International Anti-Money Laundering Organization: "Increase in Crime Exploiting COVID-19 Situation"

Financial Services Commission Announces Results of Attendance at FATF Virtual Plenary Meeting in October 2020

[Image source=AP Yonhap News]

[Asia Economy Reporter Kangwook Cho] The Financial Action Task Force (FATF) has warned that crimes involving money laundering and terrorist financing exploiting the COVID-19 pandemic are increasing, urging caution. Additionally, FATF decided to maintain the highest level of sanctions against North Korea, a country that does not comply with international standards. It also approved revisions to international standards to strengthen measures to block the financing (proliferation financing) used for the manufacture, acquisition, possession, and development of weapons of mass destruction.

The Financial Services Commission (FSC) announced the results of attending the FATF virtual plenary meeting on the 26th, which included these matters.

According to the FSC, FATF has identified that criminals are exploiting the COVID-19 pandemic amid increasing cases of counterfeit medical products, investment fraud, cybercrime, and abuse of government stimulus measures. COVID-19 has seriously impacted the ability of some governments and private sectors to detect, prevent, and investigate money laundering and terrorist financing.

In response, FATF plans to continuously understand the challenges arising from the COVID-19 crisis, share experiences and best practices related to it, and allocate resources for countermeasures. It emphasized that protecting citizens safely from damages caused by crimes such as money laundering and terrorist financing should be the top priority for governments worldwide.

Accordingly, the FSC will continue to monitor international trends regarding the impact of and responses to COVID-19 and make every effort to maintain the continuity of anti-money laundering and counter-terrorist financing operations.

Furthermore, FATF approved revisions to its international standards to strengthen measures to block proliferation financing, which involves funding used for the manufacture, acquisition, possession, and development of weapons of mass destruction.

The approved revisions require countries and financial institutions to identify, assess, and take proportionate measures against the risk of violation, non-compliance, or evasion of detailed financial sanctions obligations related to proliferation financing (proliferation financing risk).

Currently, South Korea is implementing these measures under the "Act on the Prohibition of Financing for Public Threats and Weapons of Mass Destruction Proliferation" through a system restricting financial transactions with designated persons.

Going forward, FATF plans to prepare a "Guidance on the Assessment and Mitigation of Proliferation Financing Risks" to help countries and financial institutions clearly understand how to implement the new international standards. Compliance with the revised standards will be reviewed starting from the next (5th) round of FATF mutual evaluations (the 4th round is currently underway, and South Korea was evaluated last year).

Alongside approving the revisions to international standards, FATF also adopted a public statement on proliferation financing prevention, clarifying the significance and detailed considerations of the revised standards.

The FSC will thoroughly review the revised international standards and forthcoming guidance documents and strive to implement the new standards without disruption through related legal amendments.

As a result of this FATF plenary meeting, countries' compliance with FATF standards was evaluated, and Iran and North Korea remained on the list of "high-risk jurisdictions subject to countermeasures" due to significant deficiencies. Additionally, Iceland and Mongolia were removed from the "jurisdictions under increased monitoring," leaving a total of 16 countries on the list (down from 18 countries in June).

This content was produced with the assistance of AI translation services.