FATF tells members to cut ties with North’s banks

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FATF tells members to cut ties with North’s banks

A Paris-based inter-government body combating money laundering agreed to have its member states terminate correspondent relationships with North Korean banks.

The Financial Action Task Force (FATF) announced Monday that it has decided to strengthen financial sanctions on North Korea.

The agency expressed deep concern about the North’s proliferation of weapons of mass destructions and illegal financial activities to produce them.

“Jurisdictions should take the necessary measures to close existing branches, subsidiaries and representative offices of DPRK banks within their territories and terminate correspondent relationships with DPRK branches, where required by relevant United National Security Council Resolutions [2270],” the FATF said.

Previously, the international body asked its member states to review whether they have any financial institutions doing businesses with North Korea.

Now it is asking them to end such relationships completely.

“The agency has serious concerns with the threat posed by DPRK’s illicit activities related to the proliferation of WMDs and its financing,” the FATF also said. In a previous statement in June, the FATF said it was “concerned” about such threats.

There are 37 member states in the FATF, including South Korea, the United States, China and Japan, and 28 international institutions, including the International Monetary Fund and World Bank.

The revised public statement on North Korea was passed by unanimous consent at a recent meeting in Paris.

According to the Financial Services Commission (FSC), Korea agreed to launch a trilateral money laundering council with China and Japan at the FATF’s meeting. The FSC said the three countries will regularly have meetings to set up mutual guidelines to deal with money laundering and illegal financial activities for WMD production in Asia.

The FATF will also come up with a new action plan for North Korea by February, and the FSC said it will include ways to expand financial sanctions to prevent the proliferation of WMDs.

The FATF was established in 1989 as a task force to implement financial actions set by the United Nation. Korea became a member in October 2009.

BY KIM YOUNG-NAM [kim.youngnam@joongang.co.kr]
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