RESOURCE MATERIAL SERIES No. 58

CURRENT SITUATION AND COUNTERMEASURES AGAINSTMONEY LAUNDERING:
FOCUSING ON THE EXPERIENCE AND LEGAL POLICIES OF
THE REPUBLIC OF KOREA
Chae, Jung-Sug *I. INTRODUCTION
Since late in the 20th century, people haveenjoyed the benefits of industrializationand globalization that the development oftransportation and communication
technology has brought to the world. At
the same time, this economic and socialchange has also brought about changes tothe form, technique, and scope of crime.
The consequences are that criminals arecrossing borders with an ease unknown in
the past and are expanding the area of theiractivity, and that they are becoming evermore intelligent and specialized.
The expansion of the influence oforganized crime has reached such pointthat it poses great threat to the safety ofinternational community. According to therecent statistics, crime groups arecommitting trafficking in drugs and illicit
firearms, and counterfeiting of currency
and credit card, which involve dirty money
totaling 3000 billion US dollars. Theinternational community has come torecognize that corruption serve as the soil
for the growth of organized crime. And theanti-corruption round initiated with thisrecognition has become an eloquentinternational movement.

important purpose and motivation isfinancial profits. Therefore, in order tocombat organized crime and corruption
effectively, we need to deprive offenders of
their financial gains. To attack themfinancially is to cut off the Achilles tendonof organized crime groups.1 But, criminals
are cutting off the link between crimes andcriminally-derived money, by laundering
dirty money taking advantage of all
methods and mechanisms imaginable.
We call the series of transactions turning
dirty money into clean money, money
laundering. In the following, I’ll first look
into what money laundering is, and thecurrent situation of money laundering in
the international community.
II. DEFINITION OF MONEY
LAUNDERING AND THE CURRENTSITUATION
A. Definition of Money Laundering
Money laundering is the process bywhich one conceals the existence, the illegal
source, or illegal application of income, andthen disguises that income to appear
legitimate. 2 In other words, money

1

It is difficult to give a uniform
explanation about the purpose of organizedcrime and corruption, but the most* Senior Prosecutor, Seoul High Prosecutors’ Office,Republic of Korea

352

R. Peter, Money Laundering and Its Current Status
in Switzerland: New Disincentive for Financial
Tourism, 11 Northwestern Journal of International
Law & Business 104(1990), p. 108
2 The President’s Commission on Organized Crime,
Interim Report to the President and Attorney
General, The Cash Connection: Organized Crime,
Financial Institutions and Money, 1984. 10.

117TH INTERNATIONAL SEMINAR
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laundering refer to a series of transactionstransforming criminally-derived funds into
legitimate funds through financial
institutions, for the purpose of concealing
the illicit nature and origin of the property
from government authorities.
Money laundering negatively impacts
economic growth and society at large. It
distorts economic order, shields criminal
activities, which are associated with crime
proceeds, from exposure, and corrupts
public officials and our society on the whole.
B. Characteristics of Money
Laundering
Money laundering is performed
systematically and secretly, making it
difficult to identify exactly how muchmoney is laundered and what methods are
employed. And, it is difficult to criminalize,
regulate or crackdown on money
laundering with the traditional legal notion
and system.
Criminologically, money laundering can
be characterized as borderless economic
crime or organized crime. Recently, withthe rapid development of internet andcommunication technology, crime proceeds
can be moved from one country to anotherin a matter of hours, by using wiretransfers. These factors make theregulation of money laundering moredifficult.
C. Current Situation of Money
Laundering Worldwide
As pointed out, the exact amounts oflaundered money are so difficult to assess.
However, we can give a rough estimate, bysynthesizing various informations.
According to Financial Action Task Force(FATF), it is estimated that the amountsof money laundered annually worldwide
from the illicit drug trade alone range
between 300 billion US dollars and 500
billion US dollars in 1998. Since thisestimate only regards the amountassociated with exposed drug crimes, theamounts of illicit money actually launderedworldwide could be five or six times larger.
There have been a number of money
laundering cases worldwide. The most
famous one is “The Pizza Connection” case.
And, one of the most well known money
laundering cases that are not associatedwith drug crime is “Bank of Credit andCommerce International (BCCI)” case.
These two cases revealed that money
laundering is performed comprehensively,
systematically, professionally, diversely3
and without the check of national borders.
In “The Pizza Connection” case, we could
see how various crime groups in different
parts of the world formed a network
associated with major banks of the UnitedStates and Switzerland, and see thelinkage between poppy fields of Southeast
Asia and the Pizza parlours of the UnitedStates. In “BCCI” case, it was revealed that
financial experts were deeply involved inmoney laundering, taking advantage of
their expert knowledge, discrepancy
between financial systems of individual
countries, and financial secrecy protection
system. From this case, it was reaffirmed
how difficult it is to investigate andregulate money laundering.

3 The Canadian police authorities, after examining
150 cases of money laundering, concluded that there
are various methods used to launder money fromvery simple ones to elaborate ones, and that thelimit of these methods are only set by the capacityof criminal group’s imagination. (Margaret E.
Beare & Stephen Schneider, Trading of Illicit
Funds: Money Laundering in Canada, Working
Paper No.1990-5, Ministry of the Solicitor General,
p.XI)

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RESOURCE MATERIAL SERIES No. 58
III. CURRENT SITUATION OF
MONEY LAUNDERINGREGULATION
A. International Efforts
In early 1980’s, the international
community formed a consensus that a
priority should be given to the regulationof money laundering. The efforts of theinternational community were exerted
through the United Nations and otherinternational organizations, and onregional and national level.
1. Before the Conclusion of the 1988
Vienna Convention
It was the Committee of Ministers of theCouncil of Europe4 of June 27, 1980 thatmoney laundering problem was first
discussed on international dimension. The
Committee of Ministers adopted therecommendation (R 80/10) regardingM e a s u r e s A g a i n s t t h e Tr a n s f e r o f
Safekeeping of Funds of Criminal Origin,urging European countries to take interestin the regulation of money laundering.
After that, the United States and theUnited Kingdom established domestic laws
making money laundering criminal
offense. The United Nations adopted theUnited Nations Convention Against Illicit
Traffic in Narcotic Drugs and Psychotropic
Substances on December 19, 1988. As
Spain ratified the Convention on August
13, 1990, becoming the 20 th country to
ratify it, the Convention came into force
on November 11, 1990.5
The Convention provides the conversion
and transfer of crime proceeds and theconcealment and disguise of the nature ororigin of crime proceeds as criminal offense
4

It is a European inter-governmental organization,with 26 member states. It has adopted many
conventions in the area of international criminal
justice.

354

in Article 3, Paragraph 1(b). And, theConvention provides obtaining, possessing
or using of crime proceeds with knowledge
as criminal offense in Article 3 Paragraph1(c). The Convention requires that State
Parties must implement Article3
Paragraph 1(b) and that regarding Article
3 Paragraph (c), State Parties should takemeasures to criminalize it under thedomestic law to the extent that it complies
with the principles of the Constitution andthe basic concepts of the legal system. This
Convention has a historic meaning in thatit criminalizes money laundering activity.
I will go on to the international efforts after
this Convention.
2. After the Conclusion of the 1988
Convention
On November 18, 1990, the Council ofEurope adopted the Convention on
Laundering, Search and Confiscation of theProceeds from Crime. This Convention
aimed at strengthening international
cooperation in investigation, search andseizure of proceeds derived from major
crimes (felony) such as drug crimes andterrorism which are known to yield large
profits. As the finance market of EC(European Community) countries took thecourse for unification, efforts to countermoney laundering through the authorityof EC arose in Europe. And as a part ofthis effort, EC enacted the Council
Directive on Prevention of the Use of the
Financial System for the Purpose of Money
Laundering on June 10, 1991.
The prevention of money laundering was
also discussed at the summits of G7
countries. At the Toronto summit in 1988,
G7 declared the necessity of regulating
money laundering.6 At the Arshur summit
in 1989, they made a declaration, inviting
5

The Republic of Korea deposited the instrument of
ratification of the Convention on December 28,
1998.

117TH INTERNATIONAL SEMINAR
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all countries to join G7’s cooperative efforts
to combat drug trafficking and laundering
the proceeds7 and resolved to establish the
Financial Action Task Force (FATF).
The FATF was participated by 16
countries and organizations including theG7, the council of European Community
and Sweden, etc. The first report of the
FATF was made on February 2, 1990, andwas released in each participating country
on April 19 of the same year. The report ismade up of three parts, the first part about
the scale and the mechanism of money
laundering, the second part about themeasures made to counter money
laundering, and the third part, including
recommendations.
The forty
recommendations of the third partpresented a comprehensive blueprint for
the international community in preventing
money laundering, having a continuous
influence in the international effort tocounter money laundering.
The FATF went on to enhance its
activities as more countries andorganizations joined it. The forty
recommendations are being modified
continuously. Since OECD functions as thesecretariat of FATF, it has also transformed
into a gathering of expert groups
independent from other internationalorganizations, and has played a very
important role in countering money
laundering.
There have been many efforts onregional level as well. The Organizationof American States (OAS), which had
discussed measures against drug problems,
adopted the Model Regulations Concerning
Laundering Offences Connected to Illicit
Drug Trafficking and Related Offences at
the 11th meeting of Inter-American Drug

Abuse Control Commission (CICAD) on
March 10, 1992. Through this, it wasaffirmed that in order to combat drug crime
which is one of the most formidable
problem in American continent, regulationof the proceeds and instrumentality should
be conducted in parallel. In Asia, the Asia/
Pacific Group on Money Laundering (APG)
was established in February 1997. The
APG works to enhance cooperation in theregion, by conducting studies about theprevention of money laundering in Asia/
Pacific region, and issuing evaluations on
anti-money laundering measures of Asia/
Pacific countries.
On the level of the United Nations, the8 th United Nations Congress on thePrevention of Crime and the Treatment of
Offenders held in Havana, Cuba in Augustand September 1990 adopted “Basic Rules
for the Control and Prevention ofOrganized Crime”. On December 14, 1990,
the General Assembly, through two
Resolutions8, urged states for their actions
to facilitate seizure and confiscation ofcrime proceeds and to develop effective
measures to counter money laundering.
In this atmosphere, the 1 st session ofCommission on Crime Prevention andCriminal Justice (CCPCJ) was held in April
1992 in Vienna. At the 1 st session of
CCPCJ, the participating countries
recognized that the regulation of money
laundering and flow of crime proceeds ismore important than anything to counter
crime and that the CCPCJ should place its
priority on the discussion of strategy tocounter money laundering.9 In July 1992,
the United Nations Economic and Social
Council, accepting the recommendation of
the CCPCJ, set countering money
laundering as the priority of the work of
8

6

Political Declaration, paragraph 16
7 Economic Declaration, paragraph 52

United Nations General Assembly Resolutions 45/
107, 45/123
9 Resolution 1/2

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RESOURCE MATERIAL SERIES No. 58
CCPCJ and the UN Crime Prevention andCriminal Justice Programme for four
consecutive years.10 As a consequence, the
CCPCJ has had uninterrupted discussionof the prevention of money laundering andflow of crime proceeds since the 2nd sessionof Commission in 1993 and made reportsof the result of the discussions, urging thecriminalization and strong regulation ofmoney laundering.
On December 4, 1994, the General
Assembly adopted a Model Treaty on
Mutual Assistance in Criminal Matters. At
that time, the General Assembly also
adopted the Protocol to the Model Treaty
on Mutual Assistance in Criminal Mattersconcerning the Proceeds of Crime, which
provides the framework for theinternational cooperation in theconfiscation and forfeiture of crime
proceeds.
3. Conclusion of the Convention Against
Transnational Organized Crime
In an effort to combat transnationalorganized crime which poses threat to thesafety of the international community, theUnited Nations held the Ministerial
Conference on Organized Transnational
Crime in November 1994 in Naples of Italy.
This conference adopted an international
document entitled the Naples Political
Declaration and Global Action Plan against
Organized Transnational Crime. The
Naples Political Declaration called on the
CCPCJ to collect opinions from individual
governments regarding the content and theeffect of a convention against transnationalorganized crime. The United Nations
General Assembly urged each state party
to promptly implement the Naples Political
Declaration and Global Action Plan.11

In December 1996, the General
Assembly, taking notice of a draft
convention against transnationalorganized crime proposed by Poland, called
upon the CCPCJ to give priority to theconsideration of the finalization of the draft
convention. 12 In December 1997, theGeneral Assembly decided to establish an
open-ended meeting for the intergovernmental expert group for the draft ofa comprehensive international convention
against transnational organized crime.13 In
December 1998, the General Assembly
called for the establishment of the Ad Hoc
Committee to take over the achievement
made regarding the draft convention andto finish the project.14
The Ad Hoc Committee, after having theinformal preparatory meeting in
September 1998 in Buenos Aires, held thefirst session in January 1999. Through ten
sessions of meetings, the Convention
against Transnational Organized Crime
was adopted in September 2000. Amongthe three supplementary protocols being
discussed, the “Protocol to Prevent,
Suppress and Punish Trafficking in
Persons, Especially Women and Children”,
and the “Protocol against the Smugglingof Migrants by Land, Sea and Air” wereapproved at the 11th session held in October
2000. The approval of the Protocol against
the Illicit Manufacturing of and Trafficking
in Firearms, Their Parts and Components
and Ammunition was reserved for morediscussions on some issues which have notbeen agreed on.
At the back of the UN’s positive actions
and achievements, there were regional
conferences and declarations. They are the
Buenos Aires declaration, the Dakar
declaration and the Manila declaration.

10 Resolution 45/107, 45/123

12 Resolution 51/120

11 United Nations General Assembly Resolution of

13 Resolution 52/85

December 23, 1994 49/159

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14 Resolution 53/111

117TH INTERNATIONAL SEMINAR
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The Buenos Aires declaration was adopted
at the regional ministerial workshop ofNovember 1995 which was a follow-up
meeting to the Naples Political Declaration
and Global Action Plan. The Dakar
declaration was adopted at African regional
ministerial workshop held in July 1997 in
Dakar of Senegal. The Manila declaration
was adopted at Asian regional ministerial
workshop regarding transnationalorganized crime and corruption, held inMarch 1998 in Manila, the Philippines.
Since the contents of this Convention arethose that have recently been discussed
and agreed on by the international
community, they include relatively strong
measures to combat money laundering.
Article 6 of the Convention criminalizes awide range of activities related with money
laundering, and requires state parties toinclude all major crimes provided in theConvention as the predicate offense. Thisis a step forward from the 1988 Convention
which provided for the punishment ofmoney laundering only in case it isassociated with drug crimes. Article 7
provides diverse and systematic measures
to regulate money laundering, including
reporting of suspicious transaction. Article
13 also touches upon the efforts to enhanceinternational and regional cooperation
among justice, enforcement and regulation
agencies of state parties, to implement
these measures. Article 12 of theConvention provides confiscation of crime
proceeds, usage of records including bankrecords for the confiscation of crime
proceeds, and power to freeze or seizure
proceeds. Article 13 provides forinternational cooperation for confiscation,
and Article 14 provides for the disposal of
confiscated assets.

4. C o n c l u s i o n o f C o n v e n t i o n o nCombating Bribery of Foreign Public
Officials in International BusinessTransaction
At the outset, money laundering problem
was discussed in association with drug
crimes. The discussion about money
laundering was developed in such directionthat countering money laundering isimportant to counter not only drug crimes
but also organized crimes, especiallytransnational organized crimes. Recently,
the international community perceives thatthe predicate offenses for the regulation ofmoney laundering should not be restricted
to drug crimes and organized crimes, butshould be extended to corruption crimes aswell. Corruption crimes are not a domestic
problem of an individual country. It
undermines fair competition of enterprisesin the global market place, and provides
soil for the growth of transnationalorganized crimes. The international
community has begun its work to combat
corruption.
With this background, OECD finalized
the Convention on Combating Bribery ofForeign Public Officials in International
Business Transaction. This Convention
requires state parties to take legislative
measures to criminally punish the act ofoffering bribes to foreign public officials,
and to give assistance to each other ininvestigation and extradition associatedwith such case. This Convention was
adopted at OECD in November 1997, wassigned by 34 countries in December 1997,
and came into force on February 15, 1999.
In the process of the discussion of thisConvention, there was a consensus ofopinion that prevention of money
laundering and control of crime proceeds
is essential for countering corruption.
Article 7 of the Convention provides thateach state party which has made briberyof its own public official a predicate offense

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RESOURCE MATERIAL SERIES No. 58
for the purpose of the application of its
money laundering legislation shall do soon the same terms for the bribery of aforeign public official, without regard to theplace where the bribery occurred. Article
8 of the Convention provides that stateparty shall take measures regarding themaintenance of books and records,
financial statement disclosures, andaccounting and auditing standards, toprohibit the establishment of off-the-books
accounts, the making of off-the-books orinadequately identified transactions, andshall provide civil, administrative or
criminal penalties.
B. Efforts Made by IndividualCountries
Countries worldwide have devoted
efforts to respond to money laundering
problem voluntarily or as they wereencouraged by the aforementioned
international conventions. They
established domestic laws to make money
laundering criminal offense, to confiscateproceeds associated with money
laundering, and to require financial
institutions to report cash transactions
over a certain sum. This move was led bycommon law countries, at the head of which
was the United States.
The United States enacted and enforced
the Bank Secrecy Act of 197015 as early as
1970. In the same year, the United States
established the Racketeering Influenced
and Corrupt Organizations Act of1970(RICO Act) and the Controlled
Substances Act of 1970, providing
measures to confiscate certain illicit assets
or proceeds. In 1986, the Money
Laundering Act of 198616 was established.

15 Pub.

L. No. 91-508, 401(a), 84 Stat.1114(1970)
L. No.99-570, 1351-1367, 100 Stat. 32073208. This Act is a part of the Anti-Drug Abuse Actof 1986, and is provided in 18 U.S.C. and 33 U.S.C.

16 Pub.

358

In 1986, the United Kingdom
established the Drug Trafficking Offences
Act of 1986, providing for the confiscationof certain illicit proceeds, and criminalizing
money laundering activities. The United
Kingdom is continuing its work tostrengthen related laws. Australia
established the Proceeds of Crime Act in
1987, criminalizing money laundering andproviding for the confiscation of criminallyderived assets. In 1988, Australia enacted
the Cash Transaction Reports Act of 1988.
Civil law countries were slower thancommon law countries in coming up withmeasures to counter money laundering.
Japan ratified the 1988 Vienna Convention
in 1989 and enacted the implementing laws
in 1991, which came into force in 1992.
These implementing laws are “Law
Concerning Special Provisions for the
Narcotics and Psychotropics Control Law,etc. and Other Matters for the Preventionof Activities Encouraging Illicit Conducts
and Other Activities Involving Controlled
Substances through International
Cooperation”(the so-called New Drug Law
or Anti-Drug Special Law) and “Act
Revising Parts of the Hemp Control Act,
the Stimulant Control Act and the Opium
Act”. The New Drug Act criminalizes
money laundering, and provides for theconfiscation and forfeiture of illicit
proceeds, freezing procedure, international
assistance, and reporting of suspicioustransactions. However, this Act, which
punishes money laundering associatedwith only drug-related crimes, could not be
an effective medium to respond toorganized crimes.
With this recognition, Japan established,in 1999, the “Law Concerning the
Punishment of Organized Crime and theControl of the Proceeds of Crime (so called
Anti-Organized Crime Act)”. This Act
provides for stronger punishment oforganized crime, and provides for extended

117TH INTERNATIONAL SEMINAR
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control of money laundering. Under thisAct, the predicate offenses for money
laundering regulation include drug-related
crimes, major crimes (felony) which carrya certain degree of statutory penalty, which
are likely to produce large illicit proceeds,
and include crimes like prostitution andpossession of deadly weapons though they
carry lower statutory penalty. The Act also
provides punishment for the behavior
aimed at managing the business of acorporation by using illicit proceeds derived
from the above predicate offenses, and the
conduct of disguising, concealing andobtaining the proceeds of crime. The Act
also provides measures for the confiscationand forfeiture of the proceeds of crime. The
Act requires banks and other financial
institutions to report to relevant
authorities, suspicious transactions if they
are suspected of being derived from illicit
proceeds. The Act aims at increasing theefficacy of the control of money laundering
by providing mechanisms for international
assistance process regarding confiscationand forfeiture.
In Germany, the discussion of money
laundering problem began in early 1990’s.
In 1992, the offense of money laundering
was newly included in the criminal law.
And an organized crime act called Gesetz
zur Bekämfung des illegalen
Rauschgifthandels und anderer
Erscheinungsformen der Organisierten
Kriminalität (OrgKG, vom 15.7.1992) wasestablished to make money laundering
activities associated with organized crimes
and drug crimes, a criminal offense.
Switzerland was rather late incriminalizing money laundering due to its
long-standing policy of giving strong
protection to bank secrecy. However,
Switzerland underwent a series of major
drug-related cases including the TurkeyLebanon connection case in 1987, and waspressured by the United States and theEuropean Community to take measuresagainst money laundering. In 1990,
Switzerland revised its criminal law tocriminalize money laundering.
In 1987, France provided thepunishment of money laundering activity(blanchiment de capitaux) in its publicsanitation law called le code de la santpublique. Italy had controlled money
laundering activity as a part of the control
of organized crimes, but did not have legal
provisions directly setting out thepunishment of money laundering. Moneylaundering was controlled through the
major crime (felony) prevention law of
1978, but this was an indirect way. After
ratifying the 1988 Vienna Convention, Italyestablished the Act against Mafian
Organized Crime in March 1990, which
provides improved measures againstmoney laundering.
In the past, Hong Kong did not have acentral bank, and a policy controlling theexchange of currency. Besides, Hong Kong
adopted a complete bank secrecy protection
system. For these reasons, Hong Kong wascriticized for providing a financial havenfor the laundering of drug money. In 1989,
however, Hong Kong established the Drug
Trafficking (Recovery of Proceeds)
Ordinance, and has become active incracking down on drug crimes andcontrolling money laundering.
IV. CURRENT STATUS OF MONEY
LAUNDERING IN THE REPUBLIC
OF KOREA
A. The Characteristics of Money
Laundering in the Republic of
Korea
The economic development and themethod of financial transactions in Korea
differ from the West and the early
developed nations, which are societies that
conduct business based on credit.

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RESOURCE MATERIAL SERIES No. 58
Therefore, the investigation authorities
and tax authorities in Korea are faced withcases of money laundering activity that are
different to what foreign authorities face.
In general, foreign investigation
authorities in the West handle moneylaundering cases that involve thesmuggling of drug and weapons. In
contrast, Korean investigation authorities
mostly investigate money-laundering
activities that involve bribery of
government officials and politicians,
embezzlement or breach of trust in the big
companies and public funds, and corrupt
financial dealings. The investigations
revolve around the issues concerning how
the funds were transferred to one accountto another or how the illicit funds werelaundered.
In bribery cases, the people who bribe
the officials are usually corporate
executives, and the source of the illicit
funds is the company’s slush funds. Thus,
the creation of illicit funds is orchestrated
between a company and a financial
institution, which make the investigations
very difficult. Furthermore, the people whoare bribed are mostly politicians or highranking government officials who use theirpower to ensure that the funds aretransferred in great secrecy. This also
hampers the investigation.
Recently, money laundering techniques
have become more sophisticated andoperate on an international scale due toactive economic trade, massive capital
investments from abroad, widespread useof electronic money transfers, international
travel, and the liberalization of the foreignexchange market. The sophisticatedtechniques used by money launderers
aggravate the difficult situation.

360

B. The Real Name Financial
Transaction System and Money
Laundering
Money laundering in Korea is connectedto the enforcement of the Real Name
Financial Transaction System in August
12, 1993. Before the enforcement of theReal Name Financial Transaction System,
most criminals were able to open a bankaccount under an anonymous name anduse that bank account for money
laundering activities. After the money islaundered, the bank account is discarded.
But after the Real Name Financial
Transaction System (hereafter referred toas the “system”) was enforced, criminals
were no longer able to open bank accounts
under anonymous names. Thus, fake bankaccounts were not used for money
laundering activities anymore. But, there
have been instances where criminals wereable to open accounts using the identities
of his or her relatives or co-workers in orderto launder money through these bankaccounts. In other cases, criminals
laundered money by making bank accounts
using forged identities by enlisting the helpof directors or employees who worked atfinancial institutions.
Although this may sound paradoxical,
the investigation authorities have faced
more difficulty in tracking moneylaundering activities due to this system.
Before, most money laundering wascentered on bank accounts registered undera fake name. Now, money laundering hastaken on a new form, where money isdelivered in cash or bank accounts areregistered under the criminal’s relative or
the real identity of an accomplice. Because
these types of transactions are legal anddo not appear as irregular financial
dealings on paper, the money laundering
goes unnoticed and the bank accounts are
more difficult to trace.

117TH INTERNATIONAL SEMINAR
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C. The Size of the Underground
Economy and Illegal Funds in the
Republic of Korea
The size of the underground economy in
Korea is very difficult to measure. No
official government institution has everannounced an official estimate of the sizeof the underground economy. However,
several private research institutions haveattempted to estimate the size of theunderground economy by using several
economic indicators and data.
The Korea Development Institute has
estimated that the underground economy
in Korea accounts for 15% of the nation’s
GNP. 17 This estimate was based on
analyzing annual household spending in
1994. This analysis was conducted after
the enforcement of the Real Name
Financial Transaction System. The Korean
Tax Research Institute and Korea
University’s Economic Research Institutewere contracted by the Korean government
to analyze the size of the undergroundeconomy in March 1995. The twoorganizations estimated that the size of theunderground economy during 1993 wasabout 22% of the nation’s GNP. And the
Korea Development Institute and otherorganizations estimated that the
17 As for the United States, many experts haveestimated that the underground economy in the
United States accounts for 10~15% of the nation’s
GNP. According to the material submitted to theHouse of Representatives Committee on
Appropriations in May 1995, 83% of overall people
voluntarily reported their income taxes, whereas
only 36% of small business owners did so. Evenless, 11 % of small business owners who mainly use
cash transactions (the so-called informal traders)voluntarily report their income taxes. It is also
estimated that the yearly revenue of prostitution
business in the United States amount to 1.2 billion
US dollars. This is more than the trading profits
of Toyota. The underground economy in Italy isestimated to account for 30% of the nation’s GNP.

underground economy was closer to37%~42% of the GNP in 1993. Theseestimates suggest that the size of the
Korean underground economy was
between $56.25 billion18 and $138.75 billion
in 1993.
The Korea Institute for International
Economic Policy said in a recent report thatthe size of the underground economy
accounts for 11%~33% ($39.8 billion ~$121.8 billion) of the nation’s GNP in 1998.
The dollar/won exchange rate on December
31, 1998 was 1 U.S. Dollar per 1207 Korean
Won.
How much money is needed to support
the activities in the underground economyof this size? Since the Real NameTransaction System took effect across thenation on August 12, 1993, every citizen
was required by law to use their real names
for opening a bank account. Between
August 13, 1993 and October 12, 1993, allKorean citizens were given a time period
to transfer their money to real name bankaccounts. Bank accounts opened underfake names were forbidden. Citizens andemployees of financial institutions, who did
not comply with the laws were fined andpenalized. Thus, it was natural that
irregularities and misuse of bank accounts
surfaced.
Table 1 shows that 31,000 bank accounts
which were opened under fake names andhad deposits that totaled $53.8 million
remained without transference to realname accounts, while 26 million bankaccounts which were opened under real
18 The exchange rate was 794 won to the dollar as ofJanuary 3, 1993 and 808 won as of December 31,
1993. For the sake of convenience in calculation,
the rate of 800 won to the dollar is applied to therest of the text if not specified otherwise. <cf. $1:
788 won as of 1994. 12. 31., $1:744 won as of 1995.
12. 31.$1:844won as of 1996.12.31>

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RESOURCE MATERIAL SERIES No. 58
names and had total deposits of $11.38
billion also remained without
reconfirmation by real name in June 1995.
The owners of the 31,000 bank accounts
opened under fake names were neveridentified and the money remains in thebanks. There were also strong suspicion
that the money transferred from fake namebank accounts to real name bank accounts

was illicit money. Thus, experts estimatedthat the amount of the illicit funds range
from $11.43 billion(C+E) to $19.37
billion(B+C+D+E). This estimate does notinclude the amount of cash that the citizens
possess in their homes. Taking into
consideration that Koreans yet prefer tostore cash in their homes instead of saving
it in the bank, the amount of illicit money
is probably far larger than the official
estimate.

Table 1 Current Status of The Real Name Financial Transaction Act(Dated on June 30, 1995)(Unit: US dollars)
Real NameBank Accounts

Fake NameBank Accounts

Total amount in bankaccounts
Real Name Bank
Accounts
Bank Accounts opened
under another person’s
nameBank Accounts without
an owner
Total amount in bankaccounts
Transferred to Real
Name Bank AccountBank accounts that were
not transferred

V. EFFORTS TO COMBAT MONEY
LAUNDERING IN THE REPUBLIC
OF KOREAA.

General Outlook
Until recently, the Republic of Korea did
not possess any direct restrictions thatpunished criminals engaging in money
laundering activities. However, the needfor measures to identify money-laundering
activity came to light during the processof investigating financial crimes, bribery,drugs, and organized crime. These
investigations involved the tracking downof illicit funds.

362

506.8 billion (175 millionbank accounts)
491 billion (146 millionbank accounts)
4.38 billion (2,969,000 bankaccounts)
11.38 billion (26 millionbank accounts)
3.54 billion (631,000 bankaccounts)
3.49 billion (600,000 bankaccounts)
53.8 million (31,000 bankaccounts)

In other words, until recently, proof ofmoney laundering was used as court
evidence to convict the criminal of a felony.
The money-laundering evidence was not
used to confiscate the proceeds of crimes
and the criminal assets or to impose a fine.
Therefore, unless the criminal broke any
banking laws during the money laundering
process, he or she could not be pressed withcriminal charges for money laundering. In
addition, the illicit money could not be
confiscated or be used as criminal evidence
to impose a fine except the money which
was directly offered to the criminals.

117TH INTERNATIONAL SEMINAR
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But after the signing of the 1988 Vienna
Convention, which spread awareness ofm o n e y l a u n d e r i n g a c t i v i t y, t h einternational community graduallyrealized that seizure of illicit profits from
criminal activity was necessary in order toprevent the spread of crime. These events
coincided with Korea’s campaign against
abuse of power and graft. On January 5,
1995, the Special Act on Confiscation
related with Crimes of Public Officials wasenacted. If a public official is found to haveaccepted bribes, his or her profits andassets attained from the illicit dealingss h a l l b e c o n f i s c a t e d b y t h i s l a w.
Furthermore, any money or assets received
in exchange for special favors shall also be
confiscated. This special law was aprogressive development but since it did
not punish criminals engaged only inmoney laundering and not in other criminal
activities, it had severe limitations.
After the 1988 Vienna Convention tookeffect, the Republic of Korea accepted theprovisions in the convention and enacted
the Special Act on the Prevention of Illegal
Trafficking in Narcotics, Psychotropic
Substances and Hemp on December 6, 1995
and included the provision allowing thepersecution of criminals engaging in money
laundering activity.19 This special law fully
followed the agreements in the 1988
Vienna Convention. Yet, this special law
also had limitations. Only criminals
engaging in money laundering activities
that are connected to drug trafficking(psychotropic drugs, other illegal drugs)
could be punished.

Through administrative efforts after theenforcement of the Real Name Financial
Transaction System, the Bank Supervisory
A g e n c y o r d e r e d 20 t h e d i r e c t o r s o rpresidents of all Korean financial
institutions that any employee caught
engaging in any kind of money laundering
directly or indirectly will be discharged andpunished severely.21
As a person in charge of criminal
investigations, I would like to shed lighton the problems we face. Although the Real
Name Financial Transaction Systemprevent money laundering, the system hasstrengthened the protection of bank secrecy
and has made the investigation of illicit
funds more difficult. Before theenforcement of the system, it has been
relatively easy to trace bank accountrecords with the support of the Bank
Supervisory Agency or the submission of
official administration documents to all
financial institutions. But now, thepossession of official administration
documents, only allows us to confirm theexistence of a specific bank account.
Without a warrant, we cannot investigate
the bank transaction statement and bankrelated documents, nor can we trace thebank accounts related to the suspicious
account or bank checks.
In the next section, I would like toexplain the legislation activities
surrounding the direct restriction on
money laundering.

19 Korea enacted the Special Act on the Prevention of

Illegal Trafficking in Narcotics, Psychotropic
Substances and Hemp in January 1995. Korea
ratified the 1988 Vienna Convention years later in
1998, due to controversy over some provisions of
the Convention, relating to international
assistance.

20 Bank Supervisory Agency, Guideline for thePrevention of Financial Accident, Article 7
21 Bank Supervisory Agency, Internal Regulation of

Financial Institutions, Article 9363

RESOURCE MATERIAL SERIES No. 58
B. Legislations for Directly
Restricting Money Laundering
As the investigation of money
laundering is more closely linked tofinancial crimes and abuse of power andgraft rather than drug-related crimes in
Korea, legislation activity has focused on
passing a comprehensive money
laundering prevention law that will
directly restrict money-laundering activity.
These efforts have paid off through theselection of the “Act on the Reporting andUsage of Specific Financial Transaction
Information” and the “Act on theRegulation and Punishment of Concealing
Crime Proceeds” as government bills thatwere submitted to the regular session of
the National Assembly for approval on
November 21, 2000. Unfortunately, thebills were not reviewed during the regularsession of the National Assembly, but the
chances of passing the bill in early 2000 isfavorable.
The legislation process for stronger
money laundering laws was expedited by
the request from abroad, that is, thepressure from the United Nations andOECD, domestic policies focused exposing
abuse of power and graft, and opening of
the foreign exchange market that allowed
inflows of illicit funds and capital flightoverseas. The following paragraphs briefly
outline the major provisions of the proposedbill.
1. Act on the Regulation and Punishmentof Concealing Crime Proceeds
First, let us examine the “Act on theRegulation and Punishment of Concealing
Crime Proceeds”. This law was established
to eliminate financial funds that support
criminal activities and to maintain publicorder. This law restricts money launderingof illicit profits gained from criminal
activity and allows special power of law to
confiscate and trace illicit profits.22

This law applies broadly to certain
criminal activities which are broadlys e l e c t e d a s i t f o l l o w s t h e FAT F
recommendations substantially. 23 The
predicate offenses of this law are certain
crimes that involve smuggling, bribery,
illegal capital flight and criminal activities
that are antisocial in nature and are major
crimes (felonies). (Crimes related to drugs
are covered by the Special Act on thePrevention of Illegal Trafficking inNarcotics, Psychotropic Substances and
Hemp)
FATF Recommendation [4] : Eachcountry should take such measures as
may be necessary, including legislative
ones, to enable it to criminalise money
laundering as set forth in the Vienna
Convention. Each country should
extend the offence of drug money
laundering to one based on serious
offences. Each county would
determine which serious crimes would
be designated as money laundering
predicate offences.
There are generally two approaches in
the way to categorize the predicate offensesof money laundering offense. In England,
Germany, and France a “lump sum”
approach is used to broadly categorize
predicate offenses according to the lengthand severity of the statutory penalty. In
the United States, Japan, Singapore, andother countries, predicate offenses are
categorized according to a “case-by-case”
approach. The lump sum approach has
shortcomings because it is prone to include
too many crimes as predicate offenses.
Therefore, the “case-by-case” approach was
adopted for this law.

22 Article 1, Act on the Regulation and Punishmentof Concealing Crime Proceeds
23 Article 2 Paragraph 1 of the Act on the Regulation

and Punishment of Concealing Crime Proceeds

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The statutory penalty of money
laundering crimes is a 5-year prison
sentence or less. After selecting major
crimes (felonies) that carry a maximum 5year prison sentence or more, life sentenceor death penalty, these felonies were rated
according to the severity of the crime,
involvement of organized crimes,
probability of large illicit profiteering, needfor international cooperation, and theimpact on the national economy. Crimes
that carry a maximum 5-year prison
sentence or less but fund organized crime
activities was included in this rating. 35
predicate offenses were selected as a result.
The 35 kinds of predicate offenses are
divided into five categories.
(i)Felonies: Manslaughter, Theft andB u r g l a r y, O r g a n i z e d c r i m emember (Criminal Law Act, Article
114, Paragraph 1), etc.
(ii) Crimes that involved organize
crime on a professional or repeatedb a s i s : B l a c k m a i l , Vi o l e n c e ,Smuggling (import tax evasion
exceeding the amount of US$41,700)24, etc.
(iii) Illicit profiteering of a large
amount of money around legal
business activities: Violating the
Act on the Aggravated Punishment
of Certain Economic Crimes.
(Article 3: Illicit profits that exceed
US $416,700; fraud, blackmail,breach of trust) and violation of the
Securities Exchange Law, etc.
(iv) C r i m e s r e l a t e d t o m o n e ylaundering and crimes listed on
International Treaties: Bribery of
government officials, forgery andalteration of currency, forgery andalteration of official documents,
forgery and alteration of securities,

(v)

(vi)

bribing foreign public officials, etc.
Illegal capital and asset flight withspecific focus on taking advantageof the liberalization of the foreignexchange market: Violating the Act
on the Aggravated Punishment of
Certain Economic Crimes. (Article
4: Assets and capital flight toforeign country), Violation of theForeign Trade Law (Article 54:
Manipulation of import price), etc.
Crimes that carry a maximum 5year prison sentence or less but
fund organized crime activities:
Gambling, Prostitution, Violationof the the Customs Act (Article 179,
Paragraph 3: Smuggling
activities), etc.

Especially, the details of sub-paragraph(vi) is shown in Table 2.

24 As of December 2000, won is traded at the exchangeof 1,200 won to the dollar.

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RESOURCE MATERIAL SERIES No. 58
Table 2 Predicate Offenses Whish Carry a Statutory Penalty (of Under)
Five-Year Prison Sentence
Designation of the offense
Advance acceptance of bribe
Acceptance of bribe in return formediation
Preparation/conspiracy ofcounterfeiting of valuable
securities, etc.
Making false medical certificate
Habitual gambling
Opening gambling place
Interference with an auction ora bid
Smuggling goods abroad
Prohibition of similar activities(Opening of racing track without
permit)Operating business without
permission

Prohibition of similar activities(Opening of racing track without
permit)Circulation of funds by disguising sales

Provision
Article 129(2) of the
Criminal Code
Article 132 of the Criminal
Code
Article 224 of the Criminal
Code

Penalty
3 years and below

Article 233 of the Criminal
Code
Article 246(2) of the
Criminal Code
Article 247 of the Criminal
Code
Article 315 of the Criminal
Code
Article 179(3) of the
Customs Law
Article 24 of the Bicycle
and Motorboat Racing Act

3 years and below

Article 30(1) of the Special
Act on the Regulation andPunishment of Speculative
Acts, etc.
Article 50 of the Korean
Horse Racing Association
Act
Article 70(2)(3) of theSpecialized Credit
Financial Business Act

3 years and below

For details of the predicate offenses,
please refer to Appendix A and Appendix
B.
In the course of selecting the predicate
offenses, inclusion of some offenses was acontroversial issue. First, some suggested
the exclusion of Article 8 [tax evasion
exceeding 200 million won (US $ 167,000)
a year] of the Act on AggravatedPunishment of Certain Offenses from the366

3 years and below
2 years and below

3 years and below
3 years and below
2 years and below
3 years and below
3 years and below

3 years and below

3 years and below

predicate offenses. However, it was
included in the predicate offenses as theoffense of tax evasion of huge sum is aserious crime and considering that it wasa predicate offense in the government’s
draft of 1997 for an anti-money laundering
act.
Secondly, whether to include Article 30[illicit fund raising] of the Political Fund
Act was a problem. With regard to this,117TH INTERNATIONAL SEMINAR
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various elements like the essential purposeof the Act on the Regulation andPunishment of Concealing Crime Proceeds,
the examples of foreign legislation, and thestandard for the scope of predicate offenses
were considered. Moreover, there wereconcerns that inclusion of Article 30 of the
Political Fund Act would undermine thepolitical neutrality of the financial
intelligence organization. And the Political
Fund Act itself contains provisions settingout the acceptance of unauthorized politicalfund as criminal offense, and the
mandatory confiscation of the illicit
proceeds. For these reasons, Article 30 was
not included in the scope of predicate
offenses. However, this issue could giverise to heated arguments as the eradicationof political corruption is an important
assignment for the anti-corruption round.
Thirdly, there were suggestions toinclude foreign aggression, insurrection,
violation of the National Security Act andviolation of the Military Secret Protection
Act in the scope of predicate offenses.
H o w e v e r, t h i s w a s n o t a c c e p t e d ,considering the essential purpose of the Act
on the Regulation and Punishment ofConcealing Crime Proceeds and theexamples of foreign laws.
Fourthly, it was suggested that all of theoffenses of embezzlement, breach of trustand fraud be included in the predicate
offenses. Considering that this could
excessively curb economic activities,
economic offenses exceeding 500 million
won ( US $ 416,700) were included in thepredicate offenses. This limit was set toprevent economic activities from being
overly restricted, while at the same timeto ensure the achievement of the essential
purpose of the Act on the Regulation andPunishment of Concealing Crime Proceeds.
The discussion left a room for considering
the extension of the scope of economic
offenses to be included in the predicate

offenses in the future.
In the following, I would like to explainsome provisions characteristic of this Act.
When a predicate offense and anotheroffense which is not a predicate offense arecommitted concurrently, the law provides
that the latter offense is included in thescope of predicate offenses as well. It isbecause in such a case as this, it is very
difficult to identify the exact origin of thecrime proceeds. It was noticed that the law
could be construed as being incapable ofpunishing money laundering activities or
confiscating proceeds of crime, when theoffense which is associated with money
laundering and crime proceeds is not
identified for reasons of conflict withanother offense not covered by the law.
(The Special Act on the Prevention of Illegal
Trafficking in Narcotics, Psychotropic
Substances and Hemp has a similar
provision in Article 2 Paragraph 2.)
The law also criminalizes the act oflaundering the proceeds of crime in Korea,
which originated from the criminal
activities committed by foreigners outside
Korea.25 This is aimed at preventing Korea
from becoming a financial haven for
criminal organizations, and to join theinternational effort to counter and preventmoney laundering. The law clearly sets outthat although a criminal activity which isincluded in the predicate offenses was
initiated in a foreign country, it is coveredby the law when it is included in thepredicate offenses if it is occasioned in
Korea and when it is also a criminal offensein the foreign country.
Globalization of international financeand crime has facilitated the movement ofillegal funds from country to country. Insuch circumstance, if Korea implements its
25 Article 2 Paragraph 1, Act on the Regulation andPunishment of Concealing Crime Proceeds

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RESOURCE MATERIAL SERIES No. 58
second phase plan for liberalizing
restrictions on foreign exchange market
without measures to prevent the flow ofillegal funds into the country, Korea could
become a financial haven for money
launderers. In order to prevent this, Korea
has worked to create a financial
intelligence unit which would check theflow of illegal funds in and out of thecountry, and made the Act on theRegulation and Punishment of Concealing
Crime Proceeds to cover offenses
committed by foreigners outside Korea.26
But, the law requires dual criminality
for its application to crimes committed
outside the country, in order to ensure legal
stability for nationals of foreign countries.
It would be unreasonable if a foreigner ispunished under a Korean law for
laundering funds derived from an activity
committed in another country where that
activity does not constitute a criminal
offense.
In the following, I will explain what is
punishable under the Act on the Regulation
and Punishment of Concealing Crime
Proceeds, and the penalty provided by theAct.
Under the Act, a person who disguises
the fact that he or she obtained or disposedof the proceeds of crime, conceals theproceeds of crime or disguises the facts
regarding the origin and cause of theproceeds of crime shall be punishable withimprisonment of five years and below or afine not exceeding 30 million won (US$25,000).27 A person who knowingly accepts
or receives the proceeds of crime shall bepunishable with imprisonment of not morethan three years, and a fine not exceeding

20 million won (US $16,700).28
Under this Act, the proceeds of crime
include assets derived from the commissionof predicate offenses, or assets obtained as
the remuneration for the commission ofsuch offenses, funds or assets associatedwith offenses listed in Appendix B likeflight of assets out of the country, assets
derived from the proceeds of crime, andassets which is a mixture of the preceding
assets and other assets mingled together.
Assets derived from the proceeds of crime
include assets obtained as the fruit derived
from the proceeds of crime, assets obtainedat the price of the proceeds of crime, assets
obtained at the price of the preceding
assets, and other assets obtained throughthe possession or disposal of the proceedsof crime. 29 For example, they include
money obtained by renting the land
received as remuneration for the murder
for hire (an example of the fruit derived
from the proceeds of crime), money earned
by selling the land (an example of theassets obtained at the price of the proceedsof crime), stocks purchased with the money
received by selling the land (an example of
the assets obtained at the price of thepreceding assets), and money earned byselling the stocks (other assets obtained
through the possession or disposal of theproceeds of crime).
The Act on the Regulation andPunishment of Concealing Crime Proceeds
requires certain employees of financial
institutions to report suspicious financialtransactions. Employees of financial
institutions as set out under the Act on theReporting and Usage of Specific Financial
Transaction Information, which will be
28 Article 4, Act on the Regulation and Punishment

26 The United Kingdom, Australia, Canada and Japan

have similar provisions.
27 Article 3 Paragraph 1, Act on the Regulation andPunishment of Concealing Crime Proceeds

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of Concealing Crime Proceeds
29 Article 2 Sub-paragraph 2, 3 and 4, Act on theRegulation and Punishment of Concealing Crime
Proceeds

117TH INTERNATIONAL SEMINAR
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explained in the next section, should
immediately report to the competent
investigative authorities when they comeby the fact that assets received throughfinancial transactions are the proceeds ofcrime, or the fact that their clients areconcealing or disguising the proceeds ofcrime. The employees should not disclose
to the clients or other persons associatedwith the suspicious financial transactions,the fact that they made such reporting to
the investigative authorities. Any
employee who violated these obligations ispunishable by imprisonment of not morethan two years, or a fine not exceeding 10
million won (US $8,300).30
In many cases, money laundering is
performed by legal persons including
corporations, or by agents. Regarding
those cases where a representative of alegal person, or an agent, employee orservant of a legal person or an individual
violates its provisions in relation to thebusiness of that legal person or individual,
the Act provides fines for that legal person
or individual as well as punishment for theactual performer of the offense.
The Act also provides an exception to
Article 48 of the Criminal Code regarding
the confiscation of the proceeds of crime.31
Whereas the Criminal Code limits thescope of the proceeds of crime subject toconfiscation to original articles, the Act on
the Regulation and Punishment ofConcealing Crime Proceeds expands thescope to the proceeds of crime and assets
derived from the proceeds of crime. Under
this Act, the property subject to confiscation
includes not only corporeal property suchas immovable and movable property but
also all profits that are generally accepted
30 Article 5, Act on the Regulation and Punishment

as economically valuable. If the property
obtained from the commission of offense isconverted, it is still confiscable as long as
it could be identified and traced.
This Act provides for discretionary
confiscation as does Article 48 of the
Criminal Code. Whether to confiscate or
not is determined by the judgment of thecourt. Whereas the Special Act on thePrevention of Illegal Trafficking inNarcotics, Psychotropic Substances andHemp adopts mandatory confiscation forreasons of the pressing necessity for theprevention of drug-related crime and forthe international cooperation, and theprobability of the reinvestment of the illicit
proceeds into crimes, this Act adopts
discretionary confiscation as the predicate
offenses of this Act embrace various kindsof offenses. It would be reasonable todetermine on whether to confiscate or not
regarding specific cases.
And this Act provides another exception,other than the provision on confiscation
system, to the Criminal Code. The Act
provides discretionary collection of thecorresponding value to be confiscated.32
Under the Criminal Code, the collection of
the corresponding value is allowed only
when the article subject to confiscation
cannot be confiscated. This Act provides
additional circumstances in which thecollection of the corresponding value canbe conducted. Those circumstances arethose when it is determined unreasonable
to confiscate certain asset considering thenature of the asset, the situation of its
usage, and the existence of the conflicting
rights over the asset.
This Act also contains special provisions
on the international cooperation. This Act
provides the requirements and restrictionof Concealing Crime Proceeds
31 Article 8, Act on the Regulation and Punishmentof Concealing Crime Proceeds

32 Article 10, Act on the Regulation and Punishmentof Concealing Crime Proceeds

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RESOURCE MATERIAL SERIES No. 58
on the international assistance given by
Korea regarding the execution of a final
judgment on confiscation and the freezingof assets for confiscation at the instance ofa request made by a foreign country. 33
Unlike the Special Act on the Preventionof Illegal Trafficking in Narcotics,
Psychotropic Substances and Hemp which
requires the relevant treaty to give suchinternational assistance (Article 64
Paragraph 1), this Act allows international
assistance provided on the assurance ofreciprocity, concerning the predicate
offenses listed in the Act and the offenses
provided under Article 3 and 4 of the Act.
It should be noticed that the Special Act
on the Prevention of Illegal Trafficking inNarcotics, Psychotropic Substances andHemp is Korea’s implementing law for theUnited Nations Convention Against Illicit
Traffic in Narcotic Drugs and Psychotropic
Substances of 1988, where as the Act on
the Regulation and Punishment ofConcealing Crime Proceeds is not. The
need to promote international cooperation
was considered in this Act.
In the next section, I will explain the Act
on the Reporting and Usage of SpecificFinancial Transaction Information.
2. Act on the Reporting and Usage of
S p e c i f i c F i n a n c i a l Tr a n s a c t i o nInformation
This Act is aimed at providing the legal
framework for the reporting and usage of
information on financial transactions,which are necessary for the prevention ofmoney laundering activities throughfinancial transactions, thereby deferring
crimes and establishing transparent
financial order.34

This Act provides the establishment of
the Financial Intelligence Unit (FIU) under
the Minister of Finance and Economy.35
Under this Act, the FIU is authorized todeal with the following tasks:(i)
Arrangement, and analysis of
information reported by financial
institutions, and provision of suchinformation(ii) Regulation and inspection ofbusinesses performed by financial
institutions(iii) Cooperation and exchange of
information with foreign FIUs(iv) Other related tasks as designatedby the presidential decree
The Act requires certain financial
institutions to immediately report to thehead of the FIU in the following
circumstances.36(i)
If there is sufficient reason tobelieve that the financial asset
obtained in relation to a financialtransaction is illegal asset, or thatthe client of the financialtransaction is performing money
laundering activity, and if the sumof the financial transaction inquestion is above certain amount(to be designated by thepresidential decree)(ii) If there is sufficient reason tobelieve that the client is dividing
up the financial transaction inorder to avoid the application of theabove provision, and if the totalsum of the divided financialtransactions amount to a certain
amount (to be designated by thepresidential decree)(iii) If it made a report concerning afinancial transaction to the33 Article 11, Act on the Regulation and Punishment

35 Article 34, Act on the Reporting and Usage ofof Concealing Crime Proceeds
34 Article 1, Act on the Reporting and Usage of SpecificFinancial Transaction Information

36 Article 4, Act on the Reporting and Usage of Specific

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117TH INTERNATIONAL SEMINAR
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competent investigative authority
under the Act on the Regulation
and Punishment of Concealing
Crime Proceeds (Article 5
Paragraph 1)
Furthermore, the Act on the Reportingand Usage of Specific Financial
Transaction Information ensures theconfidentiality of financial information, byprohibiting the employees of financial
institutions and the officials of theinvestigative authorities from leaking thesecrets concerning financial transactions,and from using the information for
purposes other than the ones provided
under the law.37 The Act also places the
FIU under the obligation to provide
relevant information to law enforcement
authorities including the Prosecutor
General, the Commissioner of the National
Tax Service, the Commissioner of the
Customs Service, the Financial
Supervisory Commission, and the Head of
the National Police Agency.38
VI. AN EXAMPLE OF KOREA’SMONEY LAUNDERING CASE:
INVESTIGATION OF SECRET FUND
OF EX-PRESIDENT ROH TAE WOO
The following is a description of Former
President Roh Tae Woo’s secret fund casewhich is one of the most well-known
successes in money laundering
investigation in Korea.
A. Background to the Launch of theInvestigation
After the Real Name Financial
Transaction System came into effect inKorea on August 12, 1993, there was arumor going around that an enormous
37 Article 9 Paragraph 1, Act on the Reporting andUsage of Specific Financial Transaction Information
38 Article 7, Act on the Reporting and Usage of SpecificFinancial Transaction Information

amount of secret funds in the stock market
and private financial businesses needed to
be transferred to real name, and that agreat deal of money was used to lobby
politicians and high-ranking public officials
in relation to the secret funds. And the
Korean prosecutors’ office had kept its eyeon this report.
In August 1995, the then Minister ofGovernment Administration accidentally
mentioned that he had been contacted by
the ex president’s people, who asked him
to transfer the secret funds totaling 400
billion won (500 million US dollars) to real
names. On October 19 of that year, acongressman of the opposition party
disclosed at a National Assembly sessionthat Former President Roh Tae Woo’s
secret fund totaling 400 billion won (500
million US dollars) was broken up into
portions and deposited in several differentbank accounts under various borrowed
names. The evidence produced to back theclaim was a bank record of a Shinhan Bank
(Seosomun Branch Office) account under
the name of Wooil Corporation, in which
10 billion won (12.5 million US dollars) was
deposited. On that date, the Director of
Loan Department of the Shinhan Bank
confirmed that Seosomun Branch Office ofhis bank held three accounts underborrowed names including the account in
Wooil’s name and that a total of 30 billion
won (37.5 million US dollars) were
deposited in these accounts.
The Korean prosecutors’ office
immediately initiated the investigation
into this case with recognition that thiscase is an unprecedented incident
associated with corrupt accumulation of
wealth by an ex president. The Koreanprosecutors’ office was determined to
conduct thorough and strict investigation
into this case, and to bring the ex president
to justice for any corruption substantiatedby the investigation, in order to ensure

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RESOURCE MATERIAL SERIES No. 58
social justice and to cut off the corrupt tie
between the politicians and the businesses.
B. Outline of the Investigation
On October 20, 1995, the Central
Investigation Department of the Supreme
Prosecutors’ Office obtained the warrants
of seizure regarding the suspected bankaccounts, and began the tracing of funds.
The Korean Supreme Prosecutors’ Officeinterrogated the Director of the
Presidential Security Service and theperson who took charge of the Financial
Division under the President Security
Service when Mr. Roh Tae Woo was in
office. They stated that Mr. Roh raised andused secret funds while in office and thatas he retired from his office, the left-overof the funds was deposited into theaccounts opened in the borrowed names.
A total of 74 billion won (92.5 million US
dollars) had been deposited into theseaccounts, and the remaining sum at thetime was 36.5 billion won (45.63 million US
dollars).
The investigation was extended toadditional accounts of borrowed names
opened in four banks (including theCommercial Bank) for the same purpose.
Through the investigation of the bankofficials, and the track of funds by thewarrants of seizure regarding the accounts,
the Prosecutors’ Office identified 37
accounts in which Mr. Roh’s secret funds
were deposited. It also disclosed that as
many as 500 bank accounts were involvedin this case, as means to launder the funds.
Parts of the funds were given as loans to
the involved corporations and to purchasereal estates.
On November 16 of the same year, Mr.
Roh was placed under detention for chargesof bribery (the violation of the Act on
Aggravated Punishment of Certain
Offenses). The former Director of the
Presidential Security Service was arrested

372

for complicity in the crime. Since then, theProsecutors’ Office also investigated as
many as 60 persons associated in this case,including the incumbent and former
members of the National Assembly, theformer Head Secretary for Economy in the
Presidential Office, the officials of banks
and the persons who lent their names tobe used in opening the bank accounts.
On December 7, the Prosecutors’ Officebegan investigation regarding 200 persons
including the leaders and officials ofcorporations such as Samsung, Hyundai,
Jinro, LG, and Daewoo, for having offeredbribe to Mr. Roh. Regarding the money
laundering activities in this case, theProsecutors’ Office investigated 200
persons including the Chairman of
Dongbang Oil Corporation and Mr. Roh’sbrother.
92 public officials including prosecutors,
investigators, and the officials of the
National Tax Service and the Financial
Supervisory Service were put into theinvestigation of this case.
C. Outcome of the Investigation
1. Size of the Secret Funds
Judging from the investigation of Mr.
Roh and other persons involved, the actual
sum of the secret fund raised through thecontribution of corporations is believed toamount to as much as 460 billion won (575
million US dollars). However, the sum of
the secret funds substantiated or provedby the Prosecutors’ Office was 283.8 billion
won (354.9 million US dollars). Mr. Roh
was indicted for receiving, from the leadersof 35 corporations, bribes ranging from 500
million won (625,000 US dollars) to 25
billion won (31.25 million US dollars),
totaling 283.8 billion won (354.9 million US
dollars).

117TH INTERNATIONAL SEMINAR
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2. How the Fund was Raised
Mr. Roh was the President of Korea forfive years from February 25, 1988 to
February 24, 1993. As the President,
empowered to establish and implement
governmental policies, and direct andsupervise the head of governmental
ministries, he was able to influence theactivities of corporations in relation to theselection of the provider of government-run
services, the licensing of importantbusinesses, financial assistance, andtaxation. He had private meetings withthe chairmen or presidents of corporations
pretending as if he was interested in thebriefing of the operation of the corporations
and in hearing the opinion of the businessleaders. He received enormous amount ofmoney from these corporations, by hintingthat he might exercise his powers to
influence their business.
The followings are some of the examplesof the way how he collected the funds fromthe corporations.
(i)
In May 1991, the then President
Roh received 10 billion won (12.5
million US dollars) from Chairman
Kim of Daewoo Corporation, at his
presidential office. He received a
total of 24 billion won (30 million
US dollars) from Chairman Kim
through seven transactions. The
money was given to President Rohin return for his influence inawarding the contract for theconstruction of Jinhae Navy
Submarine Base to Daewoo
Corporation, and with request for
his influence in another bidding forthe construction of Wolsung Atomic
Power Plant III and IV.
(ii) In August 1991, President Rohreceived 10 billion won (12.5
million US dollars) from Chairman
Choi of Dongah Corporation, at an
office in his presidential house. He
received a total of 23 billion won(28.75 million US dollars) from
Chairman Choi through six
transactions. The money was
given to Mr. Roh in return forawarding the contract for theconstruction of Asan Bay Navy
Base, and with request for his
influence on another bidding forthe construction of Uljin Atomic
Power Plant III and IV.
(iii) In late November 1990, President
Roh received 10 billion won (12.5
million US dollars) from Chairman
Chung of Hanbo Corporation, at asecret place near his presidential
house. He received a total of 15
billion won (18.75 million US
dollars) from Chairman Chungthrough four transactions. The
money was given to Mr. Roh withrequest for his influence on their
Suseo apartment-construction
business.
(iv) President Roh also received a totalof 25 billion won (31.25 million US
dollars) from Chairman Lee ofSamsung Corporation in return for
his influence in Samsung’s auto
manufacturing business,
construction business and others.
He also received 25 billion won(31.25 million US dollars) from
Hyundai Corporation and 21
billion won (26.25 million US
dollars) from LG Corporation, by
hinting, at private meeting withthe leaders of these corporations,that he could give favorable orunfavorable consideration about
their businesses.
3. Management of the Fund and Money
Laundering
Mr. Roh made Director Lee of the
Presidential Security Service to supervise
the overall management of the secret fund,373

RESOURCE MATERIAL SERIES No. 58
and made the Director of the Financial
Division of the Presidential Security
Service to directly manage the deposit into
and withdrawal from the accounts.
(i) M o n e y L a u n d e r i n g T h r o u g hFinancial Institutions
The fund was either deposited into thebank accounts opened under borrowed
names or used to purchase the certificate
of deposit (CD) in order to conceal the origin
or the actual owner of the fund. A total of
37 accounts were opened under borrowed
names in 8 branch offices of 5 banks. 12
other accounts under borrowed names wereused to move and launder the funds. They
purchased the certificates of deposit worth
118.3 billion won (147.88 million US
dollars). They were re-sold between
December 1992 and February 1993 anddeposited into six bank accounts opened
under the borrowed names.
While, in October 1993 when the Real
Name Financial Transaction System wasin force, they opened a real name account,using the identity of an owner of a dormant
account in collaboration with a manager
of a branch office of a bank. 520 million
won (650,000 US dollars) was deposited
into this account, and then was withdrawn
from it.
(ii) Money Laundering by Purchasing
Real Estates
They also employed the method ofpurchasing real estates to launder thefunds. Parts of Mr. Roh’s secret funds wereused to purchase real estates in the nameof his relatives. 23 billion won (28.75
million US dollars) was given to the
Chairman of Dongbang Oil Corporation(father-in-law of his son) to purchase abuilding in downtown Seoul and toconstruct a new building. 12.979 billion
won (16.22 million US dollars) was usedby his brother in purchasing a building inSeoul and a house in the city of Daegu. 2.35
billion won (2.94 million US dollars) was

374

used to purchase luxurious mansions inSeoul, which was registered under thename of a third person.
(iii)Lending Funds to Corporations
Mr. Roh faced difficulties in using andmanaging his secret funds deposited atfinancial institutions, as the Real Name
Financial Transaction System became
effective. He made his brother-in-law,Keum Jin Ho (former Minister ofCommerce and Industry) to launder thefunds as follows.
(a) In September 1993, he lent 60.62
billion won (75.78 million US dollars)
to Chairman Chung of Hanbo
Corporation at the yearly interest of
8.5% to be repaid after 5 years. This
fund had been deposited in six
accounts opened at Kookmin Bank.
Chairman Chung pretended as if he
was the owner of the fund, anddeposited the fund into accounts
opened under his real name.
(b) In October of the same year, helaundered 36.28 billion won (45.35
million US dollars) through
Chairman Lee of Daewoo
Corporation. The fund had been
deposited in twelve fake nameaccounts opened at Seosomun Branchof Shinhan Bank.
DaewooCorporation transferred this fund toaccounts opened under its real name,pretending as if it was the true ownerof the fund. Mr. Roh lent this fund to
Daewoo Corporation.
The bank officials conspired with Mr.
Roh or remained silent in this process.
(iv) Concealing of The Fund in Foreign
Country
The Korean Prosecutors’ Office
investigated into the allegation that Mr.
Roh collected a great sum of secret fundthrough Yulgok project (an armamentbuild-up project) and concealed the fund by

117TH INTERNATIONAL SEMINAR
VISITING EXPERTS’ PAPERS
depositing at the Bank of Switzerland. In
February 1990, it was exposed that Mr.
Roh’s daughter and son-in-law managed
several accounts (each holding 10,000 US
dollars or below) at various banks, totaling
200,000 US dollars. The Prosecutors’ Office
investigated the suspicion that the fundmanaged by Roh’s daughter was a portionof his secret fund.
On November 4, 1995, Korea made arequest to the U.S. authorities for provisionof information regarding the flow or originof the above fund managed by Roh’sdaughter. Two days later, Korea requested
the Swiss government to officially confirm
whether Mr. Roh’s family or relatives heldbank accounts at the banks in Switzerland.
Because of the limitation of international
assistance in criminal investigation, andthe difficulty of obtaining evidence in suchcase as this, the investigation regardingwhether Mr. Roh concealed his fund inforeign countries did not yield concrete
evidence.
4. How the involved persons were
processed
On December 5, 1995, Mr. Roh, theformer director of the Presidential Security
Service, and the former director of thefinancial division of the PSS were indicted
and placed under detention. The
Prosecutors’ Office also indicted 12 persons
including leaders of corporations. 3 bankofficials were prosecuted for summary
proceedings.
The prosecution claimed that Mr. Rohshould be subjected to life imprisonmentand confiscation totaling 283.896 billion
won (354.87 million US dollars) for chargesof bribery and insurrection. According to
the Special Act on Confiscation related with
Crimes of Public Officials, the prosecution
requested for the freezing of Mr. Roh’s
entire assets for the purpose of executing
confiscation.

On April 17, 1997, after two appeals
trials, Mr. Roh was finally sentenced to
imprisonment of 17 years and confiscationor collection of 262.896 billion won (328.62
million US dollars) by the Supreme Court.
5. Secret fund of Ex President Chun Doo
Hwan
After the investigation was initiatedregarding Mr. Roh’s secret funds, it was
exposed that another former President,
Chun Doo Hwan, who held the office fromFebruary 25, 1981 through February 24,
1988, had secretly collected funds throughsimilar methods as Mr. Roh used.
At the result of the investigation by theProsecutors’ Office, Mr. Chun was finallysentenced to life imprisonment andconfiscation or collection of 220.5 billion
won (275.63 billion US dollars) for chargesof bribery and insurrection on April 17,
1997 by the Supreme Court.
VII. CONCLUSION:
COUNTERMEASURES IN THE
FUTURE
A. Providing Legal Framework
As crime becomes more organized,
globalized, and specialized, it is no longer
a domestic problem within an individual
country, but it is becoming a serious threat
to the safety of the international
community, perhaps the human race. The
most effective countermeasure against
these crimes is depriving the perpetratorsof the crimes of all economic profits.
To make it possible, we need the legal
framework to criminalize money
laundering, and to confiscate illicit
proceeds as thoroughly as possible. There
are several approaches for providing such
legal framework: 1) adding the provisionin the criminal code, 2) including theprovision in a special law such as a drug-

375

RESOURCE MATERIAL SERIES No. 58
related special law, 3) including theprovisions both in the criminal code and as p e c i a l l a w, a n d 4 ) e n a c t i n g acomprehensive money laundering
controlling law. Each individual country
would choose a pattern based on its legal
circumstances.
In order for strong control of money
laundering activities, the law should covera wide scope of predicate offenses, allow
extensive confiscation and provide
measures to freeze the assets subject toconfiscation. The law should provide forstrict regulation of financial institutions
and should invite their voluntarycooperation. It should also include specificprovisions for international cooperation(such as extradition and mutual assistancein criminal matters). If we take these into
account, the enactment of a comprehensive
money laundering law is the most desirableway.
B. Efforts of Law Enforcement
Authorities to Strengthen
Criminal Punishment
The enactment of law alone does not
ensure the eradication of money
laundering. Only when the prosecutors,
police officers, tax officials and other law
enforcement officials commit themselves tothorough tracking down the flow of illicit
proceeds and the perpetrators, the efforts
to provide legal framework would lead tosuccessful suppression of crime.
H o w e v e r, t h e l a w e n f o r c e m e n t
authorities are facing increased difficulties
in tracing the flow of illicit proceeds forvarious reasons. The financial institutions
are strengthening the protection of banksecrecy. The businesses that the financial
institutions deal with are becoming more
complex and multifold.
The
computerization also becomes the cause forincreased difficulty in obtaining evidence.
And electronic trading and cash-less376

transactions, and the liberalization offinancial policy have increased the
movement of enormous sum of money fromcountry to country.
To effectively cope with this situation,
more persons and resources should be put
into the law enforcement authorities, foremployment and training of experts anddevelopment of scientific investigativetechniques. The budget for the suppressionof crime should be considered as aninvestment for social welfare.
C. Establishment of Credit-based
Society, Development of New
Taxation Techniques andIncrease of Public Awareness
Money laundering would not be fully
controlled only through the judicial andadministrative regulation. We need tofundamentally eradicate money laundering
by establishing a credit-based society
where dirty money is not tolerated.
We need to develop taxation techniques
to prevent the evasion of tax. And at thesame time, credit dealings should be more
widely accepted than cash transactions.
Especially, in developing countries, efforts
should be made to increase publicawareness regarding the tax evasion.
In Korea, the use of credit card has
increased dramatically in recent years, andcredit dealing is being accepted as aneffective means for trade. Korea isplanning to implement a comprehensive
taxation system for financial income
starting from February 1, 2001. When thissystem is applied in Korea, it willcontribute greatly to preventing
transactions made under the borrowed orstolen names, which are universally used
as a method of laundering money.

117TH INTERNATIONAL SEMINAR
VISITING EXPERTS’ PAPERS
D. Strengthening International
Cooperation
Illegal proceeds tend to flow from astrictly controlled place to a place with lessregulation. Therefore, the efforts of one or
two countries cannot sufficiently address
money laundering problem. We need toconclude multilateral and bilateral treaties
to facilitate international cooperation incriminal matters, and make domestic law
to back up these treaties.
And domestic laws to implement
multilateral conventions should bemonitored. The monitoring team should
be enabled to urge a state party to faithfully
implement the convention by making
reports on the result of the monitoring. The
monitoring on the implementation ofOECD anti-bribery convention is a good
example of such monitoring.
Furthermore, the international
community including the United Nations
should continue to make efforts to stop the
exploitation of tax haven and offshorebanking centers or states.39
In this regard, I believe that UNAFEI’s
recent seminars and studies regarding

39 They include Bahamas, Bermuda, Channel Islands,

Gebraltar, Panamas, British Virgin Islands,
Lebanon, Lichtenstein and others.(Ingo Walter, The
Secret Money Market, New York: Harper Business,
1990, pp. 210

money laundering are very timely anddesirable. I believe that its work willcontribute to the establishment of a safe
global community through the suppressionof crime not only in Asia region but also in
the whole world.
Appendix A
Major Crimes (regarding Article 2
Paragraph 1)
1. The offenses provided in thefollowing provisions of the Criminal
Code(a) Article 114 Paragraph 1, Part II
Chapter 5 Crimes injurious to
public security(b) Article 129 through Article 132,
Part II Chapter 7 Crimes
concerning the duties of public
officials(c) Article 207, Article 208, Article
212 (attempts to commit thecrimes specified only in Article
207 and 208) and Article 213,
Part II Chapter 18 Crimes
concerning currency(d) Article 214 through Article 217,
Article 223 (attempts to commit
the crimes specified only in
Articles 214 through 217) and
Article 224 (preparation andconspiracies with intent tocommit the crime only in Articles
214 and 215), Part II Chapter 19
Crimes concerning valuable
securities and postage andrevenue stamps(e) Article 225 through Article 2272, Article 228(1), Article 229(excluding Article 228 Paragraph2), Articles 231 through 234 andArticle 235 [attempts to commit
the crimes specified only in
Articles 225 through 227-2,
Article 228(1), Article 229(excluding Article 228 Paragraph2), Articles 231 through 234],
Part II Chapter 20 Crimes

377

RESOURCE MATERIAL SERIES No. 58
concerning documents(f) Article 246 Paragraph 2 andArticle 247, Part II Chapter 23
Crimes concerning gambling andlotteries(g) Article 250, Article 254 (attempts
to commit the crimes specified
only in Article 250) and Article
255 (preparation andconspiracies with intent tocommit the crime only in Article250), Part II Chapter 24 Crimesof homicide(h) Article 314 and Article 315, PartII Chapter 34 Crimes against
credit, business and auction(i) Articles 323 through 324-5,
Article 325 and Article 326, PartII Chapter 37 Crimes ofobstructing another fromexercising his right(j) A r t i c l e s 3 2 9 t h r o u g h 3 3 1 ,Articles 333 through 340, Article
342 (excluding attempts tocommit the crimes specified in
Article 331-2, Article 332 andArticle 341) and Article 343, PartII Chapter 38 Crimes of larceny
and robbery(k) Article 350 and Article 352(attempts to commit the crime
specified only in Article 350),
Part II Chapter 39 Crimes offraud and extortion(l) Article 355 [provided that thisarticle was violated by a person
provided in Article 2 Subparagraphs 1, 2 and 4 (onlyincluding those persons who
assist the persons provided
under Sub-paragraphs 1 and 2
and deal with a part of that
persons’ task) of the Act on the
Responsibility of Accounting
Employees, in relation to his
duties and task, knowing thatthe national treasury or a local
government would sustain loss

378

as a result of that violation], PartII Chapter 40 Crimes of
embezzlement and breach oftrust(m) Article 362, Part II Chapter 41
Crimes concerning stolen
property
2. Articles 23, 24 26 and 27 of the
Bicycle and Motorboat Racing Act
3. A r t i c l e 1 7 9 a n d A r t i c l e 1 8 2Paragraph 2 (attempts to commit thecrime specified only in Article 179)of the Customs Act
4. Article 54 Sub-paragraph 3 of theForeign Trade Act
5. Article 111 of the Lawyers Act
6. Article 5 of the Illegal Check Control
Act
7. Article 30 Paragraph 1 of the Special
Act on the Regulation andPunishment of Speculative Act, etc.
8. Article 622 and 624 (attempts tocommit the crime specified only in
Article 622) of the Commercial Code
9. Article 93 of the Trademark Act
10. Article 95-8 of the Futures TradingAct
11. Article 40 Sub-paragraph 1 andArticle 42 of the Child Welfare Act
12. Article 70 Paragraph 1, Paragraph
2 (3) and Paragraph 5 of theSpecialized Credit Financial
Business Act
13. Article 24, and Article 25 Paragraph
1 Sub-paragraphs 1 and 2 of thePrevention of Prostitution Act
14. Article 29 Paragraph 1 of the Sound
Records, Video Products and GamesAct
15. Article 207-2 of the Securities
Transaction Act
16. Article 46 and Article 47 Subparagraph 1 of the Employment
Security Act
17. Article 70 of the Act on the Controlof Firearms, Swords, Explosives, etc.
18. Article 3, 5 and 7 of the Act on the
Aggravated Punishment of Certain

117TH INTERNATIONAL SEMINAR
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Economic Crimes
19. Articles 2, 3, 5, 5-2, 5-4, 6 and 8 of
the Act on the AggravatedPunishment of Certain Crimes
20. Articles 366, 368 and 370 of the
Bankruptcy Act
21. Articles 2 through 4, Article 5 (1) and
Article 6 [attempts to commit thecrimes specified only in Article 2,
Article 3, Article 4 Paragraph 2(excluding the crimes specified in
Article 136, 255, 314, 315, 335, 337(the latter part), 340 Paragraph 2(the latter part) and 343 of the
Criminal Code) and Article 5
Paragraph 1] of the Act on the
Punishment of Violence, etc.
22. Articles 50, 51, 53, 54, 58 and 60 of
the Korean Horse Racing Association
Act

Appendix B
Predicate Offenses under Article 2
Sub-paragraph 2 (B)• Article 25 Paragraph 1(3) of thePrevention of the Prostitution Act• Article 5 Paragraph 2 and Article 6of the Act on the Punishment ofViolence, etc.
• Article 3 Paragraph 1 of the Act on
Preventing Bribery of Foreign Public
Officials in International BusinessTransactions• Article 4 of the Act on the AggravatedPunishment of Certain Economic
Crimes379