Article 1(Definitions) #
(1) The term “pawnbroking business” in this Act means a business which secures an obligation as a pawned article concerned during the period of foreclosure by acquiring a pledge right as prescribed by the Civil Act on any articles or securities (referred to as “pawned article”; hereinafter the same shall apply) and lends money by attaching standard contractual terms and conditions which connects the pawned article to the payment of the obligation, if the obligation is not paid.
(2) The term “pawnbroker” in this Act means a person who carries on the pawnbroking business, and who has obtained permission under Article 2 (1).
Article 2(Permission for Pawnbroking Business) #
(1) Any person who intends to be a pawnbroker shall obtain permission for each such business office from a chief of the police station having jurisdiction over its location according to the procedure as prescribed by the Presidential Decree.
(2) In the case of paragraph (1), when the pawnbroker establishes an office which is not managed by him, he shall assign a manager for the office.
Article 3(Standards for Permission) #
(1) In case where a person who intends to obtain permission as referred to in Article 2 (1) falls under any of the following subparagraphs, the chief of the police station shall not permit it: <Amended by Act No. 5123, Dec. 30, 1995>
1. A person who was sentenced by a punishment heavier than imprisonment without prison labor and its execution has terminated, or three years have not passed after non-execution became final;
2. A person whose conditions are improper as a pawnbroker by the reason that he has been sentenced by a fine in contravention of the provisions of Article 5 within three years before the application for permission, or he has been sentenced by a fine in contravention of other Acts and subordinate statutes;
3. Deleted; <by Act No. 5123, Dec. 30, 1995>
4. A minor who does not have the same ability as an adult with respect to the business, an incompetent or a quasi-incompetent person: Provided, That in case where his legal representative as successor of the pawnbroker does not fall under subparagraph 1, 2 or 6, he shall be excluded;
5. A person who has not been reinstated as solvent after bankruptcy;
6. A person whose license was cancelled under the provisions of Article 27 (1), and three years have not passed since the cancellation date;
7. Deleted; <by Act No. 5123, Dec. 30, 1995>
8. In appointing a manager falling under subparagraph 1, 2 or 4 through 6;
9. In the case of a juristic person, if there is a person falling under subparagraph 1, 2 or 4 through 6 among the executive officers who are on duty; and
10. A person who does not have facilities suitable for the standards for the safekeeping facilities as provided in Article 9 (1).
(2) In case where the chief of the police station does not permit it, he shall notify its decision to the applicant with the reason in writing.
Article 4(Report on Change of Business Contents) #
In the case of matters falling under any of the following subparagraphs, the pawnbroker shall make a report to the chief of the competent police station according to the procedure as prescribed by the Presidential Decree:
1. Where the pawnbroker moves his office in the area under the jurisdiction of the same police station;
2. Where the pawnbroker closes his business;
3. Where the pawnbroker suspends his business for a long-term;
4. Where there occurs any change in the mentioned items of the application for permission as referred to in Article 2 (1); and
5. Where the pawnbroker appoints a manager.
[This Article Wholly Amended by Act No. 3441, Apr. 13, 1981]
Article 5(Prohibition of Unlicensed Business) #
Any person who is not a pawnbroker shall not carry on the pawnbroking business.
Article 6(Prohibition of Name Transfer) #
No pawnbroker may have another person carry on the pawnbroking business under his own name.
Article 7(Restriction on Interest Rate) #
The restriction on the interest rate for a loan shall be prescribed separately by the Presidential Decree. <Amended by Act No. 2808, Dec. 31, 1975; Act No. 5507, Jan. 13. 1998>
Article 8(Prohibition of Interest Paid in Advance) #
No pawnbroker shall receive any interest paid in advance, honorarium, fee, commission, or other similar monies under any pretext at the time of loaning.
Article 9(Safekeeping Facilities) #
(1) If it is deemed necessary for preventing any fire, theft, etc., the standards for the safekeeping facilities of pawned articles shall be prescribed by the Presidential Decree.
(2) In case where the standards for the pawned article safekeeping facilities are determined in paragraph (1), the pawnbroker shall establish the safekeeping facilities suitable for such standards.
Article 10(License) #
(1) In case where the chief of the police station grants a license as provided in Article 2 (1), he shall deliver a license.
(2) The matters necessary for the forms, renewal, redelivery, etc. of the license shall be prescribed by the Presidential Decree. <Amended by Act No. 2808, Dec. 31, 1975>
(3) Any person who has received the license under the provisions of paragraph (1) shall post the license concerned at an easily visible place in his business office, and if he has lost the license, or it has been stolen, he shall immediately report such fact to the chief of the competent police station through the procedure as prescribed by the Presidential Decree. <Amended by Act No. 2808, Dec. 31, 1975>
Article 11(Return of License) #
(1) In case where a person who has received the license under the provisions of Article 10 falls under any of the following subparagraphs, he shall return the license to the chief of the competent police station within ten days through such procedure as prescribed by the Ordinance of the Ministry of Home Affairs:
1. Where he closes his business;
2. Where the person who has been delivered the license, recovers the lost or stolen license; and
3. Where he has cancelled the license.
(2) Deleted. <by Act No. 2808, Dec. 31, 1975>
(3) Where a juristic person is dissolved by a cause other than a merger, or extinguished by a merger, in the case of the dissolution due to any cause other than a merger, a liquidator or a trustee in bankruptcy shall return the license under the provisions of paragraph (1), and in the case of a merger, the person who was an executive officer of the extinguished juristic person shall return it.
Article 12 #
Deleted.<by Act No. 2808, Dec. 31, 1975>
Article 13(Fee) #
Any person who has received a license, or desires to receive license from the chief of the police station under the provisions of Article 10, shall pay the fee for the license, renewal or redelivery as prescribed by the Presidential Decree. <Amended by Act No. 2808, Dec. 31, 1975>
Article 14(Restriction on Business) #
(1) A pawnbroker shall not take any goods in pawn at a place other than his office or at the address or residence of the owner of the pawned article.
(2) A pawnbroker shall not enter into a contract with the owner of the pawned article by making a remarkably different evaluation of it from the market price to the disadvantage of the owner of such article.
Article 15(Confirmation and Report) #
(1) In case where the pawnbroker intends to take an article in pawn, he shall confirm the address, name, occupation and age of the owner of the pawned article as prescribed by the Presidential Decree.
(2) In case where the pawnbroker suspects that the pawned article is an illegal thing, he shall immediately report it to the chief of the police station.
Article 16(Book) #
A pawnbroker shall prepare a book in the form as prescribed by the Presidential Decree, and record the following matters, whenever he enters into a pawn contract, returns any pawned article, or disposes of any foreclosed articles:
1. The date of the pawn contract;
2. The items and quantities of the pawned articles;
3. The character of pawned articles;
4. The address, name, occupation, age, and characteristics of the owner of pawned article;
5. The method of the confirmation under the provisions of Article 15 (1);
6. The date of the return of the pawned article or the disposal of the foreclosed article;
7. The items and quantities of the foreclosed articles; and
8. The address and name of the opposite party in the disposal of the foreclosed article.
Article 17(Preservation, etc. of Book) #
(1) In case where the pawnbroker has finished the entry in the book as provided in Article 16, he shall preserve it thereafter for three years.
(2) In case where the pawnbroker has damaged or lost the book, or has it stolen as provided in Article 16, he shall immediately report it to the chief of the competent police station.
[This Article Wholly Amended by Act No. 2808, Dec. 31, 1975]
Article 18(Pawn Ticket and Passbook) #
(1) In case where a pawnbroker has entered into a pawn contract, he shall deliver a pawn ticket or a passbook to the owner of the pawned article.
(2) The forms of the pawn ticket and the passbook, and the matters to be recorded therein, shall be prescribed by the Ordinance of the Ministry of Home Affairs.
Article 19(Notice) #
(1) The pawnbroker shall post the notice on the following matters at an easily visible place in his business office:
1. The interest rates;
2. The method of the interest calculation;
3. The period of the foreclosure;
4. The matters other than those as referred to in subparagraphs 1 through 3, that are important contents of the pawn contract; and
5. Business hours.
(2) The period of foreclosure as referred to in paragraph (1) 3 shall not be determined as a period of not less than six months after the conclusion day of pawn contract.
(3) A pawnbroker shall not enter into a pawn contract which is different in content concerning the matters as referred to in paragraph (1) 1 through 4, and which is against the advantage of the owner of the pawned article.
(4) With respect to the aspect regarding infractions, any contract contrary to the provisions of paragraph (3) shall be considered to have been concluded in accordance with the notified contents.
Article 20(Return of Pawned Article) #
(1) The owner of the pawned article may pay the principal and interest, and redeem the pawned article at any time before the period of foreclosure expires. In this case, the owner of the pawned article shall return the pawn ticket, or receive an entry that he has redeemed an pawned article in the passbook.
(2) In returning a pawned article, the pawnbroker shall not return it to any person other than he who presents the materials which may certify that he has a rightful right.
Article 21(Acquisition and Disposal of Foreclosed Articles) #
(1) The pawnbroker may acquire the ownership of a pawned article at the expiration of the period of foreclosure: Provided, That in case where the owner of the pawned article pays the principal and interest within the period of foreclosure, and the amount equivalent to the interest to be paid in case the contract is renewed as a result of the expiration of the period of foreclosure, the pawnbroker shall return it.
(2) In case where the pawnbroker has acquired the ownership of the pawned article under the main sentence of paragraph (1), the pawnbroker may sell it. <Amended by Act No. 5123, Dec. 30, 1995>
Article 22(Measures for Case of Loss of Pawned Articles) #
(1) If any pawned article is destroyed, lost, damaged or stolen due to any accident or by any other reason, the pawnbroker shall notify it without delay to the owner of the pawned article.
(2) In case where any pawned article is out of the pawnbroker’s possession due to any accident or other cause unattributable to neither the pawnbroker nor the owner of the pawned article, the pawnbroker shall lose the obligation secured on the pawned article.
(3) In case where the pawned article is destroyed, lost, damaged, or stolen due to any cause attributable to the pawnbroker, the pawnbroker shall not enter into a contract to make the owner of a pawned article waive his claim for damages.
Article 23(Stolen Article Label) #
(1) In case where the chief of the police station deems it necessary for a criminal investigation, he may issue the stolen article labels to any pawnbroker.
(2) In receiving the stolen article labels as referred to in paragraph (1), the pawnbroker shall enter the date and hour of the receipt on the label, and keep it for six months after that day.
(3) In case where the pawnbroker holds a stolen article as a pawned or a foreclosed one on the day on which he receives the stolen article label, or he receives a pawned article corresponding to the stolen article label within the period as referred to in paragraph (2), he shall immediately report it to a police officer.
Article 24(Recovery of Stolen or Lost Article) #
In case where the article which a pawnbroker holds as a pawned or foreclosed article proves to be a stolen or lost one, the owner of the stolen or lost article may demand that the pawnbroker to recover it without compensation, even though the pawnbroker takes it in pawn in good faith from a business proprietor dealing with the same kinds of articles: Provided, That in case where one year has passed after it was stolen or lost, this shall not apply.
Article 25(Order of Custody) #
If there is a considerable reason to suspect as stolen or lost on article held by a pawnbroker as a pawned or foreclosed one, the chief of the police station may order the pawnbroker concerned to take custody of such article for a period not exceeding thirty days.
Article 26(Entering and Investigation) #
(1) Any policeman may enter the business office of a pawnbroker or a place where the pawned articles are taken in custody during business hours to inspect any pawned article or the books as provided in Article 16, or may ask any question to the persons concerned.
(2) In the case of paragraph (1), the policeman shall carry with himself a certificate proving his authority, and show it to the persons concerned.
Article 27(Administrative Disposition) #
(1) In case where the pawnbroker falls under any of the following subparagraphs, the chief of the police station may cancel the license of the pawnbroker, or order him to suspend the pawnbroking business for a period not exceeding one year: <Amended by Act No. 5123, Dec.30, 1995>
1. Where the pawnbroker was sentenced to a punishment heavier than imprisonment without prison labor in contravention of other Acts, or he was sentenced to a fine and his conditions are improper as a pawnbroker;
2. Where the pawnbroker falls under Article 3 (1) 5 or 8, or in case he is a juristic person, if there is a person who falls under Article 3 (1) 1, or 3 through 6 among its executive officers performing his business, or a person who was sentenced by a fine in contravention of Article 5 during the three years before his license is cancelled or his business is suspended, or who was sentenced by a fine in contravention of other Acts during the three years before his license is cancelled or his business is suspended and therefore his conditions are improper as a pawnbroker;
3. Where legal representative of the pawnbroker falls under or becomes to be subject to Article 3 (1) 1, 3 or 6, or was sentenced by a fine in contravention of the provisions of other Acts and subordinate statutes during the three years before his license is cancelled or his business is suspended, and therefore his conditions are improper as a pawnbroker;
4. Where the pawnbroker or his representative, employee or other employed person violates this Act or any other Acts and subordinate statutes under this Act: Provided, That in cases where representative of the pawnbroker, employee or other employed person violates this Act or any other Acts and subordinate statutes under this Act, if it is turned out that the pawnbroker (if he is an incompetent person, his legal representative) was not neglectful of a considerable attention to prevent the offense committed by his representative, employee or other employed person, it shall be excepted; and
5. In case where he does not maintain the safekeeping facilities under the provisions of Article 9.
(2) In case where the pawnbroker who has two or more business office, has the license for one office cancelled or suspended under paragraph (1), the chief of the police station having the jurisdiction over its location may cancel or suspend the pawnbroker license for the other business offices after considering circumstances.
Article 28(Hearing) #
Where the chief of the police station intends to cancel the pawnbroker license under Article 27, he shall hold a hearing.
[This Article Wholly Amended by Act No. 5453, Dec. 13, 1997]
Article 29(Notification) #
(1) In case where the chief of the police station knows that a pawnbroker holding a license by the chief of another police station, or his agent, employee or other employed person has violated this Act or any order under this Act, he shall notify it without delay to the chief of such other police station.
(2) In case where the chief of the police station has cancelled the license for pawnbroker, or ordered to suspend the business, if the pawnbroker has a business office under the jurisdiction of the chief of another police station, he shall immediately notify it to the chief of such other police station.
Article 30(Protection of Pawned Article Owner) #
(1) In case where a pawnbroker closes his business, or has his license for a pawnshop cancelled, the person who was a pawnbroker shall perform any acts necessary for the withdrawal of the loan, the return of the pawned articles and other acts necessary to terminate the pawn contract concerned in accordance with the contents of the contract concerned which has concluded before the business is closed or the license is cancelled.
(2) The provisions of paragraph (1) shall apply mutatis mutandis to the case where the pawnbroker has had his business suspended.
(3) In case where a pawnbroker falls under any of the following subparagraphs, he shall perform any acts necessary for the withdrawal of the loan, the return of the pawned articles and other acts necessary to terminate the pawn contract concerned in accordance with the contents of the contract concerned which has concluded before the causes introduced in the following subparagraphs occur:
1. In the case of a pawnbroker’s death, the person who obtains the approval of the chief of the competent police station for each business office concerned, among his successors, or the administrator of the inherited property;
2. In the case of a juristic person, if it is dissolved due to any cause other than a merger, the liquidator or the trustee in bankruptcy; and
3. In the case of a juristic person, if it is dissolved due to a merger, the juristic person existing continuously after the merger, or established newly by the merger.
(4) In applying the provisions of Article 16, 17 or 20 through 26, the person as referred to in paragraph (1) and those as referred to in subparagraphs of paragraph (3) shall be considered as pawnbrokers.
(5) The act as referred to in paragraph (1) (including the cases where it shall apply mutatis mutandis to paragraph (2)) or (3) shall be performed at the old business offices, except for cases approved by the chief of the competent police station.
(6) In the case of paragraph (3) 1 or (5), if the chief of the police station deems it necessary for protecting the owner of the pawned article, he may not permit it.
Article 31(Penal Provisions) #
Any person who violates the provisions of Article 5 or 6, or who violates any disposition under the provisions of Article 27, shall be punished by imprisonment for not more than three years, or a fine not exceeding ten million won. <Amended by Act No. 2808, Dec. 31, 1975; Act No. 5123, Dec. 30, 1995>
Article 32(Penal Provisions) #
Any person who violates the restriction on the interest rates as provided in Article 7, or who violates the provisions of Article 8 or 14, shall be punished by imprisonment for not more than one year, or a fine not exceeding three million won. <Amended by Act No. 2808, Dec. 31, 1975; Act No. 5123, Dec. 30, 1995>
Article 33(Penal Provisions) #
Any person who violates the provisions of Article 15 (1), 16, 17 (1) or 23 (2) and (3), or who violates the disposition under the provisions of Article 25, shall be punished by imprisonment for not more than six months, or a fine not exceeding one million won. <Amended by Act No. 2808, Dec. 31, 1975; Act No. 3441, Apr. 13, 1981; Act No. 5123, Dec. 30, 1995>
Article 34(Penal Provisions) #
Any person who violates the provisions of Article 19 (2) and (3), 20 (2) or 30 (1) (including the cases where it shall apply mutatis mutandis to paragraph (2) of the same Article), (3) and (5) shall be punished by a fine not exceeding one million won, a penal detention or minor fine.
[This Article Wholly Amended by Act No. 5123, Dec. 30, 1995]
Article 35(Fine for Negligence) #
(1) Any person who falls under any of the following subparagraphs shall be sentenced by a fine for negligence not exceeding five hundred thousand won:
1. A person who does not make a report or to post a notice, in contravention of the provisions of Article 4, 10 (3), 17 (2) or 19 (1);
2. A person who does not return the license, in contravention of the provisions of Article 11;
3. A person who violates the provisions of Article 23 (3) by negligence; and
4. A person who refuses, interferes with, or evades the entry and inspection as provided in Article 26 (1).
(2) The fine for negligence as referred to in paragraph (1) shall be imposed and collected by the chief of the police station as prescribed by the Presidential Decree.
(3) Any person who is dissatisfied with the disposition of the fine for negligence as referred to in paragraph (2) may make an objection to the chief of the police station within thirty days after he is notified the disposition.
(4) In case where the person who is subject to the disposition of the fine for negligence made by the chief of the police station under the provisions of paragraph (2) makes an objection under the provisions of paragraph (3), the chief of the police station shall notify it without delay to the competent court, and in receiving the notification, the competent court shall decide the case of the fine for negligence under the Non-Contentious Case Litigation Procedure Act.
(5) In case where no objection is made, and no fine for negligence is paid within the period as referred to in paragraph (3), it shall be collected according to the examples of the disposition of the national tax in arrears.
[This Article Wholly Amended by Act No. 5123, Dec. 30, 1995]
Article 36(Concurrent Imposition of Penalty) #
The punishment of imprisonment and fine as provided in Articles 31 through 33 may be imposed concurrently on a person who commits the offenses falling under the relevant Articles.
Article 37(Joint Penal Provisions) #
In case where a representative of a juristic person, or an agent, employee or other employed person of a juristic person, or an individual commits any offense falling under Articles 31 through 34 to the business of the juristic person or individual, the punishment of the fine as provided in the relevant Articles shall also be imposed on such juristic person or individual, in addition to the punishment of the offender: Provided, That in case where it is turned out that the individual (if he is an incompetent person, his legal representative) has not been neglectful of paying a considerable attention to prevent the offense which his agent, employee or other employed person has committed, it shall be excepted.