When foreign invested companies or branches of foreign companies in Korea do import/export transactions with their overseas parent companies, they can transact by other means than general remittance, collection (D/P, D/A), or L/C. Transaction by Offset Offset refers to a type of transaction where, instead of settling every transaction on a case-by-case basis, residents and non-residents offset claims and liabilities resulting from import/export transactions at a particular time and settle the balance. Transactions of counter trade or consignment processing trade can be offset without special restrictions. Transactions by account current Offset is divided into account current and general offset. The former refers to settling the balance on a regular basis (a certain number of months not exceeding one business year), before which the parties record all claims and liabilities on a designated account. In general, companies in frequent transactions use this method. In contrast, general offset is non-regular offset where the parties settle the balance at an agreed time. Offset Procedure Designation and declaration of foreign exchange bank : When foreign invested or owned organizations in Korea intend to use account current for settling their frequent transactions with overseas parent companies, they shall designate a foreign exchange bank and declare the fact. Required Documents : An application for designation (change) of a foreign exchange bank (a bank form) Account current report (a bank form) A copy of registry book or trader's registration certificate Proxy (a bank form) (proxy) A certificate of corporate seal impression (proxy) A certificate of proxy's real name (proxy) Opening and register of account for account current : Open an account for account current in the form of company books. Items recorded on the account are limited to claims and liabilities with the counterpart. Register of the account should be completed within 30 days after transaction of goods finishes. Settlement of account for account current : Settlement of the account should be made for a certain number of months not exceeding one business year. The balance of the account means the sum of the balances of each party. Settling balance of account for account current : Balance of the account must be paid or received after reporting the designated foreign exchange bank within three months form each settlement. <Required Documents> Report of the settlement of balance of accounts for account current (a bank form) A copy of the book for account current Expost facto management and closing of account for account current Parties should keep all books and related evidential documents. On closing the account, the parties should report the closing to the foreign exchange bank <Required Documents> Declaration of closing of account for account current (The bank form) Transactions by free Korean won account for non-residents Free Korean won account for non-residents refers to a Korean won account in the name of overseas parent company opened for deposit and withdrawal of Korean won-denominated funds in Korean won-denominated import/export transactions between the overseas parent company and foreign invested corporation or branches in Korea. Flow of export by free Korean won account for non-residents Foreign invested company or branches in Korea (the Exporter) Conclusion of a Korean won-denominated export contract with overseas parent company (the Importer)- The exporter sends shipping documents to the Importer. Correspondent bank of the Importer (Foreign bank) The Importer requests the correspondent bank for remittance of import amount to its free Korean won account. The Importer's non- resident free Korean won account Exchange the remitted foreign currency for Korean won and deposit into the Importer's free Korean won account. Korean won account of the Exporter Transfer the money to the Importer's Korean won account managed by an agreement with KEB or proxy- An export contract document is submitted on transfer. The Exporter The Exporter receives the export price. Flow of import by free Korean won account for non-residents Flow of import by free Korean won account for non-residents Conclusion of a Korean won-denominated import contract with overseas parent company (the Exporter) The Importer sends shipping documents to the Exporter KEB's Korean won account of the Importer (Foreign bank) The Importer deposits the amount of import into its KEB Korean won account. KEB transfers the money to the Exporter's non-resident free Korean won account in KEB An import contract document is submitted on transfer. The Exporter's non-resident free Korean won account The transferred money is remitted according to an agreement with KEB or at the request of proxy to the correspondent bank of the Exporter The correspondent bank of the Exporter(the Foreign bank) Notifies the Foreign bank of the remittance. The Exporter The Exporter receives the export price.