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SPECIAL ACT ON ESTABLISHMENT AND MANAGEMENT OF FOREIGN EDUCATIONAL INSTITUTIONS IN FREE ECONOMIC ZONES AND JEJU FREE INTERNATIONAL CITY

[Enforcement Date: Jul. 31, 2009] [Act No. 9366, Jan. 30, 2009, Amendment of Other Laws and Regulations]

Ministry of Education, Science and Technology (Education Welfare Policy Division) Tel.: 02-2100-6345

Article 1 (Purpose)

The purpose of this Act is to enhance the educational environment for foreigners residing in Free Economic Zones and Jeju-Do by providing for the necessary matters concerning establishment and management, etc. of the foreign educational institutions to be established pursuant to the provisions of Article 22 of the Special Act on Designation and Management of Free Economic Zones, and foreign universities to be established pursuant to the provisions of Article 22 of the Special Act on Jeju Free International City, respectively.

Article 2 (Definitions)

The definitions of the terms used in this Act shall be as follows:

1. The term "foreign school foundation" means the State, a local government or a non-profit corporation which establishes and manages preschool, elementary, secondary, and higher educational institutions in accordance with the provisions of foreign laws and regulations of a foreign country; and

2. The term "foreign educational institution" means a foreign educational institution to be established and operated in the Free Economics Zones pursuant to the provisions of Article 22 of the Special Act on Designation and Management of Free Economic Zones, and a foreign university to be established and operated in Jeju-Do pursuant to the provisions of Article 22 of the Special Act on Jeju Free International City. Article 3 (Relations with Other Acts)

Unless otherwise provided in this Act, foreign educational institutions to be established according to this Act shall not be subjected to the Early Childhood Education Act, the Elementary and Secondary Education Act, the Higher Education Act and the Private School Act.

Article 4 (Qualifications for Establishment)

Only a foreign school foundation may establish a foreign educational institution. Article 5 (Approval of Establishment of Foreign Educational Institution) (1) In the event that a foreign school foundation intends to establish a foreign educational institution, it shall obtain approval from the Minister of Education, Science and Technology upon recommendation from the person falling under any of the following subsections after satisfying the standards for establishment as prescribed by the Presidential Decree, including facilities, equipment, etc.:

1. The head of the administrative agency as prescribed in Article 27 (3) of the Special Act on Designation and Management of Free Economic Zones for foreign educational institutions to be established in Free Economic Zones; and

2. The Jeju-Do governor for foreign educational institutions to be established in Jeju-Do. (2) When intending to apply for approval for establishment of a foreign educational institution pursuant to the provisions of section (1), the foreign school foundation shall submit an application form to the Minister of Education, Science and Technology, attached with documents containing the trade name, purpose of establishment and a management plan of school affairs, etc. as prescribed by the Presidential Decree.

(3) The approval pursuant to the provisions of section (1) may be appended with certain conditions.

(4) When intending to modify the matters such as trade name, purpose of establishment, school buildings and site, and other important matters as prescribed by the Presidential Decree, among the matters for establishment approval, the head of the foreign educational institution shall obtain approval from the Minister of Education, Science and Technology.

(5) Approval procedures and other necessary matters for the establishment of foreign educational institutions shall be determined by the Presidential Decree. Article 6 (Registration, etc. of Establishment)

(1) The foreign school foundation, which has obtained approval for the establishment of the foreign educational institution, shall file a registration, identical to the registration for the establishment of a branch office of a corporation pursuant to the provisions of Article 50 of the Civil Act, within three weeks from the date when the establishment of the foreign educational institution has been approved. In this case, the term "director" among the matters to be registered shall be regarded as the "representative of the foreign school foundation". (2) The registration under section (1) shall include matters falling under each of the following subsections:

1. Laws and regulations of the relevant country which serve as the basis for the establishment of the foreign school foundation; and

2. Name and address of the head of the foreign educational institution representing the foreign school foundation in the Republic of Korea. (3) The provisions of Articles 51 through 54 of the Civil Act shall apply mutatis mutandis to the registration pursuant to the provisions of section (1). In this case, the terms "director" and "juristic person" shall be regarded as the "head of the foreign educational institution" and "foreign educational institution," respectively. (4) In filing a registration for modification pursuant to the provisions of Article 52 of the Civil Act applied mutatis mutandis pursuant to the provisions of section (3), if the modification of the registered matters occurs in a foreign country, the reasons thereof shall be immediately notified to the Minister of Education, Science and Technology, and the period of registration shall be counted from the date the notification is delivered to the Minister. Article 7 (Capacity of Foreign Educational Institutions to Enjoy Rights, Etc.) In respect to the capacity of foreign education institutions to enjoy rights and on committing unlawful activities, the provisions of Articles 34 and 35 of the Civil Act shall apply mutatis mutandis.

Article 8 (Formation, Etc. of Foreign Educational Institution) (1) A foreign educational institution shall come into existence upon the registration of establishment pursuant to the provisions of Article 6. (2) In the case of section (1), the head of the foreign educational institution shall represent the foreign school foundation.

Article 9 (Guidance and Supervision)

(1) The Minister of Education, Science and Technology shall be responsible for the guidance and supervision of foreign educational institutions.

(2) If deemed necessary for the guidance and supervision of foreign educational institutions, the Minister of Education, Science and Technology may ask the head of a foreign educational institution to submit relevant materials as prescribed by the Presidential Decree.

Article 10 (Student Quota)

(1) Except for quotas related to fostering human resources such as teachers, medical personnel, pharmacists, medical technicians, etc. as prescribed by the Presidential Decree, the quota of a foreign educational institution shall be determined by the head of the relevant foreign educational institution: Provided, that the quota for domestic students to be admitted to foreign educational institutions applicable to the various levels of schools below the high school level shall be determined by the head of the respective foreign educational institution within the scope of the ratio prescribed by the Presidential Decree. (2) Quota for domestic students admittable to foreign schools established in the Free Economic Zones pursuant to the provisions of Article 60-2 of the Elementary and Secondary Education Act shall be determined as prescribed by the Presidential Decree. Article 11 (Recognition of Academic Career)

(1) In the event that a foreign educational institution corresponding to an elementary school, middle school or high school pursuant to the provisions of Article 2 of the Elementary and Secondary Education Act operates the curriculum prescribed by the Presidential Decree, the Minister of Education, Science and Technology may designate such foreign educational institution as an educational institution for which the academic career shall be recognized.

(2) Any person who has graduated from a foreign educational institution corresponding to a university or a junior college pursuant to the provisions of Article 2 of the Higher Education Act shall be deemed to have the same academic career as that of a person who has graduated from the corresponding school in the Republic of Korea. (3) Matters necessary for the designation according to the provisions of section (1) shall be prescribed by the Presidential Decree.

Article 12 (Accounting of Foreign Educational Institutions) Accounting of foreign educational institutions shall be conducted in accordance with the accounting principles, etc. prescribed by the Minister of Education, Science and Technology.

Article 13 (Rental and Sale of State-Owned or Public Properties) In respect to the rental and sale of state-owned or public properties to foreign school foundations establishing foreign educational institutions pursuant to this Act, the provisions relating to the support for foreign investments in Article 13 of the Foreign Investment Promotion Act shall apply mutatis mutandis. In this case, the term "foreign-invested enterprise, etc." shall be regarded as "foreign school foundation". Article 14 (Financial Support, Etc.)

In the event that the State or local government provides support according to the provisions of Article 22 (6) of the Special Act on Designation and Management of Free Economic Zones, it may provide support upon receipt of the application from the foreign educational institutions as prescribed by the Presidential Decree.

Article 15 (Measures after Support)

(1) The State or local governments may take measures falling under any of the following subsections for the foreign school foundations or foreign educational institutions which received support according to the provisions of Article 13 or 14:

1. Participating in the decision-making body concerning the management of a foreign educational institution where there exists prior consent of that foreign school foundation or foreign educational institution: Provided, that the prior consent is not required for participating in the decision-making body, where the State or local government provides the whole or part of the school site and facilities and the foreign school foundation establishes and operates the foreign educational institution (hereinafter referred to as the "public-operated foreign educational institution");

2. Receiving reports on the affairs or accounting status of and by the foreign school foundation or the foreign educational institution if necessary for the support; and

3. Recommending measures for modification of budget if the budget management of the relevant foreign school foundation or the foreign educational institution is deemed improper in view of the purpose for the support.

(2) The State or local governments may cease support pursuant to the provisions of Articles 13 or 14, in the cases of any of the following subsections:

1. Continuous support is deemed improper due to poor outcomes from the support; or

2. The foreign school foundation or the foreign educational institution fails to follow the recommendations pursuant to the provisions of subsection 3 of section (1). Article 16 (Approval of Closure of Foreign Educational Institution) The head of a foreign school foundation or a foreign educational institution shall obtain approval from the Minister of Education, Science and Technology in order to close down the foreign educational institution. Article 17 (Corrective Orders, Etc.)

(1) The Minister of Education, Science and Technology may issue corrective orders by designating a specified period in the event that the foreign educational institution is subject to any of the following subsections:

1. In the case of violating the standards for establishment according to the provisions of Article 5 (1);

2. In the case of failing to satisfy the conditions of approval according to the provisions of Article 5 (3);

3. In the case of determining the student quota in violation of the provisions of Article 10;

4. In the case of failing to open classes for more than three consecutive months, except during vacation periods; or

5. In the case of violating this Act or the order pursuant to this Act. (2) The Minister of Education, Science and Technology may revoke approval for the establishment pursuant to the provisions of Article 5 (1), or take necessary measures such as the closure of departments or suspension of student recruitment, etc. as prescribed by the Presidential Decree in the event that the foreign educational institution is subject to any of the following subsections:

1. Where the foreign educational institution has failed to perform in accordance with the corrective order issued pursuant to the provisions of section (1) within the designated period without any justifiable reason ; or

2. Where it is impossible to correct the causes of the issues under the subsections of section (1).

(3) The Minister of Education, Science and Technology may order a person, who operates any facilities as a de facto foreign educational institution by using the trade name of a foreign educational institution or recruiting students without obtaining approval of its establishment as provided under Article 5 (1), to close the same facilities.

Article 18 (Modification or Revocation of Approval for Establishment of Foreign Educational Institution)

(1) The Minister of Education, Science and Technology may revoke approval for establishment pursuant to the provisions of Article 5 (1) where any of the following occurs:

1. Where the approval for establishment or modification of the approval for establishment of foreign educational institution pursuant to the provisions of Article 5 (1) or (4) has been obtained by fraudulent or otherwise illegal means; or

2. Where the foreign educational institution fails to open for more than one year from the scheduled date of opening.

(2) The Minister of Education, Science and Technology may revoke or modify approval for establishment pursuant to the provisions of Article 5 (1) where any of the following occurs:

1. The Special Act on Designation and Management of Free Economic Zones or the Special Act on Jeju Free International City is repealed or the designation of the Free Economic Zone is revoked; or

2. The foreign school foundation which established and operates the foreign educational institution is closed down or dissolved.

(3) In the event that there occurs any cause stated in section (2) 2, the head of the foreign educational institution shall report such fact to the Minister of Education, Science and Technology within seven days. Article 19 (Hearing)

When intending to revoke approval for the establishment or take necessary measures such as closure of departments or suspension of student recruitment according to the provisions of Article 17 (2) or 18, the Minister of Education, Science and Technology shall hold a hearing.

Article 20 (Liquidation of Foreign Educational Institution) (1) In the event of closure of the foreign education institution or revocation of approval for the establishment according to the provisions of Article 16, 17 (2) or 18, the foreign educational institution shall liquidate all the assets belonging to its account. In this case, the foreign school foundation which establishes and manages the foreign educational institution shall pay for the liabilities that are unpaid by all the assets of the same institution. (2) Articles 81 through 85, 87 through 92, and 94 and 95 of the Civil Act shall apply mutatis mutandis to the liquidation pursuant to the provisions of section (1). In this case, the terms "director", "juristic person" and "prosecutor" shall be regarded as "head of the foreign educational institution", "foreign educational institution" and the "Minister of Education, Science and Technology," respectively. (3) Where the foreign educational institution is liquidated pursuant to the provisions of section (1), its assets, capital, reserves and other surpluses shall first be appropriated to pay for the liabilities to Korean citizens and to foreigners who have addresses or residences in the Republic of Korea.

(4) No assets of the foreign educational institution liquidated pursuant to the provisions of section (1) shall be transferred to another account of the same institution without going through the liquidation procedures pursuant to this Act. Article 21 (Delegation of Authority)

Part of the authorities of the Minister of Education, Science and Technology pursuant to this Act may be delegated to the Superintendents of Office of Education of the Special Metropolitan City, Metropolitan City or Do as prescribed by the Presidential Decree.

Article 22 (Penal Provisions)

Any of the following persons shall be punished by imprisonment for not more than three years or by a fine not exceeding 20 million won:

1. Any person who operates facilities as a de facto foreign educational institution by using the trade name of a foreign educational institution or recruiting students without obtaining approval for its establishment pursuant to the provisions of Article 5 (1);

2. Any person who fails to obtain approval for the modification of the establishment approval in violation of the provisions of Article 5 (4);

3. Any person who has obtained approval for the establishment or modification of a foreign educational institution pursuant of the provisions of Article 5 (1) or (4) by fraudulent or otherwise illegal means;

4. Any person who has closed a foreign educational institution without obtaining approval for closure in violation of the provisions of Article 16; and

5. Any person who has transferred the assets of a foreign educational institution to a different account of the relevant foreign educational institution without going through the liquidation procedures prescribed in this Act pursuant to the provisions of Article 20 (4). Article 23 (Penal Provisions)

The head of a foreign educational institution, who has violated the corrective order pursuant to the provisions of Article 17 (1), shall be punished by imprisonment for not more than one year or by a fine not exceeding five million won. Article 24 (Fine for Negligence)

(1) The head of a foreign educational institution who has failed to perform the duties of registration pursuant to this Act shall be punished by a fine for negligence not exceeding five million won.

(2) The fine for negligence pursuant to section (1) shall be imposed and collected by the Minister of Education, Science and Technology as prescribed by the Presidential Decree.

(3) Any person who is dissatisfied with a disposition of fine for negligence pursuant to the provisions of section (2) may raise an objection against the disposition to the Minister of Education, Science and Technology within sixty days from the date on which he/she has received notification of such fine for negligence.

(4) In the event that the person who is subjected to the disposition of a fine for negligence pursuant to the provisions of section (2) has filed an objection in accordance with the provisions of section (3), the Minister of Education, Science and Technology shall, without any delay, notify the fact to the competent court of law, which shall adjudicate on the fine for negligence pursuant to the Non-Contentious Case Litigation Procedure Act.

(5) Where the person concerned has not paid the respective fine for negligence without having filed an objection within the period as prescribed in section (2), the delinquent fine for negligence shall be collected according to the examples of disposition on the national taxes in arrears.

ADDENDUM (Special Act on Designation and Management of Free Economic Zones)

Article 1 (Enforcement Date)

This Act shall enter into force six months after its promulgation. Article 2 through 7 Omitted.

Article 8 (Amendment of Other Laws and Regulations) (1) A part of the Special Act on Establishment and Management of Foreign Educational Institutions in Free Economic Zones and Jeju Free International City shall be amended as follows:

"Act on Designation and Management of Free Economic Zones" in Article 1, Article 2 (2), Article 5 (1) 1, Article 14 and Article 18 (2) 1 shall be amended to "Special Act on Designation and Management of Free Economic Zones". (2) through (14) Omitted.

Article 9 Omitted.