[2020 National Audit] Over 2 Million Reports of 'Suspicious' Financial Transactions Including Money Laundering in 3 Years

Status of Suspicious Transaction Reports (STR) by Year

[Asia Economy Reporter Park Sun-mi] The number of reports on suspicious financial transactions, such as money laundering or terrorist financing, has exceeded 2 million in the past three years.

According to data received by Song Jae-ho, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, from the Financial Services Commission, the number of Suspicious Transaction Reports (STR) over the three years from 2018 to the first half of this year reached 2,241,450. In 2018, there were 972,320 reports, about 926,950 last year, and 342,180 in the first half of this year. Although the numbers have been decreasing annually, the situation remains persistent.

Suspicious financial transactions refer to illegal financial activities such as illicit assets, money laundering, and financing of public threats, as defined under the "Act on Reporting and Using Specified Financial Transaction Information." Financial institutions are required to report such suspicious transactions to the Financial Intelligence Unit under the Financial Services Commission.

By sector, the highest number of suspicious transaction reports over the three years was from banking transactions, totaling 1,731,760 cases. This was followed by other financial sectors such as savings banks and mutual finance with approximately 464,500 cases, securities companies with 25,720 cases, and insurance companies with 19,460 cases. There were also a significant number of high-value suspicious transactions reported. Suspicious transactions ranging from 1 billion to less than 5 billion KRW amounted to about 56,400 cases. Suspicious transactions exceeding 5 billion KRW totaled 7,940 cases.

Meanwhile, the Financial Intelligence Unit provided transaction information to law enforcement agencies such as the prosecution, National Tax Service, and Customs Service for specific criminal investigations, totaling 289,740 cases over the past five years. The National Tax Service received the most information, with 223,140 cases, accounting for 77% of all information provided during this period. This was followed by the police with 42,260 cases, the Customs Service with 15,390 cases, and the prosecution with 8,249 cases.

Assemblyman Song Jae-ho stated, “Money laundering and illegal asset accumulation harm the ecosystem of our financial market,” and pointed out, “Since such illegal suspicious transactions are reported at almost consistent levels every year, unlawful practices are widespread.” He added, “Even a single financial accident or fraudulent act can cause harm to many people, so financial authorities must make greater efforts to detect fraudulent transactions actively and severely punish those responsible.”