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Taiwan’s Financial Supervisory Commission Hands Down $400,000 Fine to Union Bank of Taiwan for Fraudulent Transactions

The Financial Supervisory Commission (FSC) has imposed a fine of NT$12 million (approximately $400,000 USD) on Union Bank of Taiwan for violating regulations and failing to establish an effective internal control system.

Reasons for the Fine

• The bank’s Tonghwa Mini Branch failed to properly conduct customer due diligence and transaction monitoring, resulting in large cash withdrawals and suspicious transactions.
• The bank lacked adequate review procedures for suspicious transactions and failed to implement employee service regulations.
• Specifically:
  • The bank did not implement comprehensive know-your-customer (KYC) and ongoing due diligence operations.
  • There were no effective mechanisms for reviewing suspicious transactions.
  • Processing officers and personnel allegedly accepted illegitimate interests and failed to abide by the bank’s employee service regulations.

Deficiencies Identified

• The bank did not set up comprehensive ongoing transaction monitoring mechanisms, allowing branches to determine the setting up and removal of restrictions without adequate control and review.
• There was no comprehensive review procedure for suspicious transactions to assess money laundering risks.

Consequences and Remediation

• The FSC has imposed a fine on the bank in accordance with Article 129, Subparagraph 7 of the Banking Act.
• The bank is required to:
  • Review its anti-money laundering operations
  • Improve its training programs to enhance employee awareness of financial fraud prevention measures

Call to Action

The FSC has called on all financial institutions to periodically review and enhance their operating procedures and management mechanisms to prevent financial fraud. The commission emphasized that financial institutions must work together to prevent financial fraud and maintain the integrity of the financial system.

Contact Information

• Domestic Banks Division, Banking Bureau, Financial Supervisory Commission
• Tel: +886 (2) 8968-9681
• Email: fscmail@fsc.gov.tw