Taiwan Financial Institutions Comply with International AML/CFT Standards
Strengthening Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Measures
The Taiwanese financial sector has taken a significant step towards strengthening its anti-money laundering (AML) and combating the financing of terrorism (CFT) measures by implementing regulations consistent with international standards set out by the Financial Action Task Force (FATF).
New Regulations Require Financial Institutions to:
- Establish policies and procedures for watch list filtering, including detecting and filtering customers and connected parties of transactions against sanctions lists and terrorist organizations.
- Maintain records of their watch list filtering operations.
Ongoing Monitoring Requirements
Financial institutions are required to conduct ongoing monitoring of accounts and transactions using a risk-based approach. This includes:
- Using databases to consolidate customer information
- Establishing internal control procedures for requests and inquiries regarding customer information
- Exercising care to ensure confidentiality
Account and Transaction Monitoring Policies
Financial institutions must establish policies and procedures for account and transaction monitoring, including:
- Complete ML/TF monitoring indicators
- Parameters setting
- Threshold amounts
- Alerts
- Operation procedures
These policies and procedures must be reviewed periodically based on AML/CFT regulations, nature of customers, business scale and complexity, ML/TF trends, and related information gathered from internal and external sources.
Customer Due Diligence (CDD) Measures for Politically Exposed Persons (PEPs)
Financial institutions are required to conduct CDD measures for PEPs, including:
- Identifying and verifying whether a PEP is or has been entrusted with a prominent function by a domestic government, foreign government, or international organization
Insurance Companies and Post Offices Engaging in Simple Life Insurance Business
Insurance companies and post offices engaging in simple life insurance business must identify and verify whether the beneficiary and its beneficial owner of a life insurance policy are PEPs.
Exemptions for Insurance Agents and Brokers
Insurance agents and brokers may be exempt from certain requirements if they meet specific conditions.
Record-Keeping Requirements
Financial institutions must keep records on all business relations and transactions with their customers in hard copy or electronic form, and maintain those records for at least five years or a longer period as otherwise required by law.