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Article 10
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Offshore banking branches shall rigorously undertake customer due diligence (CDD) process in accordance with the Money Laundering Control Act, Terrorism Financing Prevention Act, documents, data or information that must be obtained or verified as required by the competent authority (see Attachment), template of the “Guidelines Governing Anti-Money Laundering and Combatting the Financing of Terrorism by the Banking Sector” and “Self-Regulatory Rules for Offshore Banking Units Accepting Account Opening by Offshore Customers and Investing in Trust Products On Behalf of Offshore Customers” set out by the Bankers Association of the Republic of China, and include related compliance matters in their internal control and internal audit system.
Offshore banking branches shall, before December 31, 2017, re-perform CDD and review the level of risk on existing customers prior to the implementation of these amended Rules promulgated on May 22, 2017. However offshore banking branches shall re-perform CDD immediately in the event of the following situations:
1. The offshore banking branch has doubts about the veracity of customer information, such as there is a suspicion of money laundering in relation to that customer, or there is a material change in the way that the customer’s account is operated which is not consistent with the customer’s business profile; or
2. It is time for periodic update of customer identityinformation.
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Article 11
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Offshore banking branches may rely on the assistance of intermediaries to perform CDD on offshore customers in accordance with these Rules and Money Laundering Control Act or criteria no less stringent than the aforementioned regulations and in compliance with the provisions below. Offshore banking branches shall also report to the FSC of the implementation plan and the list of intermediaries:
1. The act of an intermediary assisting an offshore banking branch in performing CDD conforms to or does not violate the laws and regulations at where the intermediary is located.
2. The intermediary in the latest audit on its anti-money laundering and combatting terrorism financing operation by the competent authority at where it is located or byan external institution receives a rating of “satisfactory”, “no downgrade” or “no material deficiency”, or it has taken improvement actions against the deficiency which are accepted as satisfactory by the competent authority or the external institution, or its downgraded rating has been raised. If the intermediary is subsequently downgraded by the competent authority at where it is located or by an external institution or subject to disciplinary action imposed by the competent authority at where it is located due to some material deficiency, the offshore banking branch should suspend the service of the intermediary in performing CDD.
3. An offshore banking branch should sign an agreement with the intermediary it intends to rely on. The agreement should specify the extent of assistance to be rendered by the intermediary in CDD process and proper measures to be taken by the intermediary for confidentiality and maintenance of customer data, and rights and obligations of the parties. The intermediary shall keep the records obtained in performing CDD and provide in a timely manner any document or information obtained in the course of performing CDD upon the request of the offshore banking branch.
4. An offshore banking branch should use a risk-based approach to audit and supervise on a regular and an as-needed basis the intermediary’s implementation of CDD process and the intermediary’s use, processing and control of customer information; an offshore banking branch may carry out such audit through an appointed externalinstitution.
The term “intermediary” referred to in the preceding paragraph means an overseas branch or subsidiary of a domestic bank, the head office or a branch directly under the head office of the branch of a foreign bank in Taiwan, the parent bank ora branch directly under the parent bank of the branch of a foreign bank in Taiwan.
The content of “implementationplan” referred to in Paragraph 1 herein shall include at least the scope of CDD performed by anintermediary and intermediary’s internal control system for the confidentiality and maintenance of customer data.
Offshore banking branches should review the results of CDD performed by intermediaries and bear the ultimate responsibility for the CDD process and data maintenance.
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Article 12
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Offshore banking branches should pay attention to the following when accepting the opening of new accounts:
1. An offshore banking branch shall not refer its onshore customers to agencieswho assist in setting up offshore companies, or induce or assist onshore customers to switch their identity to non-resident status in order to open an account at the offshore banking branch.
2. An offshore banking branch should enhance its understanding of the purpose of a customer opening an account, intended use of the account and planned transaction activities, and the situation, if applicable, where the shareholders, directors or beneficial owners of an offshore legal entity customer include onshore individuals or legal persons, and obtain a customer statement declaring that itdid not switch to non-resident status under inducement or for investment in specific products.
An offshore banking branch should establish a concrete and viable internal control system for matters specified in the preceding paragraph and implement the system after reporting to the board of directors for approval in the case of a domestic bank or to the head office or regional center for approval in the case of a branch of a foreign bank in Taiwan.
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