Financial Supervisory Service Reports Over 10 Trillion Won in Abnormal Foreign Currency Transfers in Banking Sector

As of now, 82 companies suspected of abnormal foreign currency remittances have been identified, with a remittance scale of $7.22 billion
an increase of 17 companies and $680 million compared to August
The Financial Supervisory Service plans to complete inspections by October

[Asia Economy Reporter Song Hwajeong] The Financial Supervisory Service (FSS) has confirmed that the scale of abnormal foreign currency remittances identified so far exceeds 10 trillion won.

On the 22nd, the FSS announced the interim results of a joint inspection on a total of 12 banks, including 10 banks where suspicious cases of abnormal foreign currency remittances were identified following self-inspections across all banks after Woori Bank and Shinhan Bank. According to the inspection results, 82 companies (excluding duplicates) suspected of abnormal foreign currency remittances have been identified so far, with the remittance amount totaling $7.22 billion (approximately 10.173 trillion won). This represents an increase of 17 companies and $680 million compared to the results of the inspections of Woori Bank and Shinhan Bank and the self-inspections across all banks announced by the FSS on August 14 (65 companies, $6.54 billion). The FSS explained, "The scale increased as we cross-verified suspicious companies by bank and identified remittance companies based on major overseas recipients for additional inspections."

The inspection revealed that, similar to the cases of Woori Bank and Shinhan Bank, in most other banks, funds transferred from domestic virtual asset exchanges were collected into domestic corporate accounts and then remitted overseas. Some cases were also found where overseas payment settlement companies received foreign currency funds sent from Korea, making it difficult to consider these as legitimate import-export transactions.

Among the 82 companies, five companies (6.1%) remitted more than $300 million, 11 companies (13.4%) remitted between $100 million and $300 million, 21 companies (25.6%) remitted between $50 million and $100 million, and 45 companies (54.9%) remitted less than $50 million. The industries of the remitting companies were led by general merchandise brokerage and wholesale with 18 companies (22.0%), travel-related businesses including travel agencies with 16 companies (19.5%), and cosmetics and beauty product wholesale with 10 companies (12.2%). Twelve companies (14.6%) remitted through 3 to 4 banks, 30 companies (36.6%) through 2 banks, and 40 companies (48.8%) through a single bank.

The regions receiving the remitted funds were led by Hong Kong at 71.8% ($5.18 billion), followed by Japan at 15.3% ($1.1 billion), and China at 5.0% ($360 million).

By bank, the remittance amounts were Shinhan Bank ($2.36 billion), Woori Bank ($1.62 billion), Hana Bank ($1.08 billion), and Kookmin Bank ($750 million). The number of remitting companies was Shinhan Bank (29), Woori Bank (26), Kookmin Bank (24), and Hana Bank (19).

The currencies used for remittance were predominantly US dollars at 81.8% ($5.9 billion), Japanese yen at 15.1% ($1.09 billion), and Hong Kong dollars at 3.1% ($230 million).

The FSS received reports of large suspicious foreign currency remittance transactions from Woori Bank and Shinhan Bank in June and immediately launched on-site inspections. Subsequently, in July and August, all banks were instructed to conduct self-inspections to identify similar suspicious foreign currency remittance transactions, and on August 22, joint inspections began on an additional 10 banks where suspicious cases were identified.

The FSS is currently verifying the substance of foreign currency remittance transactions through tracking the flow of funds and checking compliance with related laws such as the Foreign Exchange Transactions Act. The inspections of the 12 banks are scheduled to be completed by October. If it is confirmed that any banks have failed to properly comply with foreign exchange business handling and related compliance requirements based on the inspection results, the FSS plans to take strict measures according to relevant laws and procedures after legal review. An FSS official stated, "If additional suspicious foreign currency remittance transactions are identified through the inspections, we will promptly share information with related agencies," and added, "Based on the inspection results, we plan to work with related agencies to improve systems to more effectively monitor and suppress abnormal foreign currency remittance transactions."

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