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 Act on Anti-Corruption, which mandate asset disclosure and protect whistleblowers. Despite these efforts, challenges remain, as evidenced by the high-profile corruption scandals involving former Presidents Park Geun-hye and Lee Myung-bak, which highlighted systemic issues within the government. While the ROK has made strides in anti-corruption legislation and enforcement, public concern about corruption persists, and the country continues to work on improving transparency and accountability in both public and private sectors.

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. Despite significant growth in foreign portfolio investment since the 1990s, the country struggles to attract foreign direct investment due to a complex regulatory environment and increasing competition from lower-cost producers like China. The government has initiated reforms to improve the investment climate, including the establishment of a Foreign Investment Ombudsman and a regulatory sandbox program.

South Korea presents an attractive investment climate for foreign investors, characterized by political stability, a skilled workforce, and advanced infrastructure. However, the country faces challenges in attracting foreign direct investment (FDI) due to a complex regulatory environment and high operational costs, which have led to underperformance relative to its economic potential. The government has initiated reforms, including the establishment of a Foreign Investment Ombudsman and a regulatory sandbox, to enhance the investment landscape.