I heard the obligation to collect export proceeds under the Foreign Exchange Transactions Act was abolished. Can it be re-imposed and punished in cases like natural disasters, and how does it relate to customs inspections? Released

As you correctly understand, the former Foreign Exchange Transactions Act (hereinafter referred to as the "FETA") explicitly stipulated the obligation to collect claims such as export payments. However, through the 2017 amendment of the FETA, this mandatory claim collection obligation was removed. This reflects the government's policy intent to expand the freedom of foreign exchange transactions and alleviate the regulatory burden on companies' overseas expansion and trade activities. In the past, this obligation was specified in Article 7 (Order to Collect Claims) of the Foreign Exchange Transactions Act and its related enforcement decrees and regulations, but currently, those provisions have all been deleted.

However, the obligation to collect claims has not completely disappeared, and a "safety device" is in place that can be re-imposed exceptionally in situations posing a significant threat to the national economy. Article 6 of the FETA grants the Minister of Economy and Finance the authority to take specific measures, including the obligation to collect claims, in cases where natural disasters, war, armed conflict, significant and rapid fluctuations in domestic or international economic conditions, or other similar situations occur, leading to concerns about harming the stability of the national economy or expecting a serious impact on the balance of payments and the stability of the foreign exchange market.

If the Minister of Economy and Finance re-imposes the claim collection obligation in such an emergency situation and a party fails to collect claims in violation of that measure, they may be punished under Article 27, Paragraph 1, Subparagraph 4 of the Foreign Exchange Transactions Act. This can be understood as the legislative intent to maintain minimum control for managing significant national economic crises in specific circumstances. For example, if national capital outflow becomes severe or a foreign exchange crisis is imminent, it serves as a basis for the government to order exporting companies to actively collect uncollected claims. However, it should be noted that this is a special measure activated only in very exceptional and grave circumstances.

Separately, it is also important to understand the role of Customs. Customs not only handles import and export clearance but also performs the role of verifying the propriety of foreign exchange transactions. If export payments are not collected despite exports being made, or if a "Discrepancy" occurs between the export amount and the foreign exchange receipt amount, Customs may request verification. This is an important procedure to confirm the propriety of foreign exchange management and to prevent violations of foreign exchange laws through illegal capital outflow, money laundering, or abnormal trade transactions.

Therefore, if export payments cannot be received, you must thoroughly maintain all supporting documents that can clearly prove the reason (e.g., bankruptcy of the counterparty, refusal of payment, breach of contract, product defects and returns, damage compensation agreements, etc.). Examples include contracts, invoices, Bills of Lading (B/L) or Air Waybills (AWB), bank transfer records, evidence of efforts to collect claims (demand letters, litigation-related documents), communication records with the counterparty, and damage reports—materials that can objectively prove the reason for the non-collection of payments. These materials play a decisive role in explaining the propriety of the transaction during foreign exchange transaction inspections by Customs or the Bank of Korea. If supporting evidence is insufficient, there is a risk of potential violations of the Foreign Exchange Transactions Act or receiving additional requests for explanation, even though the mandatory claim collection obligation has been deleted.

In summary, while the obligation to collect export payments has been removed under normal circumstances, it can be re-imposed by the Minister of Economy and Finance during significant national economic crises, and violations may lead to punishment. Furthermore, as Customs can verify the propriety of transactions when a discrepancy occurs between exports and foreign exchange receipts, my key advice as a customs broker is to thoroughly maintain all related supporting documentation.