Banks Ordered to Halt Transactions with Unidentified Customers

Crackdown on Money Laundering and Terrorist Financing

In a move aimed at combating money laundering and terrorist financing, the government has issued new regulations requiring banks to terminate business relationships with customers who fail to complete customer identity verification within 120 days.

Enhanced Due Diligence Measures for Politically Exposed Persons (PEPs)

Under the new rules, banks are also required to take enhanced due diligence measures for customers who are PEPs entrusted by foreign governments or international organizations. This includes identifying and mitigating risks associated with PEPs and their family members and close associates.

Customer Due Diligence (CDD) Procedures

In addition, banks must perform CDD procedures on all new customers, including those established through internet banking platforms. CDD measures include:

• Verifying the identity of customers and their beneficial owners
• Performing risk assessments to identify potential money laundering and terrorist financing risks

Special Measures for Non-Face-to-Face Customers

The regulations also require banks to take special measures to mitigate risks when dealing with non-face-to-face customers, such as those who establish business relationships through internet banking or authorized persons.

Consequences of Non-Compliance

Failure to comply with these new regulations may result in fines and penalties for banks. The government has also warned that it will closely monitor bank compliance with the new rules and take swift action against any institution found to be violating them.

A Major Step Forward in Combating Money Laundering and Terrorist Financing

The move is seen as a major step forward in Taiwan’s efforts to combat money laundering and terrorist financing, and is expected to improve the overall transparency and integrity of the financial system.