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| Financial Supervisory Service (FSS) Governor Lee Bok-hyun speaks during a conference held at the National Assembly in Seoul on Aug.11. Newsis |
FSS ends probe and case is now in hands of prosecution and customs office
By Anna J. Park
The Financial Supervisory Service (FSS) wrapped up its month-long inspection of local commercial banks over dubious international remittances earlier this month. Now, a more in-depth investigation into specific details is in the hands of other investigative government agencies, including the prosecutors' office and the customs service.
"We've already sent the details of the cases to many governmental agencies, including the prosecutors' office and customs service, to share information discovered during the investigation," FSS Governor Lee Bok-hyun said during a recent press interview.
Based on further revelations of the transactions discovered by the agencies, the related banks are not expected to escape being reprimanded.
What the FSS' month-long official investigation discovered so far was that a whopping $6.54 billion was sent in dubious international money transfers at various local banks during the past year.
More specifically, the total amount of such international transactions by Woori and Shinhan Banks over the past year stood at over $3.4 billion. That is more than $10 million higher than the figure announced in early August at the end of the interim investigation by the FSS. The additional amount was calculated from the banks' voluntary internal inspection of the abnormal remittance transactions.
"The total amount related to the dubious international remittance scandal has increased to over $3.4 billion, with the additional amount spotted during the banks' voluntary inspection included in the aggregate amount," an official from the financial authority said.
The FSS investigation into the two banks was launched in July.
Initially, the banks and the FSS estimated the aggregate amount to be around $3.1 billion by the end of July, but it snowballed into more than $3.4 at the end of the investigation this month.
During the investigation, the FSS also ordered other banks ― except Woori and Shinhan Banks ― in July to conduct voluntary inspections of their transactions. With other banks also reporting similar cases to the FSS in early August, the total amount related to such abnormal international money transfers at all banks, including both Woori and Shinhan, stood at $6.54 billion.
Dozens of companies ― 26 from Woori and Shinhan and another 46 ― are involved in such international remittances at the banks. The FSS investigation showed that many of the money transfers were made to overseas corporations' accounts, while some of them are allegedly related to arbitrage transactions at local cryptocurrency exchanges.
Suspicious remittance cases include the transfers of huge sums of money by unknown small business entities compared to their capital assets, illegal transfers of money according to the Foreign Exchange Transactions Act, far too frequent deposit transactions at banks that operate linked accounts with local cryptocurrency exchanges or remittances of money to overseas companies owned by the same or closely linked people to the senders.
