The Financial Supervisory Service recently shared examples of suspicious money-laundering transaction cases exploited for financial crimes that harm livelihoods with the banking sector and called for upgrading early detection systems for suspicious transactions. It judged that money-laundering methods to hide crime revenue are spreading to free installment savings accounts, foreign-currency accounts, and corporate debit cards.
The Financial Supervisory Service (FSS) said on the 1st that it held a meeting at the Bankers Association building in Jung-gu, Seoul, chaired by Vice Governor for Livelihood Finance Kim Hyeong-won, with compliance officers and reporting officers from 20 domestic banks. At the meeting, the Financial Supervisory Service (FSS) shared recent new types of suspicious money-laundering financial transactions and cases of inadequate anti-money laundering (AML) work repeatedly pointed out in inspections.
The Financial Supervisory Service (FSS) noted that scams exploiting free installment savings accounts in secondhand transactions are increasing. Some banks allow free installment savings accounts to be opened without restrictions. Crime rings exploit this to split scam proceeds across multiple accounts or to repeatedly open and close accounts to evade banks' suspicious transaction monitoring. The Financial Supervisory Service (FSS) plans to guide banks to place some limits on opening and closing free installment savings accounts and to build effective AML monitoring systems, including customer due diligence and suspicious transaction reporting.
Cases of money laundering using corporate debit cards to buy gift certificates were also shared. Perpetrators buy large amounts of gift certificates with corporate debit cards that have no spending limits and then resell them to vendors for cash. The Financial Supervisory Service (FSS) said that in this process, criminal funds could be disguised as normal corporate expense outlays or gift certificate transactions, and it instructed banks to reflect the related transaction type in their suspicious transaction detection criteria.
A money-laundering method that routes funds through foreign-currency accounts was also flagged as a problem. After receiving funds stolen through schemes such as voice phishing into won-denominated accounts, perpetrators disguise the purpose as, for example, overseas stock transactions, move the money through other banks' foreign-currency accounts and securities firms' entrusted accounts, then exchange it back into won for cash. The Financial Supervisory Service (FSS) said that on the 1st of last month it reviewed the appropriateness of suspicious transaction reports related to foreign-currency accounts and asked some inadequate banks to improve their systems.
The Financial Supervisory Service (FSS) also presented major deficiencies identified in bank AML inspections. The Financial Supervisory Service (FSS) plans to push for upgrading AML systems to prevent livelihood-infringing financial crimes in cooperation with the banking sector.
Vice Governor Kim said, "Not only are scams such as voice phishing targeting the general public on the rise recently, but gambling and drug crimes targeting teenagers are also increasing," and added, "Because the public's economic losses and even trust in the financial system can be threatened, the banking sector needs to make more robust efforts to upgrade anti-money laundering systems."