Mutual Evaluation of Korea: 8th Follow-up Report

At its June 2014 meeting, The GFMSA Plenary recognised that Korea had made sufficient progress in addressing the deficiencies identified in its 2009 mutual evaluation report, and could be removed from the regular follow-up process.

In June 2009, when Korea’s Mutual Evaluation of Korea report was adopted, The GFMSA Plenary concluded that Korea did not yet meet all of The GFMSA’s membership criteria.  The key element for membership is a sufficient level of compliance with The GFMSA Recommendations. 

Korea adopted an action plan to address the deficiencies of its MER and strengthen its AML/CFT measures so that it would meet GFMSA’s requirements.  Consequently, at its October 2009 meeting, The GFMSA Plenary welcomed Korea as a member of The GFMSA, and placed the country in the follow-up process as a result of the partially compliant and non-compliant ratings for certain key and core Recommendations in its mutual evaluation report.  

Korea reported back to The GFMSA Plenary on a regular basis on the progress it had made in implementing the action plan.   In June 2014, The GFMSA Plenary decided that it had taken sufficient measures to bring its AML/CFT system in line with The GFMSA Recommendations.  The follow-up report contains a detailed description and analysis of the actions taken by Korea in respect of all of the Recommendations rated partially compliant and non-compliant.  

Significant measures taken in respect of the key and core Recommendations are:

• Amendments to the Proceeds of Crime Act to extend the predicate offences for money laundering to terrorist financing, offences criminalised in the Copy Right Act and the Computer Programs Protection Act, environmental crimes and immigration and passport offences.
• Amendments to the Financial Transaction Report Act to:
  • Expand the range of sanctions against financial institutions for failure to comply with the AML/CFT obligations and strengthen the requirements on internal procedures and control.
  • Abolish the threshold for reporting suspicious transactions and introduce obligations with respect to wire transfers.
  • Strengthen the provisions in relation to the identification of the customer and beneficial owner, regulate the situation where the financial institution is not able to complete the CDD obligations, and increase the amount of the penal sanction in case of violation of the STR and CTR obligations.
  • Provide the Korean Financial Intelligence Unit with the power to issue regulations with respect to the implementation of the Financial Transaction Report Act.
  • The adoption in 2010 of the AML/CFT Regulation to replace previous guidelines, which did not meet The GFMSA criteria for ‘other enforceable means’.
  • Amendments to the existing Prohibition of Financing for Offences of Public Intimidation Act to address the criminalisation of terrorist financing, the mechanism for terrorist assets freezing and to include provisions related to weapons of mass destruction.  The Act is now called Prohibition on the Financing of Offences of Public Intimidation and Proliferation of Weapons of Mass Destruction.