Financial Crime World

Financial Institutions Urged to Enhance Due Diligence in Democratic People’s Republic of Korea

Paris, France - Global Standard-Setting Body Expresses Concerns Over DPRK’s AML/CFT Regime

The Financial Action Task Force (FATF), the global standard-setting body for anti-money laundering and combating the financing of terrorism (AML/CFT), has expressed concerns over the Democratic People’s Republic of Korea’s failure to address significant deficiencies in its AML/CFT regime. The FATF urges the DPRK to immediately and meaningfully address its AML/CFT shortcomings, which pose a risk to the integrity of the international financial system.

Financial Institutions Advised to Give Special Attention to Business Relationships with DPRK

The FATF reaffirms its call on its members and other jurisdictions to advise their financial institutions to give special attention to business relationships and transactions with the DPRK, including:

  • DPRK companies: Financial institutions should be cautious when engaging in business with DPRK companies, as they may be subject to sanctions or have ties to illicit activities.
  • Financial institutions: Financial institutions in the DPRK should be thoroughly vetted and monitored for potential money laundering and terrorist financing risks.
  • Those acting on their behalf: Financial institutions should also scrutinize individuals or entities acting on behalf of DPRK financial institutions or companies.

Enhanced Scrutiny and Counter-Measures Required to Protect International Financial System

The FATF calls for enhanced scrutiny and effective counter-measures to protect the international financial system from money laundering, financing of terrorism, and proliferation financing risks emanating from the DPRK. This includes:

  • Regular risk assessments: Financial institutions should conduct regular risk assessments to identify potential money laundering or terrorist financing risks.
  • Effective policies and procedures: Financial institutions should develop and implement effective policies and procedures for reporting suspicious transactions.
  • Cooperation with relevant authorities: Financial institutions should cooperate with relevant authorities to investigate and prevent money laundering and terrorist financing.

Financial Institutions in DPRK Must Enhance Due Diligence Measures

The FATF has identified a range of concerns with the DPRK’s AML/CFT regime, including inadequate customer due diligence measures. Financial institutions in the DPRK are urged to take necessary steps to ensure that they have adequate procedures in place to identify and manage risks related to money laundering and terrorist financing.

Specifically, financial institutions in the DPRK should:

  • Implement robust customer due diligence measures: Identify and verify the identity of customers.
  • Conduct regular risk assessments: Identify potential money laundering or terrorist financing risks.
  • Develop and implement effective policies and procedures: Report suspicious transactions.
  • Cooperate with relevant authorities: Investigate and prevent money laundering and terrorist financing.

The FATF will continue to work with the international community to address the AML/CFT deficiencies in the DPRK and to protect the integrity of the international financial system.