Korea Steps Up Efforts to Combat Financial Crime Through Tough Banking Regulations

Strengthening Defenses Against Money Laundering and Terrorist Financing

In a bid to strengthen its defenses against money laundering and terrorist financing, the government of Korea has put in place an array of stringent banking regulations. At the heart of these efforts are three key legislations: the Financial Transaction Reports Act (FTRA), the Proceeds of Crime Act (POCA) and the Act on Prohibition Against the Financing of Terrorism and Proliferation of Weapons of Mass Destruction (PFOPIA).

Key Legislations

The Financial Transaction Reports Act (FTRA)

• Mandates preventive measures such as:
  • Establishment and operation of the Korea Financial Intelligence Unit (KoFIU)
  • Customer due diligence (CDD)
  • Suspicious transaction reports (STRs)
  • Currency transaction reports (CTRs)

The FTRA serves as a cornerstone in Korea’s fight against financial crime.

The Proceeds of Crime Act (POCA)

• Criminalizes money laundering activities
• Empowers authorities to seize and preserve illicit funds

POCA takes a more punitive approach, underscoring the government’s commitment to eradicating financial crime.

The Act on Prohibition Against the Financing of Terrorism and Proliferation of Weapons of Mass Destruction (PFOPIA)

• Targets terrorist financing by:
  • Criminalizing such activities
  • Enabling the Financial Services Commission (FSC) to designate individuals and entities with whom financial institutions cannot engage in transactions without prior approval

This measure is designed to prevent potential terrorists from accessing the country’s financial system.

Enhancing Global Reputation as a Reliable Player in International Financial Dealings

Through these comprehensive regulations, Korea aims to create a safer financial environment and enhance its global reputation as a reliable player in international financial dealings.