Korea Customs Service Uncovers and Sanctions 61 Currency Exchanges for Illegal Activities Including Illegal Remittance Operations

A large number of currency exchange businesses involved in illegal activities such as illegal remittance operations have been caught.

The Korea Customs Service announced on June 13 that, between March and May, it conducted a special crackdown on 127 high-risk general currency exchanges out of a total of 1,409 domestic currency exchange businesses, uncovering illegal activities at 61 of them.

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

The crackdown was carried out nationwide in consideration of the recent increase in the likelihood that currency exchange businesses are engaging in illegal currency exchange, illegal remittance operations using virtual assets, and other unlawful activities, which are closely linked to tax evasion, money laundering, and the concealment of assets both domestically and abroad.

The targets of the intensive crackdown were selected based on a history of illegal activities or repeated failure to fulfill mandatory reporting obligations for currency exchange transactions, as well as those located in areas with high concentrations of foreign nationals such as Daerim, Ansan, and Siheung, and those identified as high-risk through data analysis.

The main illegal activities detected included: violations of business operation standards such as failure to keep currency exchange ledgers and not using transaction certificates (17 businesses); violations of registration requirements such as inadequate business premises (27 businesses); falsification of currency exchange ledgers (8 businesses); failure to submit or report the disposal of currency exchange ledgers (10 businesses); and illegal remittance operations (6 businesses).

In particular, some currency exchange businesses were found to have facilitated illegal remittance operations by handling import and export payments for used cars through illegal channels, or by registering the business under the name of a naturalized compatriot instead of their own and repeatedly engaging in illegal remittance operations, thereby leading such activities.

Of the businesses caught, 42 (69%) were operated by Koreans, while 19 (31%) were operated by foreigners.

The Korea Customs Service imposed sanctions on the detected currency exchange businesses, including business suspensions, fines, and administrative investigations. Separately, for those involved in illegal remittance operations, the agency plans to conduct further investigations into both the businesses and their clients to determine the connection between illegal remittance activities and crimes such as tax evasion, money laundering, and asset flight.

An official from the Korea Customs Service stated, "Currency exchange operators must faithfully fulfill their obligations under the Foreign Exchange Transactions Act and the Act on Reporting and Using Specified Financial Transaction Information. Currency exchanges that violate these obligations will face administrative sanctions such as business suspension and fines," adding, "In light of the recent increase in cases where currency exchanges are being used as channels for illegal money laundering via virtual assets, the Korea Customs Service will respond strictly to illegal remittance operations and other unlawful activities through strong measures such as warrant-based investigations."

Meanwhile, last month the Korea Customs Service uncovered an illegal currency exchange business that facilitated illegal remittance and receipt of 58 billion won between Korea and Russia using fintech and virtual assets. Previously, in August last year, the agency detected a currency exchange business that illegally received 205.5 billion won in trade payments for smuggled copper scrap via virtual assets.

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