Political Funds Must Be Included in Anti-Money Laundering Bill

Home > Opinion > Editorials

print dictionary print

Political Funds Must Be Included in Anti-Money Laundering Bill

The government has decided to push for legislation to prevent money laundering. Because the international flow of money will be made much easier next year with the liberalization of foreign exchange policies, the enactment of such a law cannot be delayed any longer.

According to a recent survey conducted by the Korea Institute for International Economic Policy, money laundered in Korea in 1998 is estimated to have been between 48 trillion won ($43 billion) and 147 trillion won ($132 billion). The scale of money laundering since then, evidently, is increasing. For the health of the Korean economy, measures are urgently needed to stanch these illegal money flows.

If the law requiring bank employees to report suspicious financial transactions is implemented, it will help to deter organized crime, tax evasion, bribes, and illegal wiring of money to foreign nations. Among Organization for Economic Cooperation and Development (OECD) nations, Korea is practically the only one lacking a legal structure to prevent illegal currency flows. Korea is in danger of becoming a paradise for money launderers; the legislation of preventative laws is overdue.

Now that the Ministry of Finance and Economy (MOFE) is pushing for such measures, it is hard to understand why the MOFE suggests that political funds be excluded from the application of the proposed bill. It is true that the main target for an anti-money laundering law is cash related to illegal trade, narcotics, and corruption. But the MOFE seems to fear that it will be impossible to launch the law if political funds are included. There is the unfortunate precedent of a futile attempt to enact a law against the laundering of political funds in 1997, following the Hanbo Group’s slush fund scandal. Lawmakers simply refused to process that law.

It does not make sense to exempt political corruption money when the political sphere is known as a "hotbed of corruption" for having been linked to all sorts of scandalous practices. Although we have the Political Fund Act, it is far from adequate to ensure the transparent collection and management of political cash. Excluding political funds from the bill gives the impression that politicians enjoy a unique set of rights.

The exclusion of political funds infringes upon the principle of legal equity. If politicians oppose the inclusion of political funds, it is tantamount to admitting unethical practices. If they have nothing to be ashamed of, there is no reason for them to oppose the law. If the heads of political parties voluntarily propose to include political funds in the bill, they will certainly be commended by the general public.

It is undeniable that messy illegal and corrupt practices exist in every part of Korean society. The flow of illegal funds constituted a major factor in the 1997 financial crisis that resulted in bailouts from the International Monetary Fund. This is a problem that needs an urgent solution. A law to deter money laundering that includes political funds must be introduced quickly, for effecting the transparency of cash flows is an international imperative. For this law to be effective, it must contain a systematic policy that requires banks to report suspicious transactions, along with a guarantee that the identities of informers be kept secret.

by Jeffrey Jones

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)