A South Korean human rights watchdog has determined that a bank’s refusal to open an account for an Iranian national residing in the country based solely on their nationality constitutes discrimination. (Image courtesy of Yonhap)
SEOUL, Mar. 26 (Korea Bizwire) – A South Korean human rights watchdog has determined that a bank’s refusal to open an account for an Iranian national residing in the country based solely on their nationality constitutes discrimination.
According to the National Human Rights Commission of Korea (NHRCK) on March 25, an Iranian citizen, identified only by the surname A, tried to open an account at a local branch of a community credit union in 2022 but was turned away.
A’s wife subsequently filed a complaint with the NHRCK, alleging discrimination based on nationality.
The credit union explained that under the “Operational Regulations on Anti-Money Laundering and Countering the Financing of Terrorism” set by the Financial Services Commission’s Financial Intelligence Unit, it is required to refuse new account openings for customers from Iran, designated a “high-risk” country by the Financial Action Task Force (FATF) in 2011.
The regulations stipulate that financial institutions must either reject transactions involving customers from FATF-designated high-risk nations or obtain approval from top executives.
However, the NHRCK ruled that the blanket denial of access to financial services based solely on nationality constituted an unreasonable form of discrimination, citing the close link between financial access and the guarantee of basic civil rights.
The watchdog advised the credit union to notify its branches that account openings should be considered on a case-by-case basis after vetting the applicant’s creditworthiness and risk profile through a minimum verification process. It also recommended that the Financial Intelligence Unit amend its regulations accordingly.
Lina Jang (linajang@koreabizwire.com)
