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DBS Bank (Taiwan) Ltd. Fined NT$6 Million for AML/CFT Deficiencies
Introduction
DBS Bank (Taiwan) Ltd. has been fined NT$6 million by the Financial Supervisory Commission (FSC) for deficiencies in its Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) operations.
Deficiencies Found
According to the FSC, the bank failed to establish an effective ongoing customer due diligence mechanism and name screening mechanism for customers and related parties of transactions. Additionally, the bank:
- Failed to implement customer due diligence measures commensurate with the risks of customers
- Did not fully understand the customers’ beneficial owners, business locations, business nature, or purposes of establishing business relationships
Defective Transaction Monitoring Mechanism
The bank’s transaction monitoring mechanism was found to be defective, resulting in disabling alert generating functions for some suspicious transactions. Furthermore, the bank:
- Failed to investigate suspicious transaction alerts in a timely manner
- Relied on explanations provided by its business units without making any independent judgment, which resulted in failure to find abnormality in these transactions
Importance of AML/CFT Operations
The FSC emphasized that AML/CFT is an international trend and important supervisory requirement in Taiwan. International financial institutions must comply with local laws and regulations and take local environments and risk profiles into consideration.
Order to Strengthen Internal Control Mechanisms
The bank has been ordered to strengthen its internal control mechanisms and processes to ensure compliance with AML/CFT requirements.
Separate Incident: NT$10 Million Fine
In a separate incident, DBS Bank (Taiwan) Ltd. was also fined NT$10 million for similar deficiencies in its AML/CFT operations. The bank failed to establish an effective customer risk assessment mechanism, ongoing customer due diligence mechanism and transaction monitoring mechanism, and insufficient implementation of customer due diligence.
Importance of Compliance
The FSC stressed the importance of AML/CFT operations and emphasized that financial institutions must continue to improve their internal control mechanisms and processes to ensure compliance with regulations.
Response from DBS Bank (Taiwan) Ltd.
DBS Bank (Taiwan) Ltd. has accepted the fine and will take steps to strengthen its AML/CFT operations.
Source: Financial Supervisory Commission