Financial Crime World

Strengthening Defenses Against Money Laundering and Terrorist Financing

New Regulations for Third-Party Payment Enterprises

Taipei, Taiwan - The Ministry of Justice has issued new regulations to strengthen its defenses against money laundering (ML) and terrorist financing (TF). These regulations require third-party payment enterprises to enhance their knowledge of seller-side customers to combat these financial crimes.

Customer Due Diligence Measures

According to Article 7, third-party payment enterprises must conduct Customer Due Diligence (CDD) measures on all existing relationships at least once every two years for higher-risk categories. This includes:

  • Obtaining and verifying information about the customer’s identity
  • Verifying business purpose
  • Source of funds

Transaction Monitoring and Reporting

The regulations emphasize the importance of monitoring transactions that may be suspicious or unusual. Article 12 requires enterprises to file suspicious transaction reports within two business days of recognition, including transactions that:

  • Do not appear to be commensurate with the customer’s status and income
  • Are unrelated to their business nature

Record-Keeping Requirements

Third-party payment enterprises must maintain accurate and detailed records of all business relations and services provided to customers for at least five years, or for a longer period as otherwise required by law. This includes:

  • Official identification documents
  • Bank account files
  • Proof of payment
  • Contract files

Compliance with Sanctions Lists

The regulations stress the importance of complying with sanctions lists announced by the Ministry of Justice and reporting any properties or property interests held or managed to the authorities immediately upon discovery.

Industry Response

Industry experts welcome the new regulations, stating that they will enhance the overall security and integrity of the financial system. “These regulations demonstrate the government’s commitment to combating ML and TF,” said a spokesperson for the Taiwan Financial Industry Association. “We believe that they will have a positive impact on the industry as a whole.”

Key Points

  • Third-party payment enterprises must conduct CDD measures on all existing relationships at least once every two years for higher-risk categories.
  • Enterprises are required to maintain accurate and detailed records of all business relations and services provided to customers.
  • Suspicious transactions must be reported within two business days, including transactions that do not appear to be commensurate with the customer’s status and income or are unrelated to their business nature.
  • Compliance with sanctions lists announced by the Ministry of Justice is mandatory, and properties or property interests held or managed must be reported immediately upon discovery.

Sources

  • Ministry of Justice, Taiwan
  • Taiwan Financial Industry Association