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By Lee Kyung-min
North Korea will continue to remain under the "tightest" targeted sanctions over possible money-laundering and terrorism-financing risks, a global standard-setting body said Sunday.
According to the Financial Services Commission (FSC), the Financial Action Task Force (FATF) called on its members Oct. 18 (local time) to apply effective counter-measures and sanctions in accordance with applicable United Nations Security Council resolutions.
Founded in 1989, the FATF is an intergovernmental organization established on the initiative of the G7 to develop policies to combat money laundering.
It identifies jurisdictions that have strategic deficiencies posing a risk to the international financial system and encourages greater compliance with international anti-money-laundering standards.
"The FATF urges all jurisdictions to apply effective countermeasures, and targeted financial sanctions to protect their financial sectors from money laundering, financing of terrorism and weapons of mass destruction (WMD) proliferation financing risks emanating from the Democratic People's Republic of Korea (DPRK)," the FATF said. North Korea is officially referred to as the DPRK.
The decision is the continuation of the previous call made on its members and jurisdictions on Feb. 25, 2011, to advise their financial institutions to strengthen the monitoring of business relationships and transactions with North Korea including the regime's companies and financial institutions.
At the time, the global body said jurisdictions should take necessary measures to close existing branches, subsidiaries and representative offices of North Korean banks within their territories and terminate correspondent relationships with them.
It also expressed concerns about North Korea's failure to address the serious threats posed to the integrity of the international financial system.
"The FATF has serious concerns with the threat posed by DPRK's illicit activities related to the WMDs and its financing," it said.
"The FATF urges the DPRK to immediately and meaningfully address its anti-money laundering and combating of financial terrorism deficiencies."
Meanwhile, the FATF also expressed concerns about "stable coins" which it said could potentially cause a shift in the virtual asset ecosystem and pose risks of money laundering and terrorist financing.
Stable coins are cryptocurrencies whose values are pegged to fiat currencies.
"Emerging assets such as so-called global stable coins, and their proposed global networks and platforms ... could have serious consequences for our ability to detect and prevent money laundering and terrorist financing," it said.
