The validity of a seizure disposition by the tax authority on the disposition of arrears against a taxpayer, which is subject to the refund claims on deposits deposited at overseas branches of the domestic bank (negative)

Unlike the head office or domestic branch in a foreign country, the overseas branch of a domestic bank shall be deemed to be a foreign bank with the authorization under the laws and regulations of the foreign country, which is separate from the head office or domestic branch, and shall be subject to the regulation and supervision of the foreign financial authority in running banking business, and the laws and regulations of the foreign country, which is the location of the domestic bank, shall apply to deposit transactions conducted at the overseas branch of the domestic bank. In addition, the domestic bank branch is not connected with the head office or domestic branch and the computer network, but is only able to withdraw deposits deposited at the overseas branch of the domestic bank only in the foreign country where the overseas branch is located, and to dispose of them in the Republic of Korea, the domestic bank must undergo a remittance procedure again. Accordingly, the seizure disposition conducted by the tax authority on delinquent disposition against a taxpayer, which covers a claim for

Article 41 of the National Tax Collection Act

Republic of Korea (Law Firm Namsan, Attorneys Lee Chang-soo et al., Counsel for the plaintiff-appellant)

Korean Bank (Law Firm Squa, Attorneys Gyeong-chul et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2012Na63832 decided April 18, 2013

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined.

1. An overseas branch of a domestic bank shall be considered to be a foreign bank located in a foreign country and, unlike its head office or domestic branch, in accordance with the laws and regulations of the foreign country, which is separate from its head office or domestic branch, and in running banking business, it shall be subject to the regulation and supervision of the foreign financial authorities in accordance with the laws and regulations of the foreign country. In addition, an overseas branch of a domestic bank shall not be linked to the computer network with the head office or domestic branch, but shall only withdraw deposits deposited at the overseas branch of the domestic bank only in the foreign country in which the overseas branch is located, and shall undergo the remittance procedure of the domestic bank to dispose of them in the Republic of Korea

Therefore, the attachment disposition against the claims to return deposits deposited at the domestic bank's overseas branch as a disposition on default against the taxpayer shall be null and void as it is against the property not subject to attachment under the National Tax Collection Act.

2. In full view of the adopted evidence, the lower court acknowledged that the Plaintiff sent each notification of attachment stating the claims subject to attachment in the Defendant’s head office as deposit claims against the Defendant’s head office and each notification of attachment stating the claims subject to attachment as deposit claims against the Defendant Hong Kong branch. The attachment of claims subject to attachment against the Defendant’s head office cannot be deemed to have been specified as having been attributable to the deposit claims against the Defendant Hong Kong branch, and the attachment of claims subject to attachment against the Defendant Hong Kong branch as deposit claims against the Defendant Hong Kong branch is invalid because it is against the property located in an area where the right to collect national taxes is not vested in the disposition of national taxes, and thus dismissed the Plaintiff’s claim for collection on the premise that

In light of the above legal principles and records, the above determination by the court below is just and acceptable. Contrary to the allegations in the grounds of appeal, there were no errors by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal principles on the subject of reversion or disposition on default, the fairness of administrative acts, and the specification of the notification of seizure of claims under

3. Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Shin Young-chul (Presiding Justice)