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Untitled Document
REGULATIONS FOR THE IMPLEMENTATION OF THE LAW ON FOREIGN EXCHANGE CONTCONTROL

Adopted by Decision No. 20 of the Cabinet on March 14, 2002

Chapter 1. General

Article 1. These regulations are formulated to make contributions to the development of the national economy and the expansion of external economic relations by holding foreign currency in a unified way and establishing a strict order in the management and use of the country’s foreign currency through the implementation of the Law of the Democratic People’s Republic of Korea on Foreign Exchange Control.
Article 2. Foreign currency includes convertible foreign currency and non-convertible foreign currency.
Convertible foreign currency includes convertible currencies of foreign countries, securities, payment instruments and precious metals.
Convertible currencies of foreign countries includes foreign banknotes and auxiliary coins which can be freely converted into currencies of any other countries at any place and at any time.
Foreign currency securities include State bonds, local bonds, debentures, shares and investment certificates that are denominated in foreign currency.
Foreign currency payment instruments are bills, cheques, certificates of deposit and savings, payment orders and all kinds of credit cards denominated in foreign currency.
Precious metals include gold, silver and platinum, excepting decorative articles, as well as gold and silver coins and other precious metals which are transacted in the international financial markets.
Non-convertible foreign currency includes foreign banknotes and auxiliary coins which cannot be converted into currency of any other countries at any place and at any time.
Article 3. The Ministry of Finance (hereinafter called the State foreign exchange control organ) shall be responsible for the unified control of foreign currency in the country.
Article 4. Foreign currency in cash shall not be circulated inside the territory of the DPRK.
Foreign currency in cash shall be used only after having been exchanged with Korean won at designated places.
Article 5. Foreign currency transactions in the DPRK shall be undertaken by the Foreign Trade Bank.
The Bank shall set formalities and methods concerning settlements in foreign currency transactions, commission of settlement account, deposits of foreign currency, savings and interest rate of loans with the consent of the State foreign exchange control organ.
Other banks may engage in foreign currency transactions with the approval of the State foreign exchange control organ.
Article 6. Agreements between banks pursuant to the agreements between the DPRK and other governments shall be concluded by the Foreign Trade Bank.
Article 7. The bank in charge of foreign currency settlements (hereinafter called the external settlement bank) shall transact foreign currencies within the limit approved by the State foreign exchange control organ.
Article 8. Foreign currency transactions such as buying, selling, depositing, saving and mortgaging of foreign currency shall be done only through the external settlement bank.
Article 9. The kinds of exchange rate of Korean won in foreign currency and the limit of their appliance and pegged exchange rate shall be determined by the State foreign exchange control organ.
Market exchange rate such as the rate of foreign currency in cash and settlement exchange when exchanged into Korean won shall be determined by the Foreign Trade Bank.
Article 10. External settlement shall be made in foreign currencies specified by the State foreign exchange control organ.
If settlement is to be made in the foreign currencies other than those specified, approval shall be obtained for it from the State foreign exchange control organ.
When agreements have been reached concerning external settlement between governments of the DPRK and other countries, the agreements shall take effect.
Article 11. External transactions of organizations and enterprises, foreign-invested businesses, and missions of foreign countries and international organizations shall be settled through their accounts in their external settlement bank.
Article 12. Foreign currencies which are legally earned by individuals inside the territory of the DPRK, and foreign currencies which are remitted from abroad or brought in by a person himself shall be protected by law and may be transferred or inherited.
Article 13. These regulations shall be applied to the organs, enterprises and associations (hereinafter called the organs and enterprises) and citizens that earn or use foreign currency.
These regulations shall also apply to representative offices of other countries and international organizations, foreign-invested enterprises, foreign individuals and overseas Korean compatriots that earn or use foreign currency inside the territory of the DPRK.
These regulations shall also apply to the DPRK representative offices abroad, enterprises, corporations and agencies in other countries.
Article 14. Foreign exchange control in the special economic zone shall be done as specified separately.

Chapter 2. Earning and Use of Foreign Currency

Article 15. The State planning organ shall send plans for earning and expenditure of foreign currency to the relevant organs and enterprises and the State foreign exchange control organ.
Article 16. The organs and enterprises shall draw up draft foreign currency financial plans to carry out the plans for earning and expenditure of foreign currency before submitting them to the State foreign exchange control organ. The provincial people’s committee shall examine and sum up the draft foreign currency financial plans of the organs and enterprises under the local budget before submitting them to the State foreign exchange control organ.
Article 17. The State foreign exchange control organ shall review the draft foreign currency financial plans of the organs and enterprises and specify the rate of obligatory payment of foreign currency to the State by organs and enterprises on the basis of the earning and expenditure plan of foreign currency sent by the State planning organ.
Article 18. An account shall be opened under the following principles:
1. An account shall be opened as required by the principle of unified monetary management system,
2. The organs, enterprises, foreign-invested businesses and representative offices of other countries or international organizations shall keep an account at one bank only,
3. Where the organs and enterprises have several subordinate management units, they shall keep one account and, if they want to have more than one, they shall obtain approval of the State foreign exchange control organ,
4. The organs and enterprises inside the territory of the DPRK cannot keep an account at a bank in a foreign country, and
5. The DPRK establishments resident in foreign countries shall keep one account at a bank of the residing country. If necessary, they may keep one more account after receiving approval of the Cabinet through the State foreign exchange control organ.
Article 19. The organs, enterprises, and representative offices of foreign countries and international organizations shall keep an account at the Foreign Trade Bank.
Article 20. Contractual joint ventures, equity joint ventures, foreign enterprises, branch offices, agencies and other foreign-invested businesses shall keep their accounts at the Foreign Trade Bank.
Foreign-invested enterprises may keep accounts at the other external settlement banks inside the territory of the DPRK or at a bank outside the territory of the DPRK with the consent of the State foreign exchange control organ.
Article 21. In case of opening an account, the application for the opening of an account shall be submitted to the bank at which they wish to open the account.
The application for opening a bank account shall include the necessary items and be accompanied by stamped bill to be used in transactions with the bank and such an evidentiary document as certificates of approval or agreement of the State foreign exchange control organ concerning the opening of the bank account.
The certificate of approval of establishment of the enterprise shall be added to these in case of foreign-invested enterprises.
Article 22. The State foreign currency account shall be under the control of the State foreign exchange control organ.
Article 23. The organs and enterprises shall fulfil the plan for earning foreign currency and the plan of obligatory foreign currency payment to the State.
The organs and enterprises shall deliver the obligatory foreign currency prior to other expenditure out of the earned foreign currency.
Article 24. The organs and enterprises shall deposit obligatorily money due in foreign currency in the State foreign currency account within the fixed period following the procedure of the obligatory delivery of foreign currency to the State specified by the State foreign exchange control organ.
Article 25. In case the organs and enterprises that are not planned to deliver foreign currency obligatorily to the State have earned foreign currency, they shall deliver 10 per cent of the earnings to the State.
Article 26. The organs and enterprises shall keep the foreign currency they earned in their accounts at the relevant external settlement banks.
They shall not deposit foreign currency in a bank of a foreign country or keep it in the custody of an institution, enterprise or individual without the consent of the State foreign exchange control organ.
Article 27. The organs and enterprises shall deposit in their banks their foreign currency earnings accruing from economic transaction with foreign countries, such as adjustments, transaction balances, commissions, demurrage, service charges, penalties and surrender charges, within 20 days from the date on which such earnings are vested.
Article 28. The foreign-invested enterprises shall deposit foreign currency earnings accruing from selling, service charges, interest and commissions in their accounts at their banks.
Article 29. The representative offices of other countries or international organizations shall keep foreign currency remitted from abroad or earned in their accounts at the Foreign Trade Bank.
Article 30. A citizen of the DPRK may have foreign currency in cash, remitted from abroad or legally earned, within the limit defined by the State foreign exchange control organ, and in case of excess, shall either deposit it in the external settlement bank or sell it to that bank.
Article 31. A foreign individual may deposit foreign currency remitted from abroad or legally earned in the external settlement bank of the DPRK or sell it to that bank.
Article 32. Foreign currency shall be used for trade and non-trade, capital and financial transactions.
Trade transactions shall include import and export of goods and economic transactions which are directly related thereto.
Non-trade transactions shall include payments of maintenance cost of representative offices, travelling expenses of delegations, interest, dividend, transactions related to the provision of tourism, communications, port and services, and payment transactions related to inheritance and guarantee.
Capital transactions shall include transactions related to direct investment, civil investment, governmental investment, trusts, debt guarantee, selling and buying of foreign currency payment instruments or bonds, issuance and acquisition of securities, acquisition of real estates and the like.
Financial transactions shall include transactions related to the bonds and debts of the commercial banks and the central bank.
Article 33. The organs and enterprises shall use foreign currency only for specified items and purposes under the condition that they are designated in the foreign currency expenditure plan and that the State foreign currency due is paid.
In case they want to use foreign currency in the items and purposes other than the specification, they shall get approval of the State foreign exchange control organ.
Article 34. Foreign currency in a foreign currency account of the provincial, city or county people’s committee shall be used upon examination of the provincial people’s committee, only for the items and purposes specified in the foreign currency expenditure plan.
Article 35. The permanent representative missions of the DPRK in foreign countries shall be allowed to use foreign currency only for specified purposes and within the standard limit.
Article 36. The organs and enterprises shall obtain approval of the State foreign exchange control organ in case they want to deposit temporarily foreign currency in the permanent representative missions of the DPRK in foreign countries.
Article 37. The organs and enterprises that have overfulfilled their foreign currency earnings plans may use the amount of overfulfilled earnings on their own for the specified items and purposes.
Article 38. Foreign currency settlement related to external transactions shall be made in the form of letter of credit, remittance, payment claim or payment order and so on.
Article 39. The external settlement bank shall settle on a priority basis the foreign currency payments obligatory to the State in the foreign currency accounts of the organs and enterprises.
The external settlement bank shall make unconditional accounts on the State forced foreign currency payment notice issued by the State foreign exchange control organ to the organs and enterprises which have failed to pay State foreign exchange obligatory payments corresponding to their foreign currency earnings.
Article 40. Foreign currency in the State foreign currency account shall be withdrawn by the State foreign exchange control organ under the condition that it is estimated in foreign currency expenditure plan and it is approved by the Cabinet.
Foreign currency in the State foreign currency account shall not be withdrawn exceeding the balance remaining in the account.
Article 41. The State foreign exchange control organ and the external settlement bank shall not withdraw at their own will foreign currency in the accounts of the organs and enterprises without agreement of the customers concerned.
Article 42. The organs and enterprises shall make accounts through the external settlement bank in case of buying goods from other countries.
Article 43. The organs, enterprises and foreign-invested businesses shall apply for money to be paid only within the limit of the balance remaining in their accounts at the relevant external settlement bank.
Article 44. The external settlement bank shall give unconditionally the approved foreign currency wanted by the foreign-invested enterprises or representative missions of foreign countries or international organizations or by the relevant organs and enterprises within the limit of the balance remaining in their accounts.
Article 45. The external settlement bank shall take measures to unify the foreign currency balance of the bank, the State foreign currency account in the bank and the foreign currency balance of organs, enterprises and foreign-invested businesses for the accurate and timely provision of the State foreign currency due and external settlement.
Article 46. The external settlement bank shall guarantee the secrecy concerning deposits and savings of foreign currency and calculate interests as specified.
The external settlement bank shall discharge foreign currency wanted by depositors and savers in good time.
Article 47. The external settlement bank shall produce and deliver to the customer a notice of credit and debt describing the transactions of the day by the next working day and monthly balance statements describing the transactions during the month within 10 days after the end of the month.
The customer shall make sure of these notices and statements and, if he has an objection thereto, shall notify the bank thereof by the next working day in case of a daily notice and within 5 days after its receipt in case of a monthly statement.
Article 48. The organs, enterprises and foreign-invested businesses may draw a loan in foreign currency needed for the normalization of production, modernization of production processes and other business operations from the external settlement bank.
Article 49. The external settlement bank shall make a loan in foreign currency on the basis of the foreign currency loan plan.
The foreign currency loan plan shall be approved by the Cabinet after being agreed by the State foreign exchange control organ.
Article 50. The organs and enterprises shall consult with the State foreign exchange control organ and be approved by the Cabinet if they want to draw a governmental loan from another country or receive a loan or grant from an international economic organization, enterprise or financial establishment.
The organs and enterprises shall lay aside redemption margin for the borrowed money in foreign currency such as loan and grant in their accounts of the State foreign exchange control organ and notify the result to the State foreign exchange control organ.
Loan and grant include foreign currency in cash and securities and property in kind.
Article 51. Where the organs, enterprises and foreign-invested businesses wish to issue foreign currency securities such as foreign currency bonds and stocks, they shall apply to the relevant organ for its approval or consent.
Article 52. The organs and enterprises shall deposit in the relevant external settlement bank the foreign currency earned or remaining unused in a foreign country, and if they are to use it urgently, they may use it on the spot with the approval of the Cabinet through the State foreign exchange control organ.
Article 53. Where the organs, enterprises and individual officials have used foreign currency in a foreign country with the approval or consent of the State foreign exchange control organ, they shall sum up the use with their banks and undergo case-by-case review and confirmation by the State foreign exchange control organ within the specified time limit.

Chapter 3. Bringing in and Taking out of Foreign Currency

Article 54. Foreign currency in cash, foreign currency securities and precious metals may be brought into the territory of the DPRK without limit. In this case, customs declaration shall be made and commission or tariff shall not be applied.
Article 55. Foreign currency in cash shall be allowed to be taken out of the territory of the DPRK within the limit of such amount as set in the foreign currency exchange document and the paper of cash payment issued by the external settlement bank or as declared to the customs upon entry.
Article 56. Securities in foreign currency may be removed from the territory of the DPRK only with the permission of the State foreign exchange control organ.
Securities in foreign currency declared to the customs upon entry may be taken out of the territory of the DPRK without permission being sought.
Article 57. Precious metals, except those declared to the customs upon entry, and precious metals to be exported may be taken out of the territory of the DPRK with permission by the Central Bank.
Except for the commemorative coins and decorative articles purchased in the territory of the DPRK, precious metal products may be taken out of the territory of the DPRK upon production of the certificates issued by their sellers.
Article 58. A foreign-invested business may take foreign currency out of the territory of the DPRK as categorized in the followings:
1. Funds for importing raw and other materials, equipment and the like for production,
2. Funds needed for importing materials for management purposes,
3. Funds for the maintenance of branches, representative offices, agencies and liaison offices set up in foreign countries, and
4. Funds needed for the acquisition of securities or real estates of foreign countries.
Article 59. Travelers’ cheques, credit cards and the like issued or sold by the external settlement bank of the DPRK may be brought out of the territory of the DPRK without relevant certificates.
Article 60. A foreign investor may remit out of the territory of the DPRK profits and earnings from business and leftovers after liquidation of business without being taxed or transmit capital without limit under the condition that they are certified by a certific public accountants’office.
Article 61. A foreign individual may remit or take out of the territory of the DPRK foreign currency running up to 60 per cent of his total salaries and other legitimate foreign currency earnings. When an amount exceeding 60 per cent is to be remitted or taken out, it shall be approved by the State foreign exchange control organ.
Article 62. Where an agreement on bringing in and taking out of each other’s currencies has been concluded between the governments of the DPRK and a foreign country, the agreement shall take effect.

Chapter 4. Guidance and Supervision over Foreign Exchange Control

Article 63. The State foreign exchange control organ shall guide and supervise foreign exchange control under the unified guidance of the Cabinet.
The State foreign exchange control organ shall establish a correct system of guidance over foreign exchange control and balance the earning and expenditure of foreign currency.
Article 64. The organs and enterprises under the central budget shall be guided directly by the State foreign exchange control organ and the organs and enterprises under the local budget shall be guided through the provincial people’s committee.
Article 65. The State foreign exchange control organ shall exercise unified supervision and management of the foreign currency claims and liabilities of foreign countries.
The organs and enterprises concerned shall submit in time the necessary data demanded by the State foreign exchange control organ.
Article 66. The State foreign exchange control organ shall grasp financial management of foreign currency in foreign-invested enterprises and supervise their obligatory payment to the State of foreign currency.
Article 67. The State foreign exchange control organ shall formulate laws and regulations concerning foreign currency control and direct their correct implementation.
Article 68. The State foreign exchange control organ shall define the scope of foreign exchange transactions of the external settlement bank and supervise the bank’s transactions within the scope.
Article 69. The State foreign exchange control organ shall define the standards of expenditure of foreign currency such as living allowances and travel expenses of the citizens of the DPRK who reside in or travel to foreign countries (officials of diplomatic missions, overseas construction and contractual and equity joint ventures, travelers on business, technicians, specialists, students studying abroad, etc) and supervise their implementation.
Article 70. The organs and enterprises shall review the implementation of foreign exchange financial plans on a monthly and quarterly basis and submit quarterly and yearly accounts of foreign currency to the State foreign exchange control organ through their respective superior organs.
The accounts shall be accompanied by the confirmation of foreign currency remainder issued by the relevant external settlement bank.
The provincial people’s committee shall review and sum up the accounts of foreign currency of the organs and enterprises under the local budget before submitting them to the State foreign exchange control organ.
The method and form of making the accounts of foreign currency shall be defined by the State foreign exchange control organ.
Article 71. The organs of the DPRK in foreign countries shall on a quarterly basis submit the document relating to foreign exchange accounts, together with the list of floating height of their accounts at the banks of the countries concerned within specified date to the State foreign exchange control organ.
Article 72. The foreign-invested business shall settle on a quarterly basis its earning and expenditure of foreign currency, have it verified by a certific public accountants’ office and submit it to the foreign exchange control organ through the relevant organ within the specified date.
Article 73. The foreign-invested business that keeps an account at a bank of a foreign country shall submit to the State foreign exchange control organ document relating to its earning and expenditure of foreign currency in the account within 30 days of the first month of the next quarter.
Article 74. The State foreign exchange control organ shall regularly receive the quarterly and yearly financial statements and other necessary statistical data from the external settlement bank and analyze the earning and expenditure of foreign currency.
Article 75. The State foreign exchange control organ shall review on a quarterly basis the fulfillment of the national plan of earning and expenditure of foreign currency and the plan of the State foreign currency obligatory payment, analyze the data and submit it to the Cabinet.
Article 76. The State foreign exchange control organ shall regularly inspect foreign currency management of the external settlement bank and the relevant organs and enterprises and take corresponding measures.
The external settlement bank and the relevant organs and enterprises shall provide the State foreign exchange control organ necessary conditions for such inspection.
Article 77. Where the organs and enterprises have failed to pay the State foreign currency due corresponding to the foreign currency earnings within the specified date, arrearage charge of 1 per cent of the amount in question shall be imposed every day.
Article 78. Where the organs and enterprises have failed to deposit their foreign currency earnings with the bank, the State foreign exchange control organ shall confiscate the total amount and put it into the State foreign exchange account.
Article 79. Where the organs and enterprises have deposited their foreign currency earnings with a bank other than the approved external settlement bank, the State foreign exchange control organ shall move the total amount to the approved external settlement bank and fines of up to 10 per cent of the total amount of foreign currency in question be imposed.
Article 80. The external settlement bank shall pay the relevant damages in case it has inflicted losses on depositors and savers for its failure to disburse foreign currency in time.
Damages shall be paid to the savers and depositors by calculating the interest by means of the interest rate 20 per cent higher than the rate designated one for the delayed amount and period.
Article 81. The relevant total amount of foreign currency shall be confiscated in the following cases:
1. The organs, enterprises and the DPRK citizens have kept foreign currency in foreign countries,
2. The organs and enterprises have transacted with each other in foreign currency in cash without going through the external settlement bank,
3. Foreign currency was dealt in illicitly,
4. Taking in or bringing out of foreign currency is going to be conducted in violation of the relevant order, and
5. Foreign currency was earned by illegal means.
Article 82. Where an account has been opened at another bank without consent of or agreement with the State foreign exchange control organ, the account in question shall be closed and fines shall be levied within the scope of 50 per cent of the balance.
Article 83. In case of either refusal to pay arrears, indemnities, recovery, forfeit and confiscated money or failure to pay them by the set time limit, the amount in question shall forcefully be withdrawn from the relevant account at the bank.
Article 84. Arrears, confiscated money, recovery, forfeit and indemnities paid in foreign currency shall be put into the State foreign exchange account.
Article 85. The organs, enterprises and senior officials who have caused hindrance to foreign exchange management owing to breach of these regulations shall be subject to administrative or criminal penalties, corresponding to the severity of the violation whatsoever.


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