Financial Crime World

Strengthening Anti-Money Laundering and Combating Terrorist Financing Efforts in Korea

The Korean government has taken significant steps to strengthen its fight against money laundering and terrorist financing by implementing a range of anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations.

Key Legislation

At the heart of these efforts are three key pieces of legislation:

  • Financial Transaction Reports Act: This act provides for preventive measures to prevent money laundering and terrorist financing, including:
    • Establishment and operation of the Korean Financial Intelligence Unit (KoFIU)
    • Requirements for financial institutions to conduct customer due diligence
    • Filing of suspicious transaction reports
    • Maintenance of records of cash transactions
  • Proceeds of Crime Act: This act criminalizes money laundering and enables the government to seize and confiscate proceeds derived from criminal activity, disrupting organized crime groups and other entities that engage in illegal activities.
  • Act on Prohibition Against the Financing of Terrorism and Proliferation of Weapons of Mass Destruction: This act prohibits terrorist financing and provides for the designation of individuals and entities with whom financial institutions cannot conduct transactions without prior approval from the Financial Services Commission, disrupting the financial networks used by terrorist organizations to fund their activities.

Comprehensive Framework

Together, these three pieces of legislation form a comprehensive framework designed to prevent the misuse of Korea’s financial system for illicit purposes. The government remains committed to protecting the integrity of the financial system and preventing the financing of criminal activity as it continues to monitor and refine its AML/CFT regulations.

By implementing these measures, Korea is demonstrating its commitment to combating money laundering and terrorist financing, ensuring a safer and more secure financial environment for all stakeholders.