FSS investigates ‘overseas transfer’ to China and Japan

While the financial authorities are investigating a recent abnormal transaction of two trillion won worth of foreign currencies from two commercial banks, a company that transferred 400 billion won to China and Japan through Woori Bank allegedly turned out to be a paper company founded last year.

Among 800 billion won that were transferred overseas for the past year via Woori Bank branches in Seoul, more than 400 billion won was reportedly sent by Company “A” in a local area, according to a financial source on Friday. The firm remitted money to China and Japan as payments for transactions including gold bars, split into hundreds of transfers.

The authorities are focused on the possibility of Company “A” being a paper company established to keep the source of money in the dark, as it was built last year and has not been operating any export business after manufacturing or processing products.

Moreover, among foreign transactions of 1.3 trillion won handled by two branches of Shinhan Bank, several cases were suspected to be involving paper companies.

The massive overseas transactions from Shinhan Bank and Woori Bank are under growing suspicion as they were done “pre-trade,” not “post-trade,” which refers to sending money after confirm‎ing that an imported product passed through customs at the airport. In this case, whether the actual trade was made becomes uncertain.

The financial industry expressed suspicion that the money would have been sent overseas by illegal foreign exchange traders after gaining margins by selling virtual assets bought overseas in the Korean market at higher prices, or used for money laundering. Illegal bitcoin transactions once prevailed in Korea in the past, taking advantage of “Kimchi premium,” describing a gap in cryptocurrency prices in Korean exchanges compared to those of foreign exchanges.

The Financial Supervisory Service (FSS) is undergoing site investigations regarding these abnormal trades of Woori Bank and Shinhan Bank. “We are comprehensively probing into whether the banks’ have faithfully complied with the standards, such as confirm‎ing evidential documents and making reports on abnormal transactions,” a source in the FSS said.


zion37@donga.com · 1am@donga.com