South Korea Financial Services Commission’s KoFIU sets out tighter AML reporting and controls to counter transborder crimes

South Korea’s Financial Services Commission (FSC) reported that the Korea Financial Intelligence Unit (KoFIU) convened industry groups to strengthen anti-money laundering (AML) responses to transborder crimes targeting domestic citizens from abroad, setting out measures spanning suspicious transaction reporting, internal controls, and international cooperation. KoFIU plans to work with financial companies to analyse suspicious transaction typologies linked to transborder crime and expects financial companies to report every suspicious transaction considered connected to such crimes, with KoFIU conducting in-depth analysis of suspicious transaction reports (STRs) from banks and nonbanks to support investigation authorities. It also intends to tighten internal controls over firms’ AML activities following a Financial Supervisory Service inspection that identified inadequacies in the management and supervision of AML activities at banks’ overseas branches and subsidiaries, including by requiring more rigorous customer due diligence (CDD) for suspicious customers and prioritising on-site inspections of branches and subsidiaries in Southeast Asia, alongside closer scrutiny of overseas operations in future periodic AML inspections. Separately, KoFIU will strengthen cooperation with foreign financial intelligence units to facilitate information sharing and will continue seeking regulatory improvements to respond more effectively to transborder crimes.