South Korea shows a good understanding of money laundering and terrorist financing (TF) risks bolstered by an ongoing risk-assessment process, according to the Financing Action Task Force (FATF).
“Identification and cross-government response to the emerging risks posed by virtual assets is particularly positive,” wrote the authors of a mutual evaluation report by the Paris-based organisation’s Asia Pacific Group after a site visit to the country.
“Asset recovery is actively pursued and has been a formal government priority since 2017 which has allowed for increased resources and specialisation.
“Between criminal asset recovery, tax levies and restitution, [South] Korea is able to deprive criminals of a reasonable value of proceeds,” the report read.
But it also noted: “Further efforts are needed to increase the recovery of assets subject to confiscation and take advantage of available mechanisms to facilitate and ensure recovery.”
Though strong policy and operational structures exist on AML/CFT matters, “co-ordination on proliferation financing (PF) issues is largely ad hoc and would benefit from a more formal . system,” according to the report.
The comprehensive AML/CFT framework for financial institutions and casinos are generally well implemented, but there are technical gaps and short comings with TF and PF-related targeted financial sanctions.
Law enforcement agencies make good use of financial intelligence, but would benefit from enhanced operational analysis, especially in high-risk areas such as tax crime, the report stated.