Financial Crime World

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South Korea’s Financial Intelligence Unit (KoFIU) Plays Crucial Role in Combatting Money Laundering

Introduction

Seoul, South Korea - In a bid to combat money laundering and terrorist financing, the Korean government has established the Financial Intelligence Unit (KoFIU), a central agency responsible for collecting and analyzing suspicious transaction reports from financial institutions.

History of KoFIU

The KoFIU was set up under the Financial Transaction Reports Act (FTRA) in 2001. It is staffed with experts from various law enforcement agencies, including:

  • Law Enforcement Agencies
  • Financial Institutions
  • Administrative Agencies

Functions of KoFIU

The main functions of KoFIU are:

  • Receiving and analyzing suspicious transaction reports (STRs)
  • Disseminating STRs to law enforcement agencies for further action
  • Providing training to financial institutions
  • Participating in global network projects to combat cross-border money laundering

Reporting Entities

Reporting entities, including:

  • Financial Institutions
  • Law Enforcement Agencies

are required to file Suspicious Transaction Reports (STRs) and Customer Due Diligence (CDD) reports to the KoFIU. They also conduct customer due diligence implementation.

Data Collection and Analysis

The KoFIU collects data from various sources, including:

  • Relevant administrative agencies
  • Centralized credit registry
  • Centralized foreign exchange registry
  • Laws such as:
    • Act on Regulation and Punishment of Criminal Proceeds Concealment
    • Act on Special Cases Concerning the Prevention of Illegal Trafficking in Narcotics
    • Act on Prohibitions against the Financing of Terrorism and Proliferation of Weapons of Mass Destruction

AML/CFT Regime

The KoFIU’s AML/CFT regime is designed to:

  • Detect and prevent domestic and international illegal money laundering activity
  • Protect the nation from anti-social crimes
  • Promote sound financial practices in Korea

By collecting and analyzing suspicious transaction reports, providing training to financial institutions, and participating in global network projects, the KoFIU plays a key role in preventing money laundering activity through financial institutions and protecting the nation from anti-social crimes.