|
|
Sanctions:
None applicable
____________________________________________________
Offshore Jurisdiction Blacklists:
South Korea has enacted tax legislation that would deny reduced
treaty Withholding tax rates on investment income paid from
Korea to residents of low-tax jurisdictions. To date, it has applied
this law only to offshore entities based in Labuan.
____________________________________________________
US State Department Money Laundering Report - 2011:
The Republic of Korea (ROK) has strengthened its AML/CFT
regime in recent years. While most money laundering in South
Korea is associated with domestic criminal activity and official
corruption, locally-based criminal groups associate with
international crime syndicates involved in human trafficking,
contraband smuggling, and related organized crime. Korean
money launderers use illegal game rooms, customs and trade
fraud, intellectual property theft, and counterfeit goods to conceal
proceeds. They also exploit the zero value added tax (VAT) rates
on gold bars. Launderers frequently use cash transactions or
fraudulent bank accounts to conceal proceeds from illicit activities.
South Korea is not an offshore banking center. It has six free
economic zones (FEZs), with Incheon International Airport wholly
incorporated into one of the zones. While companies operating in
FEZs enjoy certain tax privileges, they are subject to the same
general laws on financial transactions as companies operating
elsewhere. Korea mandates extensive entrance screening to
determine companies’ eligibility to participate in FEZ areas, and
firms are subject to standard disclosure rules and criminal laws.
DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY
TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS
TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US
CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN
THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE
U.S.: NO
CRIMINALIZATION OF MONEY LAUNDERING:
“All serious crimes” approach or “list” approach to predicate
crimes: List approach
Legal persons covered: criminally: YES civilly: YES
CRIMINALIZATION OF TERRORIST FINANCING:
Ability to freeze terrorist assets without delay: YES
UN lists of designated terrorists or terrorist entities distributed to
financial institutions: YES
(Please refer to the Department of State’s Country Reports on
Terrorism, which can be found here: http://www.state.
gov/s/ct/rls/crt/)
KNOW-YOUR-CUSTOMER RULES:
Covered entities: Banks, exchange houses, stock brokerages,
casinos, insurance companies, merchant banks, mutual savings
banks, finance companies, credit unions, credit cooperatives,
trust companies, and securities companies
Enhanced due diligence procedures for PEPs: Foreign: NO
Domestic: NO
SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:
Covered entities: Banks, exchange houses, stock brokerages,
casinos, insurance companies, merchant banks, mutual savings
banks, finance companies, credit unions, credit cooperatives,
trust companies, and securities companies
Number of STRs received and time frame: 104,200 (January 1 to
June 30, 2010)
Number of CTRs received and time frame: 5,705,000 (January 1
to June 30, 2010)
MONEY LAUNDERING CRIMINAL
PROSECUTIONS/CONVICTIONS:
Prosecutions: Not available
Convictions: Not available
Assets forfeited: criminally: $3.6 million in 2009 civilly: None
RECORDS EXCHANGE MECHANISM:
With U.S.: YES
With other governments/jurisdictions: YES
The ROK is a member of the Financial Action Task Force (FATF)
and the Asia/Pacific Group on Money Laundering (APG), a FATF-
style regional body. Its most recent mutual evaluation can be
found here: http://www.apgml.org/documents/docs/17/Korea%
20MER%202009.pdf
ENFORCEMENT AND IMPLEMENTATION ISSUES AND
COMMENTS:
The Government of the Republic of Korea (ROK) should expand
its active participation in international AML/CFT efforts by
becoming a party to the UN Convention against Transnational
Organized Crime. Also, while the Prohibition of Financing for
Offenses of Public Intimidation is intended to implement the UN
International Convention for the Suppression of the Financing of
Terrorism, it does not clearly criminalize provision or collection of
funds or assets used by a terrorist organisation or terrorist for
purposes other than for terrorist acts. The ROK should create
language that clearly criminalizes terrorist financing as an
autonomous offense. In October 2009 the ROK initiated a three-
year action plan that puts emphasis on creating a system to
effectively prevent terrorism and terrorist financing.
Korea’s AML/CFT regime requires all obligated entities to report
STRs to the Korea Financial Intelligence Unit (KFIU). The ROK
strengthened the STR system in June 2010, lowering the
mandatory STR filing threshold from 20 to 10 million won
(approximately $8,700). It also reduced the threshold for cash
transaction reports (CTR) from 30 million won (approximately
$25,800) to 20 million won (approximately $17,200) in January
2010. The KFIU plans to abolish the STR threshold in the long
term, and instead require covered entities to report all suspicious
transactions. The ROK should make elimination of the STR
reporting threshold a short-term goal.
Officials charged with investigating money laundering and
financial crimes are widening their scope to include crimes related
to commodities trading and industrial smuggling, and continue to
search for possible links between domestic illegal activities and
international terrorist activity. ROK authorities are investigating
the underground alternative remittance systems used to send
illegal remittances abroad by South Korea’s approximately
495,886 documented and 51,068 undocumented foreign workers.
According to the Korea Customs Service, there were 601
underground remittance (hawala) cases worth 1.99 trillion won
(approximately $1.7 billion) in 2009, and 167 cases totaling 1.23
trillion won (approximately $1.07 billion) in the first eleven months
of 2010.
____________________________________________________
US State Dept Narcotics Report 2012:
Narcotics production and abuse is a minor problem in South
Korea. South Korea has very strict laws regarding illicit drugs.
Conviction for possessing, using, or trafficking illicit drugs can
result in long jail sentences and large fines. Anomalously,
because of its reputation for not having a drug abuse problem,
South Korea is favored as a transshipment location for drug
traffickers. With one of the region's largest ports, Busan, located
on its Southeast tip, South Korea remains an attractive location
for illegal drug transshipments coming from countries that are
more likely to attract a contraband inspection upon arrival. Some
narcotics smuggled through South Korea are en route to the
United States. South Korea is a party to the 1988 U.N. Drug
Convention.
As a matter of government policy, South Korea does not
encourage or facilitate illicit drug production or distribution, nor is
it involved in laundering the proceeds of the sale of illicit drugs.
According to the Korea Customs Service, there were 546 drug
interdictions of persons, carriers, cargo, and mail into and out of
the country in the first eight months of 2011, resulting in the
seizure of approximately 25 kg of illicit drugs. The number of
interdictions during the first eight months increased by
approximately five times over the first six months of last year. The
drugs seized included methamphetamine, marijuana, hashish,
and previously rarely seen substances such as cocaine, MDMA
(methylenedioxymethamphetamine), JWH-018-artificial marijuana,
and other synthetic prescription drugs.
According to the Supreme Prosecutors' Office, Korean authorities
arrested 4,228 individuals for drug violations in the first six months
of 2011, an approximately 9.5 percent decrease from 4,673
arrests in the same period last year. Of the arrests, 63.1 percent
were for use, 22.1 percent were for supply, and 5.6 percent were
for possession of illicit drugs. Synthetic psychotropic drugs
continued to be the most widely used illicit drugs, accounting for
approximately 73.9 percent of drug arrests. Marijuana seizures
were 72.8 kg, an approximate 97% increase from 36.9 kg in the
same period last year. Each District Prosecutor's Office, in
conjunction with local governments, conducts annual surveillance
into suspected marijuana growing areas during planting or
harvesting time periods to limit possible illicit diversion. According
to the Supreme Prosecutors' Office, as of September this year,
Korean authorities had seized 70,864 marijuana plants. Some
traditional Korean garments are made from the hemp of marijuana
plants. Hemp production is illegal, but the Korean Food and Drug
Administration issues licenses to farms that produce traditional
Korean garments. This year Korean authorities conducted a
crackdown on unlicensed hemp farms and many owners have
abandoned their farms, resulting in a spike of marijuana plant
seizures. Opium poppy production is also illegal in South Korea,
but poppy continues to be grown in Gyeonggi Province where
farmers have traditionally used the harvested plants as a folk
medicine to treat sick pigs and cows. Opium is not normally
processed from these plants for human consumption. Korean
authorities continue surveillance of these opium poppy-growing
areas. According to the Supreme Prosecutors' Office, as of
September this year, Korean authorities seized 37,270 opium
poppy plants.
The Ministry of Health and Welfare Affairs conducts programs to
treat drug addicts at 22 hospitals nationwide. The treatment is
free and patients can remain in the program for up to one year.
The South Korean government also funds the primary NGO
involved with drug treatment, Korean Association Against Drug
Abuse (KAADA), which has 12 branches throughout the country.
KAADA provides education on the risks and dangers of drugs, as
well as counseling, sports therapy, and Narcotics Anonymous
programs. KAADA also runs a free rehabilitation center where
drug addicts may live up to a year at the center for intensive
treatment and receive follow-up services after their stay.
The South Korean authorities remain mindful of the challenges
they face in combating transshipment of illicit drugs in and out of
the country and actively engage with law enforcement authorities
from other countries in drug control efforts through various
regional and international organizations. The Drug Enforcement
Administration (DEA) Seoul Country Office and U.S. Immigration
and Customs Enforcement, Homeland Security Investigations
(HSI) officials continue to work closely with South Korean
narcotics law enforcement authorities on international drug
interdiction, seizures of funds and assets related to illicit narcotics
trafficking, and the diversion of precursor chemicals in South
Korea and in the Far East region.
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 1)
The Republic of Korea (ROK or South Korea) is a source, transit,
and destination country for men and women subjected to forced
prostitution and forced labor. Some men and women from Russia,
Uzbekistan, Kazakhstan, Morocco, Colombia, Mongolia, China,
the Philippines, Thailand, Cambodia, North Korea, Vietnam,
Japan, and other Southeast Asian countries are recruited for
employment or marriage in the ROK, and subjected to forced
prostitution or forced labor. Some foreign women who entered the
country on entertainment visas, were trafficked for forced
prostitution. Some women from less developed countries recruited
for marriage with South Korean men through international
marriage brokers are subjected to forced prostitution or forced
labor upon arrival in the ROK or when running away from abusive
spouses; some brokers reportedly charged up to $20,000 from
Korean clients. The use of debt bondage was common among sex
trafficking victims, and employers and brokers often found ways to
compound victims’ debt. Many of these women also faced
nonpayment of earnings, withholding of their passports, and
restrictions on their movements. South Korean women were
subjected to forced prostitution domestically and abroad in
destinations including the United States, Canada, Japan, and
Australia, many coerced by traffickers to whom they owed debts.
According to government authorities, South Korean teenagers are
increasingly exploited in prostitution; particularly runaways, more
than 95 percent of commercial sexual exploitation of children in
South Korea is arranged over the Internet.
Migrant workers who travel to the ROK for employment may incur
thousands of dollars in debts, contributing to their vulnerability to
debt bondage. There are approximately 500,000 low-skilled
migrant workers in the ROK from elsewhere in Asia, many of
whom were working under the Employment Permit System (EPS).
While protections were implemented for EPS workers, observers
claimed the EPS assigns excessive power to employers over
workers’ mobility and legal status, making them vulnerable to
trafficking. Migrant workers commonly face conditions indicative of
forced labor, including nonpayment of wages, withholding of
passports, and work upon arrival in the ROK that differs from the
job description offered to them in their country of origin. Korean
men remain a source of demand for child sex tourism in Southeast
Asia and the Pacific Islands.
The Government of the Republic of Korea fully complies with the
minimum standards for the elimination of trafficking. The
government reported significant efforts to prevent trafficking
during the reporting period, including through anti-trafficking
public awareness campaigns targeting vulnerable groups, such as
teenagers at risk of commercial sexual exploitation and foreign
wives in South Korea. South Korea also maintains an extensive
network of victim protection services throughout the country, and
works in cooperation with NGOs to provide care to identified
victims of trafficking. In addition, South Korea allocated significant
resources to protecting victims of trafficking and continued to train
law enforcement and other government officials on trafficking in
persons. The government’s efforts to investigate labor trafficking
remained relatively weak, however, and the government did not
institute formal procedures to proactively identify victims of
trafficking.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2009
The Republic of Korea (South Korea) demonstrated excellent law
enforcement and intelligence capabilities to combat terrorism.
South Korean immigration and law enforcement agencies had a
strong record of tracking suspicious individuals entering their
territory and reacting quickly to thwart potential terrorist acts.
Seoul also reviewed and strengthened its emergency response
plan and, in accordance with UNSCR 1267 and 1373, further
tightened its legislative framework and administrative procedures
to combat terrorist financing. For example, the Prohibition of
Financing for Offenses of Public Intimidation Act took effect in
December 2008 and was intended to implement the UN
Convention for the Suppression of the Financing of Terrorism, to
which the South Korea has been a party since 2004. Under the
Act, funds for public intimidation offenses are identified as “any
funds or assets collected, provided, delivered, or kept for use in
any of the following acts committed with the intention to intimidate
the public or to interfere with the exercise of rights of a national,
local, or foreign government.” An amendment expanding the
government’s ability to confiscate funds related to terrorism was
enacted in March, enabling the government to confiscate not only
the direct proceeds of terrorism, but also funds and assets
derived from those proceeds. In October, South Korea became a
full member of FATF. The accession to FATF will allow Korea, an
observer since 2006, to actively participate in the process of
setting and revising global Anti-Money Laundering and
Counterterrorismm Financing Terrorism (AML/CTF) standards and
increase international cooperation.
South Korea supported U.S. counterterrorism goals in
Afghanistan by announcing the establishment of a Provincial
Reconstruction Team. In addition, South Korea worked closely
with other foreign partners and played a constructive role in
improving regional counterterrorism capabilities. South Korea
continued to participate in the counterterrorism activities of the
Asia-Pacific Economic Cooperation forum, the ASEAN Regional
Forum, and the Asia-Europe Meeting. The Korea Overseas
International Cooperation Agency hosted counterterrorism training
and capacity-building programs for regional partners in forensic
science, prevention of money laundering, and cyber security.
In March, the Counterterrorism Committee Executive Directorate of
the United Nations visited South Korea to monitor its efforts to
combat terrorism in accordance with UNSCR 1373. The team
found that Korea had made good progress with respect to
AML/CFT laws and mechanisms to criminalize terrorist financing
and freeze funds and assets. In October, the Korea Institute for
Defense Analyses hosted the ninth Biannual Symposium of the
Council for Asian Terrorism Research, with the theme “Korean
Peninsula WMD Threats: Regional and Global Implications.” In
November, South Korea hosted the second APEC Cybersecurity
Seminar on “Protection of Cyberspace from Terrorist Attacks and
Use,” which brought 13 countries together to discuss recent cyber
attacks and ways to deal with the challenges of cyber terrorism. In
December, the Ambassador for International Counterterrorism
Cooperation hosted the second round of South Korea-U.S.
bilateral counterterrorism consultations, attended on the U.S. side
by the Deputy Coordinator for Regional Affairs of the Office of the
Coordinator for Counterterrorism. Korea also held bilateral
counterterrorism meetings with Indonesia, Japan, France, and
Germany during the year.
The South Korean government has recently been concerned over
the growing number of South Korean citizens abroad who have
been victims of terrorist attacks. In March, four South Korean
tourists were killed and five were wounded in a suicide bombing in
Yemen, for which al-Qa’ida later claimed responsibility. In June,
another South Korean civilian working for a medical NGO in
Yemen was kidnapped and killed. Although the Yemeni
government did not find a conclusive connection to an established
terrorist group in that incident, the South Korean government was
put on alert and is now exploring various possibilities to prevent
future attacks on its citizens.
____________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
None applicable
____________________________________________________
Offshore Jurisdiction Blacklists:
South Korea has enacted tax legislation that would deny reduced
treaty Withholding tax rates on investment income paid from
Korea to residents of low-tax jurisdictions. To date, it has applied
this law only to offshore entities based in Labuan.
____________________________________________________
US State Department Money Laundering Report - 2011:
The Republic of Korea (ROK) has strengthened its AML/CFT
regime in recent years. While most money laundering in South
Korea is associated with domestic criminal activity and official
corruption, locally-based criminal groups associate with
international crime syndicates involved in human trafficking,
contraband smuggling, and related organized crime. Korean
money launderers use illegal game rooms, customs and trade
fraud, intellectual property theft, and counterfeit goods to conceal
proceeds. They also exploit the zero value added tax (VAT) rates
on gold bars. Launderers frequently use cash transactions or
fraudulent bank accounts to conceal proceeds from illicit activities.
South Korea is not an offshore banking center. It has six free
economic zones (FEZs), with Incheon International Airport wholly
incorporated into one of the zones. While companies operating in
FEZs enjoy certain tax privileges, they are subject to the same
general laws on financial transactions as companies operating
elsewhere. Korea mandates extensive entrance screening to
determine companies’ eligibility to participate in FEZ areas, and
firms are subject to standard disclosure rules and criminal laws.
DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY
TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS
TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US
CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN
THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE
U.S.: NO
CRIMINALIZATION OF MONEY LAUNDERING:
“All serious crimes” approach or “list” approach to predicate
crimes: List approach
Legal persons covered: criminally: YES civilly: YES
CRIMINALIZATION OF TERRORIST FINANCING:
Ability to freeze terrorist assets without delay: YES
UN lists of designated terrorists or terrorist entities distributed to
financial institutions: YES
(Please refer to the Department of State’s Country Reports on
Terrorism, which can be found here: http://www.state.
gov/s/ct/rls/crt/)
KNOW-YOUR-CUSTOMER RULES:
Covered entities: Banks, exchange houses, stock brokerages,
casinos, insurance companies, merchant banks, mutual savings
banks, finance companies, credit unions, credit cooperatives,
trust companies, and securities companies
Enhanced due diligence procedures for PEPs: Foreign: NO
Domestic: NO
SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:
Covered entities: Banks, exchange houses, stock brokerages,
casinos, insurance companies, merchant banks, mutual savings
banks, finance companies, credit unions, credit cooperatives,
trust companies, and securities companies
Number of STRs received and time frame: 104,200 (January 1 to
June 30, 2010)
Number of CTRs received and time frame: 5,705,000 (January 1
to June 30, 2010)
MONEY LAUNDERING CRIMINAL
PROSECUTIONS/CONVICTIONS:
Prosecutions: Not available
Convictions: Not available
Assets forfeited: criminally: $3.6 million in 2009 civilly: None
RECORDS EXCHANGE MECHANISM:
With U.S.: YES
With other governments/jurisdictions: YES
The ROK is a member of the Financial Action Task Force (FATF)
and the Asia/Pacific Group on Money Laundering (APG), a FATF-
style regional body. Its most recent mutual evaluation can be
found here: http://www.apgml.org/documents/docs/17/Korea%
20MER%202009.pdf
ENFORCEMENT AND IMPLEMENTATION ISSUES AND
COMMENTS:
The Government of the Republic of Korea (ROK) should expand
its active participation in international AML/CFT efforts by
becoming a party to the UN Convention against Transnational
Organized Crime. Also, while the Prohibition of Financing for
Offenses of Public Intimidation is intended to implement the UN
International Convention for the Suppression of the Financing of
Terrorism, it does not clearly criminalize provision or collection of
funds or assets used by a terrorist organisation or terrorist for
purposes other than for terrorist acts. The ROK should create
language that clearly criminalizes terrorist financing as an
autonomous offense. In October 2009 the ROK initiated a three-
year action plan that puts emphasis on creating a system to
effectively prevent terrorism and terrorist financing.
Korea’s AML/CFT regime requires all obligated entities to report
STRs to the Korea Financial Intelligence Unit (KFIU). The ROK
strengthened the STR system in June 2010, lowering the
mandatory STR filing threshold from 20 to 10 million won
(approximately $8,700). It also reduced the threshold for cash
transaction reports (CTR) from 30 million won (approximately
$25,800) to 20 million won (approximately $17,200) in January
2010. The KFIU plans to abolish the STR threshold in the long
term, and instead require covered entities to report all suspicious
transactions. The ROK should make elimination of the STR
reporting threshold a short-term goal.
Officials charged with investigating money laundering and
financial crimes are widening their scope to include crimes related
to commodities trading and industrial smuggling, and continue to
search for possible links between domestic illegal activities and
international terrorist activity. ROK authorities are investigating
the underground alternative remittance systems used to send
illegal remittances abroad by South Korea’s approximately
495,886 documented and 51,068 undocumented foreign workers.
According to the Korea Customs Service, there were 601
underground remittance (hawala) cases worth 1.99 trillion won
(approximately $1.7 billion) in 2009, and 167 cases totaling 1.23
trillion won (approximately $1.07 billion) in the first eleven months
of 2010.
____________________________________________________
US State Dept Narcotics Report 2012:
Narcotics production and abuse is a minor problem in South
Korea. South Korea has very strict laws regarding illicit drugs.
Conviction for possessing, using, or trafficking illicit drugs can
result in long jail sentences and large fines. Anomalously,
because of its reputation for not having a drug abuse problem,
South Korea is favored as a transshipment location for drug
traffickers. With one of the region's largest ports, Busan, located
on its Southeast tip, South Korea remains an attractive location
for illegal drug transshipments coming from countries that are
more likely to attract a contraband inspection upon arrival. Some
narcotics smuggled through South Korea are en route to the
United States. South Korea is a party to the 1988 U.N. Drug
Convention.
As a matter of government policy, South Korea does not
encourage or facilitate illicit drug production or distribution, nor is
it involved in laundering the proceeds of the sale of illicit drugs.
According to the Korea Customs Service, there were 546 drug
interdictions of persons, carriers, cargo, and mail into and out of
the country in the first eight months of 2011, resulting in the
seizure of approximately 25 kg of illicit drugs. The number of
interdictions during the first eight months increased by
approximately five times over the first six months of last year. The
drugs seized included methamphetamine, marijuana, hashish,
and previously rarely seen substances such as cocaine, MDMA
(methylenedioxymethamphetamine), JWH-018-artificial marijuana,
and other synthetic prescription drugs.
According to the Supreme Prosecutors' Office, Korean authorities
arrested 4,228 individuals for drug violations in the first six months
of 2011, an approximately 9.5 percent decrease from 4,673
arrests in the same period last year. Of the arrests, 63.1 percent
were for use, 22.1 percent were for supply, and 5.6 percent were
for possession of illicit drugs. Synthetic psychotropic drugs
continued to be the most widely used illicit drugs, accounting for
approximately 73.9 percent of drug arrests. Marijuana seizures
were 72.8 kg, an approximate 97% increase from 36.9 kg in the
same period last year. Each District Prosecutor's Office, in
conjunction with local governments, conducts annual surveillance
into suspected marijuana growing areas during planting or
harvesting time periods to limit possible illicit diversion. According
to the Supreme Prosecutors' Office, as of September this year,
Korean authorities had seized 70,864 marijuana plants. Some
traditional Korean garments are made from the hemp of marijuana
plants. Hemp production is illegal, but the Korean Food and Drug
Administration issues licenses to farms that produce traditional
Korean garments. This year Korean authorities conducted a
crackdown on unlicensed hemp farms and many owners have
abandoned their farms, resulting in a spike of marijuana plant
seizures. Opium poppy production is also illegal in South Korea,
but poppy continues to be grown in Gyeonggi Province where
farmers have traditionally used the harvested plants as a folk
medicine to treat sick pigs and cows. Opium is not normally
processed from these plants for human consumption. Korean
authorities continue surveillance of these opium poppy-growing
areas. According to the Supreme Prosecutors' Office, as of
September this year, Korean authorities seized 37,270 opium
poppy plants.
The Ministry of Health and Welfare Affairs conducts programs to
treat drug addicts at 22 hospitals nationwide. The treatment is
free and patients can remain in the program for up to one year.
The South Korean government also funds the primary NGO
involved with drug treatment, Korean Association Against Drug
Abuse (KAADA), which has 12 branches throughout the country.
KAADA provides education on the risks and dangers of drugs, as
well as counseling, sports therapy, and Narcotics Anonymous
programs. KAADA also runs a free rehabilitation center where
drug addicts may live up to a year at the center for intensive
treatment and receive follow-up services after their stay.
The South Korean authorities remain mindful of the challenges
they face in combating transshipment of illicit drugs in and out of
the country and actively engage with law enforcement authorities
from other countries in drug control efforts through various
regional and international organizations. The Drug Enforcement
Administration (DEA) Seoul Country Office and U.S. Immigration
and Customs Enforcement, Homeland Security Investigations
(HSI) officials continue to work closely with South Korean
narcotics law enforcement authorities on international drug
interdiction, seizures of funds and assets related to illicit narcotics
trafficking, and the diversion of precursor chemicals in South
Korea and in the Far East region.
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 1)
The Republic of Korea (ROK or South Korea) is a source, transit,
and destination country for men and women subjected to forced
prostitution and forced labor. Some men and women from Russia,
Uzbekistan, Kazakhstan, Morocco, Colombia, Mongolia, China,
the Philippines, Thailand, Cambodia, North Korea, Vietnam,
Japan, and other Southeast Asian countries are recruited for
employment or marriage in the ROK, and subjected to forced
prostitution or forced labor. Some foreign women who entered the
country on entertainment visas, were trafficked for forced
prostitution. Some women from less developed countries recruited
for marriage with South Korean men through international
marriage brokers are subjected to forced prostitution or forced
labor upon arrival in the ROK or when running away from abusive
spouses; some brokers reportedly charged up to $20,000 from
Korean clients. The use of debt bondage was common among sex
trafficking victims, and employers and brokers often found ways to
compound victims’ debt. Many of these women also faced
nonpayment of earnings, withholding of their passports, and
restrictions on their movements. South Korean women were
subjected to forced prostitution domestically and abroad in
destinations including the United States, Canada, Japan, and
Australia, many coerced by traffickers to whom they owed debts.
According to government authorities, South Korean teenagers are
increasingly exploited in prostitution; particularly runaways, more
than 95 percent of commercial sexual exploitation of children in
South Korea is arranged over the Internet.
Migrant workers who travel to the ROK for employment may incur
thousands of dollars in debts, contributing to their vulnerability to
debt bondage. There are approximately 500,000 low-skilled
migrant workers in the ROK from elsewhere in Asia, many of
whom were working under the Employment Permit System (EPS).
While protections were implemented for EPS workers, observers
claimed the EPS assigns excessive power to employers over
workers’ mobility and legal status, making them vulnerable to
trafficking. Migrant workers commonly face conditions indicative of
forced labor, including nonpayment of wages, withholding of
passports, and work upon arrival in the ROK that differs from the
job description offered to them in their country of origin. Korean
men remain a source of demand for child sex tourism in Southeast
Asia and the Pacific Islands.
The Government of the Republic of Korea fully complies with the
minimum standards for the elimination of trafficking. The
government reported significant efforts to prevent trafficking
during the reporting period, including through anti-trafficking
public awareness campaigns targeting vulnerable groups, such as
teenagers at risk of commercial sexual exploitation and foreign
wives in South Korea. South Korea also maintains an extensive
network of victim protection services throughout the country, and
works in cooperation with NGOs to provide care to identified
victims of trafficking. In addition, South Korea allocated significant
resources to protecting victims of trafficking and continued to train
law enforcement and other government officials on trafficking in
persons. The government’s efforts to investigate labor trafficking
remained relatively weak, however, and the government did not
institute formal procedures to proactively identify victims of
trafficking.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2009
The Republic of Korea (South Korea) demonstrated excellent law
enforcement and intelligence capabilities to combat terrorism.
South Korean immigration and law enforcement agencies had a
strong record of tracking suspicious individuals entering their
territory and reacting quickly to thwart potential terrorist acts.
Seoul also reviewed and strengthened its emergency response
plan and, in accordance with UNSCR 1267 and 1373, further
tightened its legislative framework and administrative procedures
to combat terrorist financing. For example, the Prohibition of
Financing for Offenses of Public Intimidation Act took effect in
December 2008 and was intended to implement the UN
Convention for the Suppression of the Financing of Terrorism, to
which the South Korea has been a party since 2004. Under the
Act, funds for public intimidation offenses are identified as “any
funds or assets collected, provided, delivered, or kept for use in
any of the following acts committed with the intention to intimidate
the public or to interfere with the exercise of rights of a national,
local, or foreign government.” An amendment expanding the
government’s ability to confiscate funds related to terrorism was
enacted in March, enabling the government to confiscate not only
the direct proceeds of terrorism, but also funds and assets
derived from those proceeds. In October, South Korea became a
full member of FATF. The accession to FATF will allow Korea, an
observer since 2006, to actively participate in the process of
setting and revising global Anti-Money Laundering and
Counterterrorismm Financing Terrorism (AML/CTF) standards and
increase international cooperation.
South Korea supported U.S. counterterrorism goals in
Afghanistan by announcing the establishment of a Provincial
Reconstruction Team. In addition, South Korea worked closely
with other foreign partners and played a constructive role in
improving regional counterterrorism capabilities. South Korea
continued to participate in the counterterrorism activities of the
Asia-Pacific Economic Cooperation forum, the ASEAN Regional
Forum, and the Asia-Europe Meeting. The Korea Overseas
International Cooperation Agency hosted counterterrorism training
and capacity-building programs for regional partners in forensic
science, prevention of money laundering, and cyber security.
In March, the Counterterrorism Committee Executive Directorate of
the United Nations visited South Korea to monitor its efforts to
combat terrorism in accordance with UNSCR 1373. The team
found that Korea had made good progress with respect to
AML/CFT laws and mechanisms to criminalize terrorist financing
and freeze funds and assets. In October, the Korea Institute for
Defense Analyses hosted the ninth Biannual Symposium of the
Council for Asian Terrorism Research, with the theme “Korean
Peninsula WMD Threats: Regional and Global Implications.” In
November, South Korea hosted the second APEC Cybersecurity
Seminar on “Protection of Cyberspace from Terrorist Attacks and
Use,” which brought 13 countries together to discuss recent cyber
attacks and ways to deal with the challenges of cyber terrorism. In
December, the Ambassador for International Counterterrorism
Cooperation hosted the second round of South Korea-U.S.
bilateral counterterrorism consultations, attended on the U.S. side
by the Deputy Coordinator for Regional Affairs of the Office of the
Coordinator for Counterterrorism. Korea also held bilateral
counterterrorism meetings with Indonesia, Japan, France, and
Germany during the year.
The South Korean government has recently been concerned over
the growing number of South Korean citizens abroad who have
been victims of terrorist attacks. In March, four South Korean
tourists were killed and five were wounded in a suicide bombing in
Yemen, for which al-Qa’ida later claimed responsibility. In June,
another South Korean civilian working for a medical NGO in
Yemen was kidnapped and killed. Although the Yemeni
government did not find a conclusive connection to an established
terrorist group in that incident, the South Korean government was
put on alert and is now exploring various possibilities to prevent
future attacks on its citizens.
____________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
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| Further Tables |
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*Please note that FATF deems that a country has significant aml deficiencies if
any of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated
either Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
any of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated
either Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
| SOUTH KOREA |
| KnowYourCountry |
|
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Key Findings from last Mutual Evaluation Report
The Financial Action Task Force (FATF) and the Asia/Pacific Group
on Money Laundering (APG) have jointly conducted an assessment
of the implementation of anti-money laundering and counter-terrorist
financing (AML/CFT) standards in the Republic of Korea (Korea).
The key findings of this evaluation are:
- Korea has demonstrated political commitment, and commitment by
government agencies and the private sector, to anti-money
laundering (AML) efforts since the mid 1990s.
- There have been no confirmed cases of terrorist financing (TF) in
Korea to date. Korea’s counter-terrorist financing (CFT) system is
new, coming into effect in December 2008, and it could be further
strengthened.
- Korea does not have structured organised crime syndicates, but
rather has ‘brotherhoods’ which are primarily involved in online
gambling, loan-sharking, extortion and prostitution. The most
prevalent offences in Korea are fraud; theft; forgery; and, copyright
and trademark violations.
- The most common money laundering (ML) techniques involve
cash transactions and accounts in other persons’ names.
- The ML offences are largely in line with international requirements
but penalties available and applied are not sufficiently effective,
proportionate or dissuasive and there is a lack of focus on ML
investigations. The confiscation regime is sound but, given the size
of the economy and the risk of money being laundered in Korea, the
number of confiscations each year and the value confiscated is low.
- The Korea Financial Intelligence Unit (KoFIU), is Korea’s financial
intelligence unit (FIU) and the lead agency in Korea for AML/CFT
matters. The Korean AML/CFT system is heavily reliant on KoFIU’s
work on financial intelligence, AML/CFT supervision, training of
obliged entities, policy, reform, national co-ordination and
international co-operation.
- Customer identification and verification represents a strength in
the Korean preventive measures but issues such as beneficial
ownership, politically exposed persons and correspondent banking
have yet to be addressed. In addition, the obligation to file
suspicious transaction reports (STRs) only applies to transactions
over KRW 20 million (USD 17 227).
- The level of sanctions available for breaches of AML/CFT
obligations is low and sanctions are not often applied by supervisory
authorities. However the compliance culture within Korean financial
institutions is very strong.
The Financial Action Task Force (FATF) and the Asia/Pacific Group
on Money Laundering (APG) have jointly conducted an assessment
of the implementation of anti-money laundering and counter-terrorist
financing (AML/CFT) standards in the Republic of Korea (Korea).
The key findings of this evaluation are:
- Korea has demonstrated political commitment, and commitment by
government agencies and the private sector, to anti-money
laundering (AML) efforts since the mid 1990s.
- There have been no confirmed cases of terrorist financing (TF) in
Korea to date. Korea’s counter-terrorist financing (CFT) system is
new, coming into effect in December 2008, and it could be further
strengthened.
- Korea does not have structured organised crime syndicates, but
rather has ‘brotherhoods’ which are primarily involved in online
gambling, loan-sharking, extortion and prostitution. The most
prevalent offences in Korea are fraud; theft; forgery; and, copyright
and trademark violations.
- The most common money laundering (ML) techniques involve
cash transactions and accounts in other persons’ names.
- The ML offences are largely in line with international requirements
but penalties available and applied are not sufficiently effective,
proportionate or dissuasive and there is a lack of focus on ML
investigations. The confiscation regime is sound but, given the size
of the economy and the risk of money being laundered in Korea, the
number of confiscations each year and the value confiscated is low.
- The Korea Financial Intelligence Unit (KoFIU), is Korea’s financial
intelligence unit (FIU) and the lead agency in Korea for AML/CFT
matters. The Korean AML/CFT system is heavily reliant on KoFIU’s
work on financial intelligence, AML/CFT supervision, training of
obliged entities, policy, reform, national co-ordination and
international co-operation.
- Customer identification and verification represents a strength in
the Korean preventive measures but issues such as beneficial
ownership, politically exposed persons and correspondent banking
have yet to be addressed. In addition, the obligation to file
suspicious transaction reports (STRs) only applies to transactions
over KRW 20 million (USD 17 227).
- The level of sanctions available for breaches of AML/CFT
obligations is low and sanctions are not often applied by supervisory
authorities. However the compliance culture within Korean financial
institutions is very strong.
___________________________________________________
AML News / Updates
August 8, 2011 - EU places South Korea on list of due diligence
equivalent jurisdictions
Read Statement (pdf file)
AML News / Updates
August 8, 2011 - EU places South Korea on list of due diligence
equivalent jurisdictions
Read Statement (pdf file)
| Last Updated: 16 April 2012 |