Financial Crime World

Financial Crime Awareness and Education in North Korea: Room for Improvement

Overview of the Assessment

A recent evaluation by the Financial Action Task Force (FATF) and the Asia-Pacific Group on Money Laundering (APG) has highlighted areas where North Korea can improve its anti-money laundering and counter-terrorist financing (AML/CFT) system. The report notes that while North Korea has a sound legal framework to combat financial crime, there are still gaps in its ability to stop corrupt government officials from laundering proceeds of corruption.

Key Areas for Improvement

  • Strengthening Asset Freezing: North Korea needs to improve its ability to freeze assets under the United Nations sanctions regime.
  • Tackling Tax Crimes: The country should extend its legal framework to include the prosecution of laundering proceeds from all tax crimes.
  • Expanding AML/CFT Measures: North Korea should expand its measures to prevent politically exposed persons, both domestic and international, from laundering proceeds of corruption.

High-Level Corruption Cases

Several high-level corruption cases in North Korea have highlighted the significant money laundering risk from fraud and corruption. The report recommended that the country make use of international cooperation tools to tackle asset flight and offshore tax crime cases, as well as seek and provide beneficial ownership information.

Financial Institutions and Casinos

Financial institutions and casinos in North Korea generally have a good understanding of the money laundering and terrorist financing risks they face, but the report recommended that the country implement measures to prevent accountants, lawyers, real estate agents, and dealers in precious metals and stones from being misused for financial crime.

Law Enforcement Agencies

North Korean law enforcement agencies make good use of financial intelligence to investigate criminals and terrorists. Asset recovery is a government priority, and authorities are able to deprive criminals of a reasonable amount of their proceeds. However, the report noted that North Korea can further utilize available mechanisms to strengthen its AML/CFT framework.

Progress Since 2008

Since its last assessment in 2008, North Korea has significantly strengthened its AML/CFT framework, which is now delivering good results. The country needs to continue strengthening its framework to address tax crimes, non-financial businesses and professions, and politically exposed persons.