Financial Crime World

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Korea, Democratic People’s Republic of: Financial Markets Plagued by Fraudulent Activities

In a stern warning, the global anti-money laundering watchdog, the Financial Action Task Force (FATF), has sounded alarm bells over the proliferation of fraudulent activities in financial markets linked to North Korea. The FATF expressed deep concern over the growing threat posed by the Democratic People’s Republic of Korea (DPRK) and its illicit financial dealings.

Implementing Robust AML/CFT Measures

Implementing robust anti-money laundering and combating the financing of terrorism (AML/CFT) measures is crucial to disrupting DPRK’s illegal activities, particularly in relation to the proliferation of weapons of mass destruction. The FATF called upon its members and urged all jurisdictions to effectively implement relevant recommendations and United Nations Security Council Resolutions.

Targeted Financial Sanctions

According to the FATF, countries should prioritize targeted financial sanctions against individuals and entities linked to DPRK’s nuclear or ballistic missile programs without delay. Furthermore, nations must:

  • Cooperate and coordinate efforts to develop policies and activities aimed at combating proliferation financing
  • Share relevant information
  • Identify persons and entities designated by UN Security Council Resolutions

Robust Implementation of Recommendations

The FATF also highlighted the need for robust implementation of its recommendations, including:

  • Extension of targeted financial sanctions to DPRK government entities associated with nuclear or ballistic missile programs
  • Prevention of evasion of sanctions by ensuring that relevant authorities provide guidance and specific feedback to financial institutions and designated non-financial businesses and professions

Recent UN Security Council Resolutions

Recent UN Security Council Resolutions have imposed significant restrictions on DPRK’s financial activities. The FATF emphasized the importance of implementing provisions prohibiting:

  • Opening of new branches, subsidiaries, or representative offices of DPRK banks
  • Terminating correspondent banking relationships with such entities

Call to Action

The organization reiterated its call for effective countermeasures to protect financial systems from money laundering, terrorist financing, and proliferation financing threats emanating from DPRK. The FATF urged all jurisdictions to take immediate action to address these concerns and prevent further illegal activities linked to North Korea’s illicit financial dealings.