Policy
FATF recommendations are international standards that exert greatest influence in the global AML/CFT regime.
FATF recommendations suggest guideline to comprehensive areas, such as legal system, financial system and regulation, international cooperation, ect., to enable an effective response to AML/CFT offense found in each nations. The recommendation is not a legally-binding multilateral agreement, but it is a binding international standard when conducting mutual evaluations (ME) on its members, and designating nations that are required to make improvements in their AML efforts. FATF Recommendation was most recently amended in February 2012, serving as a standard for the 4th round procedure which started from 2014.
FATF Recommendation
| Area | Contents |
|---|---|
| Legal System |
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| Measures applied to FIs and DNFBPs |
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| Law Enforcement |
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| International Cooperation |
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| 1990 | Established 40 recommendations to counter laundering money from drug trafficking |
|---|---|
| 1996 | Expanded the range of matters beyond drug money laundering |
| 2001 |
Agreed on eight special recommendations at a special meeting on counter-terrorism financing - Immediate ratification and implementation of relevant UN Conventions, terror-related STR, regulation on transfer transaction, EDD conducted on wire transfer, etc. |
| 2003 |
Proclaimed amended recommendations in accordance with advanced AML methodologies and changes in international environment after the 9/11 terrorist attack. - Expanded punishment on ML offenses and reinforced FIs AML/CFT obligations |
| 2004 | Added one more provision to special recommendation regarding cross-border transportation of currency (cash couriers) |
| 2012 | Enacted 40 recommendations that includes special recommendations and recommendations for WMD proliferation prohibition |
The UN Convention for the Suppression of the Financing of Terrorism consists of Preamble, 28 Articles, and Annex. The convention is an urgent call to review legal frameworks for criminalization of ML activity, confiscation of terror-related criminal proceeds, international cooperation, etc. and also to overhaul financial system regarding customer identification, STR adoption, relevant financial record-keeping, etc.
Korea ratified the convention in February 2004, and laid the foundation for domestic implementation by enacting ‘Act on Prohibition against the Financing of Terrorism’ on 21th December 2007.
UN International Convention for the Suppression of the Financing of Terrorism(1999)
As a convention that stands as the global standard in drug trafficking prevention, UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances has been ratified by more than 140 nations, including Korea. Korea enacted ‘Act on Special Cases Concerning the Prevention of Illegal Trafficking in Narcotics, Etc.’ in 1996 and ratified the above convention in December 1998.
The convention covers comprehensive provisions regarding criminal punishment from ML criminalization to confiscation, extradition, and legal coordination, etc.
| ML Criminalization | Each Party shall adopt measures as may be necessary to establish as criminal offenses when a person intentionally commits conversion or transfer of property knowing that such property is derived from any drug related offense for the purpose of concealing or disguising the illicit origin of the property; or a person commits concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of property. |
|---|---|
| Confiscation |
Each Party shall adopt measures as may be necessary to enable confiscation of: a) Proceeds derived from narcotics-related offenses, or property the value of which corresponds to that of such proceeds; b) Narcotic drugs and psychotropic substances, materials and equipment or other instrumentalities used in or intended for use in any manner in drug-related offenses |
| International Cooperation | Narcotic crimes shall be deemed to be included as an extraditable offense in any extradition treaty existing between Parties. The Parties shall afford one another, the widest measure of mutual legal assistance in investigations, prosecutions and judicial proceedings in relation to narcotic criminal offenses. |
UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1998)