FSS Requests Improvement in Anti-Money Laundering Supervision at Suhyup Central Association

The Financial Supervisory Service (FSS) has ordered the National Federation of Fisheries Cooperatives (SuHyup) to strengthen management and supervision related to Anti-Money Laundering (AML).

According to the FSS inspection and sanction disclosure on the 27th, SuHyup was advised to improve its AML management and supervision as well as its internal control system.

According to the FSS, inspections conducted by SuHyup targeting all cooperatives from January 2019 to September 2022 were only four times, and most of the 152 issues pointed out (145 cases, 95%) were addressed on-site without appropriate standards. Therefore, the FSS recommended expanding specialized inspections and establishing action standards to enhance the effectiveness of AML inspections.

The FSS ordered SuHyup to reinforce dedicated personnel and establish periodic inspection procedures. As of the end of November last year, only one person was responsible for AML tasks at both the federation and the cooperatives. Although SuHyup conducts independent audits on AML tasks, it was also criticized for having long audit cycles and not reporting audit results to the board of directors.

Additionally, while selling SuHyup’s own financial products such as mutual aid insurance, SuHyup signed entrusted contracts for customer verification with cooperatives and third-party customers, but it was revealed that no AML inspection procedures were established for these. Accordingly, the FSS requested strengthening the internal control system for AML tasks by shortening audit cycles, reporting inspection results to the board, and conducting inspections of entrusted tasks.

The FSS also ordered improvements in SuHyup’s customer verification operation system and the reporting of suspicious transactions and large cash transactions. Furthermore, the FSS pointed out that SuHyup formally stated reasons for exclusion when reporting suspicious transaction extraction cases to the Financial Intelligence Unit and that management of suspicious transaction extraction criteria was insufficient.

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