Financial Transactions of Over 50 Million Won Must Be Reported

A new plan is under way to make financial firms check not only a customer’s real name, but also the owner of funds and the purpose of the transaction when the transaction is suspected of being a result of money laundering or illegal fund raising.

Moreover, financial firms should notify the Financial Intelligence Unit (FIU) about large financial transactions. The subject of an accounting follow-up by the FIU will be expanded to domestic financial transactions.

On Wednesday, the Ministry of Finance and Economy reported its plan to revise the act on specific financial transactions at a meeting of anti-corruption agencies, supervised by the president. The report mainly focused on expanding the subject of an accounting follow-up, reporting large cash transactions, and imposing obligations on customers of financial firms.

The ministry has decided to impose a “customer notice obligation” under which financial firms grasp the real owner of funds and the purpose of transactions that are suspected of money laundering. The ministry plans to revise the specific financial transaction act and implement the new act next year.

Cash or cashier’s check transactions that exceed 50 million or 100 million won should be reported to the FIU without exception.

When the revision passes sometime this year, the Ministry will establish a one-year grace period before implementing it in the second half of next year.

At present, the FIU can only trace overseas money transactions, but when the revision is sent to the National Assembly in the first half of this year, it will be able to trace domestic money transactions.

Meanwhile, the Ministry has decided to abolish the National Election Commission’s policy on suspected money laundering transactions of political funds, which caused disputes over its fairness and effectiveness.

Chi-Young Shin higgledy@donga.com