107 Illegal Currency Exchange Offices Including 'Jjogaegi Hwanjeon' Detected

#A currency exchange office located in Mapo-gu, Seoul, was caught by customs authorities for evading the rule that prohibits the sale of more than $4,000 per transaction by the same person. The office fabricated transactions as if they were conducted in two or more installments, splitting the amount into sums under $4,000 and recording them accordingly.

#Similarly, a currency exchange office B located in Jung-gu, Seoul, was caught for splitting a total of 20 currency exchange transactions worth approximately 120 million KRW into amounts under 10 million KRW each, pretending they were multiple transactions to evade the obligation to report to the Financial Intelligence Unit (FIU) when exchanging amounts exceeding 10 million KRW by the same person.

The photo is unrelated to the article. Source=Asia Economy DB

On the 26th, the Korea Customs Service announced that it had uncovered illegal activities at 107 currency exchange offices during a focused crackdown conducted from the 28th of last month to the 22nd of this month.

The crackdown was carried out mainly on 140 high-risk currency exchange offices pre-selected after analyzing methods commonly used for money laundering through illegal currency exchange offices, considering the recent misuse of currency exchange offices as channels for various criminal funds.

The illegal activities that the Korea Customs Service focused on during the crackdown included ▲failure to record or poor recording of currency exchange transaction details ▲exceeding foreign currency sale limits ▲so-called ‘split exchange’ to evade the obligation to report high-value cash transactions ▲and continuous or repeated violations of regular reporting obligations.

The most common type of violation detected was currency exchange offices (82 locations) that lacked proper business premises or computer systems and continuously failed to fulfill the regular reporting obligation for currency exchange ledgers, which are fundamental for managing exchange transactions.

Following that were 14 currency exchange offices that submitted false reports by preparing and submitting exchange ledgers under another person’s name, 5 offices that exceeded sale limits, and 1 unregistered currency exchange business office.

Notably, among the 107 currency exchange offices caught in the crackdown, 83 offices (77%) were concentrated in the metropolitan area, and 26 offices (24%) were operated by foreigners. It was confirmed that all foreign operators were Chinese nationals.

The Korea Customs Service plans to cancel registrations, suspend operations, and impose fines on the detected currency exchange offices under the Foreign Exchange Transactions Act. Depending on the severity of the illegal activities at each office, the case may be escalated to criminal investigation, allowing related parties to face criminal penalties.

For currency exchange offices subject to suspension, a ‘Business Suspension Sign’ (newly established last month) will be attached, and continuous monitoring will be conducted to check if they operate during the suspension period. The Korea Customs Service explained that it will respond strongly, including canceling registrations, against offices that attempt to operate secretly during the suspension period.

A Korea Customs Service official stated, “Illegal currency exchange operations are highly likely to be exploited as channels for laundering proceeds from voice phishing crimes and other criminal funds. The Korea Customs Service plans to strengthen crackdowns in cooperation with related agencies such as the police and the Financial Intelligence Unit (FIU) to completely eliminate illegal currency exchange operators from the market.”

Meanwhile, the Korea Customs Service revised the ‘Notice on the Management of Currency Exchange Operators’ last month, implementing institutional improvements such as specifying cancellation regulations for illegal currency exchange operators.

As of the end of last month, there are 1,480 currency exchange offices registered nationwide with the Korea Customs Service, and their list can be checked on the Korea Customs Service website.

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