Taiwan’s Anti-Money Laundering Act Regulations: Key Points
Monitoring ML/TF (Money Laundering/Terrorist Financing) Activities
Financial institutions in Taiwan are required to establish comprehensive monitoring indicators for money laundering and terrorist financing activities. These indicators should include:
- Suspicious transaction patterns: Published by relevant associations
- Additional indicators: Developed by the institution itself, considering its risk assessment and daily transactions
When transferring funds between e-payment accounts, financial institutions must consider all information received on both accounts to determine if a suspicious transaction report is required.
Politically Exposed Persons (PEPs)
Financial institutions in Taiwan are required to implement Customer Due Diligence (CDD) measures for customers determined to be current PEPs of foreign governments. For current PEPs of the domestic government or international organizations, financial institutions should:
- Assess risks: Conduct annual reviews
- Enhanced CDD measures: Are required for high-risk business relationships with these customers
Insurance Companies and Post Offices
Insurance companies and post offices engaging in simple life insurance business must identify and verify if policy beneficiaries and their beneficial owners are PEPs before paying out benefits or cash surrender values. If high-risk circumstances are discovered, they should:
- Inform senior management: Conduct enhanced scrutiny on the whole business relationship
- Consider making a suspicious ML/TF transaction report
Record-Keeping
Financial institutions in Taiwan must maintain records of all business relations and transactions with customers in hard copy or electronic form for at least five years or as otherwise required by law. Records obtained through CDD measures should be kept for the same period after the business relationship is ended or after occasional transactions.
Exemptions
Insurance agents may be exempted from ongoing customer due diligence, watch listing filtering, ongoing monitoring of transactions, and PEP provisions if they are not undertaking underwriting and claim settlement business on behalf of an insurance company. Insurance brokerages that are not engaging in the aforementioned activities may also be exempted from these requirements.
These regulations aim to prevent money laundering and terrorist financing by requiring financial institutions to implement effective CDD measures, monitor suspicious transactions, and keep accurate records of their customers’ business relations and transactions.