Keep an eye on Mega Bank
Under the settlement provision of the New York Department of Financial Services (DFS) Consent Order announced on Aug. 19, Mega International Commercial Bank’s New York branch should do the following:
One, within 10 days of executing the order, pay the entire US$180 million fine, engage an independent compliance consultant and select an independent monitor; two, within 30 days, retain an independent monitor; three, within 60 days, complete a compliance review and submit a compliance report that includes all known or suspected violations of law, or suspicious transactions to law enforcement and supervisory authorities; four, engage a compliance consultant for up to six months to oversee and address deficiencies in Mega Bank New York’s compliance function; five, retain an independent monitor for a minimum of two years to conduct a review of Mega Bank New York’s money laundering compliance program and a lock-back review of the bank’s US currency clearing transactions from Jan. 1, 2012, to Dec. 31, 2014, to determine whether it properly identified and reported all transactions occurring at, by, or through the branch in accordance with the applicable money laundering and Office of Foreign Assets Control laws and regulations.
The US dollar value of credit transactions between Mega Bank NY and Colon FTZ was US$3.5 billion in 2013 and and US$2.4 billion in 2014. Corresponding figures for the Panama City branch were US$1.1 billion and US$4.5 billion.
Now the first 30 days is over, what has been done? There is no report of Mega International Commercial Bank’s voluntary action, but the Financial Supervisory Commission fined it NT$10 million (US$318,167). The bank is not allowed to set up new overseas branches until it improves internal management and dismisses former chairman Mckinney Tsai (蔡友才), former president Wu Hann-ching (吳漢卿), vice president Liang Mei-chi (梁美琪), chief audit officer Liu Hsiao-ling (劉小鈴) and chief compliance officer Chen Tien-lu (陳天祿), as well as New York branch president Huang Shih-ming (黃士明).
Will the commission’s requirements meet New York DFS’ order provision? Not at all. Mega Bank is required to engage an independent compliance consultant, select and retain an independent monitor. It has done nothing, but claims irregular transactions did not constitute suspicious activity.
Well, it is standard practice that wire transfers to a closed bank account are returned to the sender, a regulatory filing is required around the world, so why not for transactions from Mega Bank NY to Mega Bank Panama? That absolutely constitutes a suspicious activity.
As the DFS report said in Article 21.d: “A significant number of reported debit authorizations processed by Mega-NY between 2010 and 2014 occurred when the Panamanian beneficiary accounts identified in the underlying transactions were closed by the Colon FTZ Branch because of inadequate Know-Your-Customer documentation received by that branch — a highly suspicious level of activity. Moreover, most of these accounts were open for less than two years; a number were open even less than one year — further evidence of very questionable activity. The suspicious nature of this activity is compounded by the fact that the remitters and beneficiaries associated with many of the Suspicious Payment Reversals were identical parties; in some cases, the original payment instructions were sent months after the beneficiary accounts had already been closed. Moreover, the Suspicious Payment Reversals continued at least into 2015.”
Obviously, the commission did not do its job correctly. The commission’s NT$10 million fine is not a solution to this case. Instead it highlights the urgent need for citizen oversight.
Why did Mega Bank open two branches in Panama, which has historically been recognized as a high-risk jurisdiction for money laundering? Did it simply break money laundering laws or, worse, did it chose to flagrantly disregard regulations and participate in money laundering?
Mega Bank must frankly disclose the suspicious transactions from 2010 to last year, and reveal who the senders and recipients were. A cover-up will always make things worse.
John Hsieh
Hayward, California
Taiwan stands at the epicenter of a seismic shift that will determine the Indo-Pacific’s future security architecture. Whether deterrence prevails or collapses will reverberate far beyond the Taiwan Strait, fundamentally reshaping global power dynamics. The stakes could not be higher. Today, Taipei confronts an unprecedented convergence of threats from an increasingly muscular China that has intensified its multidimensional pressure campaign. Beijing’s strategy is comprehensive: military intimidation, diplomatic isolation, economic coercion, and sophisticated influence operations designed to fracture Taiwan’s democratic society from within. This challenge is magnified by Taiwan’s internal political divisions, which extend to fundamental questions about the island’s identity and future
The narrative surrounding Indian Prime Minister Narendra Modi’s attendance at last week’s Shanghai Cooperation Organization (SCO) summit — where he held hands with Russian President Vladimir Putin and chatted amiably with Chinese President Xi Jinping (習近平) — was widely framed as a signal of Modi distancing himself from the US and edging closer to regional autocrats. It was depicted as Modi reacting to the levying of high US tariffs, burying the hatchet over border disputes with China, and heralding less engagement with the Quadrilateral Security dialogue (Quad) composed of the US, India, Japan and Australia. With Modi in China for the
The Chinese Nationalist Party (KMT) has postponed its chairperson candidate registration for two weeks, and so far, nine people have announced their intention to run for chairperson, the most on record, with more expected to announce their campaign in the final days. On the evening of Aug. 23, shortly after seven KMT lawmakers survived recall votes, KMT Chairman Eric Chu (朱立倫) announced he would step down and urged Taichung Mayor Lu Shiow-yen (盧秀燕) to step in and lead the party back to power. Lu immediately ruled herself out the following day, leaving the subject in question. In the days that followed, several
The Jamestown Foundation last week published an article exposing Beijing’s oil rigs and other potential dual-use platforms in waters near Pratas Island (Dongsha Island, 東沙島). China’s activities there resembled what they did in the East China Sea, inside the exclusive economic zones of Japan and South Korea, as well as with other South China Sea claimants. However, the most surprising element of the report was that the authors’ government contacts and Jamestown’s own evinced little awareness of China’s activities. That Beijing’s testing of Taiwanese (and its allies) situational awareness seemingly went unnoticed strongly suggests the need for more intelligence. Taiwan’s naval
RSS