Chang Hwa Bank|Corporate Social Responsibility-Anti-Money Laundering and Countering Financing of Terrorism

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Anti-Money Laundering and Countering Financing of Terrorism

Item	Description
Policy	For the purpose of avoiding illegal money laundering and terrorism acts committed by intentional individuals through the Bank's financial products or services, the Bank has formulated "Anti- Money Laundering and Countering the Financing of Terrorism Policy" and "Directions Governing Anti-Money Laundering and Countering the Financing of Terrorism," to establish the Bank's standard regulations on AML/CFT, stabilizing the financial order.
Commitment	The Bank is committed to establishing a culture that values AML/CF T, while allocating adequate manpower and providing sufficient resources to enhance the Bank's relevant personnel's professional capabilities, strengthen all employees' awareness of AML/CFT, continuing to deepen, develop, and implement the Bank's plan on AML/CFT.
Goals and Targets	The Bank continues to conduct risk assessment of money laundering, implement the AML/CFT task, enhance all employees' professional capabilities to be aware of AML/CFT risks, and improve the Bank's internal operation standards and system mechanisms related to AML/CFT so as to effectively identify and control risks.
Responsibilities	The Board of Directors assigned the EVP & Chief Compliance Officer to be responsible for supervising the compliance of AML/CFT. There are AML/CFT Section Ⅰ & Ⅱ affiliated with the Compliance Division, which are responsible for the AML/CFT operations of the Bank. The compliance of AML/CF T includes developing AML policies and CFT plans, confirming compliance with related laws, planning training courses, large-sum transactions, relevant reporting and declaration related to suspicious transactions and the CFT law, as well as policies and implementation of identification, evaluation, and monitoring of money laundering and financing of terrorism risks. In addition, We Undertook an investigation into the conduct or conduct of a transaction consistent with the suspected misappropriation of customer funds by a financial specialist.
Resources	The Bank invests adequate resources and manpower to strengthen the mechanism for AML/CFT, and has commissioned external consultant to assist in optimizing the Bank's mechanism of AML control and comprehensive risk assessment. Additionally, we conduct verification of the Bank's AML/CFT system to improve system operational performance.
Complaint Mechanism	Regularly report on the implementation of AML/CF T of each business management division of Head Office, including newly amended relevant business procedures or standard operating procedures/processes (SOP) in line with the internal and external regulation on AML/CFT, risk assessment results, improvement status of deficiencies identified by the audit, education and training, transaction monitoring management, and declaration of suspicious transaction cases.
Actions	The Bank has incorporated "Money Laundering Control Act" and "Counter-Terrorism Financing Act," related laws & regulations and the Bank's internal regulations into the Bank's implementation of compliance. Compliance selfassessment is conducted every half year, by taking written tests and audit sampling to make sure relevant personnel's comprehensive understanding in laws & regulations and compliance status of operational procedures. Continue to enhance the effectiveness of the Bank's AML/CFT operating systems as a basis for strengthening customer due diligence measures and continuously monitoring the implementation of mechanisms. In 2021, the Bank began to introduce Robotic Process Automation (RPA) technology, which was first applied to due diligence and list inspection operations for anti-money laundering business, greatly reducing operation time. Subsequently, in 2022, we also implemented this technology in transaction monitoring operations to improve operational performance. We continue to expand the application to due diligence operations across various risk levels in 2023. The Bank's Internal Auditing Division incorporates the Bank's AML/CFT implementation and related measures (implementation status and operating procedures are included), internal audits are conducted on a regular basis, and test the Bank's AML/CFT plan for its efficiency and quality of business and risk management quality. Each year, auditing accountants are commissioned to conduct project audits. Report the Bank's implementation status of AML/CFT to the AML/CFT management team, the Board of Directors and the Audit Committee at least once every half year, and regularly provides an evaluation report on its AML/CFT risks for the Board of Directors and senior executives to understand the Bank's AML/CFT risks. Continue to adjust the Bankwide comprehensive money laundering and terrorism risk assessment methodology After The Bank's 2023 comprehensive risk assessment report on AML/CFT being reviewed and approved by the Board of Directors, the Bank submits the report and risk prevention improvement measures to the FSC for future reference. The Bank's 2023 "Statement on Internal Control System for AML/CFT" was reviewed and approved at the 10th meeting of the 27th Board of Directors on February 26, 2024, and disclosed on the Bank's official website in accordance with regulations while announced on the website designated by the FSC. The Bank provides employees with AML/CFT education training courses in forms of inperson lectures, digital lessons, video courses, etc., in order to strengthen the professional knowledge and skills of the Bank's personnel at all levels in AML/CFT. In 2023, the Bank held education and training related courses with a total of 29 classes and a total of 27,933 people participated in the training.