South Korea has significantly improved its legal framework on fighting money-laundering, but it needs to step up efforts to prevent public officials from laundering bribes and to solidify its ability to freeze the assets of persons and entities blacklisted by the United Nations, a global anti-money-laundering watchdog said.

The Financial Action Task Force, which sets standards and monitors anti-money-laundering and counterterrorism-financing policies in countries around the world, said South Korea has strengthened its rules and policies on those fronts since its last assessment in 2008.

The country has a good grasp of the financial misconduct it faces, tax crimes, illegal gambling and fraud, for instance, that could generate money to be laundered, the group stated.

But the country needs to address gaps in its regulations, the group said, specifically urging it to broaden its regulations to prevent officials from both domestic and international organizations from laundering proceeds of corruption. Recent high-level scandals involving two former Korean presidents highlighted the urgent need to do so, the FATF said.

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While South Korea faces little in the way of terrorism financing, the international organization said it should also address the weak points in its ability to freeze the assets of persons or entities designated as terrorists by the United Nations.

The FATF also recommended that the country establish ways to prevent professionals—accountants, lawyers, real-estate agents and dealers in precious metals and stones—from becoming involved, even inadvertently, in money-laundering or terrorist financing.

Requiring professions and businesses beyond the financial sector, such as casinos, to report suspicious transactions is one of the more recent standards set and assessed by FATF, said Rick McDonell, executive director of the Association of Certified Anti-Money Laundering Specialists.

“Lawyers, accountants, precious-metal dealers are seen as [having] a greater level of exposure to illicit financial transactions than previously recognized,” said Mr. McDonell, a former FATF executive secretary. “Therefore, they need to be covered and need to report suspicious transactions and need to be supervised accordingly.”

As it takes time for governments to set up the infrastructure to supervise and enforce, most countries are still at “a nascent stage of doing that in a proper way,” he added.

Write to Mengqi Sun at mengqi.sun@wsj.com