The Financial Action Task Force (FATF) has urged members to shut down overseas North Korean bank branches and to sever financial ties with the North, South Korea’s Financial Supervisory Service (FSS) announced on Tuesday.
The FATF, an intergovernmental body combating money laundering and terrorist financing, “strongly demanded” that members blockade North Korea’s financing channels in accordance with UN Security Council (UNSC) Resolution 2270, the FSS added.
“Jurisdictions (members) should take necessary measures to close existing branches, subsidiaries and representative offices of DPRK banks within their territories and terminate correspondent relationships with DPRK banks, where required by relevant UNSC Resolutions,” the FATF said on October 21 in a statement published after the 28th Plenary meeting.
The FATF expressed its concern at North Korea’s illicit activities related to the proliferation of weapons of mass destruction (WMDs) and its financing.
“The FATF further calls on its members and urges all jurisdictions to protect their financial sectors from money laundering, financing of terrorism and WMD proliferation financing (ML/FT/PF) risks emanating from the DPRK,” the organization said in a statement.
In June 2016, it stated the member states should “review the existence of subsidiaries and branches of, and relationships with, DPRK financial institutions in their jurisdiction.”
The South’s Ministry of Foreign Affairs (MOFA) on Tuesday endorsed the crackdown.
“The cooperation of the major countries and international organizations in imposing the financial sanctions can have the effect of kicking out the North from the international financial system,” MOFA spokesperson Cho June-hyuck told reporters.
“This is a key achievement of putting pressure on the North at a global level.”
The European Commission formally identified North Korea as a high-risk third country with strategic deficiencies in anti-money laundering and counter-terrorist financing in mid-July.
The United States also designated North Korea a “primary money laundering concern” under Section 311 of the Patriot Act on June 1.
There are 37 members of the FATF, including two regional organizations: the European Commission and the Gulf Co-operation Council. Members of the nuclear club, such as China, Russia, the U.S., England, France, and India are also part of the organization.
By strengthening its standards, the FATF also plans to create a system allowing members to promptly implement UN sanctions against North Korea.
The FSS pointed out there was only one provision dealing with nuclear proliferation out the FATF’s 40 provisions.
At the same time, the U.S. Congress pushes ahead with a plan to block North Korea’s access to banking infrastructure. The bill, entitled “BANK Act of 2016”, was introduced to the House of Representatives on September 28.
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Featured Image: Laundering Dollar Bills by Images_of_Money on 2011-06-18 10:32:48