Teresa Huang
The Financial Supervisory Commission (hereinafter, the “FSC”) issued the Jin-Kuan-Yin-Wai-10550001770 Circular of May 10, 2016 (hereinafter, the “Circular”) to reiterate that financial institutions not approved to set up their presence in Taiwan are not permitted to provide financial services within the territories of the Republic of China.
According to the Circular, Article 29 of the Banking Law provides that except as otherwise provided by law, a non-banking organization shall not accept deposits, manage trust funds or public property under mandate or handle domestic or foreign remittances. Therefore, if a domestic bank assists a foreign financial institution which has not set up its presence in Taiwan by referring customers in Taiwan so that they can complete the opening of accounts and relevant financial services in foreign countries without leaving Taiwan, such domestic bank is likely to violate the above requirement. The Circular also reiterates the Jin-Kuan-Yin-Wai-09950002320 Circular of August 24, 2010 from the FSC that a Taiwan branch or subsidiary of a foreign bank shall not solicit customers in Taiwan in any way to set up overseas accounts or to absorb funds in its overseas head office, affiliate banks or other foreign institutions not approved by the competent authority.
This Circular stresses that to avoid legal violations by business units or personnel of banks, banks are requested to comply with laws and regulations and carry out internal control and audit systems and shall not handle or assist with the handling of unapproved business.