South Korea Country Summary

FATF Status

South Korea is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The latest follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in South Korea was undertaken by in 2024. According to that Evaluation, South Korea was deemed Compliant for 13 and Largely Compliant for 20 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 5 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.

The Republic of Korea (ROK) has implemented various measures to combat corruption, including the Public Service Ethics Act and the Anti-Corruption and Civil Rights Commission, which focus on asset disclosure and whistleblower protection. Despite these efforts, challenges remain, as evidenced by the country's ranking in Transparency International's Corruption Perception Index and high-profile corruption scandals involving former presidents. The government has also tightened regulations on the employment of retired officials to prevent conflicts of interest, while various agencies work to monitor and improve transparency in public institutions.

South Korea's economy is characterized by its political stability, advanced infrastructure, and a highly skilled workforce, making it an attractive destination for foreign investment. However, the country faces challenges in attracting foreign direct investment due to a complex regulatory environment and increasing competition from low-cost producers like China. Despite these hurdles, the government has implemented measures to improve the investment climate, including the establishment of a Foreign Investment Ombudsman and regulatory sandboxes to foster innovation.

South Korea is an appealing destination for foreign investment, characterized by its political stability, advanced infrastructure, and a skilled workforce. However, the country struggles to attract foreign direct investment due to a complex regulatory environment and high operational costs, despite recent government initiatives aimed at improving transparency and reducing regulatory burdens. The revised Korea-U.S. Free Trade Agreement (KORUS) further enhances market access for U.S. investors, ensuring they are treated similarly to domestic investors.