Financial Crime World

Korea’s Battle Against Money Laundering and Terrorist Financing: A Look at Its Relevant Legislation

In the Republic of Korea, the war against money laundering and terrorist financing is a top priority. The country’s legislative framework is robust, with several key acts instrumental in upholding financial integrity. Below is a look at some of the most critical legislation in this regard.

The Financial Transaction Reports Act (FTRA)

The Financial Transaction Reports Act (FTRA) lays the groundwork for the preventive measures taken by the Korean government:

  • Financial Intelligence Unit-Korea (KoFIU): This organization plays a vital role in identifying, analyzing, and reporting suspected money laundering and terrorist financing activities.

  • Customer Due Diligence (CDD): Financial institutions in Korea are required to conduct thorough CDD on their customers.

  • Suspicious Transaction Reports (STRs) and Currency Transaction Reports (CTRs): Financial institutions must submit STRs and CTRs to the KoFIU. This rigorous reporting system aims to detect and prevent financial crimes.

The Proceeds of Crime Act (POCA)

The Proceeds of Crime Act (POCA) takes a punitive approach against money laundering:

  • Once suspected money laundering activities are reported and investigated, the Korean authorities can seize and confiscate the proceeds of criminal activities under this Act.

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

The PFOPIA criminalizes terrorist financing and takes a proactive stance against such activities:

  • It designates individuals and entities with whom financial institutions cannot conduct financial transactions without obtaining prior approval from the Financial Services Commission.
  • The PFOPIA imposes stringent reporting and record-keeping requirements to ensure the prevention of terrorist financing.

Conclusion

Together, the FTRA, POCA, and PFOPIA form the backbone of Korea’s efforts to combat money laundering and terrorist financing. By combining preventive measures with punitive actions and robust investigative abilities, the Republic of Korea stands as a formidable fortress against financial crimes.