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Enforcement Letter

 
Organisation: Financial Supervisory Commission
Issue No.: Financial-Supervisory-Securities-Auditing-1060023292 
Issue Date: 2017/06/26
Content:     Order of the Financial Supervisory Commission

    Issue date: 26 June 2017
    Issue no.: Financial-Supervisory-Securities-Auditing-1060023292

    Adoption of the Regulations Governing Anti-Money Laundering for Certified Public Accountants
    Attachment: Regulations Governing Anti-Money Laundering for Certified Public Accountants

    Originals: To be posted on the public notice boards of the FSC and the Securities and Futures Bureau of the FSC
    Copies: Legal Affairs Committee, Executive Yuan; FSC (Department of Legal Affairs; Department of Information Management); FSC Financial Examination Bureau; FSC Banking Bureau; FSC Insurance Bureau; Lex Data Information Inc.; Root International Information Co., Ltd.; Winkler Partners, Attorneys at Law (all including the attachment)

    Regulations Governing Anti-Money Laundering for Certified Public Accountants

    Article 1
    These Regulations are adopted pursuant to Article 7, paragraph 4, Article 8, paragraph 3, and Article 10, paragraph 3 of the Money Laundering Control Act (hereinafter, "the Act").

    Article 2
    For the purposes of these Regulations, a certified public accountant (CPA) means a person who has acquired qualification to practice as a CPA and practices as a CPA, pursuant to Article 8 of the Certified Public Accountant Act.

    Article 3
    A CPA preparing for or carrying out any of the transactions in the items under Article 5, paragraph 3, subparagraph 3, or transaction modes under subparagraph 5, of the Act shall verify the customer's identity, conduct enhanced customer due diligence measures, and keep all information obtained from verification of the customer's identity, and transaction records. The CPA shall report to the Investigation Bureau of the Ministry of Justice pursuant to Article 8 all transactions that meet any of the circumstances in Article 7.

    Article 4
    A CPA carrying out any of the transactions in the items under Article 5, paragraph 3, subparagraph 3, or transaction modes under subparagraph 5, of the Act shall verify a customer's identity when any of the following circumstances exists:
  1. When the CPA is establishing the business relationship with the customer.
  2. When the CPA discovers a suspected money laundering transaction.
  3. When, during the duration of the business relationship, the CPA is doubtful of the truthfulness or appropriateness of the customer's identity obtained previously.
  4. When, during the duration of the business relationship, there is any change in the customer's identity data obtained previously.
    A CPA establishing a business relationship with a customer shall carry out a risk-based assessment on the customer's background, transaction type, transaction amount, direct source, or flow direction of the funds.
    A CPA verifying a customer's identity shall find out the purpose of the business relationship and the nature of the business, and shall do so according to the following rules:
  1. The CPA may not shall not accept transactions by a customer anonymously or under a false name.
  2. The CPA shall identify and authenticate the customer's identity based on documents, data or information from reliable, independent sources, and shall preserve photocopies of the identification documents, or record them on file.
    1. If the customer is a natural person, the CPA shall obtain identity data such as the name, birth date, address, telephone number, and profession of the customer, and shall check the customer's national identification card, health insurance card, alien resident card, passport, or other proof of identify.
    2. If the customer is a juristic person, the CPA shall find out the business nature, ownership, and control structure of the juristic person, and shall obtain the following information:
      1. Name, country of registration, registered address, address of actual place of business, telephone number, and lines of business of the juristic person.
      2. Certificate of incorporation or registration, articles of incorporation, register of directors and supervisors.
      3. Documents or declarations that can prove ownership or actual beneficial ownership. "Actual beneficial owner" means a natural person who ultimately, directly or indirectly, holds 25% or more of the juristic person's shares or capital.
    3. If the customer is the trustee of a trust or a legal arrangement similar to a trust, the CPA shall find out the business nature, ownership, and control structure of the legal arrangement, and shall obtain, and preserve or record, the following information:
      1. The settlor, beneficiary, and the director, supervisor, trustee, or administrator of the legal arrangement.
      2. Certificate of recordation or registration.
      3. Documentation for the trust deed or legal arrangement.
      4. Documents or declarations that can prove ownership or beneficial ownership.
    If the CPA is hired by an agent that represents the customer, the CPA shall find out the truthfulness of the agent relationship, and verify the identity of the agent pursuant to the preceding paragraph.
    The obligation to verify the customer's identity shall terminate upon the termination of the business relationship.
    The provisions of paragraphs 1, 3, and 4 need not apply if the customer or its agent is any of the following:
  1. A Taiwan government entity or government-owned business entity.
  2. A foreign government entity.
  3. A Taiwan public company or any of its subsidiaries.
  4. A company whose stock listed on a stock exchange or over-the-counter market outside of Taiwan that, under the regulations of the place of listing, is required to disclose its principal shareholders, or a subsidiary of such a company.
  5. A financial institution supervised by the Taiwan government, or an investment vehicle managed by such an institution.
  6. A financial institution established or incorporated outside of Taiwan, in a non-high-risk country or region, or an investment vehicle managed by such an institution. A high-risk country or region shall mean a country or region as described in Article 11, paragraph 2 of the Act.
  7. A fund managed by a Taiwan government entity.
  8. The CPA has previously established a business relationship with the customer and one year has not yet elapsed after the termination of the business relationship; and the business relationship was rated low-risk based on the assessment under paragraph 2.
    If the CPA cannot, within a reasonable time period, complete the verification of customer's identity, the CPA shall consider refusing to undertake, or terminating, the business relationship, and, when necessary, consider reporting any suspicious transactions related to the customer.

    Article 5
    In any of the following circumstances, the CPA shall conduct enhanced customer due diligence measures in addition to the verification of the customer's identity under the preceding paragraph:
  1. Politically exposed persons and their family members or close associates, as the Ministry of Justice is authorized to determine under Article 7, paragraph 4 of the Act, that have been assessed as high-risk under Article 4, paragraph 2.
  2. Persons other than politically exposed persons and their family members or close associates under the preceding subparagraph, that have been assessed as high-risk under Article 4, paragraph 2; or, if the direct source or flow direction of the funds, or the customer, is from a high-risk country or region, then the person is a high-risk customer.
    The enhanced customer due diligence measures under the preceding paragraph shall be as follows:
  1. The CPA shall find out the purpose of the transactions, and the method of obtaining the funds.
  2. The CPA shall, during the duration of the business relationship, pay close attention to whether any of the circumstances that require reporting under Article 7 exists.
  3. The CPA shall, during the duration of the business relationship, review whether the information obtained for identifying the customer is sufficient at least once a year.

    Article 6
    A CPA shall, pursuant to the prescribed preservation period under Article 7, paragraph 2, and Article 8, paragraph 2 of the Act, establish files on the transactions of the customers accepted by the CPA, maintain the photocopies or transcriptions of the proof of identity of the customer and relevant personnel, and maintain copies or electronic files of the correspondence documents and records and certificates pertaining to the transactions.

    Article 7
    The CPA shall report to the Investigation Bureau of the Ministry of Justice pursuant to Article 10, paragraph 1 of the Act if any of the following circumstances applies to a transaction:
  1. The compensation or the transaction amount exceeds NT$500,000, and the customer, without a legitimate reason, pays or demands to pay an amount slightly lower than NT$500,000 in cash, multiple times or consecutively.
  2. The compensation or the transaction amount exceeds NT$500,000, and the customer, without a legitimate reason, pays in cash, cash in a foreign currency, or by traveler's check, draft in a foreign currency, or other bearer financial instrument.
  3. Without a legitimate reason, the customer asks to purchase immediately a real property or a business entity.
  4. The customer is a natural person, juristic person or group that has been announced and sanctioned by the Ministry of Justice pursuant to the Act Governing the Countering of Terrorism Financing, or a country announced by the Ministry of Justice, or a terrorist organization or a terrorist recognized or investigated by an international organization.
  5. The transaction amount originates from, or will be paid to, a high-risk country or region, and is suspected to be involved with any terrorist activity, terrorist organization, or terrorism financing.
  6. When the CPA prepares for, or carries out, a transaction designated under Article 5, paragraph 3, subparagraph 5 of the Act for the customer, and the customer cannot provide a concrete explanation, or the explanation provided is obviously not true.
  7. After the hiring relationship is over, the CPA discovers that the customer denies ever hiring the CPA, or that no such customer exists, or that there are sufficient facts to prove that the customer's name was falsely used by someone else.

    Article 8
    The CPA shall, within 10 working days after discovering any of the circumstances set out in the preceding article, report to the Investigation Bureau of the Ministry of Justice in the format prescribed by the Investigation Bureau of the Ministry of Justice, by mail, fax, email or other manner.
    The records of reports under the preceding paragraph shall be maintained for a period of five years in the form of copies or electronic files.

    Article 9
    These Regulations will be enforced from 28 June 2017.