Authorities are intensifying efforts to combat a surge in illegal financial activities, which have quadrupled in just four years. The national police agency has announced a comprehensive strategy to tackle these crimes, including enhanced investigations, systematic surveillance, and targeted prevention campaigns. This crackdown comes as the number of illegal financial transactions soared from 1,362 cases in 2021 to 5,519 cases last year, marking a significant escalation in illicit financial operations.
Escalating Illegal Financial Crimes
The alarming rise in illegal financial transactions, often referred to as ‘illegal usury’ or ‘loan sharking,’ has prompted a robust response from law enforcement. In November of the previous year, the police launched a special task force that, by June of this year, had investigated 2,060 individuals, including 76 core perpetrators. Despite these efforts, the problem persists, with various forms of illegal financial schemes, such as those involving counterfeit goods and intellectual property infringement, continuing to proliferate.
Recognizing the need for a more robust and decentralized approach, the police are now deploying experienced investigators to police stations nationwide. Specifically, 105 police stations that have reported at least 20 illegal financial cases annually will each be assigned a dedicated investigator. These specialized officers will not only lead investigations but also provide counseling to victims and work to dismantle the operational networks behind these illicit activities.
Enhanced Investigative Powers and Collaboration
To further strengthen the fight against illegal finance, the police are expanding their authority and improving coordination with other regulatory bodies. The scope of requesting the suspension of phone numbers used for illegal financial operations is being broadened. Previously, only the National Police Agency Commissioner could make such requests; now, this authority will be extended to all national police station chiefs, enabling faster and more efficient intervention.
Furthermore, the police are proposing amendments to the Act on Special Cases Concerning the Punishment, etc. of Specific Economic Crimes to allow for ‘undercover investigations’ into illegal financial cases. This move aims to provide investigators with more effective tools to infiltrate and disrupt criminal organizations. Joint crackdowns with relevant agencies, including the Financial Supervisory Service and special judicial police under local governments, will also be strengthened.
To expedite the freezing of accounts used in illegal financial transactions, the police are collaborating with the Financial Services Commission to establish a new system. This initiative seeks to prevent criminals from moving or utilizing illicitly obtained funds. The police also plan to apply for the seizure and provisional seizure of assets in all cases involving violations of the Act on Special Cases Concerning the Punishment, etc. of Specific Economic Crimes, even before a formal indictment.
Reclaiming Illicit Gains
A significant policy shift is also on the horizon regarding the recovery of illegal profits. Starting in November, the police intend to treat interest earned beyond the legally permitted rate as illegal gains and will seek to confiscate it. This measure aims to ensure that no one profits from illegal financial activities, regardless of the extent of the interest charged.
Hong Seok-ki, head of the National Investigation Headquarters, emphasized the severity of the issue, stating, “Illegal financial crimes are predatory financial offenses that rob not only the economic lives of citizens but also their future.” He added, “We will pursue illegal financial crimes to the end, ensuring that no one can obtain any profit through them.”
Key Strategies and Measures:
- Increased Investigator Deployment: Assigning dedicated investigators to police stations with high incidences of illegal financial cases.
- Expanded Authority: Broadening the power to request the suspension of phone numbers used in illicit operations.
- Undercover Investigations: Proposing legal amendments to permit undercover operations in illegal finance cases.
- Inter-agency Collaboration: Strengthening joint crackdowns with financial regulators and local government police.
- Expedited Asset Freezing: Developing a system to quickly freeze accounts involved in illegal transactions.
- Asset Seizure and Confiscation: Seeking seizure and provisional seizure of assets and confiscating interest exceeding legal limits.
- Targeted Prevention: Implementing customized public awareness campaigns to educate citizens about the risks.
Future Outlook
The comprehensive strategy reflects a determined effort by law enforcement to curb the growing menace of illegal financial activities. By enhancing investigative capabilities, strengthening legal frameworks, and fostering inter-agency cooperation, authorities aim to create a more secure financial environment for citizens. The focus on reclaiming illicit profits and preventing future exploitation underscores a commitment to dismantling the profitability of these criminal enterprises and protecting vulnerable individuals from predatory practices.
