Financial Firms Violating Anti-Money Laundering Obligations Fined 32.1 Billion Won Over Past 5 Years

원본보기 아이콘

Over the past five years, fines imposed on financial institutions for violations of the Act on Reporting and Using Specified Financial Transaction Information have amounted to 32.1 billion KRW. The Act on Reporting and Using Specified Financial Transaction Information regulates financial institutions' obligations to prevent money laundering.

According to data received on the 6th from the Financial Intelligence Unit (FIU) by Lee Jung-moon, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, from November 2019 to last August, there were 156 cases in which financial institutions were sanctioned for violations of the Act, with fines totaling 32.1 billion KRW.

By type, violations of the high-value cash transaction reporting (CTR) were the most frequent, with 85 cases (overlaps possible). This was followed by 30 cases of violations related to the Customer Due Diligence (CDD) system, including failure to implement CDD and obligations to restrict transactions with customers.

The largest violation case in the past five years was by Woori Bank, which failed to timely report approximately 40,000 high-value cash transactions. As a result, in March 2020, it received an institutional warning with a fine of 16.5436 billion KRW. Kangwon Land was fined 3.228 billion KRW in April 2023 for violations including enhanced due diligence (EDD) on high-risk customers, CDD violations, and obstruction of inspections.

Delio, a virtual asset deposit interest service operator that suspended customer withdrawals last year, was fined 1.896 billion KRW and suspended from business for three months due to violations such as dealing with unregistered operators and failure to restrict transactions involving related parties. Coin market exchange Hanbitco was fined 1.9942 billion KRW in October last year for EDD violations and failure to implement CDD and transaction restriction obligations.

This year, out of 43 sanctions under the Act, 36 were imposed on Saemaeul Geumgo and credit unions, mostly for CTR violations, with fines ranging from several hundred thousand to tens of millions of KRW.

Assemblyman Lee Jung-moon emphasized, "As large-scale financial accidents continue to occur, it is necessary for authorities to play an active role in introducing an effective internal control management system based on a responsibility structure."

It was also pointed out as a problem that although the amount of specified financial transaction information provided to investigative agencies is increasing, the procedure to notify individuals of this fact has not been properly carried out. From January to August this year, the number of information cases provided to investigative agencies such as the prosecution, police, and National Tax Service under the Act reached 51,446, but notifications were made in only about 16% of cases. Last year, notifications were made for 46,315 out of 71,224 cases.

Lee said, "Investigative agencies are not faithfully fulfilling their obligation to notify the parties involved, citing ongoing investigations while accessing specified financial transaction information," adding, "Like communication data, financial transaction information must be strictly managed to protect the rights and interests of the public."

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.