Korean financial and tax regulators are calling for global cooperation to track and clamp down on companies or wealthy individuals suspected of hoarding unreported funds in their accounts via paper companies in tax havens.

Korea’s Financial Supervisory Service Gov. Choi Soo-hyun told reporters that the regulatory body was seeking cooperation with the U.S. Financial Crimes Enforcement Network, a unit of the Department of the Treasury, to use its extensive database and share tax-related information.

The regulator is also reportedly seeking cooperation from Singapore, in addition to the U.S. The National Tax Service, which also previously said that it would use its global network to fight tax evasion.

The FSS chief was in Washington, D.C. to attend a seminar on global financial regulations between June 5 and 7. An FSS spokesperson declined to further comment on the issue.

The FSS’ push for a global network of collaboration comes as its prosecutors, financial and tax authorities and the central bank plan to launch a joint investigation into an account set up at Arab Bank’s Singaporean branch by former President Chun Doo-hwan son’s Jae-kook.

Chun Jae-kook was included in the fifth batch of Koreans exposed as operating tax haven shell companies by a group of activist journalists.

The younger Chun claimed that the paper company was not set up to cache any funds.

However, this disclosure by the Korea Center for Investigative Journalism triggered nationwide speculation that he may have used the ghost company in the British Virgin Islands to siphon off his father’s personal wealth gained during his rule in the 1980s.

The KCIJ, also known as Newstapa, added that the younger Chun allegedly entrusted Arab Bank to manage his funds in his account. The financial regulator has asked for documents related to Chun Jae-kook’s account from the bank’s Singaporean and Seoul branches to look for evidence of tax evasion.

The elder Chun was ordered by the state to pay 220.5 billion won ($198 million) in penalties for leading an insurrection and accepting bribes while he was the president. But he paid only 53.3 billion won over the past 17 years, leaving 167.2 billion won unpaid.

The independent journalists’ association announced last month that there were more than 200 people who possessed bank accounts in offshore tax havens.

These accountholders are suspected of storing slush funds by establishing paper companies in tax havens that allow them to pay almost zero taxes and do not recognize foreign regulatory compliance.

By Chung Joo-won  (joowonc@heraldcorp.com)