 26, 2002>
Article 1 (Enforcement Date)
This Act shall enter into force on January 1, 2003. (Proviso Omitted.)
Articles 2 through 11 Omitted.
ADDENDA<Act No. 7111, Jan. 29, 2004>
| (1) |
(Enforcement Date) This Act shall enter into force on the date of its promulgation. |
| (2) |
(Applicability concerning Period of Preservation of Records) Notwithstanding the provisions of other Acts, the amended provisions of Article 21-2 of this Act shall apply to any period during which the following documents, including those prepared and managed by the restructuring planning office established under the Financial Supervisory Commission for the purpose of developing a policy on the financial and corporate restructuring and carrying out restructuring affairs in a systematic and efficient manner in the course of raising, investing and using public funds prior to January 1, 2001 and by the corporate restructuring committee established under the arrangement among financial institutions for corporate restructuring promotion, are preserved: |
| 1. |
Documents prepared and managed by the restructuring planning office for a period from its establishment to its dissolution; |
| 2. |
Documents prepared and managed by the corporate restructuring committee for a period from its establishment to its dissolution; and |
| 3. |
Documents prepared and managed by the corporate restructuring committee, which any financial supervisory organization established under the Act on the Establishment, etc. of Financial Supervisory Organizations receives from the corporate restructuring committee. |
ADDENDA<Act No. 7428, Mar. 31, 2005>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 6 Omitted.
ADDENDUM<Act No. 7760, Dec. 29, 2005>
This Act shall enter into force three months after the date of its promulgation.
ADDENDA<Act No. 8863, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDUM<Act No. 9742, May 27, 2009>
This Act shall enter into force two months after the date of its promulgation.
Addendum<Act No. 10681, May 19, 2011>
This Act shall enter into force two months after the date of its promulgation.
