[Exclusive] Woori Bank's Strict Foreign Exchange Measures: "On-Site Verification Mandatory for First Transactions"

Woori Bank, 'Foreign Exchange Business Precautions and Improvements'
Even Large Corporations Must Comply with On-Site Visits for First Transactions
Foreign Exchange Documents Stored Digitally Instead of Paper
Branch Managers Also Urged to Practice "Jeongdo (Right Path)" Business

[Asia Economy Reporter Song Seung-seop] Woori Bank, which has been struggling with a suspicious foreign exchange remittance controversy, has announced stringent countermeasures. From now on, companies conducting import-export transactions with Woori Bank for the first time must comply with an on-site visit by a bank employee. This is to preemptively block ghost companies disguised as legitimate businesses. To ensure thorough compliance with regulations, a foreign exchange team has been newly established, and branch managers have also been urged to "practice righteous (正道) business operations."

According to the financial sector on the 2nd, Woori Bank recently distributed a document titled ‘Guidelines and Improvements for Foreign Exchange Business Related to Financial Supervisory Service Inspections’ to all branches. Woori Bank presented five key inspection points for detecting suspicious cases and complying with foreign exchange laws: document verification obligations, document retention obligations, approval processes, post-management obligations for overseas investments, and establishment of a culture of righteous foreign exchange business operations.

The official notice was issued after the Financial Supervisory Service ordered a full investigation into abnormal foreign exchange remittance transactions at domestic foreign exchange banks. Woori Bank detected abnormal foreign exchange transactions at the end of June and reported them to financial authorities. Shinhan Bank also found abnormal transactions, with a total of 4.1 trillion KRW flowing out to overseas corporations from just these two banks.

Woori Bank’s countermeasure focuses on strengthening verification procedures in the foreign exchange sector. From now on, any company conducting import-export transactions with Woori Bank for the first time will be subject to an on-site visit without exception. The size of the company’s capital is no longer a factor. Even large corporations that appear sound are not exempt.

This means that the bank employee will directly verify with their own eyes whether the company wishing to remit foreign exchange is a legitimate corporation with actual sales and capital, rather than relying solely on documents. Among the companies involved in the recent abnormal foreign exchange transactions, some existed only on paper. In reality, many had empty registered offices, minimal sales, and very small capital.

Woori Bank: "Branch Managers, Practice Righteous Business by Complying with Foreign Exchange Laws"

Woori Bank also plans to promote computerization efforts. This is to store foreign exchange documents (payment applications, supporting documents, receipt confirmations, etc.) currently kept on paper in digital form. Introducing computerized storage instead of the current method of filing in safes for five years will facilitate future post-verification and incident response. To this end, the bank plans to implement a method of scanning and saving documents as files within the second half of this year.

Under the Foreign Exchange Group, a Foreign Exchange Regulation Management Team has been newly established under the Foreign Exchange Business Department, and a Foreign Exchange Monitoring Team has been created within the Foreign Exchange Operations Center. Woori Bank notified its employees, stating, “We plan to provide convenience and actively support internal controls at branches through computerized operations and process improvements based on headquarters-led operation manuals,” and “The Foreign Exchange Group will actively support inquiries and difficulties from the field with the establishment of these teams.”

The bank also reiterated the existing regulation that customers who remit foreign exchange for overseas investments must submit a ‘Foreign Currency Securities (Bond) Acquisition Report’ within six months. This is to verify whether the foreign exchange was remitted for genuine investment purposes. Failure to properly submit the report constitutes a violation of the Foreign Exchange Transactions Act. The guidelines also include instructions to send a ‘dunning letter’ to customers if the post-management details are not properly reported.

Additionally, the bank mentioned that remittances cannot exceed the amounts stated in the documents, and that it is necessary to verify whether the remittance recipient matches the contractual counterparty. It also included a requirement that the foreign exchange remittance document manager must double-check various statements during daily closing operations.

The message was not only for branch employees but also directed at frontline branch managers. Woori Bank urged, “Branch managers are requested to take the lead in practicing righteous business operations by verifying genuine customers and complying with foreign exchange-related laws.”