From banks to the virtual asset sector… FIU strengthens anti-money laundering response to cross-border crime

The Financial Intelligence Unit (FIU) will strengthen anti-money laundering (AML) systems across industries to respond to cross-border crimes that target domestic nationals based on overseas footholds. With bulk reporting of suspicious transactions beginning centered on the banking sector, other sectors including virtual asset service providers will be sequentially incorporated into the reporting system.

On the 24th, the FIU said it held an 'Anti-Money Laundering Related Agencies Council' at the Seoul Government Complex with a total of 16 related organizations — including the Financial Supervisory Service, banks, financial investment, insurance, specialized credit finance, fintech, lenders, savings banks, NongHyup, Suhyup, Credit Unions, Forest Cooperatives, Saemaeul Geumgo Central Association, the Casino Association, and the Digital Asset Exchange Association (DAXA) — to discuss directions for responding to cross-border crime. Executives from each organization and AML officers from banks and virtual asset service providers attended the meeting.

That day, the FIU analyzed types of suspicious transactions related to cross-border crime together with the banking sector and established criteria to extract them. Under those criteria, the banking sector is conducting bulk reporting, and other sectors will apply the same criteria to phase in suspicious transaction reporting. Reported transactions will be passed to law enforcement agencies such as prosecutors and the police after the FIU's strategic analysis and used to track criminal organizations.

The results of Financial Supervisory Service inspections showing internal control deficiencies, such as paper-centered checks, at some banks' Southeast Asian branches and subsidiaries were also discussed. The FIU said it will strengthen customer identification for customers suspected of cross-border crimes and expand on-site inspections of branches and subsidiaries in the Southeast Asia region. In future AML examinations, it plans to focus on checking the management status of overseas branches and subsidiaries.

The FIU plans to strengthen information sharing and cooperation with overseas FIUs and will continue to pursue institutional improvements to respond to cross-border crime.

Lee Hyung-ju, head of the FIU, said, "This council is the first step in responding to cross-border crime," and added, "We will not limit this to the Cambodia case and will continue to strengthen our response capabilities to prepare for the various forms of cross-border crime that may occur in the future."