Financial Crimes Enforcement Network (FinCEN) Advisory: Identifying and Preventing North Korean Illicit Finance Activities

Introduction

The Financial Crimes Enforcement Network (FinCEN) has issued an advisory to provide guidance to financial institutions on how to identify and prevent transactions related to North Korea’s illicit finance activities. This advisory highlights the importance of a risk-based approach to due diligence and the need for financial institutions to take all necessary steps to investigate and prevent suspicious activity.

Key Points from the Advisory

• Identifying Red Flags: Financial institutions should consider a range of factors when evaluating potential DPRK-related illicit activity, including:
  • The presence of red flags such as cash-intensive businesses
  • Unusual transaction patterns
  • Transactions that lack clear business or apparent lawful purpose
• Suspicious Activity Reporting (SAR): SAR is required for any transaction that has no business or apparent lawful purpose or is not the sort in which the particular customer would normally be expected to engage.
• Information Sharing: Financial institutions are encouraged to share information with one another, as appropriate, either for the purposes of filing a joint SAR or under Section 314(b) of the USA PATRIOT Act.

Additional Guidance

For further guidance related to the 314(b) Program, please see FinCEN’s Section 314(b) Fact Sheet and FIN-2009-G002 “Guidance on the Scope of Permissible Information Sharing Covered by Section 314(b) Safe Harbor of the USA PATRIOT Act” (June 2009).

Consider Your Own Risk Profile

Financial institutions are encouraged to consider their own risk profiles and business models when evaluating potential suspicious activity.

Contact Us

If you have any further questions or comments regarding this advisory, please address them to the FinCEN Resource Center at FRC@fincen.gov.