Regional bank says that it’s ready for inspection
This is the third in a series looking at whether Korean lenders are properly dealing with anti-money laundering issues in time with the visit to Korea of the Financial Action Task Force this month. _ ED.
In Korea, financial companies are obliged to report cash transactions over 20 million won ($17,000) to the Financial Intelligence Unit (FIU), the country’s money laundering monitoring authority.
When legal entities open new accounts, they also have to check many things under the FIU guidelines.
Banks hardly fail to comply with the anti-money laundering (AML) regulations mentioned above. Yet, there are always some “bad apples.”
Employees of Kwangju Bank, a regional lender based in Korea’s sixth-largest city about 280 kilometers south of Seoul, violated the regulations in multiple cases over the past few years.
As a result, the Financial Supervisory Service, the country’s financial watchdog, fined the Kwangju-based lender last month for its negligence in AML compliance.
“Our officials made some mistakes. We have streamlined our system so that such violations will not take place again,” a Kwangju Bank spokesman said.
Yet, the troubles of Kwangju Bank are feared to continue as Financial Action Task Force (FATF) officials are set to visit Korea this month to check the nation’s AML policies and practices.
The FATF, which was founded in 1989 to combat money laundering, examines its member countries every year and this year is Korea’s turn. A total of 39 members comprise the inter-governmental organization.
The Paris-based entity is expected to visit a few financial institutions for on-the-spot investigations. The targets are not decided yet, but Kwangju Bank is likely to be on the list along with NH Bank, observers point out.
NH Bank, otherwise known as Nonghyup, faced an $11 million fine in New York two years ago related to AML compliance.
“We don’t know yet whether or not the FATF officials will inspect us. If so, we will put forth our best efforts to show that we now keep the AML guidelines,” the spokesman said.
“If the FATF officials take issue with our practices or systems, we will sincerely accept them.”