KoFIU, A Watchman of Black Money

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KOFIU01Did you know that the Financial Services Commission(FSC) has several affiliates to oversee and administer specific supervision functions of money and market? These separate agencies, pursuing a same goal as the FSC, are usually more effective and efficient in performing specialized tasks. Today, we will look through one of these affiliates, the Korea Financial Intelligence Unit, and its effort to battle money laundering and financing of terrorism. Especially after tragic 9/11 attack in 2001, The need for a modern Anti Money Laundering(AML) and countering the Financing of Terrorism(CLT) strategies have arisen internationally. Think about thick wads of cash stashed in an empty box of apples or pears, making their way across borders undeclared and undetected. A large sum of “black money” moving from one location to another not only is a crime itself, but also leads to serious criminal activities. Solely preventing these proceeds can significantly help decreasing drug trafficking, organized crime, corruption and furthermore such a tragic international terror as 9/11.

As mentioned above, CLT and AML are the two great enemies of international society and world financial system. Therefore, many countries adopt to affiliate supervising agencies under their government finance bodies in order to effectively and efficiently put a check on these crimes. In the United States, The Financial Crimes Enforcement Network (FinCEN), a bureau of the United States Department of the Treasury, takes this important role; In Australia, Australian Transaction Reports and Analysis Centre (AUSTRAC); In Canada, Financial Transactions and Reports Analysis Centre of Canada (FINTRAC); In Japan, Japan Financial Intelligence Center (JAFIC); Finally in Korea, The Korea Financial Intelligence Unit(KoFIU).

The Korea Financial Intelligence Unit was established in Novermber 11, 2001, after enactment of act on reporting and use of certain financial transaction information. The KoFIU analyzes the suspicious transaction reports and relays information to law enforcement agencies once the transaction is deemed to have connection with money laundering or proceeds of crimes. KoFIU requires detailed reporting by financial institutions when risks were to be identified. The KoFIU then scrutinizes illegal proceeds and transactions upon arrival of these reports. If considered to have reasonable ground for international terrorism, the information will be sent to foreign financial intelligence units in order to stop international crimes.

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Like this, the Korea Financial Intelligence Unit takes very crucial role in battling financing of terrorism and money laundering. The goal of the Financial Services Commission is to promote sound credit system and to protect customers of financial services. As an affiliate of the FSC, KoFIU also closely maintains integrity of financial system and faithfully serves the goal of the FSC.

Still know more about KoFIU? Visit http://www.kofiu.go.kr/ for more information.

By Hyungwoo Kim(whwhw1@gmail.com)

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