AML Internal Control Standards for Currency Exchange Businesses in Korea — 2026

1. Why AML Compliance Is Critical

Currency exchange businesses in Korea are classified as financial transaction reporting institutions under the Act on Reporting and Use of Specific Financial Transaction Information. Non-compliance can result in license revocation, criminal prosecution, and substantial fines.

2. Three Core AML Obligations

• Customer Due Diligence (CDD/EDD): Verify customer identity for all transactions; enhanced due diligence for high-risk customers
• Suspicious Transaction Reports (STR): Report suspected money laundering to the Financial Intelligence Unit (FIU) within 3 days
• Currency Transaction Reports (CTR): Report cash transactions of KRW 10 million or more per day per customer within 30 days

3. Internal Control Policy Document

Required AML policy document must include: risk assessment methodology, CDD procedures, STR/CTR reporting workflow, record-keeping rules (5-year minimum), employee training schedule, and compliance officer designation.

4. Transaction Monitoring Systems

• Daily CTR threshold alerts
• Pattern detection for structuring (splitting transactions to avoid CTR)
• PEP (Politically Exposed Person) screening
• Sanctions list checking (UN, OFAC, etc.)

5. Staff Training Requirements

All staff handling exchange transactions must receive annual AML training. Training records must be maintained for FIU inspection. New employees must be trained before handling any transactions.

6. Regulatory Inspections

The FIU and Ministry of Economy and Finance conduct periodic inspections. Common findings: inadequate CDD records, missing CTR filings, outdated AML policy documents.