Money Laundering Concerns Grow as International Financial System Connects with Rogue Regime

Warning Issued to U.S. Financial Institutions about Korea, Democratic People’s Republic of (DPRK)

The Financial Crimes Enforcement Network (FinCEN) has issued a warning to U.S. financial institutions about the growing risk of money laundering in Korea, Democratic People’s Republic of (DPRK). The country’s continued failure to address significant deficiencies in its anti-money laundering and counter-terrorism financing regime has raised concerns among international authorities.

FATF Adds DPRK to List of High-Risk Jurisdictions Subject to a Call for Action

The Financial Action Task Force (FATF), an intergovernmental body that sets global standards for combating money laundering, terrorist financing, and proliferation financing, recently added DPRK to its list of High-Risk Jurisdictions Subject to a Call for Action. The move comes as the FATF expressed concerns over DPRK’s illicit activities related to the proliferation and financing of weapons of mass destruction.

U.S. Financial Institutions Advised to Take Extra Precautions

The FATF has also urged all jurisdictions to remain vigilant to the risks posed by DPRK and to implement countermeasures to protect the international financial system. U.S. financial institutions are advised to take extra precautions when dealing with customers or counterparties from DPRK, including conducting enhanced due diligence and reporting suspicious transactions.

Other High-Risk Jurisdictions

DPRK is not alone in its struggles with money laundering. The FATF also listed Iran and Burma as High-Risk Jurisdictions Subject to a Call for Action, citing significant deficiencies in their anti-money laundering and counter-terrorism financing regimes. In addition, the United States has imposed extensive sanctions on both countries, prohibiting U.S. persons from engaging in transactions or dealings with them.

Importance of Financial Institutions’ Vigilance

The growing risk of money laundering in DPRK and other high-risk jurisdictions highlights the need for financial institutions to remain vigilant and proactive in detecting and preventing illegal activities. FinCEN advises financial institutions to conduct thorough customer due diligence, monitor transactions for suspicious activity, and report any suspected violations of federal law or regulation.

U.S. Government Maintains Robust Sanctions Program

In a related development, the U.S. Government has maintained its robust sanctions program against DPRK, Iran, and other countries deemed to be non-cooperative with respect to international anti-money laundering principles or procedures. The Office of Foreign Assets Control (OFAC) administers these sanctions, which prohibit U.S. persons from engaging in transactions or dealings with designated entities or individuals.

Additional Resources

For more information on the FATF’s listing of DPRK and other high-risk jurisdictions, as well as FinCEN’s guidance on money laundering and counter-terrorism financing, please visit our website at [website URL].