• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.43
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• pp.143-168
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• 2009

International Factoring transaction in Korea is different from that of financially advanced countries in terms of legal system and commercial and financial practices. As for the domestic factoring, Korean factors are only involved in advances often on a with recourse basis. With regard to the international factoring, Korean factors do not accommodate whole account receivables from clients (suppliers) but handle on a selective basis. Among Korean banks, KEXIM (Export and Import Bank of Korea) is sole factor for international transactions. Currently KEXIM and several foreign banks handle factoring provide factoring services with limitation to invoice discounting which is largely extended to large corporate names. Therefore this is far different from factoring in Europe and Americas designed for small exporters with non recourse advances. In respect of legal environment, receivable assignment is subject to debtor' acknowledge or approval of such assignment according to Civil Law Act. To remove the legal obstacles, Korean government have prepared new law which allows factor's own notification of assignment (and thereby reimbursement right) to debtor with some evidences.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.70
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• pp.21-38
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• 2016

The trend of payment terms of an international trade has been changed from letter of credit to open account. In this regard factoring has come out to support SMEs in terms of financing on a without recourse basis. However, factoring is in Korea is not workable softly due mainly to legal system affecting smooth assignment of receivables. Therefore this study suggest the following solutions : Korean Civil Law shall be modified to protect factor's position as a right creditor to debtor and protect factor's position when perfection among several creditors are incurred. However, formal modification to this end would not be easy in short run and it is suggested that a special law be established in case a commercial receivable assignment both domestic and internationally happens between seller and factor.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.76
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• pp.77-101
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• 2017

This article provides the definitions of the negotiation of credit, the negotiating bank and the negotiation credit. It further describes a number of legal status of negotiating banks by looking into the legal relations firstly between the beneficiary and the negotiating bank and secondly between the issuing bank and the negotiating bank. This study is in large part based on relevant provisions of UCP 600 and decisions of the Supreme court of South Korea. Under UCP 600 the definition of negotiation requires the purchase by the nominated negotiating bank of the required documents by advancing funds on or before the banking day on which reimbursement is due to the negotiating bank. A negotiation credit authorizes the negotiating bank who is a nominated bank to purchase from the beneficiary the documents required by the letter of credit and to present those documents to the issuing bank for reimbursement. If the credit is to be honoured at sight, reimbursement is due when the issuing bank determines that there has been a conforming presentation. Reimbursement under a letter of credit available by acceptance or by deferred payment is due at maturity of the credit. In particular, while the timing of advance by the nominated negotiating bank is up to the parties, a promise of the negotiating bank to advance the purchase price to a fraudulent beneficiary does not confer immunity from letter-of-credit fraud prior to its performance. This requires the negotiating bank who is notified of material fraud prior to making an advance to beneficiary to avoid a loss by using the fraud.

• Journal of Arbitration Studies
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• v.20 no.2
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• pp.173-198
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• 2010

The purpose of this paper is to research on the liability for the space damage and the settlement of the dispute with reference to the space activity under the international space treaty and national space law of Korea. The United Nations has adopted five treaties relating to the space activity as follows: The Outer Space Treaty of 1967, the Rescue and Return Agreement of 1968, the Liability Convention of 1972, the Registration Convention of 1974, and the Moon Treaty of 1979. All five treaties have come into force. Korea has ratified above four treaties except the Moon Treaty. Korea has enacted three national legislations relating to space development as follows: Aerospace Industry Development Promotion Act of 1987, Outer Space Development Promotion Act of 2005, Outer Space Damage Compensation Act of 2008. The Outer Space Treaty of 1967 regulates the international responsibility for national activities in outer space, the national tort liability for damage by space launching object, the national measures for dispute prevention and international consultation in the exploration and use of outer space, the joint resolution of practical questions by international inter-governmental organizations in the exploration and use of outer space. The Liability Convention of 1972 regulates the absolute liability by a launching state, the faulty liability by a launching state, the joint and several liability by a launching state, the person claiming for compensation, the claim method for compensation, the claim period of compensation, the claim for compensation and local remedy, the compensation amount for damage by a launching state, the establishment of the Claims Commission. The Outer Space Damage Compensation Act of 2008 in Korea regulates the definition of space damage, the relation of the Outer Space Damage Compensation Act and the international treaty, the non-faulty liability for damage by a launching person, the concentration of liability and recourse by a launching person, the exclusion of application of the Product Liability Act, the limit amount of the liability for damage by a launching person, the cover of the liability insurance by a launching person, the measures and assistance by the government in case of occurring the space damage, the exercise period of the claim right of compensation for damage. The Liability Convention of 1972 should be improved as follows: the problem in respect of the claimer of compensation for damage, the problem in respect of the efficiency of decision by the Claims Commission. The Outer Space Damage Compensation Act of 2008 in Korea should be improved as follows: the inclusion of indirect damage into the definition of space damage, the change of currency unit of the limit amount of liability for damage, the establishment of joint and several liability and recourse right for damage by space joint launching person, the establishment of the Space Damage Compensation Review Commission. The 1998 Final Draft Convention on the Settlement of Disputes Related to Space Activities of 1998 by ILA regulates the binding procedure and non-binding settlement procedure for the disputes in respect of space activity. The non-binding procedure regulates the negotiation or the peaceful means and compromise for dispute settlement. The binding procedure regulates the choice of a means among the following means: International Space Law Court if it will be established, International Court of Justice, and Arbitration Court. The above final Draft Convention by ILA will be a model for the innovative development in respect of the peaceful settlement of disputes with reference to space activity and will be useful for establishing the frame of practicable dispute settlement. Korea has built the space center at Oinarodo, Goheung Province in June 2009. Korea has launched the first small launch vehicle KSLV-1 at the Naro Space Center in August 2009 and June 2010. In Korea, it will be the possibility to be occurred the problems relating to the international responsibility and dispute settlement, and the liability for space damage in the course of space activity. Accordingly the Korean government and launching organization should make the legal and systematic policy to cope with such problems.

• The Korean Journal of Air & Space Law and Policy
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• v.26 no.1
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• pp.177-213
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• 2011

The purpose of this paper is to research on the liability and cases for space damage with reference to the space activity under the international space treaty and national space law of major countries. The United Nations has adopted two treaties relating to the liability for space damage as follows: the Outer Space Treaty of 1967 and the Liability Convention of 1972. Korea has enacted the Outer Space Damage Compensation Act of 2008 relating to the liability for space damages. The Outer Space Treaty of 1967 regulates the international responsibility for national activities in outer space, and the national tort liability for damage by space launching object. The Liability Convention of 1972 regulates the absolute liability by a launching state, the faulty liability by a launching state, the joint and several liability by a launching state, the person claiming for compensation, the claim method for compensation, the claim period of compensation, the claim for compensation and local remedy, the compensation amount for damage by a launching state, and the establishment of the Claims Commission. The Outer Space Damage Compensation Act of 2008 in Korea regulates the definition of space damage, the relation of the Outer Space Damage Compensation Act and the international treaty, the non-faulty liability for damage by a launching person, the concentration of liability and recourse by a launching person, the exclusion of application of the Product Liability Act, the limit amount of the liability for damage by a launching person, the cover of the liability insurance by a launching person, the measures and assistance by the government in case of occurring the space damage, and the exercise period of the claim right of compensation for damage. There are several cases with reference to the liability for damage caused by space accidents as follows: the Collision between Iridium 33 and Cosmos 2251, the Disintegration of Cosmos 954 over Canadian Territory, the Failure of Satellite Launching by Martin Marietta, and the Malfunctioning of Westar VI Satellite. In the disputes and lawsuits due to such space accidents, the problems relating to the liability for space damage have been settled by the application of absolute(strict) liability principle or faulty liability principle. The Liability Convention of 1972 should be improved as follows: the clear definition in respect of the claimer of compensation for damage, the measure in respect of the enforcement of decision by the Claims Commission. The Outer Space Damage Compensation Act of 2008 in Korea should be improved as follows: the inclusion of indirect damage into the definition of space damage, the change of the currency unit of the limit amount of liability for damage, the establishment of joint and several liability and recourse right for damage by space joint launching person, and the establishment of the Space Damage Compensation Review Commission. Korea has built the space center at Oinarodo, Goheung Province in June 2009. Korea has launched the first small launch vehicle KSLV-1 at the Naro Space Center in August 2009 and June 2010. In Korea, it will be the possibility to be occurred the problems relating to the international responsibility and the liability for space damage in the course of space activity. Accordingly the Korean government and launching organization should make the legal and systematic policy to cope with such problems.

• The Korean Journal of Air & Space Law and Policy
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• v.22 no.2
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• pp.27-51
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• 2007

The cumulative result of the work by the ICAO Secretariat, the Secretariat Study Group and the Council Special Group on the Modernization of the Rome Convention of 1952 are two draft Conventions, namely: "Draft Convention on Compensation for Damage Caused by Aircraft to Third Parties, in case of Unlawful Interference", and "Draft Convention on Compensation for Damage Caused by Aircraft to Third Parties" The core provisions of the former draft Convention are as follows: The liability of the operator is strict, that is, without the necessity of proof of fault. It would be liable for damage sustained by third parties on condition only that the damage was caused by an aircraft in flight(Article 3). However, such liability is caped based on the weight of the aircraft(Article 4). It is envisaged to create an independent organization called the Supplementary Compensation Mechanism, with the principle purpose to pay compensation to persons suffering damage in the territory of a State Party, and to provide financial support(Article 8). Compensation shall be paid by the SCM to the extent that the total amount of damages exceeds the Article 4 limits(Article 19). The main issues on the farmer draft Convention are relating to breaking away from Montreal Convention 1999, no limits on individual claims but a global limitation on air carrier liability, insurance coverage, cap of operators' strict liability, and Supplementary Compensation Mechanism. The core provisions of the latter draft Convention are as follows: the liability of the operator is strict, up to a certain threshold tentatively set at 250,000 to 500,000 SDRs. Beyond that, the operator is liable for all damages unless it proves that such damage were not due to its negligence or that the damages were solely due to the negligence of another person(Article 3). The provisions relating to the SCM and compensation thereunder do not operate under this Convention, as the operator is potentially for the full amount of damages caused. The main issues on the latter draft Convention are relating to liability limit of operator, and definition of general risks. In conclusion, we urge ICAO to move forward expeditiously on the draft Convention to establish a third party liability and compensation system that can stand ready to protect both third party victims and the aviation industry before another 9/11-scale event occurs.

• Journal of Legislation Research
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• no.53
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• pp.491-524
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• 2017

Under the general maritime law, a life salvor has no claim against the person saved, and a pure life salvor has no right to compensation from the owner of the ship or its cargo. This harsh rule, which treats the salvor of life less generously than the salvor of property, has been modified by international conventions, statutes, so that life salvors may expect a reward in most cases. It is, especially, unreasonable that a prerequisite of a salvage award is that at least some of the property must be saved, because life of a person can not be compared to values of goods such as vessels and cargoes. Also it is not understandable that only pure life salvors can not expect a reward for the saving of life from the owners of the property. In the meantime, according to Article 39 of the Korean Maritime Search and Rescue Act (hereunder, KMSARA), any person who has gave assistance and rescued in accordance with a governmental officer's order may get a compensation for their time and labour. The above mentioned compensation which is stemmed from the KMSARA may play a role as a compliment for the lack of enough compensation to a life salvor. This means that even though a life salvor failed to save property, he may expect a minimum compensation from the KMSARA. However, it should be recognized that when a life salvor is entitled to both remuneration for the salvage of life and recourse of expenditures from the KMSARA, the total remuneration shall be paid only if and to the extent that such remuneration is greater than any reward recoverable by the salvor under the Korean Commercial Code and the KMSARA.

• Journal of Korea Trade
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• v.24 no.4
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• pp.49-70
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• 2020

Purpose - The UCP is recognized as the governing law for L/C transactions, but it covers only the general details of the transaction and does not cover all complex practices. In view of this limitation, this paper examines a negotiation transaction which is most actively utilized in L/C transactions via a thorough review of the UCP provisions, analyzes the problems of the negotiation clause in the UCP, and suggests appropriate countermeasures to deal with unnecessary litigation costs. By doing so, the parties involved in the negotiation transaction would be able to avoid financial costs such as having to pay for lawsuits. Design/methodology - The present study first differentiates the general types of L/Cs (e.g., sight payment L/C, deferred payment L/C, acceptance L/C, and negotiation L/C), explains and the Article 2 and Article 12(b) of the UCP 600 where the term 'negotiation' is used, digs into the drawbacks of 'negotiation' occurring under the UCP 600, and discusses solutions to the problems found by analyzing the drawbacks descriptively. Findings - After a review of the UCP provisions on negotiation in detail, several possible problems which may occur in practice were discovered. First, as the UCP stipulates, the negotiating bank will want to delay payment to the maximum extent possible and make payment on the banking day on which the issuing bank reimburses the amount. This may lead the beneficiary towards bankruptcy or put it in financial crisis. Second, when a fraudulent transaction occurs, the negotiating bank can neither request the issuing bank to reimburse nor can it exercise its recourse right against the beneficiary because it has obtained all the rights of the beneficiary by purchasing the documents. Third, there is a practice in which the beneficiary sells the documents to its transaction bank which is not the nominated bank if the nominated bank specified in the credit is located in a third country or the exporter has no relationship with the nominated bank in the credit. In this case, whether to accept this and reimburse the non-nominated negotiating bank entirely depends on the issuing bank's decision even though such practice frequently occurs in Korea. Originality/value - There has been little research effort pertaining to negotiation transactions in detail even though negotiation L/C transactions account for around 70% in world trade notwithstanding deferred payment L/Cs and acceptance L/Cs that are also negotiated in practice. Thus, if the negotiations clause under the UCP 600 provisions were reviewed and the drawbacks of the negotiation transactions most actively used in L/C transactions were identified and examined, specific countermeasures could ultimately help smoothen the operation of L/C transactions and prevent financial losses.

• International Commerce and Information Review
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• v.14 no.4
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• pp.433-456
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• 2012

The confirming bank undertakes to make payment to the beneficiary, provided that a complying presentation is made and complies with its confirmation. In case L/C fraud is evident, though, the confirming bank as well as the issuing bank does not have the obligation to make payment. That is, the confirming bank does not take the risks involving documentary fraud. The confirming bank cannot exercise the right to recourse toward the beneficiary or the nominated bank when the issuing bank finds the discrepancies which the confirming bank has not noticed. This is because under UCP600, the issuing bank or the confirming bank cannot refuse to make payment with the cause of documentary discrepancy after 5 banking days following the presentation of documents. Even if the issuing bank accepts the discrepant documents following the confirming bank's request to do so, the confirming bank does not have the responsibility for the confirmation. When under Usance Negotiation Credit, the confirming bank acts as the nominated bank, the confirming bank should make payment in no time if the beneficiary presents complying documents. Therefore, unless the confirming bank intends to make immediate payment, they should consider using Deferred Payment or Acceptance L/C in Usance Credit. It is also safer for the beneficiary to have the reimbursing bank's undertaking to the reimbursement than just have confirmation of the credit because in the latter case they may not have full payment due to disputes regarding discrepancies of the documents even if they have confirmation of the credit.