It will take North Korea more than five years to become a member of the Asia-Pacific Group on Money Laundering, as the nation may find it difficult to comply with the group’s terms of reference, according to a former head of the Financial Action Task Force.

The Asia Pacific Group on Money Laundering is the Asia-Pacific unit of the Financial Action Task Force ― an intergovernmental organization that develops policies for combating money laundering and terrorism financing.

“In order for North Korea to be a member of the APG, the nation should demonstrate its political willingness to implement all the six terms of reference,” said Vladimir Nechaev, a former president of the FATF, in an international money laundering seminar in Seoul.

These terms include commitment to participating in the APG’s mutual evaluation programs and implementing the group’s decisions.

“It may take five years for the country to be a member of the APG or possibly more than that,” Nechaev said, considering the obligations that accompany membership.

Mutual evaluation programs, for instance, call for members to commit to a mutual peer review system for determining the levels of compliance with the international standards on fighting money laundering and the financing of terrorism. This involves a desk-based review as well as an on-site visit by a team of experts dispatched from the group.

North Korea became an observer of the Asia-Pacific Group on Money Laundering in July when it agreed to comply with three of the group’s terms of reference. The move was largely interpreted as a strategy for easing the financial sanctions it was previously issued with.

Last May, China halted all transactions with the North’s Foreign Trade Bank after the U.S. designated the bank as a window for proliferators of weapons of mass destruction and their supporters.

As an APG observer, North Korea agreed to comply with three of the group’s terms that includes recognition of the need for action to be taken to combat money laundering, terrorist financing and proliferation.

By Shin Ji-hye (shinjh@heraldcorp.com)