South Korea's Ministry of Economy and Finance published an interim progress update from the cross-government task force on illegal foreign exchange transactions, saying authorities have uncovered more than KRW 600 billion of suspected illegal activity involving hundi schemes and unlawful overseas remittances. The update highlights referrals to prosecutors in two major cases and ongoing investigations into export under-invoicing and related tax evasion. One case involved a small-sum overseas remittance firm that allegedly sent about KRW 400 billion abroad, including proceeds from illegal online gambling sites, by issuing multiple virtual accounts that allowed third-party deposits and otherwise operating outside the permitted scope of its business. The firm was referred to prosecutors on suspicion of unregistered foreign exchange business. A second case involved about KRW 200 billion of export proceeds for used cars and parts that foreign traders allegedly paid in virtual assets to an underground remittance broker, who sold the assets and transferred KRW, net of fees, to exporters without separate registration or reporting. Authorities are also investigating recipient firms in that case, as well as another case in which scrap exporters allegedly understated export prices to around one eighth of actual levels, underreported revenue, and brought back the difference through borrowed-name accounts using hundi methods. The release describes coordinated work by the Financial Supervisory Service, Korea Customs Service, National Tax Service, National Intelligence Service and the Bank of Korea. The Ministry of Economy and Finance and the Bank of Korea are pursuing institutional improvements to strengthen inter-agency foreign exchange information sharing and address investigation bottlenecks, and the task force said it will continue close cooperation after its January 15 launch.

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