Financial Terrorism Combat Efforts Fall Short in North Korea
The global financial watchdog, FATF (Financial Action Task Force), has expressed serious concerns over North Korea’s failure to address its significant anti-money laundering and combating the financing of terrorism (AML/CFT) regime deficiencies. The country’s continued lack of progress poses a significant threat to the integrity of the international financial system.
Urgent Call for Action
The FATF urges the Democratic People’s Republic of Korea (DPRK) to immediately and meaningfully address its AML/CFT deficiencies. Furthermore, the organization has serious concerns regarding North Korea’s illicit activities related to the proliferation of weapons of mass destruction (WMDs) and their financing.
Enhanced Due Diligence Measures
In response to these concerns, the FATF calls on its member countries to apply enhanced due diligence measures when conducting business with entities from the DPRK. Additionally, it urges jurisdictions to implement effective counter-measures, including targeted financial sanctions in accordance with applicable United Nations Security Council Resolutions.
Special Attention Required
The FATF has also reaffirmed its February 2011 call on its members and urges all jurisdictions to advise their financial institutions to give special attention to business relationships and transactions with the DPRK. In this regard, countries are advised to take necessary measures to:
- Close existing branches, subsidiaries, and representative offices of DPRK banks within their territories
- Terminate correspondent relationships with DPRK banks where required by relevant UNSC resolutions
North Korea’s Required Actions
The North Korean government has been asked to demonstrate an improved understanding of money laundering risks in key areas, including:
- Registering and supervising hundi operators
- Enhancing the use of financial intelligence in law enforcement investigations
- Ensuring that money laundering is investigated and prosecuted in line with risks
- Increasing international cooperation
- Addressing technical compliance deficiencies related to Recommendation 7
Remaining on the List
The DPRK will remain on the list of countries subject to a call for action until its full action plan is completed.
Conclusion
The FATF has urged North Korea to work towards fully addressing its AML/CFT deficiencies, including demonstrating a sound understanding of ML/TF risks to mitigate undue scrutiny of legitimate financial flows. The international community must remain vigilant in combating financial terrorism and ensuring the integrity of the global financial system.