In order to send a SWIFT payment to SOUTH KOREA it is highly recommended to meet the following recommendations:
Information provided by the Beneficiary: Beneficiary should provide all required bank information when opening a local account. (e.g SWIFT BIC, Account Number, and beneficiary bank address).
For additional information, please refer to the Central Bank of Korea.
Payment Restrictions: The Foreign Exchange Transaction Act (FETA) regulates foreign exchange operations, payments, and receipts of foreign exchange and certain capital movements. The regulations are promulgated and published by the Ministry of Economy and Finance (MOEF).
KRW is a restricted currency that cannot be held offshore and fund transfers in KRW are allowed only within the country. Payment against trade goods and services in KRW must fall within the definition of “Commercial transactions” (i.e., import, export, etc.) under the relevant Korean law. If you are not certain, please discuss with the servicing branch, otherwise your payment may be rejected.
“Non-Commercial Transaction” flow (Capital related) are supported on a case by case basis for this currency.
As to inter-company loans, operating funds to branch or expenses to liaison office, the Beneficiary of the payment must hold an account with JPMC Seoul, and its FX designated bank must be JPMC Seoul.
Foreign direct investment, purchase of securities/shares, purchase or deposits for real estate, etc are supported on a case by case basis for this currency.
Netting Payment: If there is any payment required after the netting of account receivable and account payable with the payment counterparty (beneficiary), please discuss with the servicing branch first.
Additional Documentation: For the amount exceeding USD100,000 equivalent, the beneficiary or the remitter will be required to provide the supporting documents which prove that such payments denominated in KRW is based on an underlying Business Transaction. Copies of invoices, agreements, etc., must be presented to the processing bank prior to the settlement of the transaction. These supporting documents may be shared with regulators.
Account Requirements: When initiating KRW payments, please ensure the beneficiary account is a KRW account, otherwise the payment will be rejected.
If the beneficiary account is a non-resident account in Korea, inform your servicing branch before executing payment; otherwise, it will be rejected.
If KRW payment amount exceeds KRW 1 billion, it will be credited in splits of max 1 billion to the beneficiary account.
Payment Formatting Rules for KRW:
New Information:
Beneficiary Contact Number: Please provide the Beneficiary Contact Number in the format of ‘Contact: XXXXXXXXXXX’. Failure to include the above information in the payment instruction may result in a delay or rejection of the payment.
If your payment purpose code and your supporting documents are not matched, we may amend your payment purpose code in accordance with your supporting document.
Sample Payment Format:
In case the Beneficiary is corporate:
/OTHR/BRN/1018212345 CONTACT: 02 758 5229
/ACC/PURPOSE/36006
In case the Beneficiary is individual:
/OTHR/BRN/9999999999999 CONTACT: 02 758 5229
/ACC/PURPOSE/36006
KRW is a zero decimal currency; payments must be entered in whole currency amounts without decimal points to avoid rejection.
For KRW payments initiated from an offshore account, JPMC Seoul is unable to provide a Certificate of Foreign Exchange Purchased/Deposited.
For the following financial institutions in SOUTH KOREA you can find a list of their correspondent banks with the currencies and nostro accounts. Also you will find an instructions how to track the payments and other useful information which will help you to send/receive a SWIFT funds transfer or investigate a status of existing payment.
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