SEOUL, Oct. 14 (Korea Bizwire) — South Korea’s foreign exchange authorities warned on Thursday that any undeclared direct foreign currency transactions between individual residents could be subject to penalties under national foreign exchange laws.
A growing number of people are buying and selling dollars in second-hand markets such as Danggeun Market to save exchange fees amid a recent rise in the earned dollar exchange rate.
According to the Bank of Korea, anyone who sells or buys foreign currency directly to/from other persons must report the transaction to the Bank of Korea under foreign exchange regulations.
Foreign currency transactions between individuals are possible as long as they are not for profit, and if the total amount is less than 5,000 USD, the transactions do not need to be declared.
Under the general capital transaction rule, annual capital transactions of less than $50,000 do not have to be reported. However, this rule is based on the premise that these transactions are carried out through foreign exchange banks.
Consequently, any direct currency transaction between individuals must be declared.
Even if the aggregate value of the transactions is less than $50,000 per year, foreign currency transactions between individuals must be declared if the amount exceeds $5,000.
Under foreign exchange laws, violators can be fined less than 100 million won ($69,790) if the amount of the violation is less than 1 billion won.
If the amount of the violation is more than 1 billion won, violators may be subject to criminal penalties.
JS Shin ([email protected])