「A Study on the Beneficial Owner Identification & Verification System in relation to Legal Persons or Organizations under the Anti-Money Laundering System」
[Table of Contents]
Chapter 1 Introduction 1
Section 1 Background of the Study 1
Section 2 Purpose of the Study 4
Chapter 2 Customer Due Diligence System and Prohibition of Nominee Transactions 9
Section 1 Significance of the Customer Due Diligence System 9
I. Anti-Money Laundering Legal System 9
A. Customer Due Diligence System 15
B. Suspicious Transaction Reporting System 15
C. Large Cash Transaction Reporting System 18
II. Customer Due Diligence System under the Anti-Money Laundering Act 20
A. Opening of a New Account 25
B. One-time Financial Transactions Above a Certain Amount 25
Section 2 Main Contents of the Real Beneficiary Verification System 28
I. Significance and Necessity 28
II. Verification of Real Beneficiaries 33
A. Significance 34
B. Step-by-Step Verification of Real Beneficiaries 35 (1) Pre-stage: Exemption from Real Beneficiary Verification 36 (2) Step-by-Step Share Verification 36
(a) Step 1 37
(b) Step 2 38
(c) Step 3 41
Section 3 Introduction of the Prohibition of Nominee Transactions System and Legal Relationships 43
I. Prohibition of Nominee Transactions System 43
II. Laws Related to Prohibition of Nominee Transactions 45
III. Discussions on Determining Real Owners in Nominee Transactions 46
IV. Regulations After the Introduction of the Prohibition of Nominee Transactions System 50
A. Significance 52
B. Structure of the Revised Prohibition of Nominee Transactions System (Real Name Financial Transactions Act, Specific Financial Information Act) 53 (1) Prohibition of Nominee Transactions for Illegal Activities 53 (2) Prohibition of Brokerage Activities 53 (3) Presumption of Ownership for Nominee Account Holders 54 (4) Obligation to Explain 54 (5) Obligation to Verify and Refuse Transactions for Real Beneficiaries and Others** 55 (6) Fulfillment of the Suspicious Transaction Reporting Obligation** 57
V. Criminal Regulations on Illegal Nominee Transactions 57
A. Punishment Regulations in Individual Laws 57
B. Punishment Regulations under the Act on Regulation of Concealment of Criminal Proceeds 59
C. Punishment Regulations under the Real Name Financial Transactions Act 61 (1) Legal Punishment Regulations 62 (2) Case Law 64
A. Punishment Regulations under the Act on Regulation of Concealment of Criminal Proceeds 66
B. Punishment Regulations under the Real Name Financial Transactions Act 68
A. Issues with Punishing Illegal Nominee Transaction Participants and Name Lenders 69
B. Issues with Punishing Evaders of Real Beneficiary Verification 70
C. Conclusion 71
Chapter 3 Issues and Improvement Measures for the Real Beneficiary Verification System for Corporations under the Anti-Money Laundering Act 75
Section 1 Inadequacies in the Real Beneficiary Verification by Virtual Asset Providers 75
I. Significance 75
II. Introduction of the Revised Law 76
III. Verification of Real Beneficiaries in Registration Forms 78
IV. Evasion of Real Beneficiary Verification During the Registration Process and Improvement Measures 80
A. Active Interpretation of Registration Form Requirements 82
B. Application of Active Sanction Regulations 94 (1) Administrative Sanction Regulations for Virtual Asset Providers 94 (2) Fines Regulations 98
(a) Issues with Double Imposition 98
(b) Imposition of Fines for Violating Enhanced Due Diligence Obligations 102
(c) Application of Fine Mitigation Principles 105
V. Issues and Improvement Measures for Establishing Separate Evasive Corporations 108
A. Issues 109
B. Review 111
A. Issues 114
B. Review 116
A. Issues 117
B. Review 119
A. Issues 122
B. Review 123
Section 2 Issues Due to Arbitrary Verification of Hierarchical Real Beneficiaries 125
I. Significance 125
II. Issues 127
A. Management Participation Private Equity Funds 131
B. Specialized Investment Private Equity Funds 133
A. Parent-Subsidiary, Holding Company and Subsidiary, and Dominance-Dependency Relationships 138
B. Head Office (Branch) and Branch (Office) 140
C. Franchise Headquarters and Franchisees 140
D. Affiliates 140
A. Significance 141
B. Multiple Non-face-to-face Verification Methods 142
III. Improvement Measures 147
A. Identity Verification and Verification of Corporations and Associations 154
B. Expansion of Basic Verification Items 155
C. Verification of Governance Structure and Actual Existence of Corporations 159
Section 3 Issues of Real Beneficiary Verification Exemption Targets 163
I. Significance 163
II. Entities Exempted from Real Beneficiary Verification 163
A. Public Institutions Under the Act on the Operation of Public Institutions 164
B. Government-funded Research Institutes 164
C. Local Enterprises Established Under the Local Public Enterprises Act 164
D. Entities Designated by the Financial Intelligence Unit as Having No Risk of Money Laundering or Terrorist Financing 165
III. Issues: Broad Interpretation of Financial Institutions 166
IV. Improvement Measures 170
Section 4 Formalistic Real Beneficiary Reporting Principle 184
I. Significance of the Reporting Principle 184
II. Issues: Absence of Formal Requirements and Customer Reporting Principle 185
III. Improvement Measures: Introduction of Mandatory Ex Officio Review and Active Interpretation of the Law 189
A. Reliable and Independent Related Data and Information 189
B. Utilization of Digital Identification Certificates and Electronic Certificates 194
A. Transaction Refusal and Termination System 201
B. Limitations in Operating the Transaction Refusal and Termination System 204 (1) Internal Limitations of Financial Institutions 204 (2) Formalistic Transaction Freeze System 206 (3) External Limitations of Financial Institutions 207
C. Supplementary Measures 210 (1) Application of Information Sharing System** 210 (2) Use of Release System after Payment Suspension 213
Section 5 Deformalization of Watchlisted Individuals Verification System 224
I. Significance of the Watchlisted Individuals Verification System 224
A. System Revision 225
B. Main Contents of Watchlisted Individuals 228 (1) List of Individuals Restricted from Financial Transactions 228 (2) Sanctioned Persons Designated by the UN 230 (3) Nationals or Residents of Countries Designated by FATF as High-Risk Countries 230 (4) Government Lists of Countries Where Overseas Branches Are Located 232 (5) Lists of Foreign Politically Exposed Persons 233
C. Transaction Procedures with Watchlisted Individuals 235
II. Issues with the Watchlisted Individuals Verification System 236
III. Improvement Measures 242
Chapter 4 Conclusion 257
References 263
Abstract 273
「자금세탁방지법제에서의 법인·단체 실제소유자 확인제도에 대한 연구」
「A Study on the Beneficial Owner Identification & Verification System in relation to Legal Persons or Organizations under the Anti-Money Laundering System」
[Table of Contents]
Chapter 1 Introduction 1
Section 1 Background of the Study 1
Section 2 Purpose of the Study 4
Chapter 2 Customer Due Diligence System and Prohibition of Nominee Transactions 9
Section 1 Significance of the Customer Due Diligence System 9
I. Anti-Money Laundering Legal System 9
A. Customer Due Diligence System 15
B. Suspicious Transaction Reporting System 15
C. Large Cash Transaction Reporting System 18
II. Customer Due Diligence System under the Anti-Money Laundering Act 20
A. Opening of a New Account 25
B. One-time Financial Transactions Above a Certain Amount 25
Section 2 Main Contents of the Real Beneficiary Verification System 28
I. Significance and Necessity 28
II. Verification of Real Beneficiaries 33
A. Significance 34
B. Step-by-Step Verification of Real Beneficiaries 35 (1) Pre-stage: Exemption from Real Beneficiary Verification 36 (2) Step-by-Step Share Verification 36
(a) Step 1 37
(b) Step 2 38
(c) Step 3 41
Section 3 Introduction of the Prohibition of Nominee Transactions System and Legal Relationships 43
I. Prohibition of Nominee Transactions System 43
II. Laws Related to Prohibition of Nominee Transactions 45
III. Discussions on Determining Real Owners in Nominee Transactions 46
IV. Regulations After the Introduction of the Prohibition of Nominee Transactions System 50
A. Significance 52
B. Structure of the Revised Prohibition of Nominee Transactions System (Real Name Financial Transactions Act, Specific Financial Information Act) 53 (1) Prohibition of Nominee Transactions for Illegal Activities 53 (2) Prohibition of Brokerage Activities 53 (3) Presumption of Ownership for Nominee Account Holders 54 (4) Obligation to Explain 54 (5) Obligation to Verify and Refuse Transactions for Real Beneficiaries and Others** 55 (6) Fulfillment of the Suspicious Transaction Reporting Obligation** 57
V. Criminal Regulations on Illegal Nominee Transactions 57
A. Punishment Regulations in Individual Laws 57
B. Punishment Regulations under the Act on Regulation of Concealment of Criminal Proceeds 59
C. Punishment Regulations under the Real Name Financial Transactions Act 61 (1) Legal Punishment Regulations 62 (2) Case Law 64
A. Punishment Regulations under the Act on Regulation of Concealment of Criminal Proceeds 66
B. Punishment Regulations under the Real Name Financial Transactions Act 68
A. Issues with Punishing Illegal Nominee Transaction Participants and Name Lenders 69
B. Issues with Punishing Evaders of Real Beneficiary Verification 70
C. Conclusion 71
Chapter 3 Issues and Improvement Measures for the Real Beneficiary Verification System for Corporations under the Anti-Money Laundering Act 75
Section 1 Inadequacies in the Real Beneficiary Verification by Virtual Asset Providers 75
I. Significance 75
II. Introduction of the Revised Law 76
III. Verification of Real Beneficiaries in Registration Forms 78
IV. Evasion of Real Beneficiary Verification During the Registration Process and Improvement Measures 80
A. Active Interpretation of Registration Form Requirements 82
B. Application of Active Sanction Regulations 94 (1) Administrative Sanction Regulations for Virtual Asset Providers 94 (2) Fines Regulations 98
(a) Issues with Double Imposition 98
(b) Imposition of Fines for Violating Enhanced Due Diligence Obligations 102
(c) Application of Fine Mitigation Principles 105
V. Issues and Improvement Measures for Establishing Separate Evasive Corporations 108
A. Issues 109
B. Review 111
A. Issues 114
B. Review 116
A. Issues 117
B. Review 119
A. Issues 122
B. Review 123
Section 2 Issues Due to Arbitrary Verification of Hierarchical Real Beneficiaries 125
I. Significance 125
II. Issues 127
A. Management Participation Private Equity Funds 131
B. Specialized Investment Private Equity Funds 133
A. Parent-Subsidiary, Holding Company and Subsidiary, and Dominance-Dependency Relationships 138
B. Head Office (Branch) and Branch (Office) 140
C. Franchise Headquarters and Franchisees 140
D. Affiliates 140
A. Significance 141
B. Multiple Non-face-to-face Verification Methods 142
III. Improvement Measures 147
A. Identity Verification and Verification of Corporations and Associations 154
B. Expansion of Basic Verification Items 155
C. Verification of Governance Structure and Actual Existence of Corporations 159
Section 3 Issues of Real Beneficiary Verification Exemption Targets 163
I. Significance 163
II. Entities Exempted from Real Beneficiary Verification 163
A. Public Institutions Under the Act on the Operation of Public Institutions 164
B. Government-funded Research Institutes 164
C. Local Enterprises Established Under the Local Public Enterprises Act 164
D. Entities Designated by the Financial Intelligence Unit as Having No Risk of Money Laundering or Terrorist Financing 165
III. Issues: Broad Interpretation of Financial Institutions 166
IV. Improvement Measures 170
Section 4 Formalistic Real Beneficiary Reporting Principle 184
I. Significance of the Reporting Principle 184
II. Issues: Absence of Formal Requirements and Customer Reporting Principle 185
III. Improvement Measures: Introduction of Mandatory Ex Officio Review and Active Interpretation of the Law 189
A. Reliable and Independent Related Data and Information 189
B. Utilization of Digital Identification Certificates and Electronic Certificates 194
A. Transaction Refusal and Termination System 201
B. Limitations in Operating the Transaction Refusal and Termination System 204 (1) Internal Limitations of Financial Institutions 204 (2) Formalistic Transaction Freeze System 206 (3) External Limitations of Financial Institutions 207
C. Supplementary Measures 210 (1) Application of Information Sharing System** 210 (2) Use of Release System after Payment Suspension 213
Section 5 Deformalization of Watchlisted Individuals Verification System 224
I. Significance of the Watchlisted Individuals Verification System 224
A. System Revision 225
B. Main Contents of Watchlisted Individuals 228 (1) List of Individuals Restricted from Financial Transactions 228 (2) Sanctioned Persons Designated by the UN 230 (3) Nationals or Residents of Countries Designated by FATF as High-Risk Countries 230 (4) Government Lists of Countries Where Overseas Branches Are Located 232 (5) Lists of Foreign Politically Exposed Persons 233
C. Transaction Procedures with Watchlisted Individuals 235
II. Issues with the Watchlisted Individuals Verification System 236
III. Improvement Measures 242
Chapter 4 Conclusion 257
References 263
Abstract 273
「자금세탁방지법제에서의 법인·단체 실제소유자 확인제도에 대한 연구」