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FINTRAC Issues Advisory on North Korea’s Financial Activities

OTTAWA, CANADA - The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has issued an operational alert to remind reporting entities subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) of their obligations to report suspicious transactions.

Jurisdictions Associated with North Korea’s Financial Activities

The alert highlights several jurisdictions that have been associated with North Korea’s use of the international financial system for laundering the proceeds of sanctions evasion. These jurisdictions include:

  • Liaoning Province, China
  • Jilin Province, China
  • Hong Kong

Additional Scrutiny Required

According to FINTRAC, transactions originating from or destined for these jurisdictions, when combined with other indicators such as those indicating possible use of shell companies, may warrant additional scrutiny.

Guidance on Identifying and Reporting Suspicious Transactions

The alert provides specific guidance on how reporting entities can identify and report suspicious transactions related to North Korea’s financial activities. Reporting entities are reminded to file suspicious transaction reports or attempted suspicious transaction reports if there are reasonable grounds to suspect that a transaction is related to a terrorist activity financing (or a money laundering) offence.

Elevated Risk Transactions

The advisory also notes that while not all transactions from these jurisdictions are high-risk, they should be considered at elevated risk when combined with other indicators. Reporting entities are encouraged to take necessary steps to identify and report suspicious transactions related to North Korea’s financial activities.

Major Cities Associated with North Korean Financial Activities

FINTRAC has also provided a list of major cities in Liaoning and Jilin provinces, China, which have been associated with North Korean financial activities. The list includes:

  • Shenyang
  • Dalian
  • Changchun
  • Others

Conclusion

Reporting entities subject to the PCMLTFA are encouraged to review the alert and take necessary steps to identify and report suspicious transactions related to North Korea’s financial activities.