Amid the vacancy of the Financial Supervisory Service (FSS) director, which has lasted over a month, the appointment of the private sanctions review committee members, which has also become vacant due to the expiration of terms, is being delayed. While there is no immediate issue in proceeding with the sanctions review, there are concerns that a prolonged vacancy in the director position may create a lack of expertise necessary for the sanctions review committee.
According to the FSS on the 16th, currently, 8 out of 20 private members of the sanctions review committee are active, and no successors have been appointed for the 7 private members whose terms expired on the 6th.
Until recently, the sanctions review committee at the FSS has been operated by a total of 19 members, including 4 ex officio members from the FSS and the Financial Services Commission (FSC) and 15 private members. The terms of the private members are set to 2 years, with each group of 7 and 8 having a staggered term of 1 year. The 7 private members whose terms recently expired began their terms in 2025, and currently, only the privately appointed members from last year are active.
The FSS restructured the sanctions review committee to a 20-member quota in 2018 and has operated with close to 20 private members. Last year, it briefly operated with 7 private members for efficiency, but at the beginning of this year, it appointed 8 additional private members, returning to a structure of 15.
The delay in appointing private members is due to the vacancy of the director position. Former FSS director Lee Bok-hyun retired on June 5 after his term expired, and the appointment has been delayed for over a month. There are observations that the delay in appointments may be linked to the restructuring of the financial supervisory system being promoted by the Presidential Committee on Policy Planning.
The FSS has stated it would swiftly proceed with the appointment of private members after the director is appointed. An FSS official noted, "Since a successor director has yet to be decided, we plan to determine how to appoint private members after the appointment of the new director," and added, "We will discuss it promptly."
However, there is a stance that the delay in appointing private members does not pose significant problems for the immediate operation of the sanctions review. Currently, the private members are operated in a 'pool' format, considering expertise and conflicts of interest regarding the cases under review, with some private members attending the sanctions review. It is a principle that 3 ex officio members and 5 private members attend the main meeting, while 2 ex officio members and 2 private members attend the subcommittee. With 8 private members remaining, it is said that the current pool can sufficiently meet the required number of private members as per the regulations.
However, concerns have been raised that as the scope of work at the FSS continues to expand and the need for expertise deepens, there is a need to quickly increase the number of sanctions review committee members. The FSS established a dedicated department for virtual assets last year and has gradually expanded its scope of work by creating a dedicated department for electronic finance earlier this year. Since the range of expertise required for the private members who determine the level of sanctions is also increasing, there is a necessity to appoint experts from various fields.
Another FSS official explained, "Before we operated with private members in a pool format, we had a fixed personnel of 6 members to make up the committee, but at that time, understanding of the traditional financial industry was sufficient," adding, "Now, practical needs require the participation of experts from various fields such as fintech and blockchain."
Delays in work due to the vacancy of the FSS director are not limited to the appointment of private members. Internally, there are complaints that reports on major issues are being delayed due to a leadership vacuum.
This official stated, "The delay in appointing the sanctions review committee members is just one visible aspect, while internally, numerous works are being delayed," and added, "The appointment of the new director needs to be made swiftly to unblock the stagnant internal work."