Starting today (June 30), accounts suspected of being involved in new types of phishing crimes, beyond traditional voice phishing, can be frozen for up to 67 business days to prevent the spread of further damage.

Financial authorities are pushing for an amendment to the Act on Reporting and Using Specified Financial Transaction Information (Specified Financial Information Act) to institutionalize the freezing of transactions for various crimes that infringe on public livelihood, such as drugs, gambling, and illegal private lending, in addition to new types of phishing.

Lee Tae-gwon, Commissioner of the Korea Financial Intelligence Unit (KoFIU), announced this policy while holding the Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) Policy Advisory Committee meeting at the Government Complex Seoul on this day.

Commissioner Lee analyzed, "Recently, crimes infringing on public livelihood have evolved into intelligent crimes utilizing non-face-to-face and digital new technologies, and criminal proceeds are being transferred and concealed more quickly and cunningly through borrowed-name accounts, virtual assets, and cross-border remittances."

He emphasized, "To effectively block criminal proceeds and prevent further damage, proactive and swift transaction suspension measures are necessary at the financial transaction stage."

Previously, financial institutions were unable to actively freeze accounts regarding new types of phishing that did not fall under voice phishing crimes as defined by the Special Act on Prevention of Telecommunications-based Financial Fraud and Refund of Damage (Telecommunications Fraud Refund Act).

However, starting today, it has been decided to allow the freezing of transactions not only for voice phishing but also for accounts suspected of being used for new types of phishing.

If damage is suspected, reporting it to 112 will lead financial institutions to take temporary measures and implement a temporary suspension of transactions.

Specifically, until it is confirmed whether the crime involves a "disguised transaction of goods or services," which is the difference between voice phishing and new types of phishing, the account will be temporarily suspended in accordance with the Telecommunications Fraud Refund Act.

Afterward, if it is determined to be a new type of phishing through verification by the police's integrated response team, a temporary transaction suspension measure can be applied for 7 business days to block deposits and withdrawals from the account based on the Specified Financial Information Act.

Subsequently, if the KoFIU recommends that the financial institution maintain the suspension, the institution will initiate a formal suspension procedure to maintain the freeze for an additional 30 business days. If requested by the police, this can be extended once for another 30 business days.

During this period, the police will conduct investigations into the criminal charges.

This means a total suspension of up to 67 business days is possible.

The KoFIU plans to pursue a legal basis in the Specified Financial Information Act that would allow the KoFIU to suspend transactions, including deposits and withdrawals, even in cases where accounts are suspected of being related to major crimes infringing on public livelihood, such as drugs, gambling, illegal private lending, and large-scale fraud, beyond voice phishing and new types of phishing.

The KoFIU expressed its expectation, stating, "Once a legal basis for the transaction suspension system covering all crimes infringing on public livelihood is established, the KoFIU will be able to play an active role in directly suspending transactions of accounts suspected of criminal activity, which will further contribute to preventing the concealment of criminal proceeds and preventing crimes."

(Photo: Yonhap News)