WORLD TRADE GATS/SC/48/Suppl.3
26February 1998
ORGANIZATION(98-0678)
Trade inServices
REPUBLIC OFKOREA
Schedule ofSpecific Commitments
Supplement 3
(This isauthentic inEnglish only)
____________________
This text replaces the Financial Services section contained indocument
GATS/SC/48/Suppl.1/Rev.1.GATS/SC/48/Suppl.3
Page2REPUBLIC OFKOREA
SCHEDULE OFSPECIFIC COMMITMENTS*
Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
ALL SECTORS INCLUDED IN
THIS SCHEDULE
(ALL SECTORS)
Therevisions intheALL
SECTORS section ofthis
schedule onlypertain tomode 3
oftheALL SECTORS
commitments contained inthe
document
GATS/SC/48/Suppl.1/Rev. 1.(3) Theacquisition ofoutstanding stocks of
existing domestic companies bynatural
persons orjuridical persons ofanother
member isrestricted. However, foreign
portfolio investment inKorean stocks is
permitted onlyforthestocks listed on
theKorean Stock Exchanges, and
individual foreign investors canownup
to6percentofeach company 'stotal
stock, while aggregate foreign
investments cannot exceed 23percent
(18percentinthecaseoftwopublic
enterprises: Pohang IronandSteel
Company, Korea Electric Power
Corporation) pereach company.(3)Theamount offoreign direct investment
must beatleast 50million Won.
Theacquisition oflandisunbound except:
(i) That theacquisition oflandby
companies which arenotdeemed as
foreign under theAlien Land Law
ispermitted, and
(ii) That theacquisition oflandby
companies which aredeemed as
foreign under theAlien Land Law
andbranches offoreign company is
permitted, subject toapproval or
notification inaccordance withthe
Alien Land Law, forthefollowing
legitimate business purposes:(3)Residents whohave
been treated as
foreigners inthe
Securities Exchange
Actareaccorded
national treatment in
portfolio investment
inKorean stocks.
*Anasterisk ontheCPC (UNProvisional Central Product Classification: Statistical Papers Series MNo.77,Department ofInternational Economic andSocial Affairs,
Statistical Office oftheUnited Nations, New York, 1991) code number indicates thatthecorresponding service subsector inthisschedule onlycovers apartorparts of
theservice subsector classified under thegiven CPC code number.GATS/SC/48/Suppl.3
Page3Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
Theacquisition ofoutstanding bonds of
existing domestic companies bynatural
persons orjuridical persons ofanother
Member isrestricted except inthe
following cases:
(i) Direct foreign investment isallowed
innon-guaranteed Convertible Bonds
issued bylisted companies.
(ii) Thepurchase ofgovernment and
public bonds, withinterest rates
comparable tointernational interest
rates, isallowed intheprimary
market.- landused forsupplying services
during thecourse ofnormal business
activities;
- landused forhousing senior
company personnel under pertinent
laws; and
- landused forfulfilling land-holding
requirements stipulated bypertinent
laws.
Eligibility forsubsidies, including tax
benefits, maybelimited tocompanies
which areestablished inKorea according
tothepertinent laws.
Unbound forresearch anddevelopment
subsidies.GATS/SC/48/Suppl.3
Page4Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
(iii) Foreign investors areallowed to
make indirect bond investment
through thepurchase ofbeneficiary
certificates offered exclusively to
foreigners.
(iv) Foreign investors areallowed to
make indirect bond investment
through country funds.
(v) Foreign direct investment inmedium
andlong-term non-guaranteed bonds
issued bysmall andmedium-sized
companies areallowed.
Theestablishment ofbranches must be
approved inaccordance withtheForeign
Exchange Management Act.GATS/SC/48/Suppl.3
Page5Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
7.FINANCIAL SERVICES1
Asdescribed inparagraph 2(a)oftheAnnex onFinancial Services, Korea shall notbeprevented from taking prudential measures including requirements
related toparent companies, theminimum capital requirement, orminimum operating funds requirement.
Inthose cases where theestablishment ofcommercial presence byforeign companies inthefinancial sector isallowed, approval bytherelevant authorities is
required inaccordance withrelated laws andregulations unless otherwise specified inanyofsubsectors below.
Allfinancial services covered by
thisschedule including Insurance(1),(2),(3) Korea undertakes astandstill
commitment forlimitations onmarket
access, where specific commitments are
undertaken, infinancial services listed in
thisschedule asof31August 1997.(1),(2),(3) Korea undertakes a
standstill commitment forlimitations on
national treatment, where specific
commitments areundertaken, infinancial
services listed inthisschedule asof
31August 1997.
Cross-border supply offinancial services
andsupply through consumer movement
maynotbesettled inKorean currency.
After theestablishment ofacommercial
presence, financial institutions mayhandle
onlytransactions, denominated andsettled
inKorean currency, withresidents.
Approval isrequired fortransactions
denominated orsettled inforeign currency
ortransactions withnon-residents.
Themanagement andoperation ofassets of
afinancial institution arerestricted. A
financial institution maynotown
non-business realestate.
1Subsectors infinancial services areclassified based ontheunitofbusiness establishment. Afinancial institution must beestablished foronlyonebusiness defined in
subsectors (1)through (14), andthuscannot engage inbusiness activities inother subsectors.GATS/SC/48/Suppl.3
Page6Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
Assets owned bybranches must bekept
within theterritory ofKorea. Thecapital
ofthehead office isnotrecognized asthe
basis fordetermining theextent offunding
andlending activities ofbranches.
- Demand deposit interest rates are
regulated.
Some newfinancial products, including
derivatives, aresubject toapproval.
- With interest rateandforeign
exchange liberalization, such
products willbemore widely
allowed, subject torelevant laws and
regulations.
BANKING AND OTHER
FINANCIAL SERVICES
(1) BANKING
BUSINESSES
Following banking services:
(i)Deposit andrelated services2
[81115*, 81116*](1)Unbound
(2)Unbound
(3)<Horizontal limitations onbanking
services>(1)Unbound
(2)Unbound
(3)None
2Activities inwhich banks obtain funds from thepublic byreceiving deposits orissuing transferable instruments orother securities.GATS/SC/48/Suppl.3
Page7Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
(ii)Loan andrelated services3
[81131*, 81132*]
(iii)Payment andmoney
transmission services
including credit card
services [81339*]Only branches offoreign banks which rank
among theworld ’stop500banks interms
ofassets sizeorrepresentative offices are
permitted.
Aperson4mayownupto4percentofthe
stocks ofabank and15percentofthe
stocks ofaprovincial bank without the
special authorization oftherelevant
authorities.
(iv)Settlement andclearing
services5[81339*]
(v)Foreign exchange services6
[81333*]Foreign exchange position isregulated.
-Theoversold position ofspotforeign
exchange isUS$5million, or3percent
ofcapital (whichever isgreatest).
3Activities, such asloans andbilldiscounts, inwhich banks provide funds tothepublic inorder toreceive interest.
4Thedefinition of“aperson ”isinaccordance withtherelevant provision ofthePresidential Decree oftheBank Act.
5Settlement andclearing services onnotes, billsandcheques bybanks according totheArticles ofKFTCI (Korea Financial Telecommunications andClearings Institute).
6Purchase, sale, issuance, remittance andcollection offoreign exchange.GATS/SC/48/Suppl.3
Page8Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
(vi)Services auxiliary to
banking:
- Saleofcommercial
bills7[81339*]
- Saleoftrade bills8
[81339*]
- Mutual instalment
deposit [81132*]
- Payment guarantees
andcommitments
[81339*]
(vii) Trust services9
[81192*, 81193]<Limitations onDeposit andRelated
Services>
Thematurity ofCDs shall bemore than
30days.
Deposits forspecific purposes, such as
housing subscription deposits, maybe
handled onlybydesignated institutions.
<Limitations onloanandrelated
services>
Foreign currency loans arerestricted with
respect toceiling anduses.
Mandatory lending tosmall-and
medium-sized companies arerequired.
<Limitations onforeign exchange
services>
Underlying transaction anddocumentation
requirements apply toforeign exchange
transactions.
Underlying documentation requirements
areexempt inthecaseofforward
transactions.
7Acommercial billisdefined asabillaccompanying commercial transactions.
8Atrade billisdefined asabillissued byexporters based onL/Cbefore shipping export cargo.
9Activities where thetrustee, having been delegated theauthority, manages assets ofthetruster forthebeneficiary.GATS/SC/48/Suppl.3
Page9Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
<Limitations ontrust services>
Real estate trust business isprohibited.
Approvals bothfrom theMonetary Board
forengaging inbusinesses other thanthe
main banking businesses andfrom the
Ministry ofFinance andEconomy for
handling atrust business arerequired,
provided thatthehead office islicensed in
thehome country tohandle atrust
business.
(4)Unbound except asindicated inALL
SECTORS.(4)Unbound except asindicated inALL
SECTORS.
(2) CREDIT CARD
BUSINESSES
Credit cardservices [81133] (1)Unbound
(2)Unbound
(3)Commercial presences arepermitted to
foreign suppliers which dealwithcredit
cardservices.(1)Unbound
(2)Unbound
(3)None
Lending forcredit cardmembers through
such means ascardloans issubject to
limitations.
Maximum limits areapplied tovarious
rates such asfeesandinterest rates.
(4)Unbound except asindicated inALL
SECTORS.(4)Unbound except asindicated inALL
SECTORS.GATS/SC/48/Suppl.3
Page10Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
(3) FINANCIAL
LEASING
BUSINESSES
Financial leasing services
[81120](1)Unbound
(2)Unbound
(3)None
(4)Unbound, except asindicated inALL
SECTORS.(1)Unbound
(2)Unbound
(3)None
(4)Unbound, except asindicated inALL
SECTORS.
Topexecutive personnel ofeach
establishment must reside inKorea.
(4) SECURITIES
BUSINESSES
Following services related to
securities
(i) Dealing [81199*]
(ii) Broking [81321*]
(iii) Underwriting [81322*]
(iv) Securities savings
[81119*](1)Unbound
(2)Unbound
(3)Only representative offices, branches, or
joint ventures offoreign securities
companies arepermitted. Representative
offices maybeestablished by
pre-notification.(1)Unbound
(2)Unbound
(3)NoneGATS/SC/48/Suppl.3
Page11Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
(v) Credit granting
[81139*]Injoint ventures, which must be
established asaChusik Hoesa (ajoint
stock corporation), foreign equity
participation must beatleast 40percent
butlessthan50percent.
Ifthere aremultiple foreign shareholders
inthejoint venture companies, atleast one
shareholder must holdmore than20per
centoftheequity. International financial
organizations mayholdlessthan5percent
oftheequity.
Equity participation inanexisting domestic
securities company byforeign securities
companies islimited tolessthan50per
centintheaggregate.
Broking forforeigners islimited to
securities allowed forforeign investment
asspecified inALL SECTORS inthis
schedule.
Ceilings andoperating conditions are
applied totheservices listed under (iv)
and(v).
(4)Unbound except asindicated inALL
SECTORS.(4)Unbound except asindicated inALL
SECTORS.
Topexecutive personnel ofeach
establishment must reside inKorea.GATS/SC/48/Suppl.3
Page12Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
(5) SECURITIES
INVESTMENT
TRUST BUSINESSES
Securities investment trust
services [81193*](1)Unbound
(2)Unbound
(3)Only representative offices, branches, and
joint ventures whose foreign share isless
than50percent offoreign securities
investment trust companies arepermitted.
Representative offices maybeestablished
bypre-notification.
Branches should bepreceded bya
representative office byatleast oneyear.
Equity participation inanexisting domestic
securities investment trust company by
foreign securities investment trust
companies islimited tolessthan50per
centintheaggregate.
Equity participation byforeign securities
investment trust companies innewor
existing joint ventures withanyoftheten
largest domestic conglomerates islimited
to30percentperforeign company.(1)Unbound
(2)Unbound
(3)None
(4)Unbound except asindicated inALL
SECTORS.(4)Unbound except asindicated inALL
SECTORS.
Topexecutive personnel ofeach
establishment must reside inKorea.GATS/SC/48/Suppl.3
Page13Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
(6) INVESTMENT
ADVISORY
BUSINESSES
Investment advisory services
[81332](1)Unbound
(2)Unbound
(3)Only representative offices andbranches of
foreign investment advisory companies are
permitted. Representative offices maybe
established bypre-notification.(1)Unbound
(2)Unbound
(3)None
Equity participation inanexisting domestic
investment advisory services company by
foreign investment advisory companies is
limited tolessthan50percentinthe
aggregate.
(4)Unbound except asindicated inALL
SECTORS.(4)Unbound except asindicated inALL
SECTORS.
Topexecutive personnel ofeach
establishment must reside inKorea.GATS/SC/48/Suppl.3
Page14Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
(7) CREDIT RATING
BUSINESSES
Credit rating services
[81339*](1)Unbound
(2)Unbound
(3)Credit rating companies should be
designated bytherelevant authorities to
assess thecredit rating ofcompanies which
maywish toissue non-guaranteed
corporate bonds andcommercial papers.
(4)Unbound except asindicated inALL
SECTORS.(1)Unbound
(2)Unbound
(3)None
(4)Unbound except asindicated inALL
SECTORS.
(8) CREDIT
INFORMATION
BUSINESSES
Credit Information Services
[81339*](1)Unbound
(2)Unbound
(3)Unbound except forequity participation of
lessthan50percent inexisting financial
information companies.
(4)Unbound except asindicated inALL
SECTORS.(1)Unbound
(2)Unbound
(3)None
(4)Unbound except asindicated inALL
SECTORS.GATS/SC/48/Suppl.3
Page15Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
INSURANCE AND
INSURANCE-RELATED
SERVICES
(9) LIFE INSURANCE
BUSINESSES
Lifeinsurance services
[81211](1)Unbound
(2)Unbound
(3)Representative offices, branches,
subsidiaries andjoint ventures offoreign
lifeinsurance companies arepermitted.
Theestablishment ofjoint ventures with
Korean lifeinsurance companies arenot
allowed.(1)Unbound
(2)Unbound
(3)None
Therecruitment andemployment of
insurance professionals, including sales
personnel, arerestricted.
(4)Unbound except asindicated inALL
SECTORS.(4)Unbound except asindicated inALL
SECTORS.
Topexecutive personnel ofeach
establishment must reside inKorea.GATS/SC/48/Suppl.3
Page16Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
(10) NON-LIFE
INSURANCE
BUSINESSES
Non-life insurance services
[8129](1)Unbound except formarine export/import
cargo andaviation insurance.
(2)Unbound(1)Unbound
(2)Unbound
(3)Representative offices, branches,
subsidiaries andjoint ventures offoreign
non-life insurance companies are
permitted. Theestablishment ofjoint
ventures withKorean non-life insurance
companies arenotallowed.(3)None
Therecruitment andemployment of
insurance professionals, including sales
personnel, arerestricted.
(4)Unbound except asindicated inALL
SECTORS.(4)Unbound except asindicated inALL
SECTORS.
Topexecutive personnel ofeach
establishment must reside inKorea.GATS/SC/48/Suppl.3
Page17Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
(11) REINSURANCE AND
RETROCESSION
BUSINESSES
Reinsurance andretrocession
services [81299*](1)None
(2)None
(3)Direct insurance companies may
participate inthesupply ofservices subject
totherestriction insection (10)regarding
non-life insurance services.
(4)Unbound except asindicated inALL
SECTORS.(1)None
(2)None
(3)None
(4)Unbound except asindicated inALL
SECTORS.
Topexecutive personnel ofeach
establishment must reside inKorea.
(12) INSURANCE
BROKING AND
AGENCY
BUSINESSES
Insurance broking and
agency services [81401*](1)Unbound
(2)Unbound
(3)Only agencies areallowed.
(4)Unbound except asindicated inALL
SECTORS.(1)Unbound
(2)Unbound
(3)None
(4)Unbound except asindicated inALL
SECTORS.
Topexecutive personnel ofeach
establishment must reside inKorea.GATS/SC/48/Suppl.3
Page18Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
(13) CLAIM
SETTLEMENT
BUSINESSES
Claim settlement
services [81403*](1)Unbound
(2)Unbound
(3)Unbound
(4)Unbound except asindicated inALL
SECTORS.(1)None
(2)None
(3)None
(4)Unbound except asindicated inALL
SECTORS.
Topexecutive personnel ofeach
establishment must reside inKorea.
(14) ACTUARIAL
BUSINESSES
Actuarial services
[81404](1)Unbound
(2)Unbound
(3)Unbound
(4)Unbound except asindicated inALL
SECTORS.(1)None
(2)None
(3)None
(4)Unbound except asindicated inALL
SECTORS.
Topexecutive personnel ofeach
establishment must reside inKorea.