Financial Crime World

PEP: Financial Institutions Must Maintain Detailed Records and Report Suspicious Transactions

Strengthening Efforts Against Money Laundering and Terrorist Financing in Taiwan

Taipei, Taiwan - To combat money laundering and terrorist financing (ML/TF), financial institutions in Taiwan are now required to maintain detailed records of their business transactions and report any suspicious activity.

Record-Keeping Requirements

  • Financial institutions must keep records of all domestic and international transactions for at least five years or as otherwise required by law.
  • Records must include information on:
    • Customer identification
    • Contract documents
    • Business correspondence

Reporting Suspicious Transactions

  • Financial institutions must report cash transactions exceeding NT$500,000 (approximately USD $17,000) to the Investigation Bureau, Ministry of Justice within five business days of the transaction.

Ongoing Monitoring and Policies

  • Financial institutions are required to establish policies and procedures for ongoing monitoring of transactions using a risk-based approach.
    • Complete monitoring indicators
    • Parameters setting
    • Threshold amounts
    • Alerts
    • Operation procedures

Suspicious Transaction Reports

  • Financial institutions must file suspicious ML/TF transaction reports with the Investigation Bureau, Ministry of Justice in a format prescribed by the bureau.
  • Reports must be filed within two business days of approval by the responsible compliance officer.

Risk Assessment and Internal Audit

  • Financial institutions must take appropriate measures to identify, assess, and understand their ML/TF risks.
    • Conducting a risk assessment report every two years
    • Keeping the risk assessment up-to-date
  • Establish an internal audit and internal control system for AML/CFT operations based on their ML/TF risks and business size.

Compliance Officer Responsibilities

  • Appointment of an AML/CFT compliance officer
  • Screening procedures for employees

These new regulations aim to strengthen Taiwan’s efforts to combat money laundering and terrorist financing, and ensure that financial institutions are able to effectively identify and report suspicious activity.