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Korea to unveil financial deregulation in Q1 next year

South Korea will unveil a package of measures during the first quarter of next year on financial regulatory reforms that would lower entry barriers for new players and boost competition in the local financial industry, the nation's top financial regulator said Thursday.

Choi Jong-ku, chairman of the Financial Services Commission, told reporters that the planned deregulation is aimed at "promoting innovation and healthy competition in the financial industry by new participants."

Choi did not elaborate on details, but the planned measures are also aimed at giving "more benefits to consumers."

Choi made the remarks after an advisory panel of private experts presented a multi-pronged proposal for financial reforms to the FSC after months of deliberation. 

Financial Services Commission Chairman Choi Jong-ku. (Yonhap)
Financial Services Commission Chairman Choi Jong-ku. (Yonhap)

On Wednesday, the panel urged the government to levy taxes on assets worth 4.4 trillion won ($4.07 billion) owned by Samsung Group Chairman Lee Kun-hee, who had allegedly withdrawn them from accounts under borrowed names.

The public scrutiny of Lee's assets again put the spotlight on the 2008 investigation in which Lee was convicted on charges of tax evasion and breach of trust.

At that time, prosecutors found that Lee owned assets, believed to be inherited from his father and the founder of Samsung Group Lee Byung-chull, in about 1,200 accounts held by his lieutenants.

In October, Rep. Park Yong-jin of the governing Democratic Party raised allegations that financial authorities had allowed Lee to inherit the assets without paying taxes.

A 1993 law requires South Koreans to open bank or other financial accounts using their real names.

Authorities can levy taxes on 99 percent of interest and dividend income earned from "non real-name assets."

The panel also called on the government to slap Lee with a fine for violating the law that bans financial transactions with borrowed-name assets.

Asked about the panel's recommendation to impose a fine on Lee, Choi replied that it is desirable for the government to do so after making its decision through a due legislative process. (Yonhap)