Amendment to the Act on Reporting and Use of Certain Financial Transaction Information... Addition of Internal Control and Data Retention Obligations to Fineable Items

March 11 to April 20
Notice of Proposed Amendments to the "Regulations on Inspection and Sanctions for Reporting Specific Financial Transaction Information"

[Asia Economy Reporter Park Sun-mi] As the amended Act on Reporting and Using Specified Financial Transaction Information (the Specified Financial Transaction Information Act, or Specified Financial Act) is set to take effect on the 25th, new criteria for imposing fines on virtual asset service providers have been established, and a basis has been created to alleviate the burden on small-scale businesses facing increased fines due to the raised fine ceilings.

On the 10th, the Financial Services Commission announced a proposed amendment reflecting newly subject matters for fines and consolidating regulations related to fines. Opinions for or against the proposed changes will be collected until the 20th of next month.

First, the amendment adds new fine imposition items subject to the fine calculation criteria table, including ▲internal control obligations ▲data and information retention obligations ▲and obligations for virtual asset service providers.

The internal control obligations include duties such as designating persons responsible for suspicious transaction reports and large cash transaction reports, preparing operational guidelines, and conducting employee training. The data and information retention obligations pertain to the retention of materials and information related to suspicious transaction reports and large cash transaction reports. The obligations for virtual asset service providers include managing transaction details separately by customer and conducting transactions only with customers who have undergone verification.

Furthermore, to ease the burden on small-scale businesses that have been increasingly burdened due to the raised fine ceilings, the grounds for mitigation in the fine imposition criteria have been supplemented.

In consideration of consistency with the "Regulations on Financial Institution Inspections and Sanctions," a provision has been newly established allowing a 50% reduction in fines imposed for violations of the Specified Financial Act, taking into account the violator's actual ability to bear the burden, the content, and circumstances of the violation. Also, under the current regulations, if the scheduled fine amount exceeds 10% of the business operator's scale (capital or total capital), mitigation is allowed within the excess portion, but the mitigation limit was recognized only up to 50% of the scheduled amount. Considering the realistic conditions such as the burden capacity of relatively smaller businesses, the 50% limit will be abolished.

Regulations related to fines will also be consolidated. The "Regulations on Fine Imposition and Collection (Financial Intelligence Unit Directive)," which stipulate matters related to fines, will be abolished and integrated into the "Inspection and Sanction Regulations on Reporting of Specified Financial Transaction Information, etc. (Financial Intelligence Unit Notice)."

A Financial Services Commission official stated, "The Inspection and Sanction Regulations on Reporting of Specified Financial Transaction Information, etc. will be announced for regulatory change by the 20th of next month and will be implemented immediately upon announcement."

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