Korea’s Anti-Money Laundering Efforts Praised, but Room for Improvement Identified
A comprehensive review by the Financial Action Task Force (FATF) and the Asia-Pacific Group on Money Laundering (APG) has found that Korea has a sound legal framework to combat money laundering and terrorist financing. However, the report also highlights areas where the country needs to improve its efforts.
Effective Anti-Money Laundering System
The FATF assessment, which was adopted at its February 2020 Plenary meeting, found that Korea’s anti-money laundering and counter terrorist financing (AML/CFT) system is effective in tackling proceeds-generating crimes such as:
- Tax evasion
- Corruption
- Fraud
- Illegal gambling
The report also praised Korea for its proactive efforts to prevent the spread of weapons of mass destruction.
Areas for Improvement
However, the assessment identified several areas where Korea needs to strengthen its AML/CFT framework. These include:
- Extending the prosecution of laundering of proceeds of all tax crimes
- Expanding measures to prevent politically exposed persons from laundering proceeds of corruption
- Implementing measures to prevent accountants, lawyers, real estate agents, and dealers in precious metals and stones from being misused for money laundering or terrorist financing
International Cooperation
The report also noted that Korea could make more use of international cooperation tools to go after asset flight and offshore tax crime cases. Additionally, the country should seek and provide beneficial ownership information more effectively.
Collaboration with Foreign Counterparts
Korean authorities were praised for their effective collaboration through policy and operational structures that bring together a broad range of government agencies and the private sector. The report also noted that Korea is effectively cooperating with foreign counterparts, including through mechanisms to streamline mutual legal assistance.
Conclusion
Overall, while Korea’s AML/CFT efforts have improved significantly since its last assessment in 2008, there are still areas where the country needs to strengthen its framework to address tax crimes, non-financial businesses and professions, and politically exposed persons.