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AML/CFT Regime

CFT Regime

Implementation of the Act on Prohibition Against the Financing of Terrorism and Proliferation of Weapons of Mass Destruction

The Act on Prohibition Against the Financing of Terrorism and Proliferation of Weapons of Mass Destruction (PFOPIA) is in force. The act is the legal grounds to implement the International Convention for the Suppression of the Financing of Terrorism, which Korea signed and ratified on February 17, 2004 and the UN Security Council resolutions on WMD, etc. The Act prohibits the collection and provision of funds for the purposes of terrorism financing and proliferation of WMD, and it stipulates the designation of restricted persons and approvals for financial transactions.

Criminalization of Terrorist Financing

Any individual who collects, provides, delivers, or keeps funds with the knowledge that such funds are to be used for terrorism will be punished by imprisonment not exceeding 10 years or a fine not exceeding KRW 100 million. The same criminal penalty is applied to any person who encourages or requests the collection, provision, delivery, or keeping of funds or assets with the knowledge that such funds or assets are to be used for terrorism (Article 6 Paragraph 1).

“Funds for terrorism” are defined as any funds or assets collected, provided, delivered, or kept for use in a prescribed list of violent acts committed with the intention to intimidate the public or to interfere with the exercise of power of a national, local, or foreign government (including any foreign local government or international organization established by an international treaty or an international agreement), or to force by intimidation such a government to abstain from acting (Article 2 Paragraph 1).

Designation of Restricted Persons

The Financial Services Commission may designate a natural person, legal person, or a group as a restricted person and publicly announce such designation when it is necessary to prevent financing of terrorism in order to implement international treaties to which Korea is a party or generally accepted international laws, or to contribute to the international efforts to maintain global peace and security (Article 4 Paragraph 1, PFOPIA).

Those persons designated and whose designation has been announced must obtain prior approval from the Financial Services Commission should they intend to conduct financial transactions with financial institutions and the resulting disbursement and receipt of the payment, or transfers, gift movable assets, immovable assets, bonds, or other property or property rights, or conduct other acts of disposal, and transfer of possession thereof or alter the original state. Not obtaining prior approval or falsely or unjustly obtaining the approval may result in imprisonment for not more than three years or a fine not exceeding 30 million won.

Current List of Restricted Persons

On December 22, 2008, the Financial Services Commission designated 974 individuals and organizations including those involved in Taleban and Al Qaeda, also designated in the UN Security Council Resolution 1267, as restricted persons for the first. Today (August 3, 2018), individuals and organizations related to terrorism or proliferation of WMD designated in UNSC Resolutions 1267/1989/2253, 1718, 2231, 1988 have been designated as restricted persons (those persons designated by each committee under the UNSC are automatically designated as restricted persons in Korea by law); and 684 individuals and organizations in addition to the above are designated as restricted persons.

※ List of Restricted Persons

  • - Financial Services Commission Public Announcement No. 2019-1 (January 16, 2019)
  • - From “1. Restricted Persons” in the Financial Services Commission Public Announcement No. 2019-1:
    A. Persons designated by Security Council Committee constituted by the UN Security Council or UNSC Resolutions 1267(1999). 1989(2011) and 2253(2015),
    1718(2006), 2231(2015), 1988(2011); pursuant to the UN Security Council Resolutions 1267(1999). 1989(2011) and 2253(2015), 1718(2006), 2231(2015), 1988(2011).
  • - ISIL (Da'esh) & Al-Qaida Sanctions Committee UNSC Resolutions 1267(1999)•1989(2011) and 2253(2015)
  • - 1718 Sanctions Committee (DPRK) UNSC Resolution 1718(2006)
  • - Iran Sanction Committee UNSC Resolution 2231(2015)
  • - 1988 Sanctions Committee UNSC Resolution 1988(2011)

Cancellation of the Designation of Restricted Persons

A person who has an objection against the designation of a restricted person or against the decision to reject financial transactions by the Financial Services Commission may raise an objection to the FSC within 30 days from the date he/she is notified thereof.

1. Restricted persons designated pursuant to a UNSC Resolution shall submit an objection using a format the UNSC Resolution determines.

  • - ISIL (Da'esh) & Al-Qaida Sanctions Committee
  • - 1718 Sanctions Committee (DPRK)
  • - Iran Sanction Committee
  • - 1988 Sanctions Committee

2. Restricted persons designated by the FSC shall submit an objection using the format in Appendix 3 of the Regulations on the Management of
Prohibition against the Financing of Terrorism andProliferation of Weapons of Mass Destruction.