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Banks to Automatically Report Financial Transactions Over 50 Million Won Starting Next Year

Banks to Automatically Report Financial Transactions Over 50 Million Won Starting Next Year

Posted September. 14, 2005 07:46,   


From next year, if over 50 million won is traded in cash through a financial company, the government will be automatically notified of the transaction. Furthermore, when opening a new account or transmitting more than 20 million won from a non-account source, people must now list not only their names and resident registration numbers but also their addresses and contact numbers.

The government held a Cabinet meeting on September 13 and passed the revision of enforcement ordinance on the act on reporting certain financial transactions containing such details in order to prevent illegal money laundering.

According to the revision, as of January 18 next year, if a person withdraws, deposits, or transmits more than 50 million won in cash (foreign currency not included) from a single financial company, the company must notify the Financial Intelligence Unit (FIU) of the transaction details.

Currently, financial companies are reporting only those suspected of money laundering out of the people with transactions of over 20 million won or $10,000 (non-cash transaction included).

The FIU analyzes the transaction details, and if there are grounds for suspicion, it requests an investigation by the prosecution or the Financial Supervisory Commission.

Most transactions of cash payments or receipts including not only transactions at bank windows but also cash services at ATM machines or deposits by non-account sources, currency exchange, and securities transactions are subject to be reported to the FIU.

However, if cash is not exchanged and the transaction takes place on paper only including account transfers or internet banking, those transactions are not subject to be reported.

The government is planning to lower the criteria to 30 million won in 3008 and to 20 million won in 2010.

Furthermore, from January 18 of next year the government is planning to implement a system in which financial companies are obligated to confirm the identity of customers in opening new accounts, holding one-time financial transactions over the amount of 20 million won or $10,000, and transactions suspected of money laundering.

Ki-Jeong Ko koh@donga.com