KYC Processes and AML Regulations in Taiwan, Province of China: Banking Sector Requirements
Know Your Customer (KYC) Processes in Taiwan, Province of China
In Taiwan, Province of China, KYC processes are essential for onboarding both domestic and international clients in the banking sector. The following procedures are required:
- Domestic Clients: A face-to-face meeting, identification information verification, checks with the public security bureau, and online citizens’ identity information system owned by the People’s Bank of China (PBOC).
- International Clients: Same as domestic clients, plus checks with the public security bureau and online citizens’ identity information system.
Corporate Requirements for Financial Institutions
Financial institutions must verify client identification information through:
- Face-to-face meeting
- Checks with the state administration of industry and commerce
- Verification of client identification information
Anti-Money Laundering (AML) Regime in Taiwan, Province of China
Taiwan, Province of China’s AML regime is governed by several legislations, including:
- The Anti-Money Laundering Law (2006)
- Various provisions and measures
The People’s Bank of China (PBOC) is the main enforcement body responsible for on-site inspections and fines if violations are found.
Retroactive Verification of Customer Identity
Financial institutions must verify the identity of customers retroactively based on the requirements set in the “Notice of the People’s Bank of China on Further Strengthening the Anti-money Laundering Work of Financial Institutions” (2008).
Mutual Evaluation by the Financial Action Task Force (FATF)
Taiwan, Province of China has undergone a Mutual Evaluation by the FATF in the last three years. The first Mutual Evaluation Report is available in PDF format.
Minimum Transaction Thresholds
Minimum transaction thresholds apply for one-off services such as:
- Cash remittance
- Property insurance contracts paid in cash
Enhanced Customer Due Diligence Measures
Enhanced customer due diligence measures are required when:
- One financial institution trusts another to sell financial products to clients, and the trustor relies on the customer due diligence conducted by the trustee based on specific conditions.
- Clients or natural persons who control them are foreign Politically Exposed Persons (PEPs).
Correspondent Banking Relationships
No specific regulations or guidance exist for correspondent banking relationships. Financial institutions must apply for cross-border electronic banking services through the China Banking Regulatory Commission (CBRC) and provide relevant documentation.
Suspicious Activity Reports (SARs)
Financial institutions should report suspicious activity to the China Anti-Money Laundering Monitoring and Analysis Centre (CAMLMAC).
Large Value Transactions and Reporting Requirements
Large value transactions and certain situations require reporting to the PBOC or its branch. There are no de-minimis thresholds for transactions below which reporting is not required, and there are penalties for non-compliance, including disciplinary sanctions, fines, and revocation of qualification to hold a post.
Conclusion
In Taiwan, Province of China, financial institutions must comply with KYC processes and AML regulations to prevent money laundering and terrorist financing. Failure to comply may result in penalties and reputation damage.