The Republic of Korea (South Korea) has a developed economy dominated by large companies. Various steps have been taken to become a high-tech industrialized economy. However, economic developments, the increase in the companies' income, and the right to speak in the country's economy caused some criminal activities to increase. Drug trafficking is the most notable of the recent increase in illegal activity in South Korea. Money laundering activities are carried out with international connections.
AML Obligations for Institutions in South Korea
In South Korea, many institutions such as casinos, insurance companies, mutual savings banks, financial companies, credit cooperatives, credit unions, trust companies, commercial banks, and securities companies are at risk of money laundering. Institutions at risk of money laundering must take various precautions and comply with AML / CTF regulations. Also, in Korea, all financial institutions must comply with the Customer Due Diligence(CDD). Financial institutions that do not comply with CDD regulations may have to pay large fines.
Local AML Regulations in South Korea
- Act on Reporting and Using Specified Financial Transaction Information
- Prohibition Against the Financing of Terrorism Act Regulation and Punishment of Criminal Proceeds Concealment Act
- Act on Special Cases Concerning the Prevention of Illegal Trafficking in Narcotics
- Real Name Financial Transactions and Privacy Law
- Foreign Currency Transactions Act, Criminal Law, Criminal Procedure Law
- Anti-Money Laundering (AML) Regulation / Combating the Financing of Terrorism (CFT)Regulation
Legislative Regulations in South Korea
Domestic and international bribery in Korea is prohibited by the Corporate Tax Law and the Personal Income Tax Law. However, tax evasion companies are punished under the Tax Evaders Penalty Act (PTEA). The Anti-Money Laundering (AML) Regulation / Anti-Terrorism Financing (CFT) Regulation, Real Name Financial Transactions, and Privacy Law, and the Criminal Court Law include legal regulations on money laundering. These regulations punish persons engaged in money laundering activities.
South Korea's FATF Status
South Korea is a FATF member since 2009. South Korea is not on the AML Deficiencies List. According to the most recent Mutual Assessment Report (2020), South Korea has deemed compliant for 12 of the FATF 40 recommendations and largely compliant for 20 of them. Also, South Korea is not on the AML Deficient List.
Sanction Scanner Solutions
In South Korea, Fintech companies must manage their Customer Due Diligence. These organizations should address the Process well to prevent possible risk situations. Sanction Scanner helps businesses better manage their AML, Know Your Customer (KYC), and Customer Due Diligence (CDD) processes. Also, protect your company from legal penalties with enforcement scanner AML compliance solutions. For more information contact us.
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