According to news released by South Korea's financial regulator on July 8, the Financial Supervisory Service (FSS) recently conducted a special inspection of the anti-money laundering (AML) system operations of three small-sum overseas remittance companies—Moin, Eninepay, and Hanpass—and is currently evaluating the results. This is the first money laundering risk inspection of such companies by the FSS since small-sum overseas remittance services were permitted to operate in 2017.
FSS Conducts First AML Risk Inspection
According to the FSS, South Korea's financial regulator allowed non-bank fintech companies to provide small-sum overseas remittance services in 2017, setting a single remittance limit of $3,000 and an annual total remittance limit of $30,000.
In the nearly nine years since then, the FSS had never conducted a specialized money laundering risk inspection of such companies. This AML special inspection of Moin, Eninepay, and Hanpass is the FSS's first systematic compliance review of this business category, primarily because the scale of small-sum overseas remittances has continued to expand recently, increasing the possibility of their use for money laundering. The FSS has taken this preventive measure.
Scale of South Korea's Small-Sum Overseas Remittance Industry: Trading Volume Growth Background and Regulatory Compliance Requirements
According to FSS statistics and the Act on Reporting and Use of Specific Financial Transaction Information, the main scale indicators and legal requirements for South Korea's small-sum overseas remittance industry are as follows:
Trading volume growth: From $14 million (about 21.2 billion KRW) in Q4 2017, it surged to $365 million (about 555.8 billion KRW) in Q1 2019, and has continued to grow.
Transaction volume growth: From 22,000 transactions to 550,000 transactions (in the same statistical period).
Number of registered companies: From 12 in 2017 to 27 in 2024 (more than doubled).
Single transaction limit: Up to $3,000; annual limit: up to $30,000 (applicable to non-bank fintech companies).
Regulatory requirements: Companies must verify customer identity information (address, contact details) and source of funds; if there is reasonable suspicion of money laundering or terrorist financing, they must report to the Financial Intelligence Unit of the Financial Services Commission.
Act on Reporting and Use of Specific Financial Transaction Information Requires Customer Verification and Suspicious Transaction Reporting
According to the FSS, South Korea's Act on Reporting and Use of Specific Financial Transaction Information stipulates specific compliance obligations for small-sum overseas remittance companies: companies must verify customer identity information, including address and contact details, as well as the purpose of the financial transaction and the source of funds; if there is reasonable ground to suspect that a financial transaction involves money laundering or terrorist financing, they must report the transaction details to the Financial Intelligence Unit of the Financial Services Commission.
This special inspection by the FSS of Moin, Eninepay, and Hanpass aimed to verify whether the three companies comply with the above regulations. Currently, the FSS says it is reviewing the inspection results and will consider possible sanctions if necessary.
Frequently Asked Questions
Why did South Korea's FSS conduct its first anti-money laundering review of small-sum overseas remittance companies at this time?
According to the FSS, in recent years the scale of South Korea's small-sum overseas remittances has continued to expand, increasing the possibility of their use for money laundering. This review is a preventive measure taken by the FSS to guard against such risks, and it is also the first AML special inspection since the approval of small-sum overseas remittance services in 2017.
Which three companies were inspected by the FSS for anti-money laundering?
According to the FSS, the three companies that underwent this special inspection of AML system operations are Moin, Eninepay, and Hanpass. The FSS is currently evaluating the inspection results, and officials have stated that they will consider possible sanctions if necessary.
What is the scale and number of companies in South Korea's small-sum overseas remittance industry?
According to FSS statistics, the number of small-sum overseas remittance companies increased from 12 in 2017 to 27 in 2024. Trading volume surged from $14 million in Q4 2017 to $365 million in Q1 2019, and the number of transactions during the same period jumped from 22,000 to 550,000, with continued growth thereafter.
