Korea, US to look into tax havens
By Na Jeong-ju
Choi Soo-hyun FSS governor
The Financial Supervisory Service (FSS) said Friday it will collaborate with financial regulators in the United States and Singapore to track down assets hidden by Koreans in offshore tax havens.
FSS Governor Choi Soo-hyun is currently visiting Washington to participate in a seminar jointly hosted by the International Monetary Fund, the World Bank and the U.S. Federal Reserve Board.
On the sidelines of the forum, he has held bilateral talks with the heads of the Securities and Exchange Commission, the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau and other senior U.S. finance officials.
The FSS said it will share information about Koreans suspected of having dodged taxes through tax havens with the Financial Crimes Enforcement Network, a financial intelligence agency under the wing of the U.S. Treasury Department.
“The information sharing is part of our efforts to crack down on offshore tax evaders and violators of the country’s Foreign Currency Transaction Law,” an FSS spokesman said.
The FSS will also ask Singapore to cooperate with its investigation into Koreans having secret accounts in the Southeast Asian country, including Chun Jae-kook, the eldest son of former President Chun Doo-hwan.
The son reportedly set up and operated a bogus company named Blue Adonis in the British Virgin Islands through Arab Bank’s Singapore branch. The firm’s accounting books, list of shareholders and other corporate documents are known to be kept at the branch.
There have been suspicions that Chun used the company to launder part of money amassed by his father.
According to sources, two Korean executives are working in the branch to handle private banking services for those from South Korea. The FSS has requested Arab Bank to provide data regarding Chun’s case. The lender, based in Amman, Jordan, also has a branch in Seoul.
Cho Min-ho, vice chairman of SK Securities, a brokerage unit of the country’s third largest conglomerate SK Group, also allegedly used the bank to operate a paper company in the Virgin Islands.
“We are now investigating more than 20 Koreans on suspicions of tax evasion and illegal currency transactions,” an FSS official said. “After concluding our probes, we will impose fines on violators and refer the cases to the National Tax Service and the prosecution.”
The FSS has teamed up with the NTS, customs officials as well as the Bank of Korea to find Koreans operating bogus companies in tax havens. The crackdown was prompted by revelations of high-profile Korean suspects by the Korea Center for Investigative Journalism.
They include Chun; Cho; actress Yoon Suk-hwa and her husband Kim Seok-ki, former CEO of the now-defunct Joongang Mutual Savings Bank; Samsung Electronics executive Lee Soo-hyung; Kyungdong University President Chun Sung-yong; Hanjin Shipping Chairwoman Choi Eun-young; and OCI Chairman Lee Soo-young.