Know Your Customer Regulations: A Guide to Compliance in Democratic People’s Republic of Korea
In the wake of global efforts to combat financial crimes and money laundering, the Democratic People’s Republic of Korea has implemented strict regulations requiring financial institutions to “know your customer” (KYC). The guidelines, which came into effect in 2001, aim to verify the identity, suitability, and risks involved with maintaining a business relationship.
Understanding the Regulations
At the heart of these regulations is the Specified Financial Information Act, which requires financial companies to conduct thorough customer due diligence (CDD) procedures. This includes verifying a customer’s real name, confirming their actual owner, purpose of transaction, sources of funds, and more.
Outsourcing CDD Procedures
In an effort to streamline these procedures, some financial institutions have turned to outsourcing CDD to third-party providers who are obligated by law to comply with anti-money laundering regulations. However, the Financial Intelligence Unit has clarified that even if a financial institution outsources its CDD responsibilities, it remains responsible for ensuring compliance with the regulations.
Requirements for Third-Party Providers
For those considering outsourcing their CDD procedures, it is essential to ensure that the third-party provider meets the requirements outlined in the Business Regulation on Anti-Money Laundering and Counter Terrorist Financing. This includes verifying the identity of customers through measures such as:
- WebID
- IDnow
- PostIdent
Supervision and Inspection
The Financial Supervisory Service will conduct regular inspections and supervision of outsourced CDD procedures to ensure compliance with the regulations.
Conclusion
In conclusion, financial institutions in the Democratic People’s Republic of Korea must prioritize KYC compliance to avoid falling foul of regulatory requirements. By understanding the intricacies of these regulations, financial institutions can better navigate the complex landscape of anti-money laundering laws and maintain a secure business environment.