Suggested citations
AGLC4 | 재정법 2015 [Financial Law of the Democratic People's Republic of Korea (2015)] [tr Daye Gang].
Bluebook | Jaejeongbeob 2015 [Financial Law of the Democratic People's Republic of Korea (2015)] translated in Law and North Korea by Daye Gang, https://www.lawandnorthkorea.com/.
Adopted on August 30, Juche 84 (1995), as Decision No. 61 of the Standing Committee of the Supreme People’s Assembly
Amended and supplemented on February 26, Juche 88 (1999), as Directive No. 483 of the Presidium of the Supreme People’s Assembly
Amended and supplemented on May 9, Juche 91 (2002), as Directive No. 3025 of the Presidium of the Supreme People’s Assembly
Amended and supplemented on April 22, Juche 93 (2004), as Directive No. 416 of the Presidium of the Supreme People’s Assembly
Amended and supplemented on January 24, Juche 95 (2006), as Directive No. 1528 of the Presidium of the Supreme People’s Assembly
Amended and supplemented on March 27, Juche 96 (2007), as Directive No. 2195 of the Presidium of the Supreme People’s Assembly
Amended and supplemented on February 26, Juche 97 (2008), as Directive No. 2601 of the Presidium of the Supreme People’s Assembly
Amended and supplemented on November 3, Juche 98 (2009), as Directive No. 392 of the Presidium of the Supreme People’s Assembly
Amended and supplemented on April 12, Juche 100 (2011), as Directive No. 1572 of the Presidium of the Supreme People’s Assembly
Amended on December 21, Juche 100 (2011), as Directive No. 2052 of the Presidium of the Supreme People’s Assembly
Amended and supplemented on April 8, Juche 104 (2015), as Directive No. 457 of the Presidium of the Supreme People’s Assembly
CHAPTER I. BASICS OF FINANCIAL LAW
Article 1 (Objectives of Financial Law)
The Financial Law of the Democratic People’s Republic of Korea shall serve to raise the ability and role of finance to arrange the currency funds required for the nation’s economy in a planned way and distribute and use them in a standardized way.
Article 2 (Principle of distribution of currency funds)
Currency funds in the Democratic People’s Republic of Korea shall be applied to fully build socialism and people’s standard of living. The State shall guarantee the balance of accumulation and consumption and the high development speed of the socialist economy, and shall distribute currency funds to correctly realize distribution according to labour.
Article 3 (Compilation and execution principles of State budget)
Correctly drawing up and implementing the State budget is a fundamental requirement of attaining the financial policy of the State. The State shall embody the mass line and the principle of scientificity to draw up and implement a realistic and mobilization-oriented State budget.
Article 4 (Principle of sole and planned management of finances)
The finances of the Democratic People’s Republic of Korea shall be based on the solid foundations of socialist property and an independent national economy. The State shall do financial management solely and in a planned way, in conformity with the requirements of the socialist economic system.
Article 5 (Principles of use of funds)
Conserving and economizing the funds of the country is a noble manifestation of patriotism. The State shall strongly open up its struggle for increasing production and frugality to do more production and construction with little funds.
Article 6 (Principle of financial review meeting)
The State shall interconnect the financial review meeting with the state of implementation for national economic plan review meeting and shall ensure that their timeliness, scientificity, and objectivity are guaranteed.
Article 7 (Principle of guidance and control over financial work)
The State shall correctly adopt a guidance system for financial work and shall strengthen financial control.
Article 8 (Exchange and cooperation in the financial field)
The State shall develop exchange and cooperation in the financial field with other countries and international organizations.
CHAPTER II. STATE BUDGET
Article 9 (Duties of State budget compilation institution)
The State budget is the foundational financial plan universally regulating the nation’s economy. The Cabinet and local political institutions shall interconnect the State budget with the national economic plan and calculate income sources and funding demand to draw up the budget so that it can smoothly guarantee the funds required for the nation’s economy.
Article 10 (Deliberation and approval of State budget)
The State budget shall be deliberated on and approved by the Supreme People’s Assembly. An approved State budget may not be changed at will.
Article 11 (Composition and budgeting year for State budget)
The State budget shall be composed of a central budget and local budgets. The budgeting year shall be from January 1 to December 31.
Article 12 (Implementation of central budget and local budgets)
The central budget shall be implemented by the Cabinet and given central bodies, and local budgets shall be implemented by local political institutions. The Cabinet and given central bodies must correctly implement the central budget approved by the Supreme People’s Assembly. Local political institutions must draw up a local budget approved by the Supreme People’s Assembly and must implement it after receiving the approval of the given People's Assembly.
Article 13 (Source of national budgeted revenues)
National budgeted revenues are currency funds concentrated in the possession of the State. Financial institutions must systematically increase national budgeted revenues according to increases in national income.
Article 14 (National budgeted revenues funds)
Institutions, enterprises and organizations must use the method of increasing the scientization level and labour productivity of production and business activities and decreasing their costs, to create more net income or income, to increase national budgeted revenues funds.
Article 15 (Foundational investment and national economic work expenses)
Financial institutions must preferentially turn State budget funds to expenditure for foundational investment and national economic work. Expenditures for foundational investment include expenditures for the construction, exploration, large maintenance, digitization, and design work of subjects important to the State, and expenditure for national economic work include expenditures for industry, agriculture, scientific and technical development, marine products industries, forestry, municipal administration, land administration, foreign economy, and regional work.
Article 16 (Expenses for people-oriented measures, expenses for social culture work)
Financial institutions must increase expenditure to people-oriented measures and social culture so that more of the benefits of the State can be allocated to the people. Expenditures for people-oriented measures include expenditure on education, public health, social insurance and social security, and expenditures for social culture include expenditures for sport, culture, and external activities.
Article 17 (National defense expenditure)
The State shall spend national defense expenditure to protect the nation and strongly maintain the gains of the revolution.
Article 18 (State administration expenses)
State administration expenses shall be expended by item and by use. The authorities concerned shall rationally organize equipment and scientize and simplify office work to decrease State administration expenses.
Article 19 (Reserve expenses)
The State shall accumulate reserve expenses to assure the funds required to execute supplementary adjustments to the national economic plan and supplementary measures for the advancement of people’s standard of living. Reserve expenses shall be spent by receiving the approval of the Cabinet.
Article 20 (Planned expenditure of State budget funds)
Financial institutions shall correctly spend State budget funds according to the expenditure plan for each article, clause, and item, to ensure that it is used effectively.
Article 21 (Source and subject of expenditure of central budget)
The central budget shall take as a foundational income source the net income or income created by central economic sectors. Funds required for economic and cultural construction that has national significance, national defence construction, foreign activities, or people’s standard of living shall be guaranteed by the central budget.
Article 22 (Source and subject of expenditure of local budgets)
Local budgets shall use as a foundational income source the net income or income created from the regional economic sectors. Funds required for regional economic development and for households shall be guaranteed by the local budget.
Article 23 (Local budget system)
The local budget system shall be executed using the county as a standard unit, based on the responsibility and creative power of the regions under the guidance of the State. Local political institutions shall carefully plan and execute the housekeeping of regions to match the income and expenditure of local budgets to each other and must give greater profits to the State. The State shall give financial perks to units that are exemplary in local budget implementation.
CHAPTER III. FINANCES OF INSTITUTIONS, ENTERPRISES AND ORGANIZATIONS
Article 24 (Duty of financial management of institutions, enterprises and organizations)
The finances of institutions, enterprises and organizations are an important component part of socialist finance and are a foundational means of assuring the execution of the national economic plan. Institutions, enterprises and organizations must do financial management so they can smoothly guarantee the execution of the national economic plan and business activities.
Article 25 (Form of financial management)
The finances of institutions, enterprises and organizations shall be managed by a self-financing system or budgetary system. The finances of institutions, enterprises and organizations that do production and business activities shall be managed by self-financing, and the finances of institutions that do not do production or business activities shall be managed by a budgetary system.
Article 26 (Drafting financial plans)
Institutions, enterprises and organizations shall adopt financial plans based on national economic plans, and must receive the approval of the authorities concerned. Financial plans that have not received the approval of the authorities concerned may not be executed.
Article 27 (Execution of financial plans)
Institutions, enterprises and organizations shall mobilize reserves without exception to increase production and carefully plan and execute business activities to execute financial plans by item, by month, and by period.
Article 28 (Evaluation of state of implementation of the financial plan)
The evaluation of the state of implementation of the financial plan shall be done by the authorities concerned. The authorities concerned must correctly evaluate the state of implementation of the financial plan, such as the State budget payment plan of institutions, enterprises and organizations.
Article 29 (Rational use of currency funds)
Institutions, enterprises and organizations must rationally use currency funds for purposes such as production and business activities or people-oriented measures.
Article 30 (Self-financing, semi-self-financing, budgetary system)
Institutions, enterprises and organizations assuring business activities using their own income shall be administered and operated by self-financing. Institutions, enterprises and organizations that receive a constant level of expenses budget funds from the State budget and realize income at the level of being able to give living expenses from their own income shall be administered and operated by semi-self-financing. Institutions, enterprises and organizations operating by receiving expenses budget funds from the State budget shall be administered and operated by a budgetary system.
Article 31 (Liquid funds)
Liquid funds shall be used on the purchase of facilities, raw material, and resources required for production and business activities. Institutions, enterprises and organizations must expedite the circulation of liquid funds and increase the effectiveness of funds.
Article 32 (Basic construction funds and large maintenance funds)
Basic construction funds and large maintenance funds shall be drawn from own funds accumulated in the State budget and in enterprises, such as depreciation or enterprise funds, within the design budget scope predicted in the plan.
Article 33 (Scientific and technical development funds)
Scientific and technical development funds for indicators under the State plan to develop science and technology shall be expended from the State budget, and scientific and technical development funds for other indicators under the scientific and technical plan shall be drawn from the own funds of institutions, enterprises and organizations, such as the scientific and technical development funds and enterprise funds.
Article 34 (Decline in cost)
Cost is the foundational indicator that regulates the quality of business activities. Institutions, enterprises and organizations must combine business activities and scientific techniques to raise labour productivity and systematically decrease costs.
Article 35 (Application of prices and fees)
In cases where institutions, enterprises and organizations sell produced products or do labour activities, they must correctly apply things such as the designated price or fee.
Article 36 (Use of net income and income)
Institutions, enterprises and organizations shall first submit the State payment portion into the State budget from their net income or income arising from the process of their business activities, and may use the remainder as funds required for business activities such as self-provisioning funds, incentives, and bonuses. Funds to be used on their own that have not been able to be used during the plan period, such as own scientific and technical development funds or bonuses, shall not be mobilized for the State budget.
Article 37 (Payment of income and spare funds)
Institutions, enterprises and organizations must submit to the State budget any income earned that is unrelated to production or business activities, or any spare funds.
Article 38 (Compensation for business administration losses)
Institutions, enterprises and organizations must do enterprise management well to not cause business administration losses. Business administration losses must be compensated by the institution, enterprise, or organization itself.
Article 39 (Drafting and storage of financial accounting documents)
Institutions, enterprises and organizations must correctly make financial accounting documents. The content of financial accounting documents may not be changed and must be preserved until the end of the designated period.
CHAPTER IV. FINANCIAL REVIEW MEETING
Article 40 (Basic requirements of financial review meetings)
Correctly doing financial review meetings is an important way for better managing the nation’s economy. Institutions, enterprises and organizations must correctly do financial review meetings within the designated period.
Article 41 (State budget implementation review meeting)
Review meetings for State budget implementation shall be done every year by the Supreme People’s Assembly. The Supreme People’s Assembly shall deliberate on and approve the report submitted by the Cabinet on the state of implementation of the State budget.
Article 42 (Central, local budget implementation review meeting)
Quarterly, biannual, and annual review meetings for central budget and local budget implementation, and monthly, quarterly, biannual, and annual review meetings for central budget implementation shall be done by the given central bodies. Monthly, quarterly, biannual, and annual review meetings for local budget implementation shall be done by the local political institutions. In these cases, the annual review meeting report for local budget implementation shall be deliberated on and approved by the given People's Assembly.
Article 43 (Daily production and financial review meeting)
Daily production and financial review meetings shall be held by the unit of the labour unit. Institutions, enterprises and organizations shall systematize daily production and financial review meetings and make them part of their daily regime.
Article 44 (Ten-day production and financial review meetings and monthly cost review meetings)
Ten-day production and financial review meetings and monthly cost review meetings shall be held by the unit of the workplace. Institutions, enterprises and organizations must solidly do ten-day production and financial review meetings and monthly cost review meetings.
Article 45 (Financial review meetings of institutions, enterprises and organizations)
Financial review meetings that are conducted at the institution, enterprise, and organizational level shall be conducted on a ten-day, monthly, quarterly, biannual, and annual cycle. Institutions, enterprises and organizations must conduct a meeting to review in detail the state of income, expenditure, living expenses, own funds, bonuses, and profits provided to the State according to the financial plans.
Article 46 (Publication of results of financial review meeting)
The results of the financial review meeting shall be published. Publication about the financial review meeting shall be done at the institution, enterprise, or organization level and shall also be done in the workplace and labour units. The public announcement about the results of the financial review meeting shall be done once per month.
Article 47 (Financial accounting settlement document)
Institutions, enterprises and organizations shall make quarterly, biannual, and annual accounting settlement documents to receive an accounting inspection, then must receive the ratification of the given higher level institution. An accounting settlement document shall only have legal effect if it receives an accounting inspection and the ratification of the given higher level institution.
CHAPTER V. GUIDANCE AND CONTROL FOR FINANCIAL WORK
Article 48 (Non-standing banking and finance committee)
The State shall strengthen collective consultation in financial work and shall establish a non-standing banking and finance committee in the Cabinet to adopt the required measures.
Article 49 (Standardized guidance for financial work)
Standardized guidance for financial work shall be done by the central financial guidance institution. The central financial guidance institution must correctly command and guide the state of implementation of the State budget and the state of implementation of the financial plan.
Article 50 (Duties of financial institutions)
Given financial institutions must rationally organize and guide the financial work of lower units or institutions, enterprises and organizations in their jurisdictional area. Institutions, enterprises and organizations shall handle financial issues by agreement with the given financial institution, and must submit materials and statistics related to financial work to the given financial institution.
Article 51 (Resolution of Statewide financial issues)
The resolution of Statewide financial issues, and the financial guarantees or settlement of State bonds or debts with other countries raised in relation to foreign economic transactions conducted by the State, shall be done by the central financial guidance institution.
Article 52 (Financial inspection)
Financial inspection shall be done by financial institutions and the given supervision and control institution. Financial institutions and the given supervision and control institutions must inspect the financial work of institutions, enterprises and organizations regularly and in a planned way.
Article 53 (Financial examination committees and financial inspection committees)
Institutions, enterprises and organizations must manage and normally operate financial examination committees or financial inspection committees so the producer masses may extensively participate in financial control. The state of implementation of decisions of a financial examination committee or financial inspection committee shall be commanded by the given financial institution.
Article 54 (Financial control over business activities)
Institutions, enterprises and organizations shall correctly adopt a business administration calculations system and correctly do business administration calculations such as work calculations and accounting calculations to strengthen financial control over business activities.
Article 55 (Administrative or criminal responsibility)
Responsible workers of institutions, enterprises and organizations and individual citizens who have violated this law shall have administrative or criminal responsibility imposed depending on the gravity.
Last updated 20 February 2021