Press Releases - Financial Services Commission

Press Releases

Period: start
~
end

1month 3month Reset

Requirement

Mar 04, 2022

Government Makes Available KRW2 Trillion Business Lending Support amid Ukraine Crisis

The FSC announced that the government has decided to make available KRW2 trillion in emergency lending support for Korean businesses hit by the ongoing Ukraine crisis during a taskforce meeting held on March 4. The emergency lending support program for SMEs and middle market enterprises will be in the form of liquidity provision of KRW2 trillion in total and maturity extension on existing loans. The Korea Development Bank (KRW800 billion), Industrial Bank of Korea (KRW700 billion) and Export-Import Bank of Korea (KRW500 billion) will each make new business loans available with preferential lending rates ranging from 40 to 100 basis points depending on lenders and their programs. In addition, a special loan forbearance will be provided for one year on existing loans and guarantees issued by state-backed financial institutions. Eligible entities include (a) businesses that have set up a branch office or a factory in Ukraine or Russia (the conflict area) and (b) exporters and importers that have transaction records to and from the conflict area between January 2021 and now or are expecting such transactions and (c) suppliers and subcontractors linked to the aforementioned entities. The emergency business lending support is available from March 4, 2022. The government will continue to closely monitor situation in Ukraine and be prepared for any ripple effects on the Korean economy. As the conflict situation in Ukraine is unfolding rapidly, the authorities will closely check the scale of damages and impact on various sectors and consider increasing the level of assistance and expanding the eligibility of support when deemed necessary. * Please refer to the attached PDF for details.
Attachment 1
Mar 03, 2022

FSC Holds Meeting on Promoting Further Growth of Financial MyData Services

FSC Chairman Koh Seungbeom held a meeting with financial MyData service providers, market experts and other relevant institutions on March 3 to discuss ways to promote further growth of the financial MyData industry. During the meeting, participants discussed diverse issues ranging from creating a fairer market place for service providers to ensuring consumers right to choose to strengthening measures for financial data security to making changes to the current regulatory framework. The following is a summary of Chairman Kohs keynote address. Chairmans remarks Since the first launch of the API-based MyData services in the financial sector about two months ago,public use of financial MyData services has become widespread with more than 12.5 billion cases of data transfer performed by 39 service providers (as of Feb. 21, 2022) and some 18.4 million individuals signing up for financial MyData services in aggregate terms. (Significance) In a society characterized as hyperconnectivity, hyperconvergence and hyperindividualism where barriers are crumbling down between diverse sectors and industries and different technologies and industries are being linked together, data is often considered as an essential facility. In a data-driven economy, financial MyData service was introduced for the first time in the world with an aim of guaranteeing data privacy rights of financial consumers and of enabling an integrated search of personal financial data scattered across all financial sectors. The API-based financial MyData services brought about many benefits. First, MyData services allow data subjects to use their own data according to their individual needs and make the use of private banking services easily accessible to ordinary consumers. Second, MyData services enable users to find and manage their financial data more quickly and safely. Third, MyData services provide a more level playing field for anyone with innovative business ideas. Competition and innovation in the finan
Attachment 1
Mar 02, 2022

FSC Changes Rules to Promote Overseas Business Expansion of Financial Institutions

The FSC approved a set of regulatory revisions that will help facilitate financial institutions overseas business operation and investment activities at the 4th regular meeting held on March 2. The measures are aimed at promoting financial institutions overseas business expansion by easing some of the reporting and filing duties when investing overseas through a foreign direct investment (FDI) or a branch office. Key Revisions a) FDIs made through offshore funds in the amount of up to USD20 million annually will be exempted from the advance reporting requirement. Previously, FDIs through foreign funds were subject to the advance reporting requirement regardless of the investment amount. This rule will be changed to allow ex post factor reporting within one month for FDIs of USD20 million or less. b) Financial companies investing in equity shares of foreign funds (10 percent or more) will no longer be required to file a report whenever their shareholding status changes due to changes in investments made by other shareholders. Financial companies will be exempted from reporting any change in their ownership status after making initial investment when there is no change to be reported in the actual amount of their investment. c) Some of the ordinary business operations by offshore branch offices, such as real estate and stock trading and loan transactions lasting longer than a year, will no longer be subject to the advance reporting requirement. The revised rule will allow financial companies to report these activities afterwards within one month from such events taking place. The revised rules will become effective from March 3, 2022. * Please refer to the attached PDF for details.
Attachment 1
Mar 02, 2022

KoFIU Unveils 1st Comprehensive Survey Result on Domestic Virtual Asset Market

The Korea Financial Intelligence Unit (KoFIU) has conducted its first comprehensive survey on 29 virtual asset service providers to have better understanding of the market based on the statistical data provided by individual business operators. Overview As of the end of 2021, the total market capitalization of the virtual asset market in Korea stood at KRW55.2 trillion with the average daily transaction volume amounting to KRW11.3 trillion. As of the end of December 2021, a total of 29 virtual asset service providers (4 KRW-based exchange platforms, 20 coin-only exchange platforms and 5 crypto wallet or depository service providers) were given an approval to operate their business according to the Act on Reporting and Using Specified Financial Transaction Information.Among them, the 5 wallet or depository service providers have been excluded from this survey as they were found to be at an early stage of business operation, thus offering no statistically significant data to the survey. The following are key findings from the survey which include key statistical data about the market size, number of virtual assets being traded, user characteristics, etc. Key Findings I. Virtual asset exchange platforms (Trade volume) In the second half of 2021, the total transaction amount at 24 virtual asset exchanges amounted to KRW2.073 quadrillion with the average daily transaction amount of KRW11.3 trillion. At the end of December 2021, the total market capitalization of virtual assets being traded by 24 crypto exchanges stood that KRW55.2 trillion. The KRW-based exchange markets average daily trading amountwas KRW10.7 trillion (or about 95%) whereas that for the coin exchange market was about KRW0.6 trillion (5%). (Transaction fee) The average transaction fee being charged at a virtual asset exchange was 0.17 percent, which is relatively high in comparison to stock trading fees. Depending on individual platforms, the transaction fee rate ranged from a minimum of 0.05 percent to
Attachment 1
Feb 25, 2022

Authorities Hold Meeting to Check Financial Market Conditions in wake of Ukraine Crisis

FSC Chairman Koh Seungbeom convened a meeting with officials from the FSS and Korea Center for International Finance on the morning of February 25 to check financial market conditions amid heightened uncertainties surrounding the deteriorating conflict situation in Ukraine. Chairman Koh said that market uncertainties have grown with stock markets at home and abroad reacting to rapidly changing situation in Ukraine. As it is possible that the Ukraine crisis may go on for a long time, Chairman Koh stressed the importance of timely detection of any ripple effects on the financial market and swift response especially with the looming tapering move around the world. In this regard, Chairman Koh urged officials to keep in close contact with overseas offices to ensure a real time exchange and sharing of information. Moreover, Chairman Koh stated that the authorities will closely look into the scale of damages and financial situations of Korean companies being affected by the Ukraine crisis and work to make available emergency financial assistance program of up to KRW2 trillion(subject to change depending on situations)to help support their financing needs when it becomes necessary. * Please refer to the attached PDF for details.
Attachment 1
Feb 24, 2022

Authorities Introduce Guidelines for Developing Senior Friendly Mobile Bank Applications

The FSC and the FSS along with the banking industry introduced a set of guidelines that will help make mobile bank applications more senior friendly amid a rapid transition to digital finance and a rise in the number of the elderly using mobile bank applications.The guidelines contain thirteen key principles categorized into three issue areas as shown below. I. Senior user mode accessibility a) Provide a senior user mode to increase usability by the elderly b) Minimize steps for arriving at the senior user mode c) Allow users to freely choose the senior user mode d) Minimize altering key functions and keep consistency and continuity II. User convenience a) Make the structure and design consistent to boost user convenience b) Provide easy-to-understand contents c) Provide key functions that are most frequently used by the elderly d) Allow elderly users to easily understand the progress of their services e) Provide sufficient time and explanation to elderly users at each stage f) Refrain from providing too much information at once III. Other issues a) Provide learning contents to facilitate use by the elderly b) Set up safeguards to prevent financial frauds targeting elderly users c) Make continuous efforts to bring about improvements to the senior user mode Expectation Schedule As the guidelines have been prepared after a sufficient review and discussions within the banking industry, it is expected that practical improvements will be made to the mobile bank applications. Following the guidelines, banks are expected to introduce updated versions of their mobile applications by the first half of 2023. The authorities plan to introduce the same level of guidelines in other financial sectors after taking feedback from banks. The guidelines will also be provided to financial education providers to be used as educational material for the elderly digital finance users. * Please refer to the attached PDF for details.
Attachment 1
Feb 23, 2022

FSC Chairman Holds Meeting to Discuss Ways to Improve Deposit Insurance Scheme

FSC Chairman Koh Seungbeom held a meeting with the president of the Korea Deposit Insurance Corporation (KDIC), financial industry group leaders and other market experts on February 23 and discussed ways to make improvements to the deposit insurance system. The following is a summary of Chairman Kohs remarks. Chairmans Remarks (Importance of Deposit Insurance for Financial Stability) The deposit insurance system has been a mainstay of our recovery efforts in times of financial crisis situations. Starting from this year, in order to minimize systemic market disorder that may result from large financial companies turning insolvent, the KDIC is overseeing their resolution plans for approval from the FSC when systemically important financial institutions (SIFIs) are unable to recover on their own.Recently, financial imbalances have become more problematic around the world and there are growing concerns about potential risks turning into a reality. As such, the role of the KDIC is becoming ever more integral in providing financial safety net. Timely detection of market risks, prevention of financial companies going bankrupt and stronger cooperation and coordination with relevant institutions should take place. As systemic risk may find us before we find it, the KDIC should have support measures ready to be prepared for market instability. (Need to Make Improvements to Deposit Insurance System) The deposit insurance system needs to be updated and improved in line with the changes taking place in the financial industry. Rapid growth of the nonbanking sector and the convergence between finance and information technology have led to the emergence of new financial services. The expanded availability of short-term money market instruments, such as repurchase agreement (repo) and asset-backed commercial paper (ABCP), and the emergence of electronic prepaid payment mechanisms may weaken the crisis response function of the traditional deposit insurance institution. In addition, d
Attachment 1
Feb 22, 2022

11th Korea-Denmark Green Growth Alliance Meeting Discusses Role of Finance for Carbon Neutrality

The FSC announced that the 11th Korea-Denmark Green Growth Alliance Meeting was held in Seoul on February 22 where government officials, financial institutions and other private sector participants from both countries discussed the role of finance in seeking carbon neutrality.Todays meeting was the first such event between the two countries since the bilateral summit held on the sideline of the 2021 P4G Seoul Summit. FSC Chairman Koh Seungbeom delivered welcoming remarks at the beginning of the event emphasizing the critical role of financial sectors in responding to the climate crisis. In this regard, Chairman Koh said that the Korean government plans to continue to expand support for carbon neutrality and gradually mandate disclosure of sustainable management reports. In order to ensure stability in the financial system and preemptively tackle climate risks that may arise from the process of seeking carbon neutrality, Chairman Koh stated that the Korean authorities are planning to introduce climate stress tests and will help establish a climate risk management system in the financial sector. The meeting consisted of four discussion sessions including (a) how governments can unlock private investments in climate solutions, (b) financial potential in de-carbonizing the hard-to-decarbonize sectors, (c) attracting investors to clean energy projects (lessons learned) and (d) ways to contribute to carbon neutrality in the financial sector. As it was the first time the two countries held a meeting after their relationship was elevated last year to a comprehensive green strategic partnership, it is expected that Koreas bilateral cooperation with Denmark will be strengthened in the climate change and environment sectors. * Please refer to the attached PDF for details.
Attachment 1
Feb 22, 2022

Improvements to IPO Lockup Rules to be Introduced

The FSC announced a plan to improve the IPO lockup rules which will require a minimum six-month lockup period on all insider holdings (company board members, etc.) and introduce a staggered lockup contracts system. Key Details The IPO lockup rules under the listing regulation of the Korea Exchange are aimed at prohibiting sale of newly listed companies stocks owned by company insiders for a certain period of time (usually six months) to protect investors from price volatility that may arise from a large scale stock sellout and to promote fair price discovery. Under the current rules, the IPO lockup rules apply only to the shares acquired through stock options prior to IPO but not the shares acquired via exercising stock options after company has gone public. As such, the applicability of the lockup rules depends on the timing of exercising ones stock options (either pre-IPO or post-IPO) and there is a regulatory loophole for those intentionally choosing to acquire company stocks after IPO. To help close this loophole, the IPO lockup rules will be changed to apply to all insider holdings regardless of the timing of exercising their stock options. Moreover, most newly listed firms have shown tendency of requiring a six-month lockup period on all insider holdings that are subject to the lockup rules even though the six-month holding period stipulated by the current regulation is the minimum requirement. This raises concern over the possibility of concentration of sell orders immediately after the end of the six-month period which may have impact on price volatility. To help address this problem, the authorities will work to introduce a staggered lockup contracts system through which newly listed companies may require different lockup periods (initial six months plus up to two years) on different stakeholders (CEO, board members, etc.) on a voluntary basis. Information about stakeholders subject to the lockup rules, their shareholding status and lockup periods will be d
Attachment 1
Feb 21, 2022

FSC Chairman Discusses Ways to Make Further Improvements to Accounting Industry

FSC Chairman Koh Seungbeom held a meeting with the heads of major accounting firms and other industry representatives virtually on February 21 and discussed the effects of the 2017 accounting reforms and the governments efforts to further improve the accounting and auditing practices. The following is a summary of Chairman Kohs opening remarks. Since the 2017 revision of the Act on External Audit of Stock Companies,the accounting industry in Korea has continued to grow with the number of certified public accountants and accounting firms rising some 20 percent and the sectors sales earnings also growing about 46 percent compared to 2017. Despite this quantitative growth shown by the accounting industry, there are still concerns about the issue of accounting transparency where inappropriate actions from a few listed firms may erode public trust built over the years. Moreover, some of the SMEs may be undergoing hardships in catching up with the accounting reforms, and the audit quality of certain accounting firms has been found to be below market expectations. Against this backdrop, the government will make efforts this year to promote qualitative growth of the accounting industry. First, the authorities will actively seek improvements to the audit quality of accounting firms through performance-based incentives and inducements for self-improvements. Second, the authorities will strengthen efforts to ensure seamless enforcement of the best practice guideline on the designation of external auditor by facilitating communication between companies and auditors and preventing the possibility of conflicts. Third, the authorities will work to ease auditing burdens of SMEs in the process of applying the current accounting and auditing standards. Fourth, the authorities will work to promote the environmental, social and governance (ESG) standards as sustainable business management is a key issue handled by the accounting sector. With the International Sustainability Standards B
Attachment 1
Feb 16, 2022

Korea Accounting Standards Board Reappointed as Member of Accounting Standards Advisory Forum

The FSC announced that the Korea Accounting Standards Board (KASB) has been reappointed by the International Financial Reporting Standards (IFRS) Foundation on February 15 to serve as a member of the Accounting Standards Advisory Forum (ASAF). Koreas membership to the ASAF from March 2022 to December 2024 follows its first three-year appointment between 2018 and 2021. The KASBs membership to the ASAF enables Korea to effectively convey opinions of domestic stakeholders to the International Accounting Standards Board (IASB), which is an independent accounting standard-setting body of the IFRS Foundation. The KASBs reappointment to the ASAF membership underscores a proven record of its contribution to the IFRS Foundation as well as its expertise in the process of establishing and revising international accounting standards. The government and the KASB will continue to effectively convey opinions of various domestic stakeholders to help promote Koreas position in setting international accounting standards. * Please refer to the attached PDF for details.
Attachment 1
Feb 15, 2022

Government Appoints KIC Chief as Honorary Ambassador for Financial Cooperation

The government announced the appointment of Jin Seung-ho, chairman and CEO of the Korea Investment Corporation, as the countrys honorary ambassador for financial cooperation on February 15. The honorary ambassador for financial cooperation will help promote Koreas financial markets to foreign investors and work to draw overseas financial companies to establish businesses here in Korea according to the 5th three-year plan for Koreas financial hub policy announced by the FSC in May 2020. Mr. Jin Seung-ho is an expert in international finance and has previously served in key positions at the Ministry of Economy and Finance. The new honorary ambassadors one-year term will begin after an official approval from the President. * Please refer to the attached PDF for details.
Attachment 1
Feb 10, 2022

Household Loans, January 2022

The outstanding balance of household loans fell KRW0.7 trillion across all financial sectors at the end of January 2022 (up 6.3% y-o-y),showing a continued slowdown in the growth rate. The household loan balance dropped KRW0.4 trillion in the banking sector and KRW0.3 trillion in the nonbanking sector. All financial sectors (y-o-y): +9.2% (Sep 2021) +8.6% (Oct) +7.7% (Nov) +7.1% (Dec) +6.3% (Jan 2022) By type, mortgage loans rose KRW2.9 trillion in January, rising slightly more than the previous month (up KRW2.6 trillion) but staying at a stable level. Other types of loans including credit loans fell KRW3.6 trillion, showing a steady decline from the previous month (down KRW2.4 trillion), due to seasonal factors and the expanded application of the debt service ratio (DSR) rules on individual borrowers. The financial authorities will continue to work for stable management of the household debt growth in 2022 while seeking measures to improve the qualitative structure of household debt. * Please refer to the attached PDF for details.
Attachment 1
Feb 07, 2022

New Installment Savings Plan for Young Adults to be Available from February 21

The FSC announced the availability of new installment savings plan for young adults which will be available at local banks from February 21 with incentives of tax exemption on interest income and savings subsidy of up to KRW360,000. The new savings scheme for young adults is intended to help encourage young adults to accumulate financial assets by offering them benefits. Young adults in the age of 19 to 34 years old at the time of applying and whose annual income for 2021 or 2020stood at or below KRW36 million can sign up for the new installment savings plan. The two-year term savings plan has a monthly installment limit of KRW500,000 and offers tax exemption on interest income and savings subsidy of up to KRW360,000upon maturity. Between February 9 and 18, prospective applicants may check their eligibility via mobile applications of local banks. From February 21, those who have previewed their eligibility status through a mobile application can sign up for the installment savings plan using a streamlined mobile signup process. * Please refer to the attached PDF for details.
Attachment 1
Jan 27, 2022

FSC Holds Meeting to Review Financial Risks in Domestic and Overseas Markets

The FSC held a meeting with the relevant institutions to review financial market risks on January 27 chaired by Secretary General Lee Se-Hoon. At the meeting, Secretary General Lee stated that even though the Feds recent announcement was largely in line with market expectations, U.S. stocks fell and the stock market volatility is continuing in domestic markets as the Fed Chairmans press announcement was taken to be hawkish. Secretary General Lee said that financial market volatility appears to be unavoidable for some time due to a number of different factorssuch as the accelerated pace of tightening in the U.S., spread of the omicron variant, slowdown in Chinas economic growth and the Russia-Ukraine conflictand that it is necessary to closely monitor markets to prevent market anxiety from spreading excessively when exports and growth indicators are standing strong. The meeting also discussed potential impact of market volatilities on the household and corporate debt situations as well as on financial companies and looked into measures to minimize negative effects. Amid recent volatility in equity markets, the FSC has raised the market monitoring level to caution on January 25. The authorities will continue to closely monitor financial market conditions at home and abroad to check potential risk factors. * Please refer to the attached PDF for details.
Attachment 1
Jan 25, 2022

Financial Development Review Committee Holds Meeting on 2022 Market Conditions and Policy Tasks

The FSC announced that the Financial Development Review Committee held a general meeting on January 25 to discuss recent market conditions and key policy measures for this year. The 2022 FDRC is made up of 49 financial market experts of which 21 of them are newly appointed. The FSC will regularly seek policy advice from the FDRC as the authorities draw up and implement financial policies for 2022. The following is a summary of Chairman Kohs keynote address. Chairmans Remarks (2021 Financial Policy) 2021 was the year that required acute balancing acts in many respects. First, the household debt management plan introduced in October 2021 focused on enhancing control over the total household debt amount. It has helped to bring down the speed of the debt growth to a steady level. Meanwhile, the COVID-19 financial support programs through the KRW175 trillion-plus support packages, loan maturity extensions and payment deferrals for small businesses have provided reliefs to the lower income and vulnerable groups. Amid a rapid transition to digitalization in the financial industry, the FSC has promoted innovation and competition in the financial industry while ensuring stability in the markets and guaranteeing consumer protections. (2022 Economic and Financial Market Condition) The financial industry is facing uncertainty and volatility from the onset of 2022. While the economy is on a recovery track, there are threats to the economy such as the spread of the omicron variant and Chinas growth slowdown. Deepening financial imbalances around the world have exposed potential risk factors. The earlier-than-expected global tapering moves will lead to the end of the easy liquidity environment. The financial landscape is rapidly changing as more convergence and collaboration take place with big tech and fintech companies. As such, there will be growing demand for more public trust and fairness in the financial system. (2022 Financial Policy Tasks) The FSCs policy initiatives for 2
Attachment 1
Jan 19, 2022

FSC Holds Kick-off Meeting for Making Indemnity Health Insurance More Sustainable

The FSC held a kick-off meeting of the public-private joint consultative body for making improvements to the indemnity health insurance system on January 19. The consultative body made up of officials from the relevant government and regulatory agencies, research institution and industry groups was established to refine the complementary function of indemnity health insurance offered by the private sector and guarantee its sustainability alongside the state-operated National Health Insurance (NHI) program. At the kick-off meeting, officials discussed the following issues and areas where improvements can be made. a) Sustainability issue related to the insurance premium hikes and cost burdens on the insured, excessive medical treatments and nonessential hospital visits, etc. b) Convenience issue related to the complicated offline insurance claims process c) Complementariness issue concerning the relationship with the state-operated NHI system particularly in the area of out-of-pocket expenses (copayments) d) Transition issue as the indemnity health insurance 4.0 became available from July 2021 Starting from the end of January, the FSC will set up working level groups with industry officials and experts to discuss and look into detailed areas where improvements can be made to the indemnity health insurance system. The FSC will continue to closely coordinate with the relevant ministries to help reduce costs for insurance and medical services. * Please refer to the attache PDF for details.
Attachment 1
Jan 19, 2022

FSC Chairman Holds Meeting to Review Debt Risks of Small Merchants

FSC Chairman Koh Seungbeom held a meeting with officials from the Bank of Korea, Financial Supervisory Service, research institutions and local banks on January 19 to check business conditions of small-scale businesses and their debt risks as the loan maturity extension and payment deferment program is set to expire at the end of March 2022.The following is a summary of Chairman Kohs keynote address. Chairmans Remarks Self-employed small businesses make up about 87 percent of all businesses and 21 percent of economically active population in Korea. However, these businesses have suffered greatly in the past two years amid the COVID-19 pandemic crisis. The financial sector has provided them with loan maturity extensions and deferment on interest payments and it has helped to ease small merchants payment burdens on some KRW272.2 trillion worth of business loans between April 2020 and November 2021. In addition, the small merchant lending support programs made available low interest rate busines loans to those facing liquidity problems. From the end of this month, adjustments made to the card processing fee rates will also help ease small merchants fee burdens.The prolonged pandemic situation, however, has raised concerns about a spread of potential risks to the financial system. For the past two years, the speed of debt growth for the self-employed has exceeded that of the household sector. An accumulation of bad debts can threaten stability in the financial system. In particular, delays in business recovery coupled with interest rate hikes can lead to a credit crunch and pose greater problems for small businesses. The loan maturity extensions and payment deferments for small merchants and SMEs are set to expire at the end of March 2022. Although it is difficult to predict events two months ahead, it is certain that there will be contradictory policy tasks between ensuring the risk handling capacity of small businesses and strengthening risk management in the financia
Attachment 1
Jan 18, 2022

Government Makes Available Low Interest Rate Lending Support for Small Merchants

The FSC and the Ministry of SMEs and Startups announced the availability of KRW8.6 trillion worth of low interest rate business loans for small merchants whose business operations have been hit by the prolonged COVID-19 social distancing measures. The lending support which will be available from January 24 aims to provide relief to some 860,000 small scale businesses that have been hit by the pandemic distancing measures and received assistance through the governments loss recovery fund from the end of last year. The total size of the low interest rate lending support program is KRW10 trillion funded by the governments fiscal expenditure. Small scale businesses that have experiences setbacks from the prolonged COVID-19 social distancing measures can apply to receive up to KRW10 million each at an interest rate between 1 percent and 1.5 percent based on their credit standing starting from January 24. Applicants with low credit scores can apply for loans through the Small Enterprise and Market Service (SEMAS). Those with mid-range credit scores between 745 and 919 can apply for loans with special guarantees from local credit guarantee foundations. Small merchants with credit scores of 920 or above can apply through local banks. Application will be available via mobile apps from local banks to help speed up the lending process. * Please refer to the attached PDF for details.
Attachment 1
Jan 17, 2022

KoFIU to Effectively Inspect and Supervise AML Compliance Duties

The Korea Financial Intelligence Unit announced its inspection and supervision plan for 2022 as the volume of digital financial transactions increases and new types of money laundering threats emerge. Since 2019, the number and the types of business entities that are subject to inspection by the KoFIU under the Act on Reporting and Using Specified Financial Transaction Information have grown to include electronic financial service providers, private loan businesses, peer-to-peer lending companies and virtual asset service providers. With more sophisticated types of money laundering threats emerging due to a rise in digital financial transactions and advancement in criminal activities, the KoFIU will work to allocate and use resources to achieve the utmost efficiency in the inspection and supervision of anti-money laundering (AML) duties. (New entities and vulnerable sectors) The authorities will carry out site inspections on 124 electronic financial service providers and 60 private loan businesses with focus on the entities that are deemed to have relatively low levels of internal control standards vis--vis their risks for money laundering threats. The inspection will specifically check their compliance with the customer due diligence (CDD) rule, internal control system and the appropriateness of their STR (suspicious transaction reports) and CTR (cash transaction reports). The KoFIU will also resume inspections on nine casino businesses after a temporary halt on inspection due to the pandemic-induced business closures. The KoFIU and the Financial Supervisory Service will strengthen inspection on the issues that are considered as common risks by closely sharing information and coordinating on risk-based responses. (Commissioned inspection agencies) The authorities will carry out site inspections on the commissioned inspection agencies for AML activities, such as mutual finance companies, Korea Post and Korea Customs Service to enhance their professional capacity and
Attachment 1