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Money-Laundering Watchdog Calls On North Korea to Fulfill Pledge

North Korean leader Kim Il-sung is seen on this 5000 North Korea won banknote in this photo illustration taken in Shanghai May 23, 2013.
North Korean leader Kim Il-sung is seen on this 5000 North Korea won banknote in this photo illustration taken in Shanghai May 23, 2013.

The Financial Action Task Force, an inter-governmental money laundering watchdog body, has called on North Korea to fulfill its pledge to combat money laundering and terrorist financing.

In a recent statement released on its website, the Paris-based group said it “remains concerned by the DPRK’s failure to address the significant deficiencies in its anti-money laundering and combating the financing of terrorism regime, and the serious threat this poses to the integrity of the international financial system."

In an apparent response to financial sanctions by the United Nations and the United States, Pyongyang has recently promised steps to fight money laundering. In July 2014, Pyongyang announced it had joined the Asian affiliate of the watchdog as an observer. Later, the communist country sent a letter to the FATF indicating its commitment to implementing actions recommended by the group.

The money laundering watchdog said it will keep its earlier decision to put the North on its blacklist.

“The FATF reaffirms its 25 February 2011 call on its members, and urges all jurisdictions, to advise their financial institutions to give special attention to business relationships and transactions with the DPRK, including DPRK companies and financial institutions,” the group said.

Pyongyang has long been accused of making money from illicit activities, including counterfeiting U.S. notes and drug trafficking. Some experts say the watchdog’s scrutiny is not sufficient to cope with Pyongyang’s illicit financing activities.

“Those warnings are persuasive to responsible banks, but North Korea continues to find willing enablers among the world’s less responsible financial institutions,” said Joshua Stanton, a Washington attorney and blogger who helped draft a congressional proposal to broaden sanctions against North Korea.

In a phone interview with the VOA Korean Service Monday, Stanton questioned Pyongyang’s will to follow international norms in its financial dealings.

“Pyongyang is worried about sanctions, but is unwilling to clean up its act,” said Stanton.

The FATF was established in 1989 by the ministers of its member jurisdictions. The objectives of the body are “to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system,” according to its website.

This report was produced in collaboration with the VOA Korean service.