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ACT ON LUMP SUM-RAISING SAVINGS OF FARMING AND FISHING HOUSEHOLDS

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ACT ON RAISING LUMP-SUM OF SAVINGS OF FARMING AND FISHING HOUSEHOLDS

Act No. 3797, Dec. 23, 1985

Amended by Act No. 4806, Dec. 22, 1994

Act No. 5454, Dec. 13, 1997

Act No. 5505, Jan. 13, 1998

Act No. 6736, Dec. 5, 2002

Act No. 6838, Dec. 30, 2002

Act No. 7311, Dec. 31, 2004

Act No. 8050, Oct. 4, 2006

Act No. 8863, Feb. 29, 2008

Article 1 (Purpose)

The purpose of this Act is not only to create a stable living base for the farmers and fishermen by supporting the gathering of their property and enhancing their will to save, but also to induce them to contribute to the development of the agricultural, fishery and livestock industries by inducing their earnings to the savings to increase the supply of agricultural, fishery and livestock funds.

Article 2 (Definitions)

(1) The term "savings institutions" in this Act means the things as prescribed by the following subparagraphs:

1. The local agricultural cooperatives established under the Agricultural Cooperatives Act;

2. The fisheries cooperatives by region and the fisheries cooperatives by business types established under the Fisheries Cooperatives Act; and

3. The livestock industry cooperatives by region and the livestock industry cooperatives by business types established under the Livestock Industry Cooperatives Act.

(2) The term "farmers and fishermen" in this Act means persons as prescribed by Presidential Decree as the persons of the following subparagraphs:

1. The farmers as prescribed by Article 10 (2) of the Agricultural Cooperatives Act;

ACT ON LUMP SUM-RAISING SAVINGS OF FARMING AND FISHING HOUSEHOLDS

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2. The fishermen as prescribed by subparagraph 3 of Article 2 of the Fisheries Cooperatives Act; and

3. The stockbreeders as prescribed by Article 2 (1) 2 of the Livestock Industry Cooperatives Act.

(3) The term "raising lump-sum savings of farming and fishing households" in this Act means the savings of the farmers and fishermen for the purposes of receiving the principal and interest of the savings, and the savings bounty in cash after the savings for a given period. Article 3 (Preferential Support)

(1) The Government, the Bank of Korea and the savings institutions shall preferentially take the necessary measures for support of the stable livelihood of farmers and fishermen, encourage them to save and amass property, and then put them in practice.

(2) Savings institutions shall perform the procedures and method of the savings faithfully under this Act and the orders under this Act, and provide the other necessary conveniencies for the farmers and fishermen saving up for the raising lump-sum savings of farming and fishing households (hereinafter referred to as the "raising lump-sum savings") under the provisions of this Act from the conclusion of the savings contract until receipt of the principal and interest of the savings and the savings bounty after the expiration of the savings contract period. Article 4 (Contract for Raising Lump-Sum Savings) (1) Farmers and fishermen who intend to save the raising lump-sum savings shall enter into the contract with the savings institutions. (2) The saving amount of the farmers and fishermen, period of savings, method of savings and other matters necessary for the savings contract shall be prescribed by Presidential Decree.

Article 5 (Effect of Savings Contracts)

(1) In cases where farmers and fishermen have not fallen under the farmers and fishermen as prescribed by Article 2 (2) after entering into a contract for raising lump-sum savings, the farmers and fishermen shall be deemed as the farmers and fishermen under this Act until the period of the savings contract expirer.

(2) No saving institutions shall change the payment rate of the interest for the savings amount nor other conditions for the raising lump-sum savings to be more disadvantageous than those as determined at the time of such ACT ON LUMP SUM-RAISING SAVINGS OF FARMING AND FISHING HOUSEHOLDS

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savings contract until the expiration of the period of the savings contract. Article 6 (Savings Bounties)

The Government shall, when farmers and fishermen have saved for a given period under the savings contract as prescribed by Article 4, pay a savings bounty as prescribed by Presidential Decree other than the payment of interest, etc. for the amount of savings by the savings institutions. In such cases, the Government shall not change the payment rate or payment method of the savings bounty to be more disadvantageous than those as determined at the time of the savings contract until the expiration of the period of such saving contract.

Article 7 (Savings Bounty Fund)

(1) The Government shall establish the bounty fund (hereinafter referred to as the "Fund") for the raising lump-sum savings of farming and fishing households to pay the savings bounty as prescribed by Article 6. (2) The fund shall be created by the financial resources of the following subparagraphs:

1. Contributions of the Government;

2. Contributions of the Bank of Korea; and

3. Operating profits of the fund. (3) The Government shall contribute more than one half of the amount required for the savings bounty each year, and cover all amounts of deficit incurred from the operation of the fund in the following year. (4) The Bank of Korea shall contribute the necessary amount of money according to the plan for fund raising and operation as prescribed by Article 9 from its surplus and reserve each year with the resolution of the Monetary Policy Committee until the fiscal year when the payment of the savings bounty under this Act has expired. Article 8 (Operation and Management of Fund)

(1) The Fund shall be operated and managed by the Financial Services Commission. (2) The Financial Services Commission may entrust the Governor of the Bank of Korea with the affairs concerning the operation and management of the Fund. (3) Accounts of the Fund shall be settled under the principle of the business accounting.

(4) The fund shall be operated by the methods prescribed by the following ACT ON LUMP SUM-RAISING SAVINGS OF FARMING AND FISHING HOUSEHOLDS

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subparagraphs:

1. Deleted.

2. Purchasing of national bonds, local government bonds, monetary stabilization bonds of the Bank of Korea and other securities as designated by the Financial Services Commission;

3. Temporary deposits or short-term loans to financial institutions; and

4. Deposits in the Bank of Korea. Article 9 (Plan for Fund Raising and Operation )

The Financial Services Commission shall draw up a plan for raising funds and operation every fiscal year and obtain approval of the President through the deliberation of the State Council.

Article 10 (Accounting Institution of Fund)

(1) The Financial Services Commission shall appoint the Fund revenue collecting officer, the Fund financial officer, the Fund expenditure officer and the Fund accounting public official out of the public officials under its control to perform the affairs concerning the revenue and expenditure of the Fund.

(2) The Financial Services Commission may, when it has entrusted the Governor of the Bank of Korea with the affairs concerning the operation and management of the Fund under the provisions of Article 8 (2), appoint the deputy governor in charge of the fund revenue and the deputy governor in charge of the act of grounds for Fund expenditure out of the deputy governors of the Bank of Korea, and appoint a staff-member for the Fund expenditure and a staff-member for the Fund accounting among the staff. In such cases, the deputy governor in charge of the Fund revenue shall perform the duties of the fund revenue collecting officer, the deputy governor in charge of the act of grounds for the Fund expenditure the duties of the Fund financial officer, the staff-member for the Fund expenditure the duties of the Fund expenditure officer, the staff-member for the Fund accounting the duties of the Fund accounting public officer respectively. (3) Deleted.

Article 11 (Temporary Loans)

(1) The Financial Services Commission may, when deemed necessary for ACT ON LUMP SUM-RAISING SAVINGS OF FARMING AND FISHING HOUSEHOLDS

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operation of the Fund, temporarily obtain funds on loan from the Bank of Korea at the liability of the Fund.

(2) The temporary loan shall be redeemed within one year from the date of loan.

Article 12 (Approval of Settlement of Accounts)

(1) The Financial Services Commission shall draw up a report on the settlement of accounts of the Fund each fiscal year and obtain the approval of the President through the deliberation of the State Council by March 31 of the next fiscal year.

(2) The provisions of Articles 68 (1) and 73 of the State Finance Act shall apply to the operational plan under the provisions of Article 9 and the approval of the settlement of accounts under the provisions of paragraph (1). Article 13 (Coverage of Loss to Savings Institutions) Each year the Fund may cover the losses of the savings institutions incurred by not modifying the payment rate of interest and other conditions under the provisions of Article 5 (2).

Article 14 (Fund Operation of Savings Institutions) (1) The Financial Services Commission shall draff a plan for creation and operation of the raising lump-sum savings Fund each fiscal year classified by the national federation of the savings institutions as prescribed by the subparagraphs of Article 2 (1).

(2) The savings institutions shall operate the Funds created by the raising lump-sum savings as the agricultural, fisheries and livestock Funds. Article 15 (Classified Accounting, etc. of Savings Fund) (1) Savings institutions shall establish separate accounts for the receipt of deposits of the raising lump-sum savings funds. (2) The savings institutions shall accept the deposit of the raising lump-sum savings funds and operate them under their own computations. Article 16 Deleted. Article 17 (Supervision, etc.)

(1) The Financial Services Commission may issue orders to the savings institutions necessary for supervision with respect to the affairs under the provisions of this Act. 6

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(2) The Financial Services Commission may, when necessary, issue orders to the savings institutions to report concerning the affairs under the provisions of this Act or cause a public official under its control to inspect such affairs. (3) The Financial Services Commission may entrust the Governor of the Financial Supervisory Service with the authority under the provisions of paragraphs (1) and (2).

Article 18 (Relationship with other Acts and Subordinate Statutes) When any provisions in the Bank of Korea Act, the Banking Act and other Acts and subordinate statutes are in conflict with the provisions of this Act, the provisions of this Act shall govern.

Article 19 (Enforcement Decree)

The matters necessary for the enforcement of this Act shall be prescribed by Presidential Decree.

ADDENDA

(1) (Enforcement Date) This Act shall enter into force on January 1, 1986. (2) (Transitional Measure) Raising lump-sum savings for farming and fishing households for which the farmers and fishermen have entered into contract with the local agricultural cooperative, the fisheries cooperatives by region and by the types of business or the corporate fishing village fraternities prior to the enforcement of this Act shall be deemed the raising lump-sum savings under this Act.

(3) (Transitional Measure) As the period of the savings contract of the lump sum-raising savings of farming and fishing households for which the local agricultural cooperatives, the fisheries cooperatives by region and by business types or the corporate fishing village fraternities had entered into the contract with the farmers and fishermen prior this Act entering into force, expired prior to this Act entering into force, when they paid the savings bounty, the amount of money which the local agricultural cooperatives, the fisheries cooperatives by region and by business types or the corporate fishing village fraternities paid with their own funds due to insufficiency of the savings bounty, shall be paid from the Fund.

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ADDENDA

Article 1 (Enforcement Date)

(1) This Act shall enter into force on January 1, 1995: Provided, That ... ... the amended provisions of the Act on Lump Sum-Raising Savings of Farming and Fishing Households under the provisions of Article 18 (3) of Addenda shall enter into force on January 1, 2004. (2) Omitted

Articles 2 through 17 Omitted.

ADDENDUM

This Act shall enter into force on January 1, 1998. ADDENDA

(1) (Enforcement Date) This Act shall enter into force on April 1, 1998.

(2) through (5) Omitted.

ADDENDA

Article 1 (Enforcement Date)

This Act shall enter into force on the date of its promulgation. Articles 2 through 4 Omitted.

ADDENDA

Article 1 (Enforcement Date)

This Act shall enter into force on January 1, 2003. Articles 2 through 7 Omitted.

ADDENDA

Article 1 (Enforcement Date)

This Act shall enter into force six months after the date of its promulgation.

Articles 2 through 16 Omitted.

ADDENDA

ACT ON LUMP SUM-RAISING SAVINGS OF FARMING AND FISHING HOUSEHOLDS

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Article 1 (Enforcement Date)

This Act shall enter into force on January 1, 2007. Articles 2 through 12 Omitted.

ADDENDA

Article 1 (Enforcement Date)

This Act shall enter into force on the date of its promulgation. Articles 2 through 5 Omitted.