South Korea Financial Transaction Reports Act – An Overview and Summary of Requirements
The Financial Transaction Reports Act in South Korea was enforced to preventcriminal and money laundering activities through financial transactions by stipulating provisions for establishment of a sound and transparent financial system.
Report by the Financial Institutions
- The financial institutions should report the following cases to the Korea Financial Intelligence Unit Commissioner without any delay:
- Cases where there are any reasonable grounds to suspect that the assets received with respect to the financial transactions are illegal, or a customer conducting the financial transactions is involved in money laundering activities.
- Cases where there are any reasonable grounds to suspect that a customer is structuring financial transactions for the purpose of evading the illegal aspects of assets.
- Cases where the financial institutions have filed reports to the competent law enforcement agencies.
- FIs should provide reasonable grounds for their suspicions when filing any reports
- FIs should keep the following documents for each report for five years starting from the date of reporting:
- Records identifying the real name of the customer
- Records of financial transaction filed
- Records filed by the financial institutions, which state the reasonable grounds for their suspicions.
- When employees working for the financial institutions file reports they should not divulge any related facts
- FIs filing reports should not take any responsibilities in the compensation for the damages to the customer whose financial transactions are related to each report, except in cases where a false report have been filed on purpose or due to significant negligence on the part of the financial institutions.
Measures to be implemented by the Financial Institutions
- Designation of persons responsible for the reporting and the establishment of an internal reporting system
- Preparation and implementation of guidelines to prevent money laundering activities
- Educating and training the management and the employees to prevent money laundering activities
Penal Provisions
- Persons who fall under each of the followings should be subject to imprisonment of 5 years or less or a fine of 30 million won or less:
- Persons who, by abusing their official authority, access and/or photocopy the related records kept by the financial institutions or request the heads of the financial institutions the information or records related to financial transactions.
- Persons who provide to others or divulge specific financial transaction information obtained on duty and information or records or use them for improper purposes, and/or persons who request specific financial transaction information and information or records to use them for improper purposes.
- Persons who fall under each of the followings should be subject to imprisonment of 5 years or less or a fine of 5 million won or less:
- Persons who make false reports
- Persons who divulge facts to the customers
Civil Fine
- Persons who fall under the following should be subject to a fine of 5 million won or less:
- Persons who fail to make reports
- Persons who refuse to comply with orders, directives, and inspections or who rejects, obstructs or evades them
- Persons who, on purpose or due to significant negligence provide specific financial transaction information to the institutions other than the competent law enforcement agencies
- Persons who refuse to comply with fines imposed can lodge appeals to the Commissioner within 30 days of the notification of such penalty
Compliance Trainings
Employee Expense Reimbursement Fraud: Detection, Prevention and Deterrence
By - Peter Goldmann
On Demand Access Anytime
By - Peter Goldmann
On Demand Access Anytime
Credit card surcharging - who is going to do it and what are the stipulations for compliance?
By - Ray Graber
On Demand Access Anytime
By - Ray Graber
On Demand Access Anytime
Compliance Standards
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