By Na Jeong-ju
The administration will abolish the 95-year-old system requiring the use of a registered legal seal, called "ingam" in Korean, for crucial contracts by the end of 2013, the Presidential Council on National Competitiveness said Wednesday.
The system has been used since its introduction in 1914 by the Japanese colonial government. Individuals must register their own legal seals at administrative offices. Without a seal, no property transaction, borrowing or other important private contracts are possible.
"The ingam was an effective tool to ensure the safety of transactions, but has became more vulnerable to forgery," the council said in a report to President Lee Myung-bak. "Costs for registration and issuance of certificates have also increased sharply as crimes related to the seals also jumped. We need to adopt a better system."
Over the next five years, an electronic certification system will replace the traditional seal. The new system is much safer and convenient to use, and will help save 450 billion won annually in taxpayers' money, said Kang Man-soo, the council's chairman.
Individuals can use the electronic system when they make contracts on property, automobiles and loans, Kang said.
The government has been operating a taskforce since March to map out measures to improve the certification system.
Policymakers are now working closely with private firms to develop the system, according to the council.