ENFORCEMENT DECREE OF THE INTRODUCTION AND MANAGEMENT OF PUBLIC LOANS ACT

Article 1(Purpose) #

The purpose of this Decree is to prescribe matters mandated by the Introduction and Management of Public Loans Act and matters necessary for the enforcement thereof.

Article 2(International cooperation organizations) #

(1) "International cooperation organizations prescribed by Presidential Decree" in subparagraph 1 of Article 2 of the Introduction and Management of Public Loans Act (hereinafter referred to as the "Act") means any of the following entities:

1. An institution that performs external economic cooperation affairs on behalf of a foreign government;

2. The International Bank for Reconstruction and Development, the Asian Development Bank, and other international organizations which deal with development finance;

3. A foreign financial institution funded by a foreign government that provides loans under conditions equivalent to those of the international organizations specified in subparagraph 2;

4. A foreign financial institution which provides loans in collaboration with any institution or organization specified in subparagraphs 1 through 3.

(2) "Korean corporation prescribed by Presidential Decree" in subparagraph 6 of Article 2 of the Act means any of the following persons: <Amended on Dec. 30, 2003; Mar. 29, 2017; Sep. 10, 2020>

1. A local government;

2. A government-invested institution defined in Article 2 of the Framework Act on the Management of Government-Invested Institutions;

3. A government-financed institution;

4. A government-funded institution (limited to the Korea National Railway).

Article 3(Overseas remittance) #

(1) If a borrower of public loans intends to make overseas remittances under Article 4 of the Act, the borrower shall obtain confirmation from the head of a foreign exchange bank with respect to the overseas remittance.

(2) Where the head of a foreign exchange bank intends to provide confirmation for an overseas remittance under paragraph (1), he or she shall verify the legitimacy of the overseas remittance.

Article 4(Application for introduction of public loans) #

(1) A person who intends to introduce a public loan in accordance with Article 6(1) of the Act shall file an application for the introduction of the public loan with the Minister of Economy and Finance through the competent Minister. In such cases, where the relevant project falls under the criteria determined by the Minister of Economy and Finance, the application shall be filed after consultation with the heads of the relevant agencies. <Amended on Feb. 29, 2008; Dec. 30, 2025>

(2) When the Minister of Economy and Finance intends to determine whether to proceed with the introduction of a public loan in accordance with Article 6(2) of the Act, the Minister shall review the following matters concerning the relevant project; in such cases, the Minister of Economy and Finance may, if deemed necessary, seek the opinions of the heads of the relevant agencies: <Amended on Feb. 29, 2008; Dec. 30, 2025>

1. Economic and technical feasibility of the project;

2. Appropriateness of the required amount of funds and the feasibility of financing;

3. Site conditions and construction plan;

4. Capacity to repay principal and interest;

5. Appropriateness of comprehensive measures to raise and manage public loans;

6. Other matters deemed necessary by the Minister of Economy and Finance.

Article 5(Consultation) #

(1) When the head of a relevant agency intends to prepare or transmit agreements, supplementary memoranda, or similar documents with prospective lenders or lenders regarding the terms and conditions of the convention and the implementation of a project for the promotion of a public loan project, he or she shall have a prior consultation with the Minister of Economy and Finance. <Amended Feb. 29, 2008; Dec. 30, 2025>

(2) When the Minister of Economy and Finance intends to conclude a public loan convention in accordance with Article 7 of the Act, he or she shall have a prior consultation with the heads of relevant agencies regarding the terms and conditions of such convention; provided, this shall not apply when the relevant public loan project requires urgent implementation. <Amended Feb. 29, 2008; Dec. 30, 2025>

Article 6(Scope of relevant contracts) #

"Contract which has a direct effect on the conclusion of the public loan convention" in Article 7(2) of the Act means a contract for the introduction of equipment or raw materials and a contract for technology or services which are related to the conclusion of the public loan convention, and other contracts equivalent thereto.

Article 7(Decision on introduction of public loans) #

(1) Where a Korean corporation files an application for the introduction of a public loan in accordance with Article 6 of the Act, the Minister of Economy and Finance shall, in determining whether to proceed with the introduction of the public loan, verify the following matters: <Amended on Feb. 29, 2008; Dec. 30, 2025>

1. Whether the project falls under a case where it is impracticable for a financial institution to provide a payment guarantee;

2. Whether the capability to provide collateral is reliable (excluding cases where the provision of collateral is exempted under the proviso of Article 10 of the Act).

(2) When the Minister of Economy and Finance makes a decision on whether to introduce a public loan in accordance with paragraph (1), he or she shall notify the relevant Korean corporation (hereinafter referred to as "government-guaranteed corporation") of such decision without delay. In such cases, if the decision is made not to proceed with the introduction of the public loan, the reasons therefor shall be specified. <Amended Feb. 29, 2008; Dec. 30, 2025>

(3) When the Minister of Economy and Finance grants approval for the conclusion of a public loan convention in accordance with Article 7(2) of the Act, the Minister may collect a guarantee fee from the government-guaranteed corporation. <Amended on Feb. 29, 2008; Dec. 30, 2025>

Article 8(On-lending of public loans) #

(1) If the Minister of Economy and Finance on-lends a public loan in accordance with Article 9 of the Act, the Minister shall enter into an agreement concerning the on-lending (hereinafter referred to as the "on-lending agreement") with the on-lending borrower. <Amended on Feb. 29, 2008; Dec. 30, 2025>

(2) An on-lending borrower may, with the approval of the Minister of Economy and Finance, on-lend a public loan received through on-lending to an actual user. <Amended on Feb. 29, 2008; Dec. 30, 2025>

Article 9(Provision and management of collateral) #

(1) A government-guaranteed corporation and an on-lending borrower who has entered into an on-lending agreement under Article 8(1) (excluding those exempted from providing collateral under the proviso of Article 10 of the Act) shall provide the collateral within 30 days from the date of receiving approval or the date of entering into the on-lending agreement. In such cases, if the owner of the collateral is not the relevant government-guaranteed corporation or on-lending borrower, such owner shall provide the collateral.

(2) The Minister of Economy and Finance may require that capital goods introduced under the relevant public loan convention that serves as the basis for the government guarantee or on-lending agreement, or factories or other facilities constructed therewith, be provided as part of the collateral under paragraph (1). <Amended on Feb. 29, 2008; Oct. 1, 2025>

(3) When the Minister of Economy and Finance receives collateral in accordance with paragraph (1) or (2), the Minister shall, without delay, take measures necessary to preserve the relevant rights. <Amended on Feb. 29, 2008; Dec. 30, 2025>

Article 10(Entities exempted from providing collateral) #

(1) "Government-invested institution" in the proviso of Article 10 of the Act means a government-invested institution under Article 2 of the Framework Act on the Management of Government-Invested Institutions (hereinafter referred to as "government-invested institution").

(2) "Person prescribed by Presidential Decree" in the proviso of Article 10 of the Act means the following persons: <Amended on Feb. 29, 2008; Dec. 30, 2025>

1. A corporation in which a government-invested institution has invested the entire amount of capital;

2. A corporation operated with contributions granted by the Government under statutes;

3. An institution that deals with development finance with long-term development funds borrowed from the Government;

4. The National Agricultural Cooperatives Federation, the National Federation of Fisheries Cooperatives, the National Livestock Cooperatives Federation, and the National Forestry Cooperatives Federation;

5. A corporation in which a government-invested institution and a corporation referred to in subparagraph 2 have jointly invested the entire amount of capital;

6. A corporation in which the Government has invested;

7. A corporation in which a corporation referred to in subparagraph 6 has invested;

8. A corporation in which a local government has invested;

9. A school corporation and other public corporations acknowledged by the Minister of Economy and Finance.

Article 11(Procedure for compulsory disposal) #

(1) When the Government has repaid all or part of the obligations that gave rise to the payment guarantee on behalf of a government-guaranteed corporation, the Minister of Economy and Finance shall, without delay, make a claim for reimbursement for the amount so repaid. <Amended Feb. 29, 2008; Dec. 30, 2025>

(2) When the Minister of Economy and Finance deems that the claim cannot be recovered through the claim for reimbursement under paragraph (1), the Minister shall dispose of the collateral in accordance with Article 11 of the Act. <Amended on Feb. 29, 2008; Dec. 30, 2025>

(3) When the Minister of Economy and Finance deems that a government-guaranteed corporation is able to perform its obligations within a reasonable period and to repay all obligations by the final repayment date specified in the repayment plan, the Minister may defer the disposal of the collateral for a certain period. <Amended on Feb. 29, 2008; Dec. 30, 2025>

(4) When the Minister of Economy and Finance has disposed of collateral in accordance with paragraph (2), he or she shall deduct from the disposal proceeds the costs incurred for the disposal, the amount repaid by the Government on behalf of the government-guaranteed corporation and its interest, and the unpaid principal, and shall return any remaining balance to the relevant government-guaranteed corporation. <Amended Feb. 29, 2008; Dec. 30, 2025>

(5) Paragraphs (2) through (4) shall apply mutatis mutandis where an on-lending borrower fails to repay all or part of his or her obligations.

Article 12(Use of public loans) #

A public loan shall be used in accordance with the terms and conditions of the public loan convention concluded in accordance with Article 7 of the Act, and where it is intended to be used for purposes other than those stipulated therein, prior approval shall be obtained from the Minister of Economy and Finance. <Amended on Feb. 29, 2008; Dec. 30, 2025>

Article 13(Reporter of introduction of public loans) #

"Head of any institution related to the introduction and management of public loans as prescribed by Presidential Decree and other interested persons" in Article 16(2) of the Act means a person who falls under any of the following subparagraphs: <Amended on May. 29, 2009; Dec. 30, 2014>

1. President of the Bank of Korea;

2. The Chairperson and Chief Executive Officer of the Korea Development Bank;

2-2. Deleted. <Dec. 30, 2014>

3. The head of an entity which falls under any subparagraph of Article 2(2) of this Decree.

Article 14(Disposal of public loans) #

(1) When the head of a customs office intends to sell public loans in accordance with Article 18(2) of the Act, he or she shall submit a list of such public loans to the Minister of Economy and Finance through the Commissioner of the Korea Customs Service. In such cases, the Minister of Economy and Finance may, within 20 days from the date of receipt of the list of such public loans, request the head of the customs office to withhold the sale thereof after consultation with the head of the relevant agency. <Amended on Feb. 29, 2008; Dec. 30, 2025>

(2) If no request for withholding is made within the period in accordance with paragraph (1), the head of the customs office shall sell the relevant public loans under Article 18(2) of the Act and report the sale to the Minister of Economy and Finance. <Amended on Feb. 29, 2008; Dec. 30, 2025>

Article 15(Entrustment of authority) #

(1) If it is necessary to expedite the implementation of public loan projects, the Minister of Economy and Finance may, in accordance with Article 21(2) of the Act, entrust to the head of the relevant central administrative agency the authority to conduct negotiations and conclude public loan conventions under Article 7(1) of the Act. In such cases, the Minister of Economy and Finance shall publicly notify the details of such entrustment. <Amended on Feb. 29, 2008; Dec. 30, 2025>

(2) If it is necessary to promptly promote a public loan project, the Minister of Economy and Finance may entrust the authority to negotiate the introduction of public loans under Article 7(1) of the Act, in accordance with Article 21(3)1 of the Act, to a person falling under any of the following subparagraphs; in such cases, the Minister of Economy and Finance shall issue a public notice of the details of the entrustment: <Amended on Dec. 30, 2003; Feb. 29, 2008; Mar. 29, 2017; Sep. 10, 2020; Dec. 30, 2025>

1. A local government;

2. A government-invested institution;

3. A government-financed institution;

4. A government-funded institution (limited to the Korea National Railway).

(3) The Minister of Economy and Finance shall entrust his authority in any of the following subparagraphs to the Chairperson and Chief Executive Officer of the Korea Development Bank in accordance with Article 21(3) of the Act: <Amended on Feb. 29, 2008; May 29, 2009; Dec. 30, 2014; Dec. 30, 2025>

1. Acquirement and management of collateral under Article 10 of the Act and Article 9 of this Decree;

2. Disposal of collateral under Article 11 of the Act and Article 11 of this Decree.

(4) The Minister of Economy and Finance entrusts the Governor of the Bank of Korea with the authority to receive reports under Article 16 of the Act, in accordance with Article 21(3) of the Act. <Amended on Feb. 29, 2008; Dec. 30, 2025>

(5) A person who has been entrusted with business affairs under paragraphs (1) through (4) shall notify or report to the Minister of Economy and Finance on the handling of such entrusted business affairs. <Amended on Feb. 29, 2008; Dec. 30, 2025>

(6) The Minister of Trade, Industry and Resources may determine details necessary for performing business affairs delegated or entrusted under paragraphs (1) through (4). <Amended on Mar. 24, 2014; Oct. 1, 2025; Dec. 30, 2025>

Article 16(Expenses incurred in handling entrusted duties) #

(1) If the Chairperson and Chief Executive Officer of the Korea Development Bank performs the affairs of acquirement and management of collateral entrusted under Article 15(3), he or she may request the Minister of Economy and Finance to pay expenses necessary for the performance of such affairs. <Amended on Feb. 29, 2008; May 29, 2009; Dec. 30, 2014; Dec. 30, 2025>

(2) When the Chairperson and Chief Executive Officer of the Korea Development Bank incurs any expenses in relation to the entrusted duties under paragraph (1), he or she shall claim reimbursement from the relevant government-guaranteed corporation or on-lending borrower; and if reimbursement is not made by the government-guaranteed corporation or on-lending borrower, he or she may request payment from the Minister of Economy and Finance. <Amended on Feb. 29, 2008; May 29, 2009; Dec. 30, 2014; Dec. 30, 2025>

(3) When the Minister of Economy and Finance receives a request for payment under paragraph (1) or (2), he or she shall make such payment within the budget. <Amended on Feb. 29, 2008; Dec. 30, 2025>

Article 17(Procedure for imposition and collection of administrative fines) #

(1) When the Minister of Economy and Finance intends to impose an administrative fine under Article 26(2) of the Act, he or she shall, after investigating and verifying the relevant violation, notify the person subject to the disposition of the administrative fine in writing, specifying the details of the violation, the amount of the administrative fine, and other relevant matters. <Amended on Feb. 29, 2008; Dec. 30, 2025>

(2) The Financial Services Commission shall, if it intends to impose an administrative fine under paragraph (1), provide any person subject to such fine with an opportunity to present his or her case orally or in writing (including an electronic document) for a period of time of not less than 10 days. In such cases, he or she shall be deemed to have no comment if no comment has been made by the designated date. <Amended on Mar. 17, 2004; Feb. 29, 2008; Dec. 30, 2025>

(3) In determining the amount of an administrative fine, the Minister of Economy and Finance shall take into consideration the motive for, and the consequences of, the relevant violation. <Amended on Feb. 29, 2008; Dec. 30, 2025>

(4) Procedures for collecting administrative fines shall be prescribed by Decree of the Ministry of Economy and Finance. <Amended on Feb. 29, 2008; Dec. 30, 2025>