Financial Crime Awareness and Education in Democratic People’s Republic of Korea: International Community Urged to Disrupt Illicit Financial Activities

Warning from FATF on Proliferation Financing Risk

The Financial Action Task Force (FATF) has issued a stern warning regarding the proliferation financing risk emanating from the Democratic People’s Republic of Korea (DPRK), emphasizing the importance of robust implementation of international standards to disrupt the country’s illicit financial activities.

Background: UNSC Resolutions on DPRK

In recent years, the United Nations Security Council (UNSC) has passed several resolutions that reinforce strict financial restrictions on DPRK. The FATF is reiterating its relevant international standards related to proliferation financing, urging all jurisdictions to effectively implement the recommendations and UNSC Resolutions.

Key Recommendations for Robust Implementation

The FATF highlights the importance of targeted financial sanctions against individuals and entities without delay. Countries are also encouraged to propose new listings of individuals and entities meeting designation criteria. The updated Recommendation 7 reflects recent UNSC Resolutions, including extending targeted financial sanctions to DPRK Government entities associated with nuclear or ballistic missile programs.

Key Actions:

• Targeted financial sanctions against individuals and entities without delay
• Propose new listings of individuals and entities meeting designation criteria
• Cooperate and coordinate between relevant authorities on combating proliferation financing
• Share relevant information, develop policies, and activities to prevent the evasion of sanctions

UNSC Resolutions Relevant to DPRK

Recent UNSC resolutions have imposed strict financial restrictions on DPRK, including:

• Prohibiting the opening and operation of new branches, subsidiaries, and representative offices of DPRK banks
• Closing existing branches, subsidiaries, and representative offices, and terminating correspondent banking relationships with DPRK banks
• Prohibiting financial institutions from opening new representative offices or subsidiaries, branches, or banking accounts in DPRK
• Limiting the number of bank accounts to one per DPRK diplomatic mission and consular post, and one per accredited diplomat and consular officer

FATF Call for Countermeasures

The FATF has been urging its members and all jurisdictions to apply effective countermeasures to protect their financial systems from the ML/TF and PF threat emanating from DPRK for six years. The international community is urged to take necessary actions to disrupt DPRK’s illicit financial activities and prevent the proliferation of WMD.