The Asia/Pacific Group on Money Laundering (APG) yesterday said Taiwan has made progress in fighting money laundering, but still has shortcomings, including insufficient disclosure of beneficiary owners and poor risk management in local lenders’ offshore banking units (OBUs), while penalties are too light.
After the nation’s third round of mutual evaluations ended yesterday, the nine-member APG team listed its key findings and suggestions in a report, which was released by the Cabinet’s Anti-Money Laundering Office at a news conference.
The team leader, APG Secretariat member David Shannon, said they were impressed by the nation’s performance during the evaluations, acknowledging Taiwan’s progress in using financial intelligence to fight money laundering and terrorist financing, Minister Without Portfolio Lo Ping-cheng (羅秉成) said at the news conference.
Photo: Liao Chen-huei, Taipei Times
The team also recognized the nation’s efforts in international cooperation, such as having overseas legal secretaries and police officers exchange information with other nations, especially as it knows that Taiwan cannot sign many mutual legal assistance agreements due to its international isolation, Lo said.
However, compared with the Financial Action Task Force — a global body that works to eliminate tax havens — and EU regulations related to the registration of beneficial owners — which can find the beneficiary with real control through many layers and affiliates — Taiwan’s regulations on information disclosure on shareholders with a 10 percent stake is insufficient, the report said.
OBUs are subject to the same money-laundering regulations as their domestic counterparts, but most of their clients are foreigners, so they are potential targets of money laundering, Financial Supervisory Commission (FSC) Vice Chairman Thomas Huang (黃天牧) said, adding that it might be why APG has focused on them.
The commission plans to announce new regulations for OBUs next month, Huang said.
Vice Minister of Justice Chen Ming-tang (陳明堂) said that the government is aware that the regulations are not sufficient and would discuss the issue with the Ministry of Economic Affairs, which is responsible for overseeing the Company Act (公司法).
The ministry would update the team about its progress in March, when follow-up interviews are to be held, Chen said.
Asked about penalties being too light to curb money laundering, Huang said that the existing punishments hurt financial institutions’ reputations.
APG also criticized Taiwan’s control on illegal foreign funds but Chen said the Anti-Money Laundering Office has paid attention to the issue.
Chen, who is director of the office, said they have received 35 reports about foreign funds intervening in the upcoming local government elections, among which five cases have been under investigations.
APG plans to announce its initial ratings for Taiwan in January and the government is optimistic about the outcome, Lo said.
The final ratings are to be announced in July.
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