North Korea Reclassified as 'High-Risk Country' for Money Laundering and Terrorist Financing; Iran and Myanmar Also on Blacklist

The Financial Action Task Force (FATF) has reclassified North Korea as a "high-risk country" for money laundering and terrorist financing. As a result, North Korea has now been categorized as a high-risk jurisdiction for 16 consecutive years since 2011.
The Financial Intelligence Unit (FIU) under the Financial Services Commission announced on the 18th that this decision was made at the 5th plenary meeting of the 34th FATF, held in Mexico City from the 9th to the 13th.
Established in 1989, FATF is an international body dedicated to anti-money laundering (AML) and countering the financing of terrorism (CFT). It is composed of 40 members, including 38 countries and 2 international organizations.
After assessing how each country implements international standards, FATF reclassified North Korea, Iran, and Myanmar as high-risk jurisdictions (blacklist) with serious deficiencies that require countermeasures.
North Korea and Iran were placed in the category of jurisdictions subject to countermeasures, while Myanmar retained its status as a jurisdiction subject to enhanced due diligence. Financial institutions must apply strengthened verification procedures when conducting transactions with entities in these countries.
At the same plenary, FATF also adopted reports on cyber fraud and virtual assets. The reports call on countries to support responsible technological innovation while using risk-mitigation tools to respond to evolving threats.
A separate report on virtual asset projects was also adopted. FATF analyzed how criminals exploit regulatory and supervisory gaps and inconsistencies, and it proposed ways for national authorities to respond.
In addition, FATF adopted a standalone report analyzing new risks that may arise when stablecoins are transferred through peer-to-peer (P2P) transactions. Stablecoins are virtual assets designed to track the value of legal tender such as the U.S. dollar, and their relatively low volatility has led to growing use in payments and remittances. FATF warned that when such stablecoins are transferred directly between individuals, it can become difficult to trace the flow of funds. It also pointed out that supervisory blind spots may emerge when transactions are conducted through unregistered virtual asset service providers located overseas.

zoom@fnnews.com Lee Jumi Reporter