Money Laundering Crackdown in South Korea: Prosecution, Penalties, and Asset Freezing Laws
South Korea’s legal framework against money laundering includes several key laws enforced by specific government entities. The following discussion outlines the criminal offenses related to money laundering, those subject to prosecution, the required intent and offenses, limitations on assets and transactions, predicate offenses, defenses, and penalties and asset recovery.
Criminal Offenses and Prosecution
Articles 3 and 4 of the Criminal Proceeds Regulation Act (CPRA) and articles 7, 8, and 11 of the Act on Special Cases Concerning the Prevention of Illegal Trafficking in Narcotics, etc. (Special Act on Narcotics Illegal Trafficking) make money laundering in specific crimes and drug-related offenses a criminal offense. The prosecution is responsible for investigations when an allegation arises.
Who Can Be Prosecuted?
Both natural persons and legal entities, such as corporations or individuals representing them, can be held accountable for money laundering. However, a corporation or individual will not face penalties if they have exercised sufficient care to prevent such offenses.
Offenses and State of Mind
Money laundering offenses include concealment and disguise of criminal proceeds, attempts, preparations, or conspiracies to commit these offenses, disguise of their acquisition or disposition, or concealing them for specific crimes or to evade taxes or customs duties. A required intent to commit the action must be present for each offense.
Predicate Offenses and Limitation on Assets and Transactions
The Criminal Proceeds Regulation Act (CPRA) defines a predicate offense as a “specific crime.” Predicate offenses include various crimes, such as illegal sex trafficking, economic crimes, and narcotics offenses. Money laundering offenses must be committed in conjunction with these predicate offenses.
South Korean law imposes no limitations on the types of assets or transactions that can be the basis of a money laundering offense.
Limitations on Criminal Infringements of Foreign Jurisdictions’ Laws
Criminal infringements of foreign jurisdictions’ laws cannot directly serve as predicate offenses. However, criminal acts submitted to the International Criminal Court in accordance with the Rome Statute may be considered predicate offenses if they fall under the relevant provisions like genocide or war crimes.
Defenses and Penalties
There are no codified or common law defenses specifically for money laundering charges in South Korea. Defenses like a lack of intent, self-defense, justifiable acts, urgent refuge, or victim’s consent are generally acknowledged for criminal offenses but would not typically be applied to money laundering due to its nature.
Money laundering offenders and conspirators face imprisonment and fines based on the Criminal Proceeds Regulation Act (CPRA) and the Special Act on Narcotics Illegal Trafficking. Upon an order of preservation, assets related to money laundering or criminal proceeds may be frozen prior to or after indictment. The court may also confiscate these assets, with the value of unconfiscable assets being collected instead. Victims may file civil damage claims under civil law.
Key Takeaways
- Money laundering is illegal in South Korea for specific crimes and drug-related offenses.
- Natural persons and legal entities can be prosecuted.
- A required intent is necessary for each offense.
- South Korean law imposes no limitations on asset types or transactions.
- Criminal acts from foreign jurisdictions cannot directly serve as predicate offenses but can in cases submitted to the International Criminal Court.
- Defenses for money laundering are limited.
- Offenders face imprisonment, fines, and asset forfeiture.