Gov`t unveils plan for another FX lib.

Starting next year, travelers carrying more than $10,000 for overseas trips must declare the funds to customs regulators. If the amount exceeds $50,000, they will have to report it to the Bank of Korea (BOK). The two agencies will hand over related data to the National Tax Service (NTS).

Notification of remittances of over $10,000 will automatically be sent to the NTS and remittances of over $50,000 will require BOK approval.

Overall, foreign exchange transactions will be liberalized with the abolition of various limits on overseas remittances.

The Ministry of Finance and Economy Thursday announced an array of measures for the second-phase foreign exchange liberalization to be implemented next January.

Beginning next year, the individual ceiling on the amount of funds that can be taken out of the nation for overseas trips, study and changes of residence will be abolished. Currently, individuals are banned from taking more than $10,000 on overseas trips and posting remittances of more than $5,000. The maximum allowable for a four-member family taking up overseas residence is $1 million.

The amount funds taken out for long-term overseas residence and studies will be reported to the NTS if it exceeds $100,000 a year. BOK approval is required in cases where it surpasses $100,000. If the funds for overseas residence exceed $100,000, tax officials will launch investigations into sources.

The current limit on offshore credit card expenditures of $10,000 a year will be abolished but spending over $20,000 must be reported to the NTS.

Presently, citizens are allowed to purchase and possess up to $20,000 in foreign currencies from foreign exchange banks but the limit will be eliminated next year. But if the amount of a one-time purchase exceeds $10,000, the NTS will be notified. Foreigners are also free to purchase foreign currencies but if the amount surpasses $10,000, they should report it to the BOK.

Restrictions will be removed on annual overseas deposits and trust transactions by Koreans, which were set at $500 million for exporters and importers, $5 million for corporations and $50,000 for individuals.

But if the amount tops $50,000 per case, they will have to report it to the BOK and if it exceeds $10,000, the NTS must be notified. Corporations should report to the BOK if their deposits or balances exceed $500,000 a year and individuals will be required to do the same when the amount tops $100,000 a year.

Local non-profit organizations and individuals will be allowed to borrow money from overseas financial institutions. Currently, non-profit organizations are required to obtain BOK approval when they acquire real estate overseas but exceptions will be made in cases where hospitals or schools are being established. Under current rules, in order to acquire real estate here, foreigners have to get permission from the BOK. Starting next year, they will only be required to report it.

Kwon Soon-Hwal shkwon@donga.com