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ACT ON REAL NAME FINANCIAL TRANSACTIONS AND GUARANTEE OF SECRECY

Amended by Act No. 9324, Dec. 31, 2008

Article 1 (Purpose)

The purpose of this Act is to realize economic justice and to facilitate the sound development of National economy by implementing real name financial transactions and protecting financial secrets through normalized financial transactions. Article 2 (Definitions)

For the purpose of this Act, the definitions of terms shall be as follows:

1. The term "financial institutions" means: (a) The Bank of Korea, Korea Development Bank, Export-Import Bank of Korea, Industrial Bank of Korea, and financial institutions under the Banking Act; (b) The Long-Term Credit Bank under the Long-Term Credit Bank Act; (c) An investment trader, an investment broker, a collective investment business entity, a trust business entity, a security finance company, a merchant bank and a transfer agent under Article 32 of the Financial Investment Services and Capital Markets Act;

(d) Deleted; (e) Mutual savings banks and the Federation of Savings Banks under the Mutual Savings Banks Act;

(f) Agricultural cooperatives and the National Agricultural Cooperative Federation under the Agricultural Cooperatives Act;

(g) Fisheries cooperatives and the National Federation of Fisheries Cooperatives under ACT ON REAL NAME FINANCIAL

TRANSACTIONS AND GUARANTEE

OF SECRECY

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the Fisheries Cooperatives Act;

(h) Livestock cooperatives and the National Livestock Cooperatives Federation under the Livestock Cooperatives Act;

(i) Ginseng cooperatives and the National Ginseng Cooperatives Federation under the Ginseng Cooperatives Act;

(j) Credit unions and the National Credit Union Federation under the Credit Unions Act;

(k) Community credit cooperatives and the Korean Federation of Community Credit Cooperatives under the Community Credit Cooperatives Act; (l) and (m) Deleted; (n) Insurers under the Insurance Business Act;

(o) Post offices under the Postal Savings and Insurance Act; and (p) Other institutions as determined by the Presidential Decree;

2. The term "financial assets" means cash and securities, such as demand deposits, installment deposits, installments, fraternity dues, depositary receipts, investments, trust property, stocks, bonds, beneficiary certificates, contribution quotas, bills, checks and debt certificates which are dealt with by financial institutions, and other similar items as determined by Ordinance of the Prime Minister;

3. The term "financial transactions" means transactions in which financial institutions receive, sell and purchase, repurchase, mediate, discount, issue, redeem, are entrusted with, register, or exchange financial assets, or in which financial institutions pay interest, money discounted, or dividends of those financial assets or carry out such payment as an agent, or other transactions involving financial assets as determined by Ordinance of the Prime Minister; and

4. The term "real name" means a name entered in a resident registration card, a name entered in the business registration certificate, and other names as determined by Presidential Decree.

Article 3 (Real Name Financial Transactions)

(1) Financial institutions shall perform financial transactions with customers under their real names.

(2) Notwithstanding the provisions of paragraph (1), financial institutions may decide not to verify real names of the customers concerned in case of any transactions falling under the following subparagraphs: No. 8635, Aug. 3, 2007>

1. Continuous transactions by accounts in which the real names of the persons concerned have been verified, and transactions such as receipt of public impositions and transfers of not more than one million won, as determined by Presidential Decree;

2. Transactions such as the purchase of foreign currency, receipt of deposits in foreign currency or transfers of bonds in foreign currency, during the period as determined by Presidential Decree; and

3. Transactions of bonds which fall under any of the following items (hereinafter referred to as "specific bonds") and are issued under the issue terms such as the period, interest rate, and maturity as determined by the Minister of Finance and Economy between the date of entry into force of this Act and December 31, 1998: (a) Bonds issued for employment stabilization security, improvement of workers' vocational abilities and livelihood stabilization as determined by Presidential Decree;

(b) Bonds in foreign currency which are foreign exchange equalization fund bonds referred to in Article 14 of the Foreign Exchange Control Act; (c) Bonds issued for restructuring assistance to small and medium businesses, as determined by Presidential Decree;

(d) Corporate bonds which a merchant bank issued under Article 329 of the Financial Investment Services and Capital Markets Act; and (e) Other bonds issued for the stabilization of people's livelihood and the sound development of the national economy, as determined by Presidential Decree. (3) The verification methods and procedures of real name transactions and other necessary matters shall be determined by Ordinance of the Prime Minister. Article 4 (Guarantee of Secrecy of Financial Transactions) (1) No person working for financial institutions shall provide or reveal information or data concerning the contents of financial transactions (hereinafter referred to as "transaction information") to any person unless he receives a request or consent in writing from the holder of a title deed (in case of trust, meaning a truster or beneficiary), and no person may request a person working for financial institutions to provide transaction information. Provided, that the same shall not apply to any 864 Ministry of Government Legislation

of the following cases in which the said transaction information is requested or provided to the minimum limit necessary for the purpose of use thereof:

1. The release of the transaction information is upon order of the court, to be produced as evidence or upon subpoena duces tecum issued by a judge;

2. To provide of tax data which must be submitted under tax-related Acts, and to provide transaction information necessary to confirm inherited or donated property to prove a suspected case of tax evasion, to request information on taxpayer's property, and to make legal inquiries and investigation into taxes due, wherein they fall under any of the subparagraph of Article 14 (1) of the National Tax Collection Act to the heads of the competent agencies;

3. To provide transaction information by the Governor of the Financial Supervisory Service and the President of the Korea Deposit Insurance Corporation through a resolution by the relevant investigation committees, as necessary for the legislative investigation of state affairs under the Act on the Inspection and Investigation of State Administration Act;

4. To provide transaction information necessary to supervise and inspect financial institutions by the Financial Services Commission (referring to the Securities Futures Commission in the case of investigation of unfair trade practices in the securities or derivatives markets; hereafter the same shall apply in this Article), the Governor of the Financial Supervisory Service and the President of the Korea Deposit Insurance Corporation, where it falls under any of the following items and where it is to be presented to the investigation committees pursuant to subparagraph 3:

(a) Where it is necessary to investigate insider trading and unfair transaction practices;

(b) Where it is necessary to detect financial misconduct such as embezzlement of funds from customer or cash withdrawal after receiving payments without proof of legitimate sources;

(c) Where it is necessary to investigate unsound financial transaction practices such as receipt of compulsory deposits and issuance of cashier's checks; (d) Where it is necessary to investigate the violation of certain provisions of Acts and Statutes such as a violation of real name financial transactions, off-book transactions, loans for contributors or loans for an individual in excess of the Laws on Green Growth, and Economic Investment in Korea 865 05_LawsConcerningEconomicInvestment

amount that can be loaned; and

(e) Where it is necessary for the deposit insurance services under the Depositor Protection Act to carry out the functions of making a list of depositors by the President of the Deposit Insurance Corporation under the Act on the Structural Improvement of the Financial Industry;

5. Provision of transaction information necessary for business within any financial institution or between financial institutions;

6. Provision of transaction information that are necessary for the Financial Services Commission and the Governor of the Financial Supervisory Service to cooperate with foreign financial supervisory institutions (including international financial supervisory bodies; hereinafter the same shall apply), which perform the work equivalent to the Commission's or Service's work, in facilitating their work cooperation on the matters falling under each of the following items: (a) The supervision and the inspection of financial institutions, the overseas branches of the financial institutions and local corporations; and (b) In cooperation in the facilitating of the exchange of information and the inspection as provided for in Article 437 of the Financial Investment Services and Capital Markets Act;

7. To provide transaction information held by security companies and futures traders needed by the Korea Exchange, as established pursuant to the Financial Investment Services and Capital Markets Act (hereinafter referred to as the "Korea Exchange"), in cases falling under each of the following subparagraphs: (a) Where the examination or the supervision are performed on any irregular transaction pursuant to the provisions of Article 404 of the Financial Investment Services and Capital Markets Act; and

(b) Where it is necessary to cooperate with any foreign exchange company that perform the functions equivalent to the functions of the Korea Exchange in connection with the examination or supervision of any irregular transaction. Provided, that the same shall only apply to cases where prior approval therefore is obtained from the Financial Services Commission; and

8. Other provision of any transaction information under Acts which must be disclosed to various persons under the relevant Acts.

(2) A person who requests transaction information pursuant to paragraph (1) 1 through 4, or 6 through 8 shall do so at a specified business place of a financial institution 866 Ministry of Government Legislation

by means of the standard form as stipulated by the Financial Services Commission containing the following subparagraphs. Provided, that in the event that anyone intends to request the provisions of transaction information, etc. referred to in paragraph (1) 1 and transaction information referred to in paragraph (1) 2, both of which are concerned with a person who is recognized to be suspected of having evaded the income tax or the corporate tax, which is corroborated by indisputable data on his holding period of real estate (including any right to such real estate; hereafter in this paragraph the same shall apply), the number of his real estate, the scale of his transaction of real estate and his ways of executing real estate transaction in connection with the real estate transaction prescribed by Presidential Decree and that it is necessary to confirm the fact of his evading taxes (including any person who has acted as an agent or a broker for the transaction of the relevant real estate) or transaction information, etc. that are necessary to inquire about the property of any defaulter whose arrearage amounts to not less than 10 million won under the conditions as prescribed by Presidential Decree, he may request the department which keeps and manages transaction information to provide such information:

1. Personal information on the holder of a title deed;

2. Trade period subject to a request;

3. Legal ground for a request;

4. Purpose of the use of information;

5. Contents of transaction information requested; and

6. Personal information, such as the name and duties etc., of the person in charge and the authorized person in the institution to be requested. (3) Where persons working for financial institutions receive a request for the provision of transaction information in violation of paragraph (1) or (2), they shall be denied such request.

(4) No person who obtains knowledge of transaction information pursuant to paragraph (1) (including Article 5 (1) 1 through 4 of the previous Real Name Financial Transactions Act and each subparagraph of Article 4 (1) of the Presidential Financial and Economic Emergency Order on Real Name Financial Transactions and Guarantee of Secrecy) shall provide or disclose such information to other persons, or use such information for other purposes other than the original purpose, and no person shall request a person who comes to know such information to provide such information: Laws on Green Growth, and Economic Investment in Korea 867 05_LawsConcerningEconomicInvestment

Provided, That the same shall not apply to a case where the Financial Services Commission or the Governor of the Financial Supervisory Service provides any foreign financial supervisory institution with the transaction information, etc. that it or he has learned pursuant to the provisions of paragraph (1) 4 and 6 or the Korea Securities and Futures Exchange provides any foreign exchange, etc. with any transaction information pursuant to the provisions of paragraph (1) 7. (5) Persons who have obtained transaction information in violation of paragraph (1) or (4) of (including those who have obtained transactions information again from them) shall not divulge or disclose it to another.

(6) Where provision of transaction information is requested pursuant to any of the following Acts, it shall be based upon the standard form as stipulated by the Financial Services Commission under paragraph (2), notwithstanding the provisions of relevant Acts:

1. Article 27 (2) of the Board of Audit and Inspection Act;

2. Article 134 (2) of the Act on the Election of Public Officials and the Prevention of Election Malpractices Act;

3. Article 8 (5) of the Public Service Ethics Act;

4. Article 50 (5) of the Monopoly Regulation and Fair Trade Act;

5. Article 83 (1) and (2) of the Inheritance Tax and Gift Tax Act;

6. Article 10 (3) of the Act on Report on Specific Financial Transaction Information and Utilization Thereof, etc.; and

7. Article 6 (1) of the Act on the Submission and Management of Taxation Data. Article 4-2 (Notice of Fact to Provide Transaction Information) (1) Where a financial institution has provided transaction information with the written consent of the holder of a title deed, or has provided it pursuant to Article 4 (1) 1, 2 (excluding taxable data, etc. that shall be submitted under the tax-related Acts), 3 and 8, the financial institution shall notify in writing the holder of a title deed of the relevant contents, purpose of use, person to be provided, and date of provision, etc., within 10 days from the date of such provision (where such notice is deferred under paragraph (2) or (3), the date on which the deferred period of notice expires).

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(2) Where a financial institution receives a written request for a deferment of notice from a person requesting for a transaction information, subject to notice on the grounds falling under any of the following subparagraphs, the financial institution shall defer such notice for the requested deferment period (6 months where the deferment of notice has been requested or longer on the grounds of subparagraph 2 or 3):

1. Where the relevant notice provides that there is imminent threat to human life or body;

2. Where the relevant notice carries a matter of obvious concern about obstructing the progress of fair legal procedures such as destruction of evidence or threat to witness; or

3. Where the relevant notice carries a matter of obvious concern about obstructing, or delaying to excess the progress of administrative procedures such as an interrogation or investigation.

(3) Where a person requesting for transaction information presents that the reasons falling under any subparagraph of paragraph (2) is continued and repeatedly requests in writing a deferment of notice, a financial institution shall defer such notice for the requested deferment period within the limited time of 3 months for each time and may only be deferred twice from the date of such original request (excluding the case of paragraph (2) 1). Provided, that where a person requesting for transaction information under Article 4 (1) 2 (excluding taxable data, etc. that shall be submitted under the tax-related Acts) requests a deferment of notice, it shall defer such notice for the requested deferment period within 6 months from such date. (4) Expenses spent by any financial institution to notify the title holder of the fact of provision of transaction information under paragraph (1) shall be borne by anyone who has requested that such transaction information be provided pursuant to Article 4 (1) under the conditions as prescribed by the Presidential Decree.

(5) Where provision of transaction information is requested pursuant to any of the following Acts, paragraphs (1) through (4) shall be applicable:

1. Article 27 (2) of the Board of Audit and Inspection Act;

2. Article 134 (2) of the Act on the Election of Public Officials and the Prevention of Election Malpractices Act;

3. Article 8 (5) of the Public Service Ethics Act; Laws on Green Growth, and Economic Investment in Korea 869 05_LawsConcerningEconomicInvestment

4. Article 50 (5) of the Monopoly Regulation and Fair Trade Act;

5. Article 83 (1) and (2) of the Inheritance Tax and Gift Tax Act; and

6. Article 6 (1) of the Act on the Submission and Management of Taxation Data. [This Article Newly Inserted by Act No. 6682, Mar. 30, 2002] Article 4-3 (Record and Management of Details concerning Provision of Transaction Information)

(1) A financial institution shall record and manage, pursuant to the standard form as stipulated by the Financial Services Commission, information containing the following subparagraphs, in case where it has provided transaction information to persons other than the holder of a title deed with his written consent, has received a request that a transaction information be provided from persons other than the holder of a title deed pursuant to Article 4 (1) 1, 2 (excluding taxable data, etc. that shall be submitted under the tax-related Acts), 3, 4, 6, 7 or 8 or has provided transaction information to other persons than the holder of a title deed:

1. Personal information of the person requesting (person in charge and responsible person), details and date of such request;

2. Personal information of the provider (person in charge and responsible person) and the date of provision;

3. Details of transaction information provided;

4. Legal ground for provision; and

5. Date on which the financial institution has notified the holder of a title deed. (2) Records under paragraph (1) shall be preserved for 5 years from the date when the transaction information was provided (where such request has been refused, the date of denial of the request was received).

(3) Where provision of transaction information is requested pursuant to any of the following Acts, paragraphs (1) and (2) shall be applicable:

1. Article 27 (2) of the Board of Audit and Inspection Act;

2. Article 134 (2) of the Act on the Election of Public Officials and the Prevention of Election Malpractices Act;

3. Article 8 (5) of the Public Service Ethics Act; 870 Ministry of Government Legislation

4. Article 50 (5) of the Monopoly Regulation and Fair Trade Act;

5. Article 83 (1) and (2) of the Inheritance Tax and Gift Tax Act;

6. Article 10 (3) of the Act on Report on Specific Financial Transaction information and Utilization Thereof, etc.; and

7. Article 6 (1) of the Act on the Submission and Management of Taxation Data. [This Article Newly Inserted by Act No. 6682, Mar. 30, 2002] Article 4-4 (Duties of Financial Services Commission) The Financial Services Commission shall collect the statics data on request for transaction information and the granting of such request under this Acts or other Acts, and upon the request of the National Assembly, submit a report thereto.

[This Article Newly Inserted by Act No. 6682, Mar. 30, 2002] Article 5 (Differential Taxation on Income Accruing from Non-Real Name Assets)

With respect to the income from interests and dividends accruing from financial assets transacted under non-real names, the withholding tax rate for the income tax shall be 90/100 (20/100 (15/100 on and after January 1, 2001) for the income from interests arising from specific bonds), and such income shall not be included in the calculation of tax base for global income referred to in Article 14 (2) of the Income Tax Act. Article 6 (Penal Provisions)

(1) A person who violates the provisions of Article 4 (1) or (3) through (5) shall be punished by imprisonment for not more than five years or by a fine not exceeding 30 million won.

(2) Penalty of imprisonment and fines pursuant to paragraph (1) may be concurrently imposed.

Article 7 (Fine for Negligence)

(1) Officers and employees of financial institutions who violate the provisions of Articles 3, 4-2 (1) and (5) (limited to the cases where the provisions of Article 4-2 (1) are applied) and 4-3 shall be punished by a fine for negligence not exceeding five million Laws on Green Growth, and Economic Investment in Korea 871 05_LawsConcerningEconomicInvestment

won. (2) A fine for negligence pursuant to paragraph (1) shall be imposed and collected by the Financial Services Commission under the conditions as determined by Presidential Decree. (3) through (5) Deleted. Article 8 (Joint Penal Provisions)

If the representative of a juridical person, or an agent, an employee, or any other employed person of the juridical person or an individual commits an act in violation of Article 6 or 7 in connection with the affairs of the juridical person or the individual, not only shall such person be punished, but also the juridical person or the individual shall be punished by a fine or a fine for negligence under the same Article: Provided, That this shall not apply in cases where the juridical person or individual has not committed negligence in giving reasonable attention and supervision to the affairs in order to prevent the violation thereof.

[This Article Wholly Amended by Act No. 9324, Dec. 31, 2008] Article 9 (Relations with Other Acts)

(1) Where this Act conflicts with other Acts, this Act shall apply. (2) Notwithstanding the provisions of paragraph (1), at the time when the Presidential Financial and Economic Emergency Order on Real Name Financial Transactions and Guarantee of Secrecy enters into force, Acts applied in preference to the said Presidential Financial and Economic Emergency Order shall govern. ADDENDUM

This Act shall take effect on the date of its promulgation.