‘Money Laundering Channels’ Exchange Offices Illegal Activities Intensive Crackdown

#A exchange office exchanged a large amount of Japanese yen smuggled in by a Japanese courier without customer verification, intending to collect fees. Additionally, using multiple copies of passports kept in storage, they falsified exchange records (splitting small amounts) and were caught for illegally exchanging approximately 1.7844 trillion KRW over five years.

Recently, exchange offices have been primarily used as channels for money laundering. In response, the government plans to take strict action against illegal money laundering activities (such as illegal currency exchange) like those conducted by A exchange office.

Examples of illegal virtual asset remittance cases. Provided by Korea Customs Service

On the 28th, the Korea Customs Service announced that it will conduct an 'Intensive Crackdown on Illegal Activities by Currency Exchange Operators' from the 28th to the 22nd of next month.

So far, considering the operational difficulties faced by currency exchange operators due to the decline in travelers caused by COVID-19, the Customs Service has focused more on industry guidance rather than crackdowns.

However, as cases have increased where exchange offices exploit the relaxed enforcement situation to launder criminal funds from voice phishing, virtual assets, real estate speculation, smuggling exports/imports, etc., the crackdown will be strengthened again.

The intensive crackdown will analyze the methods mainly used when laundering funds at illegal exchange offices, select high-risk exchange offices, and investigate whether illegal activities are taking place.

The illegal activities that the Customs Service will focus on include ▲ failure to record or poor recording of exchange transaction details ▲ so-called 'split exchange' to evade reporting obligations for high-value cash transactions ▲ continuous and repeated violations of regular reporting obligations, which form the basis of managing currency exchange operators.

In particular, the Customs Service has determined that ineffective sanctions are one of the main reasons for the continuation of illegal activities, and will implement major institutional improvements. The related laws will be amended to institutionally block illegal money flows through exchange offices in advance.

For example, the Customs Service will revise the 'Notice on the Management of Currency Exchange Operators' to specify that if an exchange operator is found to be conducting unregistered foreign exchange business such as criminal proceeds remittance or hawala transfers, their exchange business registration can be canceled.

A Customs Service official stated, “Illegal exchange offices are used as major distribution channels for criminal funds that harm the everyday economy, such as voice phishing and virtual assets. The Customs Service plans to respond firmly with strict law enforcement to eradicate illegal exchange operators involved in illegal currency exchange exceeding the saleable limit and illegal remittance agency services.”

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