Illegal Foreign Exchange Transactions: Types of Punishment and Key Points to Know During Police Investigation

  “I never imagined that a money transfer I didn’t even realize was a violation would lead to a police investigation…”   Cases like this actually happen — when someone sends or receives money at the request of a friend or family member abroad, it can be treated as illegal foreign exchange transactions (unauthorized remittance).   In particular, if the transaction involved an account not under your own name or cash was delivered directly, authorities may consider it a violation of the Foreign Exchange Transactions Act.   Such cases often do not end with a simple fine — depending on the circumstances, penalties can range from hundreds of thousands to millions of won in fines, or even imprisonment.   During a police investigation, even a single statement or document submission can affect the outcome. Therefore, preparing with the assistance of a legal expert from the very beginning is the most practical and effective approach.    

Contents

 

1. What Kind of Remittance Can Violate the Foreign Exchange Transactions Act?

 

2. The Most Critical Time to Respond Is Before Attending the Police Investigation

 

3. A Criminal Verdict Doesn’t Mean It’s Over

 

4. In Conclusion: You Must Set Your Strategy for an Illegal Remittance Allegation Before Making Any Statement

   

1. What Kind of Remittance Can Violate the Foreign Exchange Transactions Act?

  Even a simple overseas money transfer can carry legal liability, depending on its purpose and method of execution.   In particular, for large remittances involving capital transactions — such as purchasing overseas real estate or investing in a foreign company — you are required to file a foreign exchange transaction report before transferring the funds abroad.   If the remittance is made without this prior reporting, you may face up to one year of imprisonment or a fine of up to 100 million won. The larger the amount involved, the heavier the court tends to view the responsibility.   Another type of violation involves using unofficial channels to send foreign currency.   For example, if money was transferred using an account under someone else’s name, cash was exchanged directly, or an unregistered money exchange service was used, authorities will likely determine that it was not a legitimate transaction.   Such cases are regarded as illegal foreign exchange remittance (“unlicensed money transfer”), and can lead to up to three years of imprisonment or a fine of up to 300 million won, with the possibility of additional fines up to three times the transaction amount.   In reality, many people claim they simply “didn’t know the proper procedure,” but under the Foreign Exchange Transactions Act, if the remittance route itself violates regulations, law enforcement can initiate a compulsory investigation starting from the police inquiry stage.    

2. The Most Critical Time to Respond Is Before Attending the Police Investigation

  If you have received a notice of investigation for a violation of the Foreign Exchange Transactions Act, the first step should be to review what documents and evidence to prepare before making any statement.   Simply saying “I didn’t know” is not persuasive — the police will focus on whether the structure of the remittance itself was illegal. If your explanation lacks detail or the context is misunderstood, your actions may be interpreted as intentional illegal remittance rather than a simple mistake.   This risk is even higher for foreign nationals, as language barriers or limited understanding of local procedures can easily lead to miscommunication during questioning.   If you fail to submit proper explanatory materials, your case may be referred to an immigration review, resulting in denial of visa extension or criminal review proceedings.   Moreover, if you do not provide a written statement of remorse, documentation explaining the background of the remittance, or evidence tracing the flow of funds, there is a possibility that the court may impose a prison sentence instead of a fine.   Since the police investigation stage effectively marks the beginning of criminal proceedings, the most effective protection is to have a legal professional review your statements and evidence preparation from the very start.    

3. A Criminal Verdict Doesn’t Mean It’s Over

  Even if criminal punishment has already been imposed in a case involving a violation of the Foreign Exchange Transactions Act, foreign nationals may still face a separate immigration review process afterward.   Even when a fine is imposed by the criminal court, if the amount exceeds a certain threshold, there are many cases where authorities decide on visa extension denial, revocation of stay permission, or forced deportation.   The Immigration Office typically uses the following standards to assess visa eligibility:

• A single fine exceeding 3 million won
• Cumulative fines exceeding 5 million won within the last five years
• A record of imprisonment or suspended sentence

  In practice, even if you merely transferred money at someone’s request, if the transaction involved unofficial remittance routes or repeated money movements suggesting intent, the immigration authorities may determine the case warrants a deportation order.   Therefore, even if the criminal punishment seems minor, the immigration review may still treat the conviction itself as a reason to restrict your stay. For this reason, it is crucial to prepare for both the police investigation and immigration procedures simultaneously from the very beginning.    

4. In Conclusion: You Must Set Your Strategy for an Illegal Remittance Allegation Before Making Any Statement

  A violation of the Foreign Exchange Transactions Act is not merely a simple remittance issue — it is a criminal case in which the entire flow and structure of funds are subject to investigation. The method of transfer, as well as the clarity of the source and intended use of the funds, can significantly affect both the type of punishment and the intensity of the investigation.   For foreign nationals, the matter can extend beyond criminal penalties to include a visa eligibility review, meaning that both police investigation and immigration response must be prepared simultaneously for effective protection.   A criminal defense attorney can intervene in the investigation by clarifying the structure of the remittance and coordinating early statements.   An immigration law specialist can prepare evidence proving the necessity of continued stay in Korea in accordance with immigration review standards to counter forced deportation.   Our team organizes and explains the remittance path and fund flow, while also preparing supporting documents to prove the source and intended use of funds.   We also provide practical assistance in preparing police statements, letters of remorse, and petitions, as well as explanatory documents to maintain visa status through consistent and credible testimony.   If you’ve received a notice of investigation, preparing for both criminal defense and immigration procedures together will change the outcome.   Now is the time to make your first and timely decision — before it’s too late.