Reporting Requirements for Currency Exchange Operators on Transactions Exceeding USD 10,000 or KRW 10 Million Released

When a currency exchange business operator purchases foreign currency exceeding USD 10,000 or cash amounting to KRW 10 million or more from the same individual, they are legally obligated to report specific information to the Korea Customs Service (KCS), National Tax Service (NTS), and Korea Financial Intelligence Unit (KoFIU) within designated deadlines. These procedures are critical for maintaining transparency in financial transactions and preventing illegal fund flows.

Reporting Foreign Currency Purchases Exceeding USD 10,000

If a money changer purchases foreign currency (or other foreign means of payment) exceeding USD 10,000 from the same person on the same day, the following obligations apply under the Foreign Exchange Transactions Act:

• Recipients: The Korea Customs Service (KCS) and the National Tax Service (NTS).
• Deadline: By the 10th day of the month following the month in which the transaction occurred.
• Required Document: A copy of the Foreign Exchange Sale Application (the form completed during the purchase).
• Objective: To prevent illegal foreign exchange dealings, monitor tax evasion, and ensure the soundness of cross-border capital movements.

High-Value Cash Transaction Report (CTR) for KRW 10 Million or More

Under the Act on Reporting and Use of Certain Financial Transaction Information, additional reporting is required for large cash transactions to combat money laundering:

• Criteria: Cash transactions (including purchases) of KRW 10,000,000 or more involving the same person on the same day.
• Recipient: The Commissioner of the Korea Financial Intelligence Unit (KoFIU).
• Deadline: Within 30 days from the date of the transaction.
• Purpose: This is categorized as a High-Value Cash Transaction Report (CTR), serving as a core mechanism for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT).

Submission Methods and Legal Consequences of Non-Compliance

Reporting is typically conducted through the electronic filing systems of each respective institution. For USD 10,000+ transactions, operators use the KCS and NTS foreign exchange information systems. For KRW 10 million+ cash transactions, reports are filed via the FIU Reporting System. It is essential for operators to maintain meticulous transaction records and strictly adhere to deadlines.

Failure to fulfill these reporting obligations may result in severe penalties, including:

• Administrative Sanctions: Imposition of fines for negligence, suspension of business operations, or revocation of registration.
• Criminal Penalties: Possible criminal prosecution under the Foreign Exchange Transactions Act and related financial laws.

To ensure full compliance and avoid legal risks, currency exchange operators should stay updated on relevant regulations or seek professional guidance from a Customs Broker or trade consultant.