Korea's AML/CFT Legal and Regulatory Framework
This domain tests how well you know the Korean AML/CFT statutory architecture, which regulator does what, and how reporting duties flow from the law into institutional procedures. The core statute is the Act on Reporting and Using Specified Financial Transaction Information, often called the Specific Financial Information Act, supported by its Enforcement Decree and supervisory rules. The Financial Services Commission sets policy, the Korea Financial Intelligence Unit receives and analyzes STRs and CTRs, and the Financial Supervisory Service examines financial institutions. The Act on Prohibition of Financing of Terrorism and Proliferation of Weapons of Mass Destruction supplies targeted financial sanctions duties, while customs and immigration rules govern cross-border cash.
Core rules
- Covered institutions include banks, securities firms, insurers, asset managers, savings banks, credit unions, and registered virtual asset service providers.
- Core duties include customer due diligence, beneficial ownership identification, STRs, high-value cash reports, recordkeeping, and confidentiality.
- Supervisory sanctions can be administrative as well as criminal; individuals and institutions can both face consequences.
Worked example
A bank employee receives a customer request to explain why a transfer was delayed after an internal report. The employee should not confirm or deny that an STR was filed. Confidentiality and anti-tipping-off rules prohibit disclosure; the correct response is to handle the customer query through normal channels and escalate it to the AML compliance officer.
Traps
Do not confuse the KoFIU's intelligence role with the FSS's examination role. Do not assume an STR requires a completed crime or a fixed won threshold. Do not treat the SFIA and the terrorism-financing/WMD act as interchangeable.