In the photo, taken March 31, 2020, a Bank of Korea (BOK) official is seen inspecting U.S. banknotes. (Yonhap)
SEOUL, Oct. 14 (Korea Bizwire) — South Korea’s foreign exchange authorities on Thursday have warned that any unreported direct foreign currency transactions between individual residents can be subject to punishment under the nation’s foreign exchange laws.
A growing number of individuals are buying and selling dollars through secondhand marketplaces such as Danggeun Market to save foreign exchange commissions amid a recent hike in the won-dollar exchange rate.
According to the Bank of Korea, any individual who sells or buys foreign currency directly to/from other individuals should report the transaction to the Bank of Korea under the foreign exchange transaction regulations.
Foreign currency transactions between individuals are possible as long as they are not for money-making purposes, and if the total amount is less than US$5,000, transactions do not need to be reported.
Under the general rule for capital transactions, annual capital transactions of less than $50,000 do not need to be reported. However, this rule is based on the premise that such transactions are made via foreign exchange banks.
Accordingly, any direct foreign currency transaction between individuals should be reported.
Even if the aggregate transaction value is less than $50,000 annually, foreign currency transactions between individuals should be reported if the amount exceeds $5,000.
Under foreign currency exchange laws, violators can face a fine of less than 100 million won (US$69,790) if the amount of the violation is less than 1 billion won.
If the amount of the violation is higher than 1 billion won, violators can be subject to criminal punishment.
J. S. Shin (js_shin@koreabizwire.com)
