Photo: Yna. ROK National Assembly votes in favor of the country’s first virtual-asset-specific legislation
On March 5, 2020, National Assembly of the Republic of Korea unanimously passed Amendment on “Act on Reporting and Using Specified Financial Transaction Information,” which includes first-ever requirements and regulations concerning virtual asset transaction. The Amendment reflects FATF’s Standards and is expected to foster healthy and transparent virtual asset market.
The Amendment bill was introduced to National Policy Committee in November last year. On March 4, Legislation and Judiciary Committee passed the bill, and on March 5, the bill was unanimously voted for by 182 MPs. The amended act will take effect from March 2021.
The Amendment newly includes anti-money laundering (AML) duty for virtual asset service providers (VASP) and requirements for financial companies in transaction with VASPs. More specifically, new VASP will need to have a real-name identification account, a certified ISMS (Information Security Management System), and a criminal record check before reporting their operation to Financial Intelligence Unit, the overseeing authority. VASP already in operation are required to report to FIU within 6 months.
As for financial companies, they are required to verify their clients’ information, purpose of transaction, and FIU report when transacting with VASPs. Asset segregation and duty to close any financial transaction in case of high risk of AML or absence of client’s FIU report are also required.
FIU will actively consult with experts and industry representatives to prepare the amendment for the Enforcement Decree and properly implement the amended Act. The following Enforcement Decree will define ‘virtual asset’ and ‘VASP’ that are subject to the Act, FIU reporting procedure specifics, etc.
BY MSEAP Cyber Secretariat (email@example.com)