FRAMEWORK ACT ON ELECTRONIC COMMERCE

CHAPTER I GENERAL PROVISIONS

Article 1 (Purpose) The purpose of this Act is to contribute to the national economy byclarifying the legal concern and ensuring the security and reliability of electronic transaction aswell as establishing the framework so as to improve of electronic transactions.Article 2 (Definitions) The definitions of terms used in this Act shall be as follows:1. "Electronic message" shall mean information which is generated, sent, received or stored ina kind of electronic form by using information processing systems;2. "Information Processing Systems" shall mean electronic devices or systems which have aninformation processing ability to be utilized for the generation, transmission·reception or storeof electronic messages;3. "Originator" shall mean a person by whom, or on whose behalf, an electronic messagepurports to have been generated and sent;4. "Addressee" shall mean a person who is intended by the originator to receive an electronicmessage;5. "Electronic commerce" shall mean a transaction of goods or services the whole or part ofwhich is made by using an electronic message;6. "Electronic commerce businessman" shall mean a person who conducts Electronic commerceas a major business;7. "Electronic commerce user" shall mean a person who avails himself of Electronic commerceexcept for Electronic commerce businessman.Article 3 (Scope) Except as otherwise provided in any other Act or subordinate statute, thisAct shall apply to all Electronic commerces using electronic messages.

CHAPTER II ELECTRONIC MESSAGES

Article 4 (Validity of Electronic Messages) An electronic message shall not be denied itsvalidity only because it takes the electronic form except as otherwise provided in any otherActs.Article 5 (Retention of Electronic Messages) (1) Where an electronic message satisfies thefollowing requirements, the retention of any document as set forth in the relevant Acts andsubordinate statutes may be replaced by the retention of the electronic message:1. The information contained therein is accessible;2. The electronic message is retained in the format in which it was generated, sent orreceived, or in a format which can be demonstrated to represent accurately the informationgenerated, sent or received; and3. Such information, if any, is retained as enables the identification of the origin and

destination of an electronic message and the date and time when it was sent or received.(2) For the purpose of paragraph (1), any part of an electronic message the sole purpose ofwhich is to enable the electronic message to be sent or received may not be deemed toconstitute the electronic message.Article 6 (Time and Place of Dispatch and Receipt of Electronic Messages) (1) The dispatch ofan electronic message shall be deemed to occur when the originator or the person who canrepresent the originator enters it information processing systems which are able to receiveelectronic message.(2) The receipt of an electronic message shall be deemed to occur at any time falling underany of the following:1. If the addressee has designated an Information processing system for the purpose ofreceiving electronic messages, the time when the electronic message enters that Informationprocessing system: Provided, That if the electronic message is sent to an Informationprocessing systems that is not designated, the time when the electronic message is retrievedby the addressee; or2. If the addressee has not designated an Information processing system for the purpose ofreceiving electronic messages, the time when the electronic message enters an Informationprocessing system of the addressee.(3) An electronic message shall be deemed to be dispatched or received at the place wherethe originator or the addressee has its place of business; in this case, if the originator or theaddressee has more than one place of business, the place of business is that which has theclosest relationship to the underlying transaction or if there is no underlying transaction, theprincipal place of business: Provided, That if the originator or the addressee does not have aplace of business, reference is to be made to its habitual residence.Article 7 (Case Where Originator is Deemed to have Sent Electronic Messages) (1) Anelectronic message shall be deemed to be sent by the originator if it was sent by a personwho is authorized to do so on behalf of the originator, or by a computer program or any otherelectronic means intended to send or receive electronic messages automatically on behalf ofthe originator.(2) In cases falling under any of the following subparagraphs, the addressee of an electronicmessage may conduct the declaration of intention included to the electronic message when thedeclaration of intention may be seen that of the originator.1. Where the addressee has followed any agreed procedure so as to identify that theelectronic message has been made by the originator.2. Where a received electronic message has been transmitted by the originator or a personwho has a justifiable reason to reflect a relationship between the originator and a person whois related to a duputy, or a person who is able to prove that the electronic message is thedeclaration of intention from the addressee or the deputy(3) The paragraph (2) shall not apply in cases falling under any of the followingsubparagraphs:1. Where the addressee would be able to have a reasonable time to conduct an indispensible

arrangement after the time the addressee has received a notice from the originator that theelectronic message was sent against the intention of the originator.2. Where the addressee would be able to know that the electronic message was sent againstthe intention of the originator or if he followed any agreed procedure with the originator, orgave reasonable care in this case paragraph (2) 2.Article 8 (Separateness of Electronic Messages Received) Electronic messages received shall bedeemed to be separated from each other: Provided, That this shall not apply in case where theaddressee would be able to know that electronic messages which are one and the same wassent repeatedly if the addressee followed any agreed acknowledging procedure which isconferred with the originator, or gave reasonable care.Article 9 (Acknowledgement of Receipt) (1) Where the originator has sent the electronicmessage stating that it is conditional on receipt of the acknowledgement, it shall be deemed asif it had never been sent, until the acknowledgement is received by the originator. In this case,this does not apply in Article 534 of the Civil Act.(2) Where the originator has requested the acknowledgement of receipt of the electronicmessage without stating that it is conditional on receipt of the acknowledgement, the originatormay withdraw the dispatch of the electronic message unless it receives the acknowledgementthereof within a reasonable time (which means the time specified by the originator, or the timeagreed upon by the originator and the addressee).Article 10 (Adaptation by Agreement between the originator and the addressee) The originatorand the addressee may conduct an agreement against the provisions of Articles 6 through 9,except as otherwise provided in other Acts and subordinate statutes.Article 11 (Matters concerning Digital Signatures) When the electronic commerce is intended toconduct, any matters concerning electronic signature shall be deemed as a condition prescribedby the electronic signature Act.

CHAPTER IIITHE SECURITY OF ELECTRONIC COMMERCE

AND CONSUMER PROTECTION

Article 12 (Protection of Personal Information) (1) The Government shall formulate andimplement necessary policies for protecting the personal information of the electroniccommerce users so as to ensure the security and reliability of electronic commerce.(2) Electronic commerce businessmen shall follow concerning provisions as well as the act onpromotion of information and communications network utilization and information protection, etc.in collecting·using·providing and controlling personal information of the electronic commerceusers.Article 13 (Protection of Business Secret) (1) The Government shall formulate and implementnecessary policies for protecting the personal information of the electronic commerce users soas to protect the Business secret of the electronic commerce users.(2) Electronic commerce businessmen(including a person who is entrusted the operation of

Information processing systems) shall adopt any measures in order to protect the Businesssecret of the electronic commerce users.(3) Electronic commerce businessmen shall not provide or reveal the fact that the businesssecrets of users to any other person without obtaining an agreement from the electroniccommerce users.(4) Any necessary matters concerning paragraph (1) or (3), criteria for the scope of businesssecret and protective measure, etc. shall be set forth in the Presidential Decree.Article 14 (Use of Encrypted Products) (1) The businessman of electronic commerce may usethe encrypted products to guarantee the security and reliability of electronic commerce.(2) The Government may restrict the use of encryption technology where it is deemednecessary for national security, etc., and take any necessary measures to gain access to theoriginal of encoded information or encryption technology.Article 15 (Establishment and Implementation of the Consumer protection policy, etc.) (1) TheGovernment shall formulate and implement necessary policies for protecting the fundamentalright and interest of consumers and ensuring the reliability of consumers related to electroniccommerce to the relevant Acts and subordinate statutes including Consumer Protection Act andDoor to Door sales, etc. Act.(2) The Government may encourage the establishment of the norm and course of actionautonomously to the businessman of electronic commerce or the institute of electroniccommerce businessman in order not to occur an unreasonable behavior related to electroniccommerce hereafter.Article 16 (Prevention and Remedy of Consumer Damages) (1) The Government shall formulateand implement necessary policies with respect to provision of information and extension ofeducation for consumers to prevent the occurrence of consumer damages related to electroniccommerce.(2) The Government shall formulate and implement necessary policies for the prompt and fairsettlement of consumers' complaints and damages related to electronic commerce.Article 17 (General Observance Matters of electronic commerce businessman) Electroniccommerce businessmen shall observe the following matters to protect consumers related toelectronic and to ensure the security and reliability of electronic commerce:1. Provision accurate information concerning trade name(including the name of therepresentative in case of a juristic person) and information related to himself etc, as well asgoods, services and the condition of contract etc,.2. Provision and preservation of an agreement to make consumers access and acknowledgeeasily.3. Provision of procedures which Consumers may cancel or change the orders of themselves.4. Provision of procedures which may the cancellation of subscription, exchange and returnseasily.5. Provision of procedures which may deal with the complaint and requirement of consumerspromptly as well as fairly.6. Preservation of business documents which are necessary the proof of transactions for

reasonable time.Article 18 (Certification for the businessman of electronic commerce) The Government maysupport a certification business for the excellent businessman of electronic commerce so as toprotect consumers and to sound development of electronic commerce businessmen.

CHAPTER ⅣESTABLISHMENT OF BASIC POLICES FOR ELECTRONIC COMMERCE AND DEVELOPMENT

SYSTEMS

Article 19 (Principle of basic policies for electronic commerce and obligation of theGovernment) The Government shall formulate and implement basic policies based on suchprinciples as encouraged private sector initiative, minimized governmental restrictions, enhancedsecurity and reliability of electronic commerce, and strengthening of international cooperation,etc.Article 20 (Formulation and Implementation of Electronic Commerce Promotion Program) (1)The Government shall formulate and implement a program (hereinafter referred to as the"electronic commerce promotion program") in accordance with the principle of basic policies forelectronic commerce as prescribed by Article 19, which contains the following:1. Basic framework of electronic commerce promotion program;2. Matters concerning international norms with respect to electronic commerce;3. Matters concerning the electronic payment system;4. Matters concerning protecting intellectual property rights;5. Matters concerning protecting the interests of electronic commerce;6. Matters concerning guaranteeing the security and reliability of electronic commerce;7. Matters concerning developing and standardizing information technology with respect toelectronic commerce;8. Matters concerning further promoting environments suitable for, and creating demand for,electronic commerce;9. Matters concerning international cooperation with respect to electronic commerce;10. Matters concerning supporting the buildup of the infrastructure necessary to promoteelectronic commerce;11. Matters concerning establishing high-speedy telecommunication networks and facilitating theuse thereof; and12. Other matters necessary to promote electronic commerce.(2) The heads of relevant central administrative agencies(hereinafter referred to as the"relevant central administrative agencies") shall formulate sectional programs for any suchmatters falling under subparagraphs of paragraph (1) as are under their respective jurisdictionand shall take them into the consideration in establishing and implementing their major policies.(3) When the Minister of Commerce, Industry and Energy intends to formulate the electroniccommerce promotion program, he shall have it established by the Informationization Committeein accordance with Article 8 of the Framework Act on the Informationization Promotion, after

combining all the sectional programs of relevant central administrative agencies and thenreferring them to the Committee on Electronic Commerce Policy for deliberation in accordancewith Article 21 hereof.Article 21 (Committee on Electronic Commerce Policy) (1) A Committee on ElectronicCommerce Policy (hereinafter referred to as the "Policy Committee") shall be established todeliberate matters related to promoting electronic commerce.(2) The Policy Committee shall deliberate the following matters:1. The electronic commerce promotion program;2. The assesment of the performance of the electronic commerce promotion program;3. The coordination of the policies for promoting electronic commerce or the programs of therelevant central administrative agencies; or4. Other matters referred to it for deliberation by the Chairman thereof as major policy issuesto promote electronic commerce.(3) The Policy Committee shall be composed of less than 30 members of committee includingthe chairman of the committee.(4) The chairman of the committee shall be the Vice-Minister of Commerce, Industry andEnergy and the Minister of Commerce, Industry and Energy shall appoint the person as themember of the committee among government officials of class 3 or more than correspond toclass 3 who have taken charge of duties(activities) concerning electronic commerce or personswho have a lot of knowledge and experience related to electronic commerce.(5) Other necessary matters relating to the composition and operation of the PolicyCommittee shall be prescribed by the Presidential Decree.Article 22 (Korea Institute for Electronic Commerce) (1) A Korea Institute for ElectronicCommerce (hereinafter referred to as the "KIEC") shall be established for the efficient andsystematic implementation of projects and businesses to promote electronic commerce as wellas to support the development of policies related to electronic commerce.(2) The KIEC shall be a juristic person.(3) The KIEC shall conduct the following projects with respect to electronic commerce:1. Domestic or world-wide survey and research, and businesses for publishing, public relationsand promotions;2. Institutional research and other businesses for creating environments suitable for thepromotion of electronic business;3. Research and development of information standards, distribution and activity of internationalstandards in accordance with Article 24;4. Projects for supporting the development of information technology under Article 25;5. Projects for Certification to an excellent electronic commerce businessmen as prescribedArticle 18;6. Projects for international exchanges and cooperation to promote electronic commerce inaccordance to Article 29;7. Operation of the Korea EDI Committee under Article 23 (2); and8. Operation of the Electronic Commerce Mediation Committee as prescribed Article 32;

9. Other businesses entrusted by the Minister of Commerce, Industry and Energy or the headsof the relevant central administrative agencies.(4) The KIEC may conduct a profitable projects under the conditions as prescribed by thePresidential Decree to supply necessary expenses for attainment of an object pursuant toparagraph (1).(5) The Government may support the whole or part of the expenses for operating of theKIEC within the limit of the relevant budget.(6) The KIEC may be contributed money from the businessman of electronic commerce toappropriate for necessary expenses for the operation or business performance of KIEC.(7) The KIEC may collect fees from the persons who use the information standards developedby itself, under the conditions as prescribed by the Presidential Decree.(8) The relevant provisions of the Civil Act with respect to the foundation shall apply mutatismutandis to the KIEC except as otherwise provided by this Act.(9) The relevant provisions of the Civil Act with respect to the foundation shall apply mutatismutandis to the KIEC except as otherwise provided by this Act.

CHAPTER PROMOTION OF ELECTRONIC COMMERCEⅤ

Article 23 (Promotion of using electronic messages) The Government shall formulate andimplement necessary policies for the consolidation of concerning Acts etc, to promote the useof electronic messages.Article 24 (Standardization of Electronic Commerce) (1) The Government shall implement thefollowing measures in order to the efficient operation of electronic commerce and to theguarantee of interchangeability of related information technologies:1. Establishment, revision, repeal and distribution of standards with respect to electronicmessages;2. Research and development of domestic and foreign standards relating to electroniccommerce; and3. Other matters necessary to standardize electronic commerce.(2) The Korea EDI Committee shall be established pursuant to the Presidential Decree in theMinistry of Commerce, Industry and Energy so as to research, deliberate and decide thestandardization of electronic messages as prescribed in paragraph (1) 1.(3) The Government may, if necessary for the efficient implementation of the matters as setforth in each subparagraph of paragraph (1), have the relevant research institutes andnon-government organizations act on its behalf. In this case, it may support the requiredexpenses to them in accordance with the Presidential Decree.Article 25 (Development of Information Technology for electronic commerce) The Governmentshall perform the following measures in accordance with the relevant Acts and subordinatestatutes so as to develop the information technology necessary to promote electronic commerceand to enhance technology standards:1. Research of technical standards for electronic commerce, research and development of

information technology and practical use of the developed technology;2. Cooperation with respect to the technology of electronic commerce, the direction and thetransfer thereof;3. Smooth distribution of technology information and industrial - educational - researchablecooperation on electronic commerce; and4. Other necessary matters for the development of technology of electronic commerce.Article 26 (Education of special human resources for electronic commerce) (1) The Governmentshall try to educate professional human resources necessary to the promotion of electroniccommerce.(2) The Government may support the whole or part of the expenses necessary for operatingthe business to train special human resources that research institutes including a researchinstitute which is appropriated by the Government etc, under the act on the establishment,operation and fosterage of Government Invested research Institutions and universities pursuantto the higher education Act as well as non-government organizations and other relevantorganizations in accordance with paragraph (1).(3) Any necessary matters concerning the support of expenses for special human resourceeducation institutes of electronic commerce in accordance with paragraph (2) shall beprescribed by the Presidential Decree.Article 27 (Promotion of electronic commerce for public sectors) The Government agency, localself-governing bodies, government investment agencies or public organizations etc,. (hereinafterreferred to as the "The Government agency, etc.") shall formulate and implement programs soas to conduct businesses of agency as electronic commerce or procurement of goods orservices necessary in operation of the business.Article 28 (Electronic Commerce Statistics etc, a fact-finding survey) (1) The Minister ofCommerce, Industry and Energy may conduct electronic commerce statistics etc, a fact-findingsurvey so as to the effective formulation and implementation of electronic commerce promotionpolicies. In this case, Statistics Act shall apply when electronic commerce statistics intends tobe generated.(2) The Minister of Commerce, Industry and Energy may require a presentation of relatedmaterials or a statement of opinions to the Government agencies, electronic commercebusinessmen or juristic persons and organizations related to electronic commerce if necessaryfor the fact-finding survey including electronic commerce statistics etc., in accordance withparagraph (1).(3) Where they are required to the presentation of related materials etc, pursuant toparagraph (1) from the Minister of Commerce, Industry and Energy, the Government agencies,electronic commerce businessmen or juristic persons and organizations related to electroniccommerce shall cooperate positively with such the demand.(4) Any necessary matters concerning the performance of the fact-finding survey, electroniccommerce statistics etc., shall be prescribed by the Presidential Decree.Article 29 (Internationalization of Electronic Commerce) (1) The Government may support theprojects or businesses for exchanges of the relevant information, technology and manpower,

joint research and development and technical cooperation as well as internationalstandardization, etc. so as to promote the international cooperation with respect to electroniccommerce.(2) The Government shall make an effort to facilitate launching into foreign market ofelectronic commerce businessmen as well as to cope with and participate in a controversy ofinternational organizations related to electronic commerce.Article 30 (Electronic Commerce Support Center) (1) The Government shall formulate andimplement necessary policies to promote electronic commerce of small and medium enterprises.(2) The Minister of Commerce, Industry and Energy may, for the purpose of promotingelectronic commerce of small and medium enterprises, designate any institute which conductsbusinesses for supporting education and training, technical guidance, management consultationand information provision, etc. as the Electronic Commerce Support Center (hereinafter referredto as the "ECSC").(3) Any necessary matters concerning the designation of the ECSC, criteria for the withdrawalof such designation, report for the achievement of promotion programs and support of expensesetc., shall be set forth in the Presidential Decree.Article 31 (Support for promotion of electronic commerce) (1) The State or the localgovernment may grant the preferential taxation treatment such as regulation of tax reductionand exemption Act and Local Tax Act etc., pursuant to tax-related Acts in order to promoteelectronic commerce.(2) The Government may support part of the expenses therefor to the limit of the relevantbudget if any juristic person or organization related to electronic commerce performs a projectwhich is prescribed by the electronic commerce promotion program.

CHAPTER ELECTRONIC COMMERCE MEDIATION COMMITTEEⅥ

Article 32 (Establishment and Composition of Electronic Commerce Dispute MediationCommittee) (1) A Electronic Commerce Dispute Mediation Committee (hereinafter referred toas the "Dispute Mediation Committee") shall be established to mediate any dispute overElectronic Commerce.(2) The Committee shall consists of not less than fifteen but not more than fifty membersincluding one chairman.(3) The members shall be appointed or commissioned by the Minister of Commerce, Industryand Energy from among the persons falling under any of the following subparagraphs, and thechairman shall be elected from among the members.1. Persons who presently serve or have served in universities as associate professors orhigher and in publically recognized research institutes as researchers with their positionscorresponding to the former and majored in a field relating to electronic commerce;2. Public officials of Grade IV or higher or persons who presently work or have worked inpublic institutions with their positions corresponding to the former and have experiences indealing with the affairs of electronic commerce;

3. Persons who holds qualifications of judges, prosecutors, or attorneys-at-law;4. Persons recommended by nonprofit nongovernmental organizations established pursuant toArticle 2 of the Assistance for Nonprofit Non-governmental Organizations Act;5. Other persons who have knowledge and experience in dealing with electronic commerce anddispute mediation.(4) The members of the Committee shall be non-standing, and the terms of office for themembers shall be 2 years and they may be reappointed or recommissioned.(5) A secretariat shall be established in the Korea Institute for Electronic Commerce pursuantto Article 22 to support the Dispute Mediation Committee's affairs.(6) Any necessary matters for the qualification of the members and the guarantee of theirstatus as well as the exclusion, exception and refrainment of the members shall be determinedby the Presidential Decree.Article 33 (Mediation of Dispute) (1) Any person who wants to refer any dispute conciliationand loss redemption over the electronic commerce may request a mediation of the dispute tothe Committee.(2) The Committee shall, upon receiving an application for mediating a dispute underparagraph (1), advise to parties involved in the dispute and make out a draft mediation within45 days from the date of receiving such application: Provided, That if there are unavoidablecircumstances for extending the period, the Dispute Mediation Committee shall notify to partiesinvolved in the dispute and specify the reason and period for extending.(3) The Committee may commit the department of mediation which is composed of withinthree members to the mediation of dispute, if necessary matters for the mediation of disputein accordance with paragraph (2).Article 34 (Request for Materials, etc.) (1) The Dispute Mediation Committee may ask partiesinvolved in a dispute or relevant witnesses to provide materials necessary to mediate thedispute. In this case, the relevant parties shall comply with the request unless the justifiablegrounds exist that make it impossible for them to do so.(2) The Committee may, when it is deemed necessary, get parties involved in a dispute orrelevant witnesses to be present at a meeting of the Dispute Mediation Committee to heartheir opinions.Article 35 (Effect of Mediation) (1) The Mediation shall be concluded in cases falling underany of the following subparagraphs:1. Where parties involved in the dispute shall agree to a mediation recommendation inaccordance with Article 33 (2).2. Where parties involved in the dispute shall submit a written agreement for the mediationwhich is made by themselves in the Committee.(2) The committee shall prepare a written mediation and the parties involved in the disputeshall subscribe their names thereto and affix their seals thereon in case of paragraph (1).(3) The written agreement for the mediation under paragraph (2) shall have the full force andeffect of a mutual agreement between parties.Article 36 (Rejection and Suspension of Mediation) (1) The Committee shall give parties

involved in the dispute a notice that the mediation has been rejected and suspended in casesfalling under any of the following:1. Where an application of dispute mediation shall be withdrawn or any side of partiesinvolved in the dispute shall decline the mediation of dispute.2. Where parties involved in the dispute shall reject the mediation plan of the committee.3. Where filed a lawsuit in a law court to the dispute mediation case.4. Where it is deemed that it is inappropriate for the committee to mediate the case in thelight of its nature.Article 37 (Expenses for Mediation, etc.) (1) The Committee may bear the expenses formediation to parties who are applied for the dispute mediation pursuant to the PresidentialDecree.(2) The Government may contribute or subsidize the expenses necessary for the operation ofthe Committee within the scope of the budget.Article 38 (Operation of the Committee) With the exception of what is prescribed in Articles 36through 39, necessary matters concerning the operation of the Committee and the mediationdepartment as well as the procedures for mediating any dispute, etc. shall be prescribed by thePresidential Decree.

CHAPTER VI SUPPLEMENTARY PROVISIONSArticle 39 (Delegation and Entrustment of Authorities) Part of authorities of the Minister ofCommerce, Industry and Energy under this Act may be delegated to the heads of organizationsunder his control or local governments, or entrusted to the heads of the relevant centraladministrative agencies in accordance with the Presidential Decree.Article 40 (Reciprocity) This Act shall be applied to individuals and juristic persons of foreignstates: Provided, That individuals and juristic persons of any foreign state which does not grantcounterparts of the Republic of Korea the protection equivalent to that under this Act may begranted the correspondingly restricted extent of the protection under this Act or saidinternational treaties in the Republic of Korea.

ADDENDA

Article 1 (Enforcement Date) This Act shall enter into force on July 1, 2002.Article 2 (Transitional Measures concerning Designation of Electronic Commerce SupportCenter) The institution which has been designated as an Electronic Commerce Support Centerin accordance with previous Article shall be deemed to be designated as the ECSC inaccordance with Article 30 (1) hereof.Article 3 (Relation with other Acts) If other Acts and subordinate statutes cite the formerframework Act on Electronic commerce or the provision at the time this Act enters into force,this Act or the corresponding provisions in this Act shall be regarded as being cited.