The Central Bank promulgated the amendments to Paragraphs 1 and 4 of the Operating Guidelines for Foreign Exchange Business Handled by Banks (hereinafter, the “Guidelines”) via the Tai-Yang-Wai-Seven-1050012209 Directive of April 28, 2016. The Guidelines came into effect on the day of their promulgation.
Paragraph 1, Subparagraph 2 is added to specifically stipulate that when a bank handles customer identity verification with respect to foreign exchange business, the relevant requirements for banks to prevent money laundering activities should be followed and provide: when handling all kinds of foreign exchange business, a bank shall follow relevant provisions of the Notice for Banks’ Prevention of Money Laundering Activities and Suppression of Financial Aids to Terrorism and verify the identity of customers.
Paragraph 4 of the Guidelines is amended to specifically stipulate the scope of application of the requirements that shall be followed by banks and Chunghwa Post Co., Ltd. in handling general inward and outward remittance business and provide: when designated banks and affiliated post offices of Chunghwa Post Co., Ltd. handle general onshore or cross-border inward and outward remittance business, the Money Laundering Prevention Law, its relevant provisions and the Guidelines shall be followed. However, this restriction shall not apply to remittances between the above institutions for their own money transfer and settlement.
With respect to messages transmitted for inward and outward remittance business, the amendments specifically provide for the specific details in the payee’s information which should be included in the remittance messages as well as the measures that should be taken in the absence of essential information about the senders or payees in the messages. If a sender does hold an account at the remitting bank, the remitting bank may verify the independent serial number of such remittance in place of the account. In the absence of the address, a remitting bank may replace it with the ID number, passport number or residential permit number of the sender based on actual circumstances. By the same token, in the absence of the payee’s account number, the independent serial number of such remittance in lieu of the account may be verified.
In addition, with respect to the inward remittance business, the amendments specifically provide that a risk management procedure shall be formulated and examination shall be strengthened, including: (1) reasonable measures including feasible after-the-fact or real-time monitoring, shall be taken to identify remittances whose sender or payee information is missing; and (2) in the absence of sufficient sender or payee information in an inward remittance, a risk-based policy and procedure shall be created to determine when to execute, refuse or suspend a remittance whose sender or payee information is missing and to take proper follow-up action.
In addition, the amendments also enhance the obligations of intermediary banks which should ensure that remittance information about the sender and payee that accompany the remittance message be completely retained in the outward remittance message in the course of remittance. If the above essential information that accompanies a cross-border remittance cannot be forwarded for domestic remittance operation due to technical constraints, all information from the remitting bank or other intermediary banks shall be retained for at least five years. In addition, a risk management procedure shall be created with enhanced examination.