FATF Maintains North Korea’s High-Risk Status for Money Laundering and Terrorist Financing

“Heightened Terrorism Risk”… Strengthening Compliance with International Standards.

The Financial Intelligence Unit (FIU) under the Financial Services Commission discussed sanctions against countries that fail to meet international standards at the Financial Action Task Force (FATF) General Assembly held in Paris, France.

On the 29th, the FIU and six other institutions announced that they attended the 4th General Assembly of the 33rd FATF held at the headquarters of the Organization for Economic Cooperation and Development (OECD) in Paris, France.

At the General Assembly, member countries recognized that the risk of terrorism is increasing worldwide due to the diversification and sophistication of terrorist groups’ fundraising methods.

In response, the FATF revised international standards related to Non-Profit Organizations (NPOs) to prevent them from being exploited for terrorist financing. It also decided to strengthen the implementation of international standards, including recommendations to prevent terrorist financing.

At the same time, the FATF announced a report containing the revision of international standards for freezing and recovering crime proceeds and strengthening the role of the ‘Asset Recovery Network’ (ARIN). ARIN has a function to track money laundering crimes across borders.

Yoonsoo Lee, head of the FIU, said, “Guidance is needed for countries like Korea that have not introduced the ‘confiscation without conviction’ and ‘transaction suspension system for suspicious transactions’ included in the revised recommendations.”

In addition, the FATF decided to maintain North Korea’s high-risk status. The FATF announces a list of ‘high-risk countries requiring action’ (countermeasures, enhanced customer verification) and ‘countries under observation’ (grey list) at each General Assembly. Iran and North Korea maintained their status as high-risk countries (countermeasures). Myanmar was classified as a high-risk country (enhanced customer verification). Bulgaria was added to the countries under observation, and Albania, Jordan, the Cayman Islands, and Panama were excluded.

In addition, the FATF approved to hold the International Cooperation Review Group (ICRG) reviewer group education at Busan TRAIN, an educational institution, in the second half of next year at the General Assembly in response to the request from the head of the institution to diversify the programs of Busan TRAIN.

By. Park Eun Kyung