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Asia Financial Cooperative Network

Seok-dong Kim, the chairman of Financial Services Commission (FSC) visited Thailand and Hong Kong from June 9 to June 13. This business trip was an extension of his endeavour to establish Asia Financial Network including previous business trips to Mongol (September 2011) and Vietnam and Indonesia (March 2012).

It was a meaningful achievement to set up a cooperative system with Thailand and Hong Kong. Above all, Thailand has been Korea’s sincere allied nation since Korean War. In 1958, after establishing diplomatic ties, Thailand is now the 17th export country ($8.4billion), the 22nd import country ($5.4billion) and the 21st foreign direct investment country ($0.176billion).  Also, it is needless to say the importance of Hong Kong because, as a centre of global finance and trade, there are a lot of global finance companies including 34 Korean companies.

Beginning his first schedule, Kim reinforced the corporation between Korean and Thai financial authorities. In detail, FSC and Thai financial authorities such as Office of Insurance Commission (OIC) and Securities and Exchange Commission (SEC) signed MoU to strengthen cooperation. Considering geopolitical factor of Thailand which is located in the centre of Indochina Peninsula, close cooperation might play an important role for Korea to advance into Asia rising countries such as Laos, Cambodia and Myanmar. According to this MoU, both authorities can exchange information about financial policies and supervisions. Also, they agreed to share political experiences and professionalism through regular meeting. Especially, at the meeting with Vorapool Socatiyanurak, secretary general of Thai SEC, FSC agreed the close cooperation to foster capital market and establish financial infrastructure in ASEAN and Greater Mekong Subregion (GMS).  From this, both authorities expect for Korean private company to advance into Thailand actively.

In Hong Kong, Kim made an effort to establish the market stabilization plan against the Eurozone crisis. Visiting Hong Kong Monetary Authority (HKMA) and Hong Kong Securities and Futures Commission (HKSFC), he shared opinions about Euro crisis and tried to seek cooperative counter plan. In particular, HKSFC conceded the necessity of reinforcement of cooperation, so acceded to cooperate with signing MoU in the near future as well as currently availing through International Organization of Securities Commissions (IOSCO) and APRC.

During the business trip, Kim also held a meeting with local advanced businessmen in both Thailand and Hong Kong. The participants highly requested for Korean government to support the companies’ advances and the local business activities continuously. They said the support is critical because Thailand and Hong Kong are located in the centre of Indochina and the core of Chinese economic region respectively.

FSC evaluated this cooperation with Thailand and Hong Kong as a promising achievement because of their geopolitical advantages. With the previous business trip to Mongol, Vietnam and Indonesia, this business trip has a significant meaning of expanding Asian Financial Cooperative Network to Indochina Peninsula and Hong Kong (China). FSC will keep strengthening financial diplomacy concentrating on the rising countries to support Korean companies’ advances to the global market.

Chaehack Chad Suh (chaehack.suh@gmail.com)

BIFC, at the heart of finance?

BIFC, at the heart of finance? 

     Imagine 2013 of Busan. What do you see? You would see Asia’s giant international finance city. Upon BIFC’s completion, it would have a huge impact on local economy as well as bringing new life to its city of Busan. The following picture is projected 3D image of an aerial view of BIFC.

     The construction of ‘Munhyeon Finance Complex’ (MFC) has finally gotten off the ground. ‘Busan Center for International Finance‘ (BIFC) will be built in the core of this enormous complex. It would be a 63 stories building just like the signature skyscraper of Seoul’s ’63 Building’. Lead by Hyundai Engineering and Construction Co, a joint venture called ‘Finansia’, was selected as a preffered in this project. Finansia proposed a concept of developing ‘a mega wave in Finansia (finance-Asia) which refers to expanding through five oceans and six continents as a financial hub of Asia. The center is expected to be completed in the 2013 and is going to be a landmark of ‘MFC’ as well as its innovative city of Busan in near future. As Busan was announced to be a finance center city, January, last year, this mega project is set to strengthen related infrastructure and needs. 

     To make this innovation city project successful, many of government financial institutions and agencies as well as private companies decided to move into ‘Munhyeon Innovation City’ (MIC) and ‘Development Committee of Busan Finance Center’ was formed. The committee has planned the activities of organizing meetings between private and public administrators in Seoul and Busan and also overseas. They are still working for resolving differences among financial institutions that will be moving into MIC and trying to solve required laws to be revised to make this easier.

     However, there’s a bad news for those expecting this financial hub to be completed soon. It is quite behind its schedule of completion. It was originally expected to have a grand opening at the end of 2012. Several reasons that it couldn’t follow the dates are followings. The government did not approve the plan of public institutions’ move to the MFC. For example, KRX (Korea Exchange), who decided to move to this center, recently made an unclear decision of entering the center or not which delayed and slowed down the process. And more importantly, global financial crisis that occurred recently contributed in freezing investors to open and invest widely.

      Six public organizations surely decided to move into the center at the beginning of 2013 are KSD (Korea Securities Depository), KAMC (Korea Asset Management Corporation), HF (Korea Housing Finance Corporation), KHG (Korea Housing Guarantee Co.,Ltd), KYCI (Korea Youth Counseling Institute), KOSPO (Korea Southern Power Co.,Ltd). A city official of Busan says “Its plan fell through due to lack of using the method of Mixed-Use Development though, now it is restarting. And we expect that everyone would work hard for completion of financial complex in 2013 so that public institutions’ move in process can be done as smooth as possible in scheduled time.”

      Munhyeon Innovation City is the biggest and would soon known to be one of the leading financial complexes in Asia. As serving the financial industry and people, MIC has high hopes of becoming the center of financial world. The core of MIC, BIFC would also be introduced to world as public and private financial hub center for city of Busan and further more whole of Asia.

Min Young Kim (min4609@naver.com

Weekly e-Briefing 4. President Lee Myung Bak’s key comments at Davos

President Lee, Myung-Bak at Davos world economic forum addressed the point that it is very important to achieve consensus across the G-20 nations for successful implementation of framework for strong, sustainable and balanced growth. For this point, he has added 3 elements we need to give focus on; 1) Finding ways to counter the procyclical nature of the global economy and the financial system. 2) The problem of the institutions which are ‘Too big to fail.’ 3) Transition to a more normal policy stance. To see more, Please visit http://www.fsc.go.kr/eng/index.jsp

Korea, a New Member of FATF

In order to effectively deal with Money-Laundering, the FATF was established attendant upon the consensus at G7 Summit in 1989. Furthermore, the consolidated role of the FATF was required to strengthen the transparency of global financial market and cut down on the risk of Money Laundering at the last G20 Summit. That is to say, international society agreed on sorting out and seeking the sanction against Non-Cooperative Jurisdiction, who does not implement the global standard regarding Terrorist-Financing and distract the transparency of the financial market.  

The FATF consists of 35 countries (33 countries and 2 international organizations) with OECD (Organization for Economic Cooperation and Development) members as the core. However, among 30 OECD members, 4 countries including Poland, Hungary, the Czech Republic, and Slovakia are not joining into the FATF. Nevertheless, as we can see, the FATF includes most of the countries around the globe which promise to actively support and participate in the global efforts on AML. To be brief,  it reflects the international society recognizes the significance of the role of Anti-Money Laundering.   

 

the FATF carries out the 3 main roles. The first is Anti-Money Laundering and the creation of the blocking global network. The second is the study on the method of Money Laundering and development of its countermeasure. At last, there is the enactment and legislation of the related international regulations and institution.   

 

Korea joining the FATF, Why is it significant?  

Korea has been admitted as a full member into the FATF(Financial Action Task Fore) during the FATF plenary meeting in Paris from October 14 to 16,2009. This has several significant implications. Above all, there is the increasing necessity of Anti-Money Laundering system. The four major reasons for Korea in joining the FATF are (1) The improvement of the credibility of financial institution, (2) The efficient regulation against a criminal act, (3) The prevention of side effect triggered by liberalization measure of foreign exchange, (4) The affirmative participation to the global effort for counter-terrorist financing. It will also bring positive aftermath to the improvement of overseas credibility and the global authorization acquisition concerning domestic factors including institution. It will not merely contribute to the enlargement of the role of Korea within the FATF as the chair country of the next G20 summit on November, 2010, but strengthen the global representative status within Asia.  Due to the fact that the issue of money laundering or terrorist financing was one of the main agenda of the last G20 summit. Korea needs to actively participate in not merely Asia-Pacific related activities, but the broader global efforts as the chair of the next G20 summit in 2010 as mentioned previously. Furthermore, Korea is required to enlarge the participation in the FATF working group. Eventually, the diverse efforts and its role for AML/counter-terrorist financing should not be restricted within the scope of counter-terrorism and crime.

FSC Press Release_January 13th

Introduction of Foreign Investor Express Card

The Financial Services Commission (FSC), the Ministry of Justice and the Fn Hub Korea (the Center) of the Financial Supervisory Service have agreed to issue the “Financial Investor Express Card” with an aim to increase the number of foreign executives of foreign financial institutions eligible for fast-track immigration lanes.   CLICK HERE