Financial Institutions Must Comply with Stricter AML/CFT Regulations to Combat Money Laundering and Terrorist Financing
New Regulations Introduced in Taiwan to Prevent Money Laundering and Terrorist Financing
Taipei, Taiwan - The government has introduced new regulations requiring financial institutions to implement stricter anti-money laundering (AML) and combating the financing of terrorism (CFT) measures to prevent money laundering and terrorist financing.
Key Requirements for Financial Institutions
- Establish policies and procedures for watch list filtering based on a risk-based approach to detect and filter out customers or connected parties who are sanctioned under the Terrorism Financing Prevention Act or identified as terrorists or terrorist groups by foreign governments or international organizations.
- Maintain ongoing monitoring of accounts and transactions using a database to consolidate basic information and transaction data, enabling the institution to identify suspicious transactions and take necessary action.
- Conduct customer due diligence (CDD) measures on customers who are politically exposed persons (PEPs), including assessing their risks and conducting annual reviews. Enhanced CDD measures will be required for higher-risk business relationships with PEPs.
Insurance Companies and Post Offices Engaging in Simple Life Insurance Business
- Take reasonable measures to identify and verify whether the beneficiary and its beneficial owner of a life insurance policy, investment-related insurance policy or annuity insurance policy are PEPs before paying out benefits.
- Exemptions for insurance agents and brokers who solicit insurance policies on behalf of insurance companies. However, these entities must still comply with certain requirements related to CDD measures and ongoing monitoring of transactions.
Record Keeping Requirements
- Keep records of all business relations and transactions with their customers in hard copy or electronic form for at least five years or a longer period as otherwise required by law.
Consequences of Non-Compliance
- Financial institutions that fail to comply with these regulations may face penalties, fines, and even criminal prosecution.
Government Commitment
“We are committed to ensuring the integrity of our financial system and protecting it from money laundering and terrorist financing,” said a spokesperson for the government. “These new regulations demonstrate our commitment to implementing international standards set by the Financial Action Task Force (FATF) and strengthening our AML/CFT framework.”