Funds Bill Passed

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Funds Bill Passed

The National Assembly on Friday passed two pieces of legislation aimed at curbing the practice of laundering political funds.

But it wasn't easy; a separate meeting of floor leaders had to be convened to iron out differences on the sensitive issues of political funds and tax evasion.

One of the new laws - on regulating and prosecuting the laundering of illegally obtained funds - will sentence those who hide illegal wealth, including slush funds, to a maximum of five years in prison or a maximum fine of 30 million won ($24,000).

The opposition Grand National Party has argued that the law could be used by the ruling camp to crack down on the opposition. It modified its position Friday and agreed to pass the law.

The other law - on reporting and utilizing information on financial transactions - allows the government to establish the Financial Intelligence Unit to collect and analyze information on money laundering. Financial institutions will now have to report suspicious transactions to the unit.

Rep. Cho Soon-hyung of the ruling Millennium Democratic Party, one of the proponents of the laws, explained that whereas the existing laws are about punishing the accumulation of slush funds or the transaction of bribes, the new laws are aimed at preventing people from making profits with illegal money. He added that such an institutional mechanism can essentially eradicate bribes and money laundering.

Another ruling party official emphasized the preventive power of the new laws saying, "Since illegal transactions can be uncovered more easily, only legally obtained political funds will survive."

Meanwhile, some legislators were concerned that the laws might be misused to track down the accounts of politicians or to crack down on opposition parties. They called for establishing measures to counter such misuse.


by Seo Seung-wook

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