[Asia Economy Honam Reporting Headquarters Reporter Yoon Jamin] Since the revision of the Foreign Exchange Transactions Act Enforcement Decree by the Korea Customs Service in 2013, the amount of illegal capital transactions detected among export-import companies has reached 4.9882 trillion KRW.
According to data received from the Korea Customs Service by National Assembly member Yang Hyang-ja (Planning and Finance Committee, Gwangju Seo-gu Eul) on the 20th, since the revision of the Foreign Exchange Transactions Act Enforcement Decree in 2013, up until August this year, there have been a total of 77 crackdowns on capital transactions of export-import companies, with detected amounts reaching 4.9882 trillion KRW.
The Korea Customs Service has been conducting inspections of parties and related persons involved in export-import transactions, service transactions, and capital transactions, commissioned by the Ministry of Strategy and Finance, since the revision of the Foreign Exchange Transactions Act Enforcement Decree in 2013.
With the revision of the enforcement decree, the Korea Customs Service was granted joint inspection authority with the Financial Supervisory Service (FSS) over illegal capital transactions of export-import companies, and they conduct continuous monitoring together.
However, over the past eight years, the joint inspection record totals only 10 cases, with detected amounts of 143.3 billion KRW, showing that the performance of joint inspections has been very minimal.
In the case of the Financial Supervisory Service, although it has inspection authority over illegal capital transactions of general export-import companies, continuous crackdowns have not been conducted, resulting in a de facto absence of supervisory functions over illegal capital transactions.
Under the Foreign Exchange Transactions Act, joint inspections by the Financial Supervisory Service and the Korea Customs Service are possible, but since they are different institutions, joint inspections have not been properly carried out in practice.
In particular, the Korea Customs Service is an institution with over 20 years of know-how and expertise in foreign exchange investigations and inspections of export-import companies, and it has been confirmed that in the past five years, foreign exchange investigations and crackdowns on illegal capital transactions totaled 59 cases, amounting to 3.8752 trillion KRW.
Representative Yang said, “Although joint crackdowns by the Financial Supervisory Service and the Korea Customs Service are possible under current law, in reality, crackdowns are being conducted solely by the Korea Customs Service,” and added, “If the Korea Customs Service, which has expertise, secures independent inspection authority over capital transactions, it will be a good measure to block illegal capital transactions.”
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