Policy
Suspicious Transaction Report (STR) is one of the core measures to fight money laundering and terrorist financing. Financial institutions and casinos are required to file STR when they have reasonable grounds, based on their expertise and subjective judgment, to suspect that the funds that they have received are criminal proceeds or that the customer is engaged in money laundering or terrorist financing.
Financial institutions and casinos are required to report to the KoFIU without delay when they have "reasonable grounds" to suspect that the funds they received in relation to a financial transaction are illegal assets, or that the customer is engaged in money laundering or financing for offences of public intimidation. They are also required to report to the KoFIU when they have reported to a law enforcement agency funds that they have come to know are criminal proceeds or transaction that they have come to know is involved in money laundering.
Failure to do so can result in sanctions, such as disciplinary action against employees at financial institutions and administrative fines for financial institutions themselves, all of which are implemented by the Korea Financial Intelligence Unit.
If, based on his/her expertise, experience, and the usual transaction profile of a customer, a front desk teller suspects that a transaction or a movement of funds is related to money laundering or to terrorist financing, he/she will report it to the reporting officer in his or her organization. The reporting officer will review what was reported by the front desk teller and, if there are reasonable grounds for ML/TF suspicion, he/she will report the transaction using a standard STR form, which is part of the Financial Transaction Report and Supervision Regulation. An STR must include the name of the reporting entity, the ground for suspicion, information about the customer, a description of the transaction, and the list of data kept in relation to the reported transaction. The STR can be filed on-line, in hard copy, or as an electronic file contained on a disk. If a transaction must be reported urgently, it can be reported by fax or telephone, and supplemented afterward.
The KoFIU will conduct comprehensive analysis of all the STR it receives based on the information contained in the STR, and on additional information that it obtains, such as foreign exchange transactions data, credit information, and information provided by foreign FIUs, etc. If it finds reasonable grounds to suspect that the reported transaction is related to money laundering or terrorist financing, it will pass on the STR to an appropriate law enforcement agency. The appropriate law enforcement agencies for STR dissemination include the Public Prosecutor's Office, the National Police Agency, the National Tax Service, the Korea Customs Service, the Financial Services Commission, and the National Intelligence Service. The law enforcement agencies will conduct further investigation into the case and take appropriate law enforcement actions, as needed.