Regulation regarding enforcement of the electronic B/L stipulations of the Commercial Act

Presidential Decree No. 20829

Regulation regarding enforcement of the electronic bill of lading stipulations of the Commercial Act

1. Article 1 (Purpose) The purpose of this decree is to stipulate matters mandated in Article 862 of the Commercial Act and matters necessary for their enforcement.
2. Article 2 (Definition) The terms used in this decree are defined as follows:
   1. An "electronic bill of lading" (aka: e-B/L) refers to a bill of lading that was generated as an electronic document, and registered with an official electronic B/L registration authority according to Clause 1 of Article 862 of the Commercial Act (referred to as the "Act" hereinafter).
   2. The "electronic bill of lading registration authority" (referred to as the "registration authority" hereinafter) refers to the person or organization, as designated by the Minister of Justice, who issues, registers and transfers an electronic B/L, converts to a paper bill of lading, and stores all electronic and related records.
   3. The "electronic bill of lading title registry" (referred to as the "title registry" hereinafter) refers to the ledger electronically managed by the registration authority for entries concerning issuance, registration and transfer of the electronic B/L and its conversion (if necessary) to a paper bill of lading.
   4. A "public digital certificate" refers to the digital signature in accordance with Clause 3 of Article 2 of the "Digital Signature Act."
   5. The "holder of the title to the electronic bill of lading" refers to the person who had first possession of the electronic B/L by the registration authority or the transferee of the electronic B/L.
   6. The "registration and issuance of the electronic bill of lading" (referred to as "registration and issuance" hereinafter) refers to the responsibility incumbent upon the registration authority to register the electronic B/L into the e-title registry for the purpose of issuing it at the request of the carrier.
   7. The "closing of the e-title registry" refers to the measures taken to prevent the registration authority from deleting or changing entries or adding entries to the electronic registry.
3. Article 3 (Qualifications to be a registration authority)
   1. Those who wish to be designated as a registration authority to handle electronic bills of lading according to Clause 1 of Article 862 must have the following qualifications.
   1. They must be incorporated.
   2. Technical competencies: The sum total of technical professionals must be at least twelve (12).
   1. At least one person must possess the technical qualifications stipulated by the Minister of Justice, i.e. that of a national technical qualification equal to that of an IT engineer, information processing engineer or computer cooperation engineer according to the National Qualifications Act
   2. At least one person who has worked more than 2 years in information security or IT operation and management as stipulated by the Minister of Justice
   3. At least one person who completed the education courses given by the Korea Internet & Security Agency pursuant to Article 52 of the Act on Promotion of Information and Communications Network Utilization and Information Protection, Etc. in regard to operation of facilities and equipment related to certification, emergency recovery measures and response to intrusion incidents
   4. At least one person who worked more than 3 years in a trade-related financial business or shipping & logistics
   1. Financial capabilities :
   1. Net assets worth more than KRW20 billion (i.e. the value obtained by subtracting liabilities from total assets)
   2. They must be insured against damages that they may cause to users as a result of any kind of mishap or irresponsibility directly attributed to them.
   1. Facilities and equipment :
   1. They must possess all facilities and equipment necessary to enable them to efficiently carry out their duties as a registration authority, and permit users (i.e. shippers, consignors or consignees) to exercise their rights with regards to registration, endorsement and presentation of electronic bills of lading.
   2. They must possess all facilities and equipment necessary for confirming the dates of sending and receiving electronic bills of lading, and creating and archiving all records related to the electronic bills of lading either electronically or conventionally (i.e. paper storage) as necessary.
   3. They must possess all the necessary security related facilities and equipment for safely operating the entire IT system related to the issuance, distribution and archiving of the electronic bills of lading.
   4. Any and all other facilities and equipment necessary for efficient and safe issuance and distribution of electronic bills of lading
   1. Work rules of the registration authority pertaining to general matters related to procedures and methods for managing and operating the facilities and equipment pursuant to Subclause 4, and matters concerning the archiving of the electronic bills of lading and related electronic records pursuant to Article 13.
   1. In case they entered into an agreement for the use of facilities and equipment with an entity having the facilities or equipment pursuant to Subclause 4 of Clause 1 or the title to them for more than three years for technical reasons, or exercise of rights in applying Clause 1, they will be deemed to have the facilities and equipment pursuant to Subclause 4 of Clause 1.
4. Article 4 (Procedure for designating a registration authority)
   1. Those who want to be designated as a registration authority must attach the following documents and submit the application for designation to the Minister of Justice. In this case the Minister of Justice must confirm the attested copy of the corporate registry and the attested copies of the resident registration of the CEO and executives through the joint use of administrative information pursuant to Clause 1 of Article 21 of the Electronic Government Act, and if the applicants do not agree to it, the Minister of Justice must have the applicants attach them.
   1. The articles of incorporation
   2. Supporting documents confirming that the applicant has the technical competencies, financial capabilities, facilities & equipment and other necessary matters as stipulated in Clause 1 of Article 3
   3. Business plan
   4. In case they entered into a contract for the use of facilities and equipment pursuant to Clause 2 of Article 3, the documents proving the conclusion of said contract and the details thereof
   1. If necessary for deliberation to designate a registration authority, the Minister of Justice may request the applicants to submit materials, or hear the opinions of the applicants.
   2. If deemed necessary after deliberating the work rules described in Subclause 5 of Clause 1 of Article 3, the Minister of Justice may request the applicants to keep the contents, and in this case the applicants must comply with the request unless there are valid reasons not to.
   3. With regard to the application for designation described in Clause 1, the Minister of Justice must then determine whether the applicant meets the requirements after comprehensively considering all the net assets, number of technical professionals, suitability of facilities and equipment, and ability to perform all the registration tasks.
   4. If the applicant is designated a registration authority, the Minister of Justice must issue a letter of designation, publish the fact of designation, the name and address of the person designated as a registration authority, the date of designation, and other necessary information in the official gazette, and notify it by posting it on the appropriate section of the website of the Ministry of Justice.
5. Article 5 (Change of designation of qualifications)
   1. If the registration authority changes any of the following described in Clause 1 of Article 3 after designation as such, it must immediately notify the Minister of Justice by attaching documents proving the contents of the change.
   2. If the Minister of Justice receives a notice pursuant to Clause 1, it may check the registration authority’s technical competencies, financial capabilities and safe operation of facilities and equipment and request appropriate supplementation.
6. Article 6 (Issuance of electronic bills of lading)
   1. To issue an electronic B/L, the carrier must attach the certificate of the carrier and a document (including an electronic document) confirming that the consignor consented to the issuance of the electronic B/L to the ‘electronic application for issuance and registration’ including the following, and send them to the registration authority.
   1. The information stipulated in Clause 1 of Article 853 of the Act
   2. Place of receipt and place of delivery
   3. The signature of the carrier or its agent electronically reproduced
   1. In case the carrier applies for issuance and registration according to Clause 1, it must send the agreement of the electronic B/L to the registration authority. If the agreement is already registered with the registration authority, however, it may be omitted.
   2. If the registration authority receives an application for issuance and registration described in Clause 1, it must carry out its issuance and registration responsibilities, including the information mentioned in Clause 1 and the agreement, archive the essential information in the e-title registry, and send them immediately to the consignor as electronic documents.
   3. If the electronic B/L is issued, the document of carriage pursuant to Articles 852, 856 and 863 cannot be issued.
7. Article 7 (Charterage and electronic B/L) If the electronic B/L was issued in accordance with Clause 1 of Article 855, the carrier will be regarded as the shipowner and the consignor as the charterer.
8. Article 8 (Transfer of the electronic B/L)
   1. If the holder of the title to the electronic B/L transfers the electronic B/L, it must create an electronic document containing the intention of endorsement, attach the electronic B/L, and request the registration authority to send it to the transferee.
   2. The electronic transfer application mentioned in Clause 1 must include the following information:
   1. Information showing the identity of the electronic B/L
   2. Information about the transferee
   3. Public digital signature of the transferer
   1. Having received the transfer request described in Clause 1, the registration authority must input the proper entries in the e-title registry including the information described in Clause 2, and immediately send them to the transferee as electronic documents.
   2. After sending the information described in Clause 3 to the transferee, the registration authority must immediately notify the matter to the transferer electronically.
   3. The transferee intending to take over the electronic B/L must register his/her information including name, resident registration number or business license number and the address with the registration authority in advance.
9. Article 9 (Changing entries in the electronic B/L)
   1. If the holder of the title to the electronic B/L wants to change any entries in the electronic B/L, it must electronically apply for the change(s) with the registration authority.
   2. When the registration authority receives the change application mentioned in Clause 1, it must immediately notify the matter to the shipper electronically.
   3. When the carrier receives the notification mentioned in Clause 2, it must electronically inform the registration authority whether it approves it.
   4. When the registration authority receives the approval notification from the carrier described in Clause 3, it must immediately notify the matter to the holder of the title to the electronic B/L electronically. If the shipper approved the change(s), it must send the notification after changing the entries in the e-title registry.
10. Article 10 (Goods delivery request according to the electronic B/L)
    1. If the holder of the title to the electronic B/L wants to have the goods delivered, it must create an electronic document containing the intention to request the delivery of goods, attach the electronic B/L, and send it to the registration authority, and the registration authority must immediately send it to the shipper electronically.
    2. If the request for the delivery of goods is made as described in Clause 1, the registration authority must state in the e-title registry that the electronic B/L cannot be transferred anymore.
    3. If the carrier refuses to deliver the requested goods as described in Clause 1, it must send an electronic document containing the intention and reason to the registration authority, and the registration authority must immediately send the goods delivery request to the holder of the title to the electronic B/L who requested the delivery of goods.
11. Article 11 (Delivery of goods and redemption of the electronic B/L)
    1. The carrier, who received the delivery request through the registration authority, must check if the requester is the holder of the title to the electronic B/L in the e-title registry, and deliver the goods.
    2. After delivery of goods the carrier must notify the recipient and the delivery date to the registration authority electronically, and the registration authority in receipt of the notification must immediately record it in the e-title registry, and notify the carrier and recipient electronically.
    3. If the goods are delivered in accordance with Clauses 1 and 2, the electronic B/L will be deemed to have been redeemed for the carrier.
12. Article 12 (Conversion to a paper B/L)
    1. If the registration authority received a request for converting the electronic B/L to a paper B/L from the titleholder, it must issue a paper B/L to the requester. In this case the electronically reproduced signature or seal will be deemed as the signature or seal described in Clause 1 of Article 853 of the Act.
    2. The registration authority must record the data regarding the transfer of the electronic B/L on the back of the paper B/L mentioned in Clause 1.
    3. The data pertaining to the transfer recorded on the back of the paper B/L described in Clause 2 will have the same effect as an endorsement.
    4. The accuracy of the entries made on the paper B/L converted and distributed according to Clause 1 will be deemed to be guaranteed by the registration authority.
13. Article 13 (Archiving of the electronic B/L. etc.) The work rules of the registration authority pursuant to Subclause 5 of Clause 1 of Article 3 must include information on archiving the electronic records regarding the electronic B/L, its issuance, transfer, conversion and changes for at least:
    1. 10 years from delivery in case the goods are delivered
    2. 10 years from the creation of the records regarding the electronic B/L in case the goods are not delivered
    3. 10 years from the closing of the e-title registry for the electronic B/L in case it was converted to a paper B/L
14. Article 14 (Supervision, etc.) The Minister of Justice may supervise the registration authority’s compliance with the Act or this decree, and confirm the technical competencies and financial capabilities of the registration authority, and the safe operation of facilities and equipments.
15. Article 15 (Cancellation of designation)
    1. The Minister of Justice may cancel its designation of a registration authority if any of the following occurs :
    1. in case the registration authority was designated as a result of fraud or other illegal means
    2. in case the registration authority is found to have seriously violated the designation qualifications described in Clause 1 of Article 3
    3. In case the registration authority terminated business on account of merger, bankruptcy or shutdown
    1. The Minister of Justice must hold a hearing to cancel designation according to Clause 1.
    2. If designation is cancelled according to Clause 1, the Minister of Justice must immediately announce the fact in the official gazette, and on the appropriate section of the website of the Ministry of Justice.
    3. The Minister of Justice may take necessary measures, such as permitting the registration authority, whose designation was cancelled according to Clause 1, to continue to finish work related to the transfer of electronic B/L’s issued and registered prior to the cancellation, or transfer the task of archiving related electronic records to another registration authority or convert them to paper B/L’s according to Article 12.
16. Article 16 (Request for cooperation) If necessary for performing tasks related to designation of registration authorities, the Minister of Justice may request the cooperation of the Minister of Strategy and Finance, the Minister of Commerce, Industry and Finance, the Minister of Land, Transport and Maritime Affairs, the Financial Services Commission, etc.
17. Supplementary Provision
18. This decree will go into effect on August 4, 2008.