Suggested citations
AGLC4 | 외화관리법 2004 [Foreign Currency Management Law of the Democratic People's Republic of Korea (2004)] [tr Daye Gang].
Bluebook | Oehwagwanlibeob 2004 [Foreign Currency Management Law of the Democratic People's Republic of Korea (2004)] translated in Law and North Korea by Daye Gang, https://www.lawandnorthkorea.com/.
Adopted on January 31, 1993, as Decision No. 27 of the Standing Committee of the Supreme People’s Assembly
Amended and supplemented on February 26, 1999, as Directive No. 484 of the Presidium of the Supreme People’s Assembly
Amended and supplemented on February 21, 2002, as Directive No. 2852 of the Presidium of the Supreme People’s Assembly
Amended and supplemented on November 16, 2004, as Directive No. 750 of the Presidium of the Supreme People’s Assembly
CHAPTER I. BASICS OF FOREIGN CURRENCY MANAGEMENT LAW
Article 1 (Objectives of Foreign Currency Management Law)
The Foreign Currency Management Law of the Democratic People’s Republic of Korea shall strictly adopt systems and order in the import, use, entry, and exit of foreign currency, and shall serve to command foreign currency in a standardized way and use it rationally.
Article 2 (Definition of foreign currency)
Foreign currency includes convertible currency of a foreign country, and marketable securities in foreign currency, such as government bonds and corporate bonds. Foreign currency payment methods such as promissory notes, cheques, and transferable deposit certificates, and gold, silver, white gold that are not ornaments, and gold coins, silver coins, and precious minerals traded on the international finance markets are also included in foreign currency.
Article 3 (Important principles of foreign currency management)
Managing foreign currency in a standardized way is an important principle of foreign currency management. The State central financial guidance institution shall command and manage foreign currency in a standardized way.
Article 4 (Banks doing foreign currency conversion work)
Foreign currency conversion work in the Democratic People’s Republic of Korea shall be done by trading banks. Different banks may also receive the approval of the central financial guidance institution to do foreign currency conversion work.
Article 5 (Principle of prohibition on circulation of foreign currency cash)
Foreign currency cash may not be circulated in the territory of the Democratic People’s Republic of Korea. Foreign currency cash shall be used by exchanging it with North Korean won.
Article 6 (Principles of sale and purchase, saving, deposit, security as collateral of foreign currency)
Sale and purchase, saving, deposit, and security as collateral of foreign currency may only be done through banks that are responsible for foreign currency conversion work. A bank that is responsible for foreign currency conversion work shall do foreign currency work within the scope of approval by the central financial guidance institution.
Article 7 (Decision on exchange rate)
The type and scope of application of the foreign currency exchange rate for North Korean won, and the work of determining the fixed currency exchange rate shall be done by the central financial guidance institution. The work of determining the payment exchange rate for North Korean won and the cash circulation exchange rate shall be done by trading banks.
Article 8 (Foreign currency for foreign settlements)
Foreign settlements shall be done using the foreign currency determined by the central financial guidance institution. In cases where an arrangement has been concluded related to settlements between the government of our country and the government of another country, it shall be followed.
Article 9 (Protection of foreign currency obtained legally)
The State shall protect foreign currency obtained legally and shall guarantee the right of inheritance of citizens in relation to it.
Article 10 (Subject of application of law)
This law shall be applied to institutions, enterprises, organizations, and citizens who have foreign currency income or use foreign currency. This law shall also be applied to missions of other countries or international organizations, foreign country investment enterprises, foreigners, and Korean compatriots in the territory of the Republic who have foreign currency income or who use foreign currency. Foreign currency management order applicable to special economic zones shall be separately determined.
CHAPTER II. FOREIGN CURRENCY INCOME AND ITS USE
Article 11 (Institution of State foreign currency obligatory payment rate)
The central financial guidance institution must determine a State foreign currency obligatory payment rate according to the foreign currency income and expenditure plan as instructed by state planning institutions. Institutions, enterprises and organizations must have an account in a trading bank and must deposit foreign currency in time.
Article 12 (Foreign currency accounts of missions of other countries and international organizations)
The missions of other countries and international organizations must have an account in a trading bank and must deposit foreign currency in it.
Article 13 (Foreign currency accounts of foreign country investment enterprises)
Foreign country investment enterprises must have accounts in trading banks and must deposit the foreign currency they earn. In cases where they seek to hold accounts in other banks or in banks outside the territory of the Republic, they must do it by agreement with the central financial guidance institution.
Article 14 (Preferential payment of State foreign currency obligatory payment amounts)
Institutions, enterprises and organizations shall execute foreign currency income plans in time and must preferentially submit their State foreign currency obligatory payment amounts.
Article 15 (Possession, sale, and saving of foreign currency by citizens)
Citizens may possess foreign currency obtained by law. In cases where they seek to sell or save foreign currency, they must do it at a bank that handles foreign currency exchange prices.
Article 16 (Saving and selling of foreign currency by foreigners)
Foreigners may save or sell foreign currency remitted from outside the territory of the Republic and foreign currency obtained by law at a bank that handles foreign currency exchange prices.
Article 17 (Scope of use of foreign currency)
Foreign currency may be used in the following trade.
1. Trade in accordance with foreign economic contracts and payment arrangements
2. Non-trade transactions such as payment transactions for travel expenses, expenses, or maintenance expenses
3. Trade involving purchasing or selling North Korean won from a bank
4. Trades such as deposits, trusts, borrowing, or debt guarantees
Article 18 (Foreign settlement methods)
Foreign settlements shall be done using methods such as letters of credit, remittances, demands for payment, or contracting out of payments.
Article 19 (Use of foreign currency by institutions, enterprises and organizations)
Institutions, enterprises and organizations must use foreign currency on designated indicators and items. In cases where foreign currency is sought to be used apart from on designated indicators and items, the approval of the central financial guidance institution must be received.
Article 20 (Use of foreign currency exceeding the foreign currency import plan)
Institutions, enterprises and organizations may put to their own use any sums of money that have exceeded the foreign currency import plan. In these cases, they must use it on the designated indicators and items.
Article 21 (Confidentiality and duty to repay for the deposit or saving of foreign currency)
Banks handling foreign currency exchange prices shall guarantee the confidentiality of foreign currency deposits and savings, and must calculate and pay the given interest. Foreign currency requested by the depositor or the saver must be withdrawn and given to them in time.
Article 22 (Lending from banks)
Banks handling the foreign currency exchange prices of the Republic may lend foreign currency to institutions, enterprises, organizations, and foreign country investment enterprises. In these cases, a foreign currency lending plan shall be adopted and agreed with the central financial guidance institution, and the ratification of the Cabinet must be received.
Article 23 (Borrowing from other countries or international organizations)
Institutions, enterprises and organizations may borrow the foreign currency required for their management and operations from other countries or international organizations. In these cases, they must reach agreement with the central financial guidance institution and the ratification of the Cabinet must be received.
Article 24 (Approval to issue marketable securities in foreign currency)
Institutions, enterprises and organizations seeking to issue marketable securities in foreign currency must receive the approval of the authorities concerned.
CHAPTER III. FOREIGN CURRENCY IMPORT AND EXPORT
Article 25 (Import of foreign currency and duty exemption from fees and customs)
Foreign currency cash, marketable securities in foreign currency, and precious minerals may be brought into our country without restriction. In these cases, fees or customs duties shall not be applied.
Article 26 (Export of foreign currency cash)
Foreign currency cash may be taken out of the territory of the Republic within the scope of the sum of money stated on a foreign currency exchange certificate document issued by a bank, or on a customs declaration made at the time of entry into the country.
Article 27 (Export of marketable securities in foreign currency)
Marketable securities in foreign currency may be taken out of the territory of the Republic only upon the approval of the central financial guidance institution. Marketable securities in foreign currency reported to customs at the time of entry into the country may be taken out of the territory of the Republic even without receiving approval.
Article 28 (Export of precious minerals)
Precious minerals may be taken out of the territory of the Republic only upon the approval of the Central Bank. Precious minerals brought in while entering the country may be taken out of the territory of the Republic within the scope of what has been reported to customs.
Article 29 (Export of profits and other income monies of foreign investors)
Foreign investors may remit profits and other income monies obtained in operating their enterprises out of the territory of the Republic without taxation. Investment assets may be taken out of the territory of the Republic without taxation.
Article 30 (Export of wages and foreign currency obtained legally by foreigners)
Foreigners working in foreign country investment enterprises may remit or take with them out of the territory of the Republic any wages and up to 60% of other foreign currency obtained legally.
CHAPTER IV. GUIDANCE AND CONTROL OVER FOREIGN CURRENCY MANAGEMENT WORK
Article 31 (Guidance institution for foreign currency management work)
Guidance and control for foreign currency management work shall be done by the central financial guidance institution under the standardized guidance of the Cabinet. The central financial guidance institution shall correctly adopt a guidance system for foreign currency management work to make a balance between foreign currency income and expenditure.
Article 32 (Foreign currency management of Province People’s Committee)
Guidance for foreign currency management work by central budgeting institutions, enterprises and organizations shall be done directly by the central financial guidance institution. However, guidance for foreign currency management work for regional budgeting institutions, enterprises, and organizations shall be done through the Province People’s Committees.
Article 33 (Standardized command and management for foreign currency bonds and debts)
Central financial guidance institutions must command and manage foreign currency bonds and debts for other countries in a standardized way. Given institutions, enterprises and organizations must respond to the requirements of central financial guidance institutions in time.
Article 34 (Management of foreign currency living expenses and foreign currency travel expenses)
Central financial guidance institutions must correctly determine the expenditure standards for things paid in foreign currency, such as living expenses or travel expenses, and must correctly implement them.
Article 35 (Management of banks handling foreign currency conversion work)
Central financial guidance institutions must receive quarterly and annual position statements and required administrative statistics from banks handling foreign currency conversion work.
Article 36 (Submission of annual foreign currency plan execution statement)
Institutions, enterprises and organizations shall make quarterly and annual foreign currency plan execution statements and submit them to the central financial guidance institution. Central financial guidance institutions must conduct review meetings of the state of implementation of foreign currency plans and must make reports to the Cabinet.
Article 37 (Inspection for state of foreign currency management)
Central financial guidance institutions may inspect the state of foreign currency management of institutions, enterprises, organizations and banks handling foreign currency conversion work. Institutions, enterprises, organizations, and banks handling foreign currency conversion work must guarantee the conditions required for inspection by the central financial guidance institution.
Article 38 (Levy of arrears charges)
In cases where State foreign currency obligatory payment amounts have not been correctly paid in time, arrears charges shall be imposed.
Article 39 (Damage compensation)
In cases where a depositor or saver has sustained damage because the foreign currency requested was not able to be given in time, the relevant damage shall be compensated.
Article 40 (Levy of a penalty)
In cases where foreign currency has not been deposited within the designated period or has been deposited in a different bank, a penalty shall be imposed.
Article 41 (Confiscation)
Foreign currency and relevant goods illegally traded or smuggled out of the territory of the Republic shall be confiscated.
Article 42 (Administrative or criminal responsibility)
Responsible workers of institutions, enterprises and organizations and individual citizens who have caused grave consequences in foreign currency management by violating this law shall have administrative or criminal responsibility imposed depending on the gravity.
Last updated 6 November 2021