Fraudulent Evasion of Compulsory Execution: Elements, Conduct, Punishment, and Enforcement

What Is Fraudulent Evasion of Compulsory Execution?

The offense of fraudulent evasion of compulsory execution (강제집행면탈죄) is defined in Article 327 of the Korean Criminal Act.

Article 327 (Fraudulent Evasion of Compulsory Execution) A person who, for the purpose of evading compulsory execution, conceals, damages, falsely transfers property, or assumes a fictitious debt, thereby harming a creditor, shall be punished by imprisonment for up to 3 years or by a criminal fine of up to 10 million won.

What Is Compulsory Execution?

Compulsory execution is provided for under Article 389 of the Korean Civil Act, under the name of compulsory performance.

Article 389 (Compulsory Performance) ①Where an obligor fails to voluntarily perform an obligation, the obligee may apply to the court for compulsory performance. This does not apply, however, where the nature of the obligation does not permit compulsory performance.

②Where the obligation under the preceding paragraph aims at a juristic act, the obligee may apply for a judgment that substitutes for the obligor's declaration of intention; and where it aims at an act that is not exclusively personal to the obligor, the obligee may apply to the court to have it performed by a third party at the obligor's expense. <Amended 2014. 12. 30.>

③Where the obligation aims at a forbearance and the obligor acts in violation of it, the obligee may apply to the court to have the result of the violation removed at the obligor's expense and to obtain an appropriate disposition for the future.

④The provisions of the preceding three paragraphs do not affect a claim for damages.

In other words, compulsory execution is a means of compelling the realization of an obligation.

Because an obligation is an original right, there is no need for the obligor to be at fault.

Requirements for Compulsory Execution

Requirements for compulsory execution

• Obtaining a title of execution
• Having a writ of execution attached to the title of execution
• Filing an application for compulsory execution

Methods of Compulsory Execution

Methods of compulsory execution

• Direct compulsion
• Substitute execution
• Indirect compulsion
• Execution of the obligation to make a declaration of intention

Property Not Subject to Compulsory Execution

Property not subject to compulsory execution is set out in Articles 195 and 246 of the Korean Civil Execution Act.

Article 195 (Property Exempt from Seizure) The following property may not be seized. <Amended 2005. 1. 27.>

1. Clothing, bedding, furniture, kitchen utensils, and other daily necessities required for the living of the obligor and the relatives living together with the obligor (including relatives by de facto relationship; hereinafter referred to as the “obligor, etc.” in this Article)

2. Two months' worth of food, fuel, and lighting materials required for the living of the obligor, etc.

3. Money in the amount prescribed by Presidential Decree as one month's living expenses required for the living of the obligor, etc.

4. Farming implements, fertilizer, livestock, feed, seeds, and other comparable items indispensable to a person who engages in farming mainly through their own labor

5. Fishing gear, fishing nets, bait, fingerlings, and other comparable items indispensable to a person who engages in fishery mainly through their own labor

6. Uniforms, tools, and other comparable items indispensable to a professional, technician, laborer, or other person who engages in an occupation or business mainly through their own mental or physical labor

7. Decorations, medals, badges, and other comparable tokens of honor received by the obligor or the obligor's relatives

8. Memorial tablets, portraits of the deceased, gravestones, and other items required for funeral rites, ancestral rituals, or worship

9. Genealogies, historical family records, photo albums, and other items required for ancestor veneration

10. Seals, nameplates, signboards, and other comparable items indispensable to the obligor's living or duties

11. Diaries, commercial account books, and other comparable items indispensable to the obligor's living or occupation

12. Items relating to unpublished works or inventions

13. Textbooks, books of doctrine, learning materials, and other comparable items used by the obligor, etc. at a school, church, temple, or other educational institution or religious organization

14. Eyeglasses, hearing aids, dentures, artificial limbs, canes, wheelchairs for the disabled, and other comparable assistive devices required for the daily life of the obligor, etc.

15. A light vehicle for the disabled, as prescribed by the Motor Vehicle Management Act, that is a motor vehicle required for the daily life of the obligor, etc.

16. Firefighting equipment, alarm devices, evacuation facilities, and other comparable items that must be installed under statutes for the prevention of disasters or for safety

Article 246 (Claims Exempt from Seizure) ①The following claims may not be seized. <Amended 2005. 1. 27., 2010. 7. 23., 2011. 4. 5., 2022. 1. 4.>

1. Support payments and survivors' assistance allowances (遺族扶助料) prescribed by statutes

2. Income that the obligor continues to receive through relief programs or the assistance of a third party

3. A soldier's pay

4. An amount equal to one-half of wages, pensions, salaries, bonuses, retirement pensions, and other salary-type claims of a similar nature. Provided, that where such amount falls short of the amount prescribed by Presidential Decree in consideration of the minimum cost of living under the National Basic Living Security Act, or exceeds the amount prescribed by Presidential Decree in consideration of the living expenses of a standard household, the amount shall be the amount prescribed by the relevant Presidential Decree.

5. An amount equal to one-half of severance pay and other salary-type claims of a similar nature

6. The amount eligible for preferential reimbursement under Article 8 of the 「Housing Lease Protection Act」 and the Enforcement Decree of that Act

7. Insurance proceeds of indemnity-type insurance that the obligor receives on account of life, injury, illness, accident, or the like (including refunds upon cancellation and maturity refunds). Provided, that the scope of exemption from seizure shall be prescribed by Presidential Decree in consideration of the costs expected to be required for maintaining a livelihood, medical treatment, recovery from disability, and the like.

8. Deposits necessary for one month's maintenance of the obligor's livelihood (including installment savings, mutual aid installments, deposits, and postal transfers). Provided, that the amount shall be prescribed by Presidential Decree in consideration of the minimum cost of living under the 「National Basic Living Security Act」 and the amount prescribed in subparagraph 3 of Article 195.

② Where money of the kinds prescribed in subparagraphs 1 through 7 of paragraph (1) is transferred into the obligor's account opened at a financial institution, the court shall, upon the obligor's application, revoke the seizure order with respect to the corresponding portion. <Newly Inserted 2011. 4. 5.>

③Upon a party's application, the court may, in consideration of the living circumstances of the creditor and the obligor and other circumstances, revoke all or part of the seizure order or issue a seizure order against the claims exempt from seizure under paragraph (1). <Amended 2011. 4. 5.>

④In the case of paragraph (3), the provisions of paragraphs (2) through (5) of Article 196 shall apply mutatis mutandis. <Amended 2011. 4. 5.>

Elements of Fraudulent Evasion of Compulsory Execution

Elements of fraudulent evasion of compulsory execution.

• The requirements for compulsory execution are satisfied
• There is a purpose of evading compulsory execution
• There is intent to harm a creditor through concealment, damage, false transfer of property, or the assumption of a fictitious debt

Conduct Constituting Fraudulent Evasion of Compulsory Execution

Conduct constituting fraudulent evasion of compulsory execution

• Concealment: making the discovery of property impossible or difficult
• Damage: an act that reduces the value of property
• False transfer: changing the title to property by pretending to have transferred it when the transfer is fictitious
• Fictitious debt: an act of pretending to have assumed a debt that does not actually exist

Sentencing Standards for Fraudulent Evasion of Compulsory Execution

According to the sentencing guidelines of the Sentencing Commission, the sentencing standards for fraudulent evasion of compulsory execution are as follows.