Compliance Procedures for Financial Institutions in Korea, Democratic People’s Republic of

High-Risk Jurisdiction: The Democratic People’s Republic of Korea (DPRK)

The Financial Action Task Force (FATF) has identified the Democratic People’s Republic of Korea (DPRK) as a high-risk jurisdiction for money laundering, terrorist financing, and proliferation financing. As a result, all countries are urged to apply enhanced due diligence measures when dealing with DPRK-related transactions.

Global Concerns over DPRK’s AML/CFT Regime

The FATF has expressed serious concerns over the DPRK’s failure to address significant deficiencies in its anti-money laundering and combating the financing of terrorism (AML/CFT) regime. The organization is calling on the international community to take necessary measures to protect their financial sectors from money laundering, financing of terrorism, and WMD proliferation financing risks emanating from the DPRK.

FATF Recommendations

The FATF recommends that countries:

• Enhance Due Diligence Measures: Advise financial institutions to give special attention to business relationships and transactions with the DPRK, including DPRK companies, financial institutions, and those acting on their behalf.
• Apply Effective Counter-Measures: Apply effective counter-measures, including targeted financial sanctions in accordance with applicable United Nations Security Council Resolutions.
• Close DPRK Bank Branches and Terminate Correspondent Relationships: Close existing branches, subsidiaries, and representative offices of DPRK banks within their territories and terminate correspondent relationships with DPRK banks.

Continued Vigilance against WMD Proliferation Financing

The FATF also warns that the international community should remain vigilant against the threat posed by the DPRK’s illicit activities related to the proliferation of weapons of mass destruction (WMDs) and its financing. Countries are urged to continue implementing effective measures to prevent and counter these risks.

Enhanced Due Diligence Procedures for Financial Institutions in Korea, Democratic People’s Republic of

In light of the FATF’s recommendations, financial institutions in Korea, Democratic People’s Republic of should take immediate action to enhance their due diligence procedures when dealing with DPRK-related transactions. This includes:

• Conduct Enhanced Customer Due Diligence: Conduct enhanced customer due diligence on individuals and entities involved in DPRK-related transactions.
• Report Suspicious Transactions: Report suspicious transactions related to DPRK to the relevant authorities.
• Ensure Compliance with AML/CFT Laws and Regulations: Ensure compliance with applicable laws and regulations related to AML/CFT.

Preventing Money Laundering, Terrorist Financing, and Proliferation Financing Risks

By implementing these measures, financial institutions can help prevent and counter money laundering, terrorist financing, and proliferation financing risks associated with DPRK activities.