Financial Institutions Warned to Strengthen Security Protocols Against North Korea’s Financial Threat

Global Financial Watchdog Sounds Alarm on Proliferation Financing Risk

SEOUL, DEMOCRATIC PEOPLE’S REPUBLIC OF - The Financial Action Task Force (FATF), a global financial watchdog, has expressed deep concerns over the proliferation financing risk emanating from the Democratic People’s Republic of Korea (DPRK). In response to recent United Nations Security Council Resolutions passed this year, the FATF has warned financial institutions in the DPRK to strengthen their security protocols and prevent illicit financial activities from spreading globally.

Key Concerns

• Robust implementation of international standards is crucial in disrupting North Korea’s illicit financial activities.
• The proliferation financing threat emanating from the DPRK poses a significant risk to global financial systems.

FATF Recommendations

The FATF has emphasized that countries must take concrete steps to address this issue, including:

• Implementing targeted financial sanctions against individuals and entities without delay
• Sharing information and coordinating efforts between relevant authorities
• Preventing the evasion of sanctions by developing mechanisms to prevent front companies, shell companies, joint ventures, and complex ownership structures from violating sanctions

FATF Calls on Countries to Take Action

The FATF has called on its members and all jurisdictions to apply effective countermeasures to protect their financial systems from the money laundering (ML)/terrorist financing (TF) and proliferation financing (PF) threat emanating from the DPRK. The organization will continue to monitor the situation closely.

Implementing Effective Countermeasures

To effectively combat the ML/TF and PF threat emanating from the DPRK, countries must take a comprehensive approach that includes:

• Prohibiting new branches, subsidiaries, and representative offices of DPRK banks
• Closing existing branches, subsidiaries, and representative offices of DPRK banks
• Terminating correspondent banking relationships with DPRK banks

By working together to address the proliferation financing risk emanating from the DPRK, countries can protect their financial systems and prevent illicit activities from spreading globally.