| Title： |
The Regulation for the Implementation of the Offshore Banking Act(1999.03.19) |
| Date： |
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Article 1
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The Regulation is enacted in accordance with Article 23 of the Offshore Banking Act (the “Act”).
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Article 2
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The competent administrative authority referred to in Article 2 of the Act, the Ministry of Finance (“MOF”),
shalltake charge of the following matters:
1.Drafting or enacting the Act, the Regulation and the Rules Governing Offshore Banking Branches;
2.Interpreting laws and regulations related to offshore banking, and setting or promulgating relevant administrativedirectives;
3.Granting approval for the establishment of an offshore banking branch;
4.Granting approval of the business scope of an offshore banking branch;
5.Supervising the financial conditions, business operation and personnel matters of offshore banking branches;
6.Examining offshore banking branches; and
7.Taking disciplinary actions in accordance with the Act. Matters as provided in Item 1, 3 and 4 (and matters in Item2 which
relate to the authority of the CBC) of the preceding section shall be handled in coordination with the Central Bank of China
(“CBC”).
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Article 3
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The competent operational authority referred to in Article 2 of the Act, the CBC, shall take charge of the
followingmatters:
1.Granting approval to businesses related to transactions and remittances between foreign currency and NewTaiwan Dollars
by an offshore banking branch;
2.Examining offshore banking branches;
3.Reviewing information related to the business and financial conditions and annual reports of offshore bankingbranches;
4.Producing statistics, analysis and reports regarding the business, performance and scale of offshore bankingbranches;
5.Conducting researches on the development of offshore banking businesses; and Coordination with the MOF formatters
required to have prior consultation.
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Article 4
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A foreign bank as provided in Article 3, Item 2 and 3 of the Act, is eligible to apply for the approval of
theestablishment of an offshore banking branch within the territory of the Republic of China (“R.O.C.”), if the said bank
meets the following requirements:
1.the said bank shall have not committed any material violation of rules, regulations or laws, neither have beenrecorded any
serious misconduct within the most recent five years;
2.the said bank shall rank, in terms of capital or assets, among the top five hundred banks in the world one yearprior to
application, or shall have conducted transactions with banks and major enterprises of the R.O.C. amounting to one billion U.S.
Dollars during the three calendar years prior to application, of which medium or long term credits shall be no less than one
hundred and eighty million U.S. Dollars;
3.the said bank shall have a ratio of its capital to risk-weighted assets in compliance with the standards set by theMOF;
4.the said bank shall have obtained the approval from the banking authority in its home country for theestablishment of an
offshore banking branch within the R.O.C. and the said authority shall have indicated its commitment to cooperating with the
R.O.C. government in the supervision of the said bank on a consolidated basis; and
5.both the parent banking authority and the head office of the said bank shall demonstrate the capability to superviseall of its
foreign branches on a consolidated basis.
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Article 5
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A bank wishing to set up an offshore banking branch shall file an application with the MOF that contains
thefollowing documents:
1.An application letter, business items to be approved, a rief history of the said bank, the balance sheet and theincome
statement of the said bank;
2.Certified copies of the currently effective banking license issued by the MOF or relevant banking authorities in thehome
country of the said bank and articles of incorporation of the said bank’s head office (Chinese translation of both required);
3.A certified copy of the resolution, made by the board of directors of the said bank, in favor of the proposedapplication
(Chinese translation required);
4.A list of the said bank’s directors, other responsible persons and the designated agent for litigation and non-litigation in the
R.O.C. (Chinese translation required);
5.A notarized copy of power of attorney issued by the said bank for appointing a litigious and non-litigious agent inthe R.O.C.
(Chinese translation required);
6.A self-assessment of the compliance and soundness of the said bank’s business operations, including astatement as to
whether or not the said bank has committed any violations of laws or regulations, events of fraud or serious misconduct or
been subject to sanctions;
7.A certified copy of statement regarding the said bank’s ratio of its capital to risk-weighted assets at the end of thepreceding
fiscal year, issued by the banking authority in the said bank’s home country or by a certified public accountant;
8.A letter, issued by the banking authority of the said bank’s home country, confirming (1) its approval for thesaid bank to
set up an offshore banking branch in the R.O.C., (2) its willingness to cooperate with the R.O.C. government in supervision of
the said bank on a consolidated basis, and (3) the soundness of the said bank’s financial conditions and business operations.
9.Documents evidencing the nationality of the responsible person who files the application or does so through anattorney or a
certified public accountant, and if the said person is not a legal representative of the said bank, a notarized copy of power of
attorney issued by the said bank;
10.A power of attorney issued by the responsible person of the said bank if the application is filed by an authorizedattorney or a
certified public accountant;
11.The statistics showing that the transactions between the said bank and R.O.C. banks, and between the said bankand R.O.C.
major enterprises during the three calendar years prior to application, if the said bank did not rank among top five hundred
banks worldwide in terms of capital or assets;
12.A business plan, the contents of which shall contain the followings:
1)organizational structure, division of responsibilities and the use of computer hardware and software;
2)business scope;
3)operating procedures or rules for major businesses;
4)authorized ceilings for business operations and risk management systems;
5)accounting information management and internal audit systems;
6)certificates indicating the education and experiences of the appointed offshore banking branch manager;
7)assessment of business operations and forecast of businesses for the next three years; and
8)Systems and procedures with regard to asset quality assessment, provision for losses, and management ofoverdue and non-
performing loans.
The MOF shall review the application in coordination with the CBC after the receipt of the application.
The MOF shall issue a license for the establishment of an offshore banking branch and the CBC a license for the operation of
international financial businesses, if the application is approved in accordance with the preceding paragraph.
An offshore banking branch which applies for undertaking the businesses stipulated in Article 4, Item 4 of the Act shall submit
copies of the approval letter and license issued by the securities authority.
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Article 6
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A foreign bank stipulated in Article 3, Items 2 and 3 of the Act, after having been allowed to establish an
offshorebanking branch, shall apply for recognition in accordance with the Company Law and complete the branch registration
requirements.
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Article 7
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A foreign bank stipulated in Article 3, Items 2 and 3 of the Act, after having been allowed to establish an
offshorebanking branch, shall allocate working capital for its operation in the R.O.C. at a minimum amount of two million US
Dollars (US$2,000,000).
The MOF may adjust the amount of the said minimum requirement for working capital, depending on domestic economic and
financial circumstances.
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Article 8
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The net worth of an offshore banking branch of a foreign bank shall be calculated in combination with the net
worthof all branches of the said bank within the R.O.C. The aggregate net worth shall be no less than two-thirds of the required
working capital.
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Article 9
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The following occurrences with regard to an offshore banking branch should be reported to the MOF for
approvaland the CBC should be duly notified:
1.Change of the name;
2.Change of the location;
3.Change of the responsible persons;
4.Change of the working capital;
5.Acquisition of the entire or major part of the business or property of any other offshore banking branch, ortransfer to any
other offshore banking branch of the entire or major part of its business or property; or
6.Suspension, resumption or termination of the business.
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Article 10
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The phrase “offshore banking branch with a separate set of accounts” referred to in Article 3 of the Act meansthat the branch shall use separate accounting documents, establish separate accounts and prepare separate accounting statements in the manner that any of them shall not be mixed with those of the head office or other branches of the same bank.
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Article 11
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The phrase “natural person outside the territory of the R.O.C.” referred to in Article 4, Item 1 through Item 6 andItem 9 of the Act means a natural person holding a passport issued by a foreign country and having no residence in the
R.O.C.; and, the phrase “juridical person outside the territory of the R.O.C.” referred to therein means a juridical person organized and registered under the laws of a foreign country; however, a branch recognized by the R.O.C. government for conducting business within the R.O.C. shall be excluded.
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Article 12
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The schedule of the “license fee” referred to in Article 21 of the Act shall be set by the MOF.
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Article 13
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The Regulations shall become effective as of the date of its promulgation.
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