RegAlert2017-09-22 | FinCEN Advisory FIN-2017-A007Added · Updated
Advisory on North Korea’s Use of the International Financial System (FinCEN Advisory FIN-2017-A007)
This advisory alerts financial institutions to red flags associated with North Korean schemes that use front companies, trade-based payment schemes, and financial representatives to evade sanctions and finance weapons programs. It outlines specific indicators such as geography, shared addresses, and surge activity cycles to help institutions identify illicit activity. The document reiterates regulatory obligations under Section 311 of the USA PATRIOT Act, including the prohibition on correspondent accounts for North Korean financial institutions and requirements for special due diligence. Financial institutions are instructed to file Suspicious Activity Reports when transactions lack a lawful purpose and are encouraged to share information under Section 314(b) of the USA PATRIOT Act.
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Advisory Information
FIN-2017-A007
DPRK Financing Advisory (v16)+language2.pdf
(215.55 KB)
Issued Date
Subject
Advisory on North Korea’s Use of the International Financial System
North Korea uses front and trade companies to disguise, move, and launder funds to finance its nuclear and ballistic missile programs.
The Financial Crimes Enforcement Network (FinCEN) is issuing this advisory to further alert financial institutions to North Korean schemes being used to evade U.S. and United Nations (UN) sanctions, launder funds, and finance the North Korean regime’s weapons of mass destruction (WMD) and ballistic missile programs. This advisory is being issued in conjunction with today’s designations by Treasury’s Office of Foreign Assets Control (OFAC), which targeted several representatives of designated North Korean financial institutions. [1] This advisory provides financial red flags of illicit North Korean schemes, including the use of China-based financial representatives, front companies, trading companies, and financial institutions operating in areas bordering the Democratic People’s Republic of Korea (DPRK). These red flags will assist financial institutions in identifying and reporting suspected illicit activity by the North Korean government and its financial institutions. This advisory should be shared with:
- Chief Risk Officers
- Chief Compliance Officers
- Legal Departments
- AML/BSA Departments
- AML/BSA Analysts
- Sanctions Analysts
Recent Treasury Actions
The U.S. Department of the Treasury is implementing a strategy designed to impose pressure on the DPRK’s finances and economy and protect the U.S. and international financial systems from misuse by the DPRK. The Treasury Department continues to take actions targeting DPRK’s ongoing development of WMD and ballistic missile programs, as well as its continued violations of UN Security Council resolutions (UNSCRs). [2] Recent Treasury Department actions include the following:
OFAC has issued a number of substantial DPRK-related designations and identifications, including Executive Order 13810, which was issued on September 21, 2017. This Executive Order significantly expands Treasury’s authorities to target persons who continue to finance and facilitate North Korea’s economic activity. The designations, 257 persons to date, expose the North Korean regime’s international reach and continued access to the international financial system; [3]
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Lineage: In force
Source: Financial Crimes Enforcement Network — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works