Account Tracking Is Dropped From Money-Laundering Bill

The three major political parties hammered out on Tuesday a compromise version of a bill to control money-laundering. They agreed to set up a Financial Intelligence Unit that will look into money-laundering cases, but without authority to track financial accounts.

Instead the unit, which will fall under the Ministry of Finance and Economy, will refer account-tracing powers to prosecutors in criminal and drug-smuggling cases ; to the National Tax Service in tax evasion cases; and to the National Election Commission in cases of illegal political funds.

Civic groups blasted the agreement as a "compromised" bill.

Rep. Lee Sang-soo of the ruling Millennium Democratic Party, Rep. Chung Chang-wha of the opposition Grand National Party and Rep. Lee One-ku of the United Liberal Democrats congregated with members of the committees on legislation and judiciary, and on finance and economy to complete the details of the law.

Lawmakers negotiated to pass two other laws governing trade in financial information and windfall gains.

The money-laundering law does not reflect prior demands by the ruling Millennium Democratic Party that the unit have financial account-tracking powers. The opposition Grand National Party also yielded on its demand that the unit be an independent agency with an obligation to give notice to the parties concerned before beginning any investigation, including the tracing of bank accounts.

The law was drafted by the ruling party to prepare for the second phase of foreign exchange liberalization scheduled for January 2002, and to regulate the flow of illegal funds in and out of the nation. The international community's heightened demand for a more transparent financial sector in the wake of the 1997 financial crisis is another reason for the legislation.

However, the law had also been the focus of intense partisan wrangling as politicians, opposition politicians in particular, pointed out the potential of the law to turn into a government tool to oppress opposition politicians.

The compromise law alleviated these concerns, as the central election commission must give charged politicians a chance for defense.

Both the Finance and Economy Ministry and advocacy groups protested strongly, grumbling that the final law is only a "shadow of the original bill."

by Lee Yang-soo