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Anti-Money Laundering

& Countering Financing of Terrorism

The Bank has set up an AML/CFT Section affiliated with the Compliance Division, which is responsible for the AML/CFT operations of the Bank, and continues to strengthen the Bank's AML/CFT mechanisms.

  1. Item
    Description
    Policy
    For the purpose of Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT), stabilizing the financial order, as well as strengthening and developing the Bank’s plan on AML/CFT, while 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.
    Commitment
    The Bank continues to deepen and develop the implementation of its plan on AML/CFT. The Bank is committed to establishing a culture that values AML/CFT, 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, and implement the operations related to 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 is an AML/CFT Section affiliated with the Compliance Division, which is responsible for the AML/CFT operations of the Bank, and continues to strengthen the Bank's AML/CFT mechanisms. 
    ● Develop AML/CFT policies and plans, confirm compliance with laws related to AML/CFT, plan AML/CFT training courses, supervise large-sum transactions, suspicious transactions, and relevant reporting and declaration related to the CFT law. Monitor the risks related to money laundering and financing of terrorism, supervise the Bank's identification of money laundering and financing of terrorism risks, evaluate and monitor the planning and implementation of policies and procedures, as well as coordinate and supervise the Bank's comprehensive identification and assessment of money laundering and financing of terrorism risks. 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, to conduct verification of the Bank’s AML/CFT system.
    Complaint Mechanism
    Divisions of Head Office and business units regularly report the implementation of AML/CFT, 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 reporting, improvement status of deficiencies identified by the audit, education and training, transaction monitoring management, and declaration of suspicious transaction cases.
    Actions
    ● The Bank has set up an AML/CFT Section affiliated with the Compliance Division, which is responsible for the AML/CFT operations of the Bank, and continues to strengthen the Bank's AML/CFT mechanisms.
    (1) Customer Due Diligence (CDD)
    When a customer would like to establish business relationship or conduct business with our Bank, we shall undertake customer due diligence measures when certain CDD timing. The CDD measures to be taken shall be as follows: identifying the customer and verifying that customer’s identity using reliable, independent source documents, data or information; and inquiring about the purpose and nature of business. At the same time, the Bank shall undertake customer due diligence measures on beneficial owner, senior management and that any person purporting to act on behalf of the customer. 
    In addition, customer risk assessment is carried out according to the relevant mechanism. For high risk customer, appropriate enhanced measures are taken based on business characteristics.
    As for the timing of ongoing customer due diligence, in principle, conduct CDD according to our policies and procedures and establish the corresponding review frequency and control measures based on customer risk assessment result. 
    Trigger event customer due diligence will be initiated under either of the following circumstances:finding suspicious ML/FT transactions or the customer's beneficial owners or senior managers are suspected of being sanctioned;there is a significant change in customers' identity;the customer's transaction behavior is inconsistent with the customer's business characteristics;or the customer's transactions or account operations have significant abnormal changes. In the future, the Bank will continue to optimize related processes.
    (2) Non-face-to-face customer due diligence
    When conducting customer due diligence, an appropriate method of customer due diligence should be selected according to the business characteristics and delivery channels. In addition to face-to-face interviews, on-site visits, and telephone interviews, it is also possible to contact the customer’s previous bank, conduct online inquiries, or conduct non-face-to-face due diligence through video, email, etc. 
    The Bank need to collect individual customers’ identity documents and verify their identity and address, etc. Corporate customers, in principle, must provide company establishment registration documents, business licenses, registration forms of changes or similar documents, company articles of association, directors and shareholders lists, and beneficial owner identification documents, etc. To perform verification of corporate customer information, the Bank’s accesses the official website of the place of registration to verify that the registration information is consistent with the information provided by the customer and is still valid, and there is no registration of dissolution, liquidation, closure or abolition, etc.
    Contact customers by phone or letter when necessary. In addition, the Bank has set up a "Customer Identity Update Platform" on official website and Personal e-Banking, which provides customers with real-time online information update and improves the customer's experience of convenient service. 
    (3) Name screening
    ■ Terrorist financing
    Real-time name screening should be conducted for customers and their associates (including but not limited to person in charge, beneficial owners, senior management, agent) when the Bank establishes new business relationships or recognizes the change of customers’ risk level or substantial change of customers’ background or executes specified transactions. Name screening mechanism has been established with determined alert releasing time limit, and the name lists are updated daily. The name screening system has been validated regularly by an effectiveness validation mechanism. 
    Meanwhile, the Bank focuses on the sanction related information released by The Financial Action Task Force (FATF), the United Nations (UN) and other competent authorities, in an effort to regularly update an appropriate country risk list to effectively manage geography risk. The list ,including known or suspected terrorists, selected by the Bank for filtering includes but is not limited to the Taiwan Ministry of Justice (MOJ) sanctions list, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) List, the United Nations Security Council (UNSC) comprehensive sanctions list and other significant sanctions list of our concern.
    ■ PEPs
    When the Bank establishes new business relationships or recognizes the change of customers’ risk level or substantial change of customers’ background or executes specified transactions, in order to screen whether customers and their beneficial owners and senior managers are PEPs, the Bank uses the information system to assist in the verification of identities against name lists in the database. If the aforementioned person is confirmed to be PEPs, the Bank will conduct enhanced KYC measures, carry out EDD and strengthen transaction monitoring, and the approval of senior management is required before business relationships are established. 
    ■ Senior management approval and sign off
    If the aforementioned person is confirmed to be PEPs, the Bank will conduct enhanced KYC measures, carry out EDD and strengthen transaction monitoring, and the approval of senior management is required before business relationships are established. In addition to business relationships with PEPs customers that require senior management approval, when assessing the customer’s geographic risk, if customer’s nationality and place of registration involved in countries or regions with a high risk of money laundering or terrorism financing, enhanced measures commensurate with such risks are adopted. When assessing the customer’s risk, the customer’s occupation and industry characteristics should be considered. If the industry category is assessed by the Bank as prone to be used to assist money laundering or terrorism financing, the Bank will implement EDD when establishing or adding new business relationships, and confirm the source of funds and wealth of customers, etc. The aforementioned customer business relationship establishment can only be undertaken following the senior management approval. 
    The Bank will refuse to establish a business relationship with any customer who is on the sanction list or whose nationality, place of correspondence, place of registration, or place of business is involved in transactions of money laundering or terrorism financing with sanctioned countries, such as Iran, North Korea, or any corporate customer that is identified as virtual currency platform operators.
    (4) Record keeping
    All documents and information obtained for the execution of customer identity verification and due diligence measures, including relevant identification and verification of customer identity information and transaction records, are stored by the Bank for at least five years after the end of the business relationship with the customer or the end of the temporary transaction. 
    (5) Annual independent assessment
    ■ AML/CFT Annual Assurance Report AML/CFT
    The Bank has published the 2022 "Statement on the Internal Control System for AML/CFT" and disclosed it on the Bank's official website in accordance with regulations, and filed via the website designated by the Financial Supervisory Commission (FSC). The Bank's ad-hoc audit of the 2022 AML/CFT mechanism was conducted by external independent agency PricewaterhouseCoopers(PwC) Taiwan. 
    ● The Bank has incorporated “Money Laundering Control Act” and “Counter-Terrorism Financing Act,” related laws & regulations, the Bank’s related regulations into the Bank’s implementation of compliance. Compliance self-assessment is conducted every half year, by taking written tests and audit sampling to make sure relevant personnel have comprehensive understanding in laws & regulations and related operations. 
     ● 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 RPA robotic process automation 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.
    ● 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 Bank-wide comprehensive money laundering and terrorism risk assessment methodology. 
    ►The Bank’s 2022 comprehensive risk assessment report on AML/CFT was reviewed and approved at the 40th meeting of the 26th Board of Directors on June 7, 2023, and the Bank submitted the report and risk prevention improvement measures to the FSC for future reference.
    ● The Bank’s 2022 “Statement on Internal Control System for AML/CFT” was reviewed and approved at the 37th meeting of the 26th Board of Directors on March 25, 2023, 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 in-person lectures, digital lessons, video courses, etc., in order to strengthen the promotion of the Bank’s AML/CFT mechanisms and the professional knowledge and skills of the Bank’s personnel at all levels in AML/CFT. In 2022, the Bank held education and training related courses with a total of 18 classes and a total of 9,433 people participated in the training. 2022 CHB AML/CFT Training Situation Course training hours Number of trainees Compliance Department face-to-face education training or video courses 6,631 1,047 Digital learning courses with self-assessment quizzes 11,286 6,511 External professional face-to-face education training and digital learning courses 6,373 1,692 Mandatory Annual Video Course 2,196 183 Total 26,486 9,433 
  2. 2022 CHB AML/CFT Training Situation
    Course
    training hours
    Number of trainees
    Compliance Department face-to-face education training or video courses
    6,631
    1,047
    Digital learning courses with self-assessment quizzes
    11,286
    6,511
    External professional face-to-face education training and digital learning courses
    6,373
    1,692
    Mandatory Annual Video Course
    2,196
    183
    Total
    26,486
    9,433
    Note: For compliance in respect of personal information protection, please refer to 2.6 Information Security and Personal Information Protection.
  1. Note: For compliance in respect of personal information protection, please refer to Social aspect - "Information Security and Personal Information Protection."