Taiwan Legal Update: FSC issued NT$8 Million Fines & Q2 GDP Growth Beats Expectations

WEEKY NEWS PICTURE (TW)

Taiwan Legal Update: FSC issued NT$8 Million Fines & Q2 GDP Growth Beats Expectations

FSC issues Taipei Fubon Bank and First Commercial Bank NT$6 and NT$2 million Fines

Within 9 days, the FSC fined nine banks a total of NT$53 million. South China Bank, Federal Bank, Taishin Bank, HSBC (Taiwan) Bank, Shin Kong Bank, CITIC Bank and Cathay Pacific Bank were fined on July 30th for “misappropriation of client funds”. On August 1, 2019, First Commercial Bank and Taipei Fubon Bank were issued NT$2m and NT$6 million fines, respectively, for inadequate money laundering operations.  The FSC found that the banks were in violation of the following:

 

First Commercial Bank

 

•           Failure to establish a proper money laundering prevention system and control transaction monitoring mechanism. The handling of customer due diligence, customer identity measures and review mechanisms were not implemented, and the account and transaction continuous monitoring operation were found to be inadequate.

•           The bank was in receipt of a nominal cash remittance greater than NT$ 500,000 which was not sufficiently checked. The bank were unable to confirm the identity of the customer, triggering a Ministry of Justice investigation.

•          Inconsistency with Article 13 (3) of the Money Laundering Prevention Act and the provisions outlined in Article 13 of the Financial Institutions’ Measures against Money Laundering.

•           According to Article 129, paragraph 7, of the Banking Act, the bank is subject to a fine of NT$2 million.

 

Taipei Fubon Bank

 

•         Failure to implement KYC(know your customer) to understand customers and conduct risk assessment. The FSC committee determined that Taipei Fubon bank had not properly established and implemented adequate internal control systems to prevent money laundering.

•        This was in violation of Article 7 of the Money Laundering Prevention Act and Article 1 of Article 45 of the Banking Act.

•        The provisions  mandate that sound management will be subject to a NT$6 million fine and corrected in line with Article 1 and Article 129, Paragraph 7 of the Banking Act.

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Taiwan Q2 GDP Growth Beats Expectations

The Directorate General of Budget, accounting and Statistics (DGBAS) reported GDP growth higher that surpassed previous predictions. It was suggested that the economy likely grew by 2.41 percent during the second quarter, surpassing the estimation of 1.78 percent. On Wednesday, it was reported that the annual growth of the year will likely reach 2.19 percent as Taiwan’s exports and domestic investment surpassed an earlier estimate.

In the first half of 2019, GDP grew by 2.07 percent and consumption also increased by 1.57%(yoy). This is higher than the 1.32% growth in the previous quarter, mainly reflecting the sales growth of cars and electric scooters and partly offset by a decrease in sales of information and communications equipment, and the slump in financial services.

Investment also increased by 6.04%(yoy), following the 6.90% growth in the first quarter, primarily due to the increase in machinery and equipment investment as well as transport equipment. Additionally, real exports of goods and services grew by 4.11%(yoy), an improvement from 0.97% growth in the previous quarter, mainly driven by strong international demand for information, communication and audio-video, as well as refined petroleum products. Finally, imports also increased by 3.69%(yoy).

The DGBAS said it will release an updated GDP growth forecast for 2019 on August 16 but have cautioned to consider “numerous unpredictable factors” including exchange rates, politics and oil prices.

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