Illegal forex deals soar 26% in H1 in Korea

Illegal foreign exchange dealings in South Korea shot up 26 percent in the first half of this year from a year earlier, data showed Tuesday, amid the government's push to root out violators of local foreign exchange rules. The Financial Supervisory Service (FSS) has imposed administrative punishment against 150 unlawful foreign exchange transaction cases in the January-June period, up from 119 cases the previous year, according to the financial regulator. Nearly 65 percent of the cases came from foreign direct investment, with 13.3 percent related to loans in foreign currencies and others, the FSS said. The regulator gave warnings to one-third of the cases, imposing fines on 55 other cases and suspending foreign exchange deals on 39 cases. The data came as the government stepped up to uncover illegal foreign exchange transactions as part of a broader effort to clamp down on tax evasion and money laundering that often involve high-profile Koreans in corporate and political spheres. Most of the cases found by the FSS breached the rule by choosing not to report the foreign exchange transaction to the bank, which is required by local forex law. The FSS said it has notified the tax and customs agencies here of 43 suspicious deals in relation to possible tax-dodging. It also said it expects the number of violators to rise as it will continue to run its task force on illegal foreign exchange transactions.