RFID

RFID, abbreviated from radio frequency identification (무선주파수인식/無線周波數認識), is the use of a wireless non-contact system (비접촉식무선시스템/非接觸式無線系統) that uses radio-frequency electromagnetic fields to transfer data from a tag attached to an object, for the purposes of automatic identification and tracking.

There are two types of RFID tags - active and passive. Unlike a bar code, the tag does not need to be within line of sight of the reader and may be embedded in the tracked object. The tag contains electronically stored information which may be read from up to several meters away.
 * Passive RFID tags (수동형 전자식별표지/手動型 電子識別標識) require no battery and is powered and read at short ranges via magnetic fields (electromagnetic induction).
 * Active RFID tags (능동형 전자식별표지/能動型 電子識別標識) use a local power source and emit radio waves (electromagnetic radiation at radio frequencies). In some cases, GPS may be attached to active RFID tags for the geographic location. So this type is expensive depending on such value-added functions.

The broader technology is referred to automatic identification and data capture (AIDC) technologies including bar codes, QR codes, MCRs and biometrics.

Key words
RFID, asset/facility management (A/FM), chattel mortgage, AIDC

Usage of RFID
RFID tags are used in many industries. For example, RFID tags attached to an automobile during production can be used to track its progress through the assembly line.

Pharmaceuticals can be tracked from the manufacturers to warehouses and drug stores. The Ministry of Health and Welfare has enforced bar codes or RFID tags containing lot (manufacturing) numbers, circulation period, etc. to be put on the phamaceuticals since January 1, 2013.

Livestock and pets may have tags injected, allowing positive identification of the animal. Pet animals like three-or-more-month old dogs (excluding cats) are required to be registered with local governments or their agents as provided by the Act.

Nowadays RFID tags are attached to clothing, possessions for the purpose of asset/facility management. In consequence, the possibility of reading personally-linked information without consent of the data subject has raised privacy concerns.

Relevant Statutes
For the chattel mortgage and asset/facility management, RFID or other electronically identifiable tags may be used under the Act on Security Interest in Movable Properties, Account Receivables, etc. (동산·채권 등의 담보에 관한 법률/動産·債權擔保法) and Article 67 (2) of the Enforcement Decree of the Public-owned Properties and Goods Management Act (공유재산 및 물품관리법 시행령/公有財産·物品管理法 施行令), among others.

Solution for Chattel Mortgage
When the Act on Security Interest in Movable Properties, Account Receivables, etc. comes into force on June 11, 2012, corporate movable assets, receivables and IPRs will be eligible for statutory collateral. The new Act provides for security registries that will be established via Internet-based computer systems.

The new Act premises that the Security Registry of movable properties and account receivables shall be conducted electronically (Article 7). Specifically, the following provision of the Act should be noted for the purpose of this paper.


 * Article 17 (Inspection of Status Quo Collateral and Supplement of Collateral) of the Act
 * (1) The security interest provider shall not, without any justifiable reason, deny the request of the secured creditor to inspect the status quo collateral. In this case, necessary measures including posting electronically identifiable tags, etc. may be taken for the inspection of status quo collateral subject to the agreement between both parties.

Thanks to this proviso in Paragraph 1 Article 17 of the Act, which was inserted during the course of the National Assembly deliberation, the security administrative issues, as discussed above in Cases 1 through 3, can be easily resolved.

Anticipating brand-new asset-based loans (ABLs) could be provided by banks to SMEs, the Financial Supervisory Service held a seminar on "How to Activate ABLs" on December 6, 2011. Owing to the high mobility and low identifiability of movable properties provided to secured creditors as collateral, RFID technology could be efficiently used for the collateral administration of creditor banks.

Government Property Management System
In this connection, RFID/USN technology is actively used in the administration of movable properties in the public sector. Since 2010, the Public Procurement Service (PPS, 조달청/調達廳) has applied RFID technologies in managing government-owned properties totaling 12 million units.

In 2013, the largest purchaser in the public sector has reportedly expanded its RFID-based government properties management sevice which will cost 633 million won. The proposed PPS system on bid includes:
 * Operation and management of integrated application programs for the PPS RFID asset management system;
 * Operation and management of PPS RFID asset management-linked systems;
 * Operation of the PPS RFID asset management system;
 * Dissemination of the PPS system to the public entities;
 * Education and Support of the RFID asset management program;
 * Operation and management of application programs for education and development; and
 * Testing of RFID equipment and Defect minimizing efforts.

Prospects
RFID systems are used to recognize the identity of machinery, equipment and inventories, to manage traceable history of collateral, and to control the operations and movement of collateral on an integrated basis, while USN (ubiquitous sensor network) technologies are useful for the monitoring of machinery and inventories, and real-time reporting to the secured creditors.

Cost reduction is another important factor, but many corporations will make the most of the existing asset and facility management systems to take movable properties as collateral. Systems connecting collateral administration and corporate financing may be incorporated into the whole systemic business administration.