Korea’s Progress in Anti-Money Laundering and Counter Terrorist Financing

The Democratic People’s Republic of Korea has made significant strides in strengthening its anti-money laundering and counter terrorist financing (AML/CFT) framework, according to a recent review by the Financial Action Task Force (FATF) and the Asia-Pacific Group on Money Laundering (APG).

Key Findings

• Korea has a sound legal framework in place to tackle money laundering and terrorist financing, and confiscate funds involved.
• However, areas for improvement include addressing tax crimes, non-financial businesses and professions, and politically exposed persons.

Proceeds-Generating Crimes and Money Laundering Risk

Tax crimes, illegal gambling, fraud, and corruption are identified as the most important proceeds-generating crimes that present a high risk of money laundering in Korea. The report notes that high-level corruption cases have highlighted the significant money laundering risk from fraud and corruption.

Recommendations to Mitigate Risk

• Expand AML/CFT measures to prevent politically exposed persons, both domestic and international, from laundering proceeds of corruption.
• Implement measures to prevent accountants, lawyers, real estate agents, and dealers in precious metals and stones from being misused for money laundering or terrorist financing.

Asset Recovery and International Cooperation

Asset recovery is a government priority in Korea, with law enforcement agencies making good use of financial intelligence to investigate criminals and terrorists. However, further use could be made of available mechanisms to strengthen asset recovery.

Conclusion

Since its last assessment in 2008, Korea has significantly strengthened its AML/CFT framework, which is now delivering good results. The country needs to continue strengthening its AML/CFT framework to address the areas highlighted in the report.