Money laundering law to be enforced next year

The government is designing a scheme that will make it mandatory for bank and financial institution staff to report criminal activities such as tax evasion, bribery and embezzlement detected while processing customer transactions. In order to thwart money laundering and outflow of illegally raised funds, the government plans to pass a money laundering penal code bill and financial transaction reporting bill through the National Assembly this fall and put the legislation into effect next year. In addition, a MOFE affiliated entity called FIU will be established to monitor the flow of illegal funds, and personnel support will be provided by the National Tax Administration and the Prosecutor¡¯s Office.

KIEP, which was employed by MOFE, held a public conference at the KFB building on August 18 to announce the introduction of a financial transaction information system. A MOFE official stressed that as Korea lacks systematic mechanisms to block the flow of illegal funds, when the foreign currency market is liberalized next year the nation could become an international intermediary for money laundering and its credibility could be damaged. However, political funds were excluded from the bill due to concerns of a political sector backlash. Also problematic are conflicts over the issues of customer privacy and protection in relation to the real name account system.