South Korea tightens restrictions on financial transactions with entities owned by terrorists

In South Korea, corporations directly or indirectly owned or controlled by individuals involved in terrorism or the proliferation of weapons of mass destruction (WMD) are designated as "subject to restrictions on financial transactions, etc." and financial transactions and disposal of property rights are restricted.
On the 14th, the Financial Services Commission of Korea announced a bill to restrict the freezing of funds for the purpose of threatening the public and for the proliferation of weapons of mass destruction, which includes expanding the scope of the freezing of assets of those related to terrorism.
The Financial Services Commission announced that a bill to amend the Act on the Prohibition of Terrorist Financing (Prohibition of Terrorist Financing) was approved by the Cabinet.
Previously, it was possible to restrict transactions only with funds and assets owned directly or indirectly by terrorist-related persons.
- Corporations that the Financial Services Commission has designated as terrorist-related persons are also subject to restrictions on financial transactions, etc. Furthermore, even if a corporation is not designated by the Financial Services Commission, if it is owned or controlled by such a person, financial transactions and assets may be restricted.
This is expected to increase the effectiveness of the Anti-Terrorist Financing Act, which prohibits fundraising activities related to terrorism and the proliferation of weapons of mass destruction.
It is expected that complying with the international standards of the Financial Action Task Force (FATF) will also have a positive impact on international confidence in the domestic financial system.
The proposed amendments are expected to be published in January and will come into effect one year after publication.
"We plan to revise subordinate laws before the law comes into effect and guide financial institutions to restrict financial transactions between terrorist-related individuals and corporations they own or control in accordance with the revised system," the official said.
He said.