Taiwan’s Joint Effort with Private Sector Yields Revised Money Laundering Threat Assessments

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In a move to strengthen its anti-money laundering (AML) and combating the financing of terrorism (CFT) efforts, Taiwan has conducted a joint review with private sector experts to revise its money laundering threats and vulnerabilities assessments.

Background

The revisions were based on the analysis of gaps between Taiwan’s existing laws, supervision, and prevention measures and the standards set by the Financial Action Task Force (FATF). The assessment was also informed by international sources, including:

• Assessment of Inherent Risks of Money Laundering and Terrorist Financing in Canada
• Regional Risk Assessment Report for Southeast Asia and Australia
• Global Terrorism Index issued by the Institute for Economics and Peace

Joint Review Process

The joint review aimed to identify inherent risks, assess residual risks, and develop risk mitigation measures. The participating experts determined the ratings by consensus, taking into account sensitive issues and using a rigorous process.

Risk Assessment Methodology

ML Threats

Taiwan’s risk assessment methodology focuses on assessing money laundering threats and vulnerabilities independently from terrorist financing risks. The assessment considers 23 ML threats, including:

• Predicate offences
• Underground remittance
• Professional money launderers

The selected rating factors include:

• Actors’ capacity
• Scope of ML activity
• Estimated Proceeds of Crime Annually

TF Risks

For TF risks, the threat profiles included three rating factors:

• Actors’ capacity
• Scope of terrorists’ and terrorism organizations’ activities
• Estimated TF proceeds

Authorities also referenced international papers and typology reports to analyze seven indicators in detail.

National Risk Assessment Results

The revised national risk assessment results were officially verified in March 2018 and announced by the Premier to facilitate public and private sectors to re-evaluate their internal policies and regulations. The results will help integrate national risk assessments into industry risk analyses performed by government agencies and private institutions, enabling effective AML/CFT operations.

Conclusion

Taiwan’s risk assessment process features adaptability, sustainability, and a commitment to strengthening its anti-money laundering and combating the financing of terrorism efforts. The revised assessments will serve as a valuable tool for stakeholders to better understand money laundering threats and vulnerabilities in Taiwan.

Attachment

Please see Attachment 3 for detailed definitions of ML threat ratings and Attachment 4 for ML/TF vulnerability ratings.

Attachment 3: Detailed Definitions of ML Threat Ratings

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Attachment 4: ML/TF Vulnerability Ratings

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