Saturday, September 18, 2021

Taipei Fubon Commercial Bank fined for violating anti-money laundering laws

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The Financial Supervisory Commission (FSC) yesterday fined Taipei Fubon Commercial Bank (台北富邦銀行) NT$2 million (US$71,508) for failure to comply with rules against money laundering, as its Hong Kong branch activated a bank account following oral instructions from bank president Roman Cheng (程耀輝).

The commission did not suspend Cheng from his post, but demanded that the Taipei Fubon Commercial Bank board of directors determine what responsibility he should take and propose plans to improve, Banking Bureau Chief Secretary Phil Tong (童政彰) told a videoconference.

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The FSC detected the compliance issue during a special examination, which was conducted after the commission in August last year received an anonymous tip that Cheng allegedly approved a loan to a Chinese company for his own benefit, Tong said.

“Not enough evidence shows that Cheng intentionally approved the loan, but the bank did not implement a solid regime against money laundering, as Cheng was involved,” Tong said.

In 2015, Cheng opened three accounts at Taipei Fubon Commercial Bank’s Hong Kong branch for three foreign companies as their representative, Tong said.

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The branch deactivated the accounts in August 2016, as they showed no transactions for more than a year, he said.

In 2017, Cheng resigned from the three firms before he was promoted to lead the bank, but the account owner details were not changed, despite the firms modifying their representatives, Tong said.

In May 2018, the new representatives asked Cheng how to reactivate the accounts and Cheng told them to contact the Hong Kong branch, Tong said.

However, the same month, Cheng went to Hong Kong on a business trip and told the head of the branch that clients wanted to reactivate the accounts, Tong said.

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In July 2018, the branch activated the accounts, even though the clients had not supplied required documents, such as know-your-customer (KYC) verifications, he said.

Cheng was still listed as beneficiary for the accounts and the branch did not conduct KYC checks until February 2019, Tong said, adding that this indicated a significant compliance issue.

The Banking Act (銀行法) does not specifically ban top-level managers from opening or owning corporate accounts at banks they work at, but banks should be careful with any account activity that involves their staff and should not relax practices to counter money laundering, he said.

Top bank managers should also be cautious in their behavior and speech when it comes to transactions or account activities that they have personal links to, Tong said.

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