10 Government Agencies Have Free Access to Financial Information


By Chung Ah-young
Staff Reporter



Controversy is growing over possible breaches of privacy resulting from abusive investigative power in tracing corporate and individual bank accounts.

Civic activists argue that indiscriminately tracing bank accounts constitutes a violation of human rights as it reveals personal information against one’s will.

They also say that excessive tracing of bank accounts runs counter to the Constitution, which guarantees the right to privacy.

According to a report released by Grand National Party Rep. Joo Sung-young during the National Assembly inspection last month, the number of traces conducted under search and seizure warrants, albeit legitimate, has showed a 4.7-fold increase over the last four years. The number stood at 19,585 in 2003, 15,420 in 2002, 7,669 in 2001 and 4,138 in 2000.

As of June this year, the figure had already reached 13,965. Experts expect the number to rise to around 25,000 by the end of the year.

Joo, a prosecutor-turned-lawmaker, said that a single search and seizure warrant allows prosecutors and authorities to trace hundreds of bank accounts, with free access to other connected accounts.

In particular, the tracing of connected bank accounts means investigating all accounts involved in transactions with the account originally subject to the search warrant.

Prosecutors also have the authority to thoroughly investigate all connected bank accounts of witnesses as well as suspects based on the provision of a comprehensive warrant.

Critics say all accounts are vulnerable to traces conducted by government agencies under the system.

Currently over 10 state agencies have the authority to trace bank accounts: the courts, prosecutors’ offices, the Financial Supervisory Service (FSS), the Fair Trade Commission (FTC), the National Election Commission (NEC), the National Tax Service (NTS), the Korea Financial Intelligence Unit (FIU) and local governments under the law concerning the real-name financial transaction system and the guarantee of secrecy.

In July the relevant government agencies gained free access to financial information in investigations related to allegations over real estate speculation. Account tracing is also allowed in cases of tax in arrears, tax evasion and the property registration of public officials.

Critics have pointed out that the financial system allows the authorities to gain free access to bank accounts, which could lead to overlapping traces.

In particular, the most serious problem is that some tracking is conducted without a search warrant or the owners’ consent, representing 64.8 percent of all cases, or more than 1.1 million cases since 1998.

Although the authorities are required to notify owners when an account is traced, they do not always comply with the law.

``People’s concerns are escalating because bank accounts are very exposed to the authorities and they do not reveal how the tracing is conducted or how financial data is used afterward,’’ Joo said.

He also pointed out that problems in the tracing of bank accounts is a result of the free access granted to prosecutors and the authorities to all relevant bank accounts connected with each other and the lack of management, which triggers a breach of privacy.

He cited the so-called ``list’’ cases as the outcome of tracing connecting bank accounts.

He added that the purpose of tracing bank accounts is not clear because the authorities do not make bank account information public.

However, Park Kun-yong, coordinator of the People’s Solidarity for Participatory Democracy, one of the largest civic groups, said that the increasing number of bank account traces cannot solely be regarded as a violation of rights.

``The figure does not necessarily refer to breaches of privacy. The rise in the number of accounts being traced just indicates a surge in the number of financial frauds or irregularities requiring such an investigation. In particular, given the nature of financial irregularities, in many cases tracking bank accounts is necessary for securing evidence,’’ Park said.

He said that civic groups are asking for a legitimate procedure for tracing bank accounts within the scope of the law.

``The law enforcement agency is supposed to conduct investigations based on a warrant system. The abuse of tracing bank accounts is a legal matter,’’ he said.

The Citizens’ Coalition for Economic Justices (CCEJ) has waged a campaign to call for thorough and transparent investigations by tracing the bank accounts of major companies to ensure the fairness of their financial transactions in Korea.

The CCEJ urged the government to extend the authority of the Fair Trade Commission (FTC) in the tracing of corporate bank account records. The FTC has had this authority since 1998.

chungay@koreatimes.co.kr