Review of Korean secured transaction law in light of the principles in the UNCITRAL Model Law.

This article analyzes the Republic of Korea’s Act on Security over Movables and Receivables, enacted in 2010 and effective from 2012, which introduced a unified registration system for security rights in movable assets, receivables, and intellectual property. The Act aims to modernize Korea’s secured transactions law by supplementing the Civil Code, expanding financing options—especially for small and medium-sized enterprises—and enhancing transparency through a grantor-based registration system. Despite these innovations, the article identifies limitations such as the restricted scope of eligible grantors (limited to corporations and individuals with registered businesses), a five-year duration cap on security rights, and challenges in promoting private enforcement and integrating the traditional security by means of transfer (Yangdodambo) system. Evaluated against international norms like the UNCITRAL Model Law on Secured Transactions, the article suggests reforms including broadening the Act’s applicability, considering a notice registration system, improving collateral preservation mechanisms, and addressing the coexistence of competing security regimes to better align Korea’s legal framework with global best practices and commercial needs.