1. These Directions are adopted to strengthen the
   anti-money laundering and countering terrorism
   financing (AML/CFT) regime of the Republic of
   China (R.O.C.), and to enhance soundness of the
   internal control and internal audit system of the
   credit departments of farmers’ and fishermen’s
   associations (collectively referred to as the
  “credit departments” hereunder).

2. In matters related to AML/CFT internal controls, a
   credit department shall comply with these
   Directions as well as relevant provisions in the
  “Money Laundering Control Act”,“ Terrorism
   Financing Prevention Act”, “Regulations Governing
   the Deposit Accounts and Suspicious or Unusual
   Transactions” and “Directions for Confirming
   Customer Identity in Domestic Remittance Operations
   of Financial Institutions.”

3. A credit department should assess the money
   laundering or terrorist financing risks that may
   arise in relation to the development of new
   products or services or new business practices
   (including new delivery mechanisms, use of new
   technologies for pre-existing or new products or
   business practices) and est ablish relevant risk
   management measures to mitigate those risks.

 
4. Credit departments shall observe the following
   provisions when conducting wire transfers：
(1) A credit department shall provide information on
    the originator and the beneficiary by any of the
    means below when conducting domestic wire
    transfers involving NTD:
    A. Include in the wire transfer information on the
       originator and the beneficiary; or
    B. Include in the wire transfer the account number
       or a unique transaction reference number which
       permits traceability of the transaction and
       make information on the originator and the
       beneficiary available within three(3) business
       days of receiving a request from the
       beneficiary financial institution or from
       appropriate competent authorities. However when
       a prosecutors office or judicial police office
       requests the provision of relevant information
       immediately, the credit department shall
       respond accordingly.
(2) A credit department shall maintain all information
    on the originator and the beneficiary.
(3) The aforementioned originator information shall
    include: name of the originator, the originator
    account number where such an account is used to
    process the transaction (if not available, a
    unique transaction reference number that permits
    traceability), the originator’s address, or
    national identity number, or date and place of
    birth.
(4) The aforementioned beneficiary information shall
    include: name of the beneficiary and the
    beneficiary account number (if not available, a
    unique transaction reference number that permits
    traceability).
(5) A credit department that fails to conduct wire
    transfers in compliance with the preceding four
    subparagraphs are not allowed to carry out wire
    transfer business.

5. Rules regarding internal control system:
(1) The AML/CFT internal control system established by
    a credit  department and its amendments thereafter
    shall be approved by its board of directors and
    contain the following particulars:
    A. The policies and procedures to identify, assess
       and manage its money laundering and terrorist
       financing risks;
    B. An AML/CFT program established based on money
       laundering and terrorist financing risks and
       business size to manage and mitigate identified
       risks, which also includes enhanced control
       measures for higher risk situations; and
    C. Standard operational procedures for monitoring
       compliance with AML/CFT regulations and for the
       implementation of AML/CFT program, which shall
       be included in the self-inspection and internal
       audit system, and enhanced if necessary.
(2) The money laundering and terrorist financing risk
    identification, assessment and management
    mentioned in Item A of the preceding subparagraph
    should cover at least customers, geographic areas,
    products and services, transactions and delivery
    channels and observe the following provisions:
    A. A risk assessment report should be produced.
    B. Risk assessment should consider all risk
       factors to determine the level of overall risk,
       and appropriate measures to mitigate the risks.
    C. There should be a risk assessment update
       mechanism in place to ensure that risk data are
       kept up-to-date.
    D. When risk assessment is completed or updated,
       the risk assessment report shall be submitted
       to the Council of Agricultural, Executive Yuan
       (referred to as the “Council” hereunder) for
       recordation.
(3) The AML/CFT program mentioned in Item B of
    Subparagraph (1) shall include the following
    policies, procedures and controls:
    A. Verification of customer identity;
    B. Checking of names of customers and trading
       counterparties;
    C. Ongoing monitoring of accounts and
       transactions;
    D. Correspondent banking business;
    E. Record keeping;
    F. Reporting of currency delivery above a certain
       amount;
    G. Reporting of suspicious transactions;
    H. Appointment of a chief compliance officer to
       take charge of AML/CFT compliance matters;
    I. Employee screening and hiring procedure;
    J. Ongoing employee training program;
    K. An independent audit function to test the
       effectiveness of AML/CFT system; and
    L. Other matters required by the AML/CFT
       regulations and the Council.
(4) The board of director of a farmers’or
    fishermen’s association should ensure the
    establishment and maintenance of an appropriate
    and effective AML/CFT internal control system. The
    board of directors and secretary-general should
    understand its money laundering and terrorist
    financing risks and the operation of its AML/CFT
    program, and adopt measures to create a culture of
    AML/CFT compliance.

6. Rules regarding the chief AML/CFT compliance
   officer of farmers’ and fishermen’s associations
   are as follows:
(1) A credit department should be staffed with
    adequate manpower and resources dedicated to
    AML/CFT that are appropriate to the size and risks
    of the business. The secretary-general of a
    farmers’ or fishermen’s association shall
    appoint a senior officer to act as the chief
    AML/CFT compliance officer and vest the officer
    full authority in AML/CFT implementation, and make
    sure that the chief AML/CFT compliance officer
    does not hold concurrent posts that may have a
    conflict of interest with their AML/CFT
    responsibilities.
(2) The chief AML/CFT compliance officer mentioned in
    the preceding subparagraph shall be charged with
    the following duties:
    A. Supervising the planning and implementation of
       policies and procedures for identifying,
       assessing and monitoring money laundering and
       terrorist financing risks.
    B. Coordinating and supervising association-wide
       AML/CFT risk identification and assessment.
    C. Monitoring and controlling money laundering and
       terrorist financing risks.
    D. Developing an AML/CFT program.
    E. Coordinating and supervising the implementation
       of AML/CFT program.
    F. Confirming compliance with AML/CFT regulations,
       including the relevant compliance template or
       self-regulatory rules produced by the
       Agricultural Bank of Taiwan and approved by the
       Council.
    G. Supervising the reporting on suspicious
       transactions and on the properties or property
       interests and location of individuals or legal
       entities designated by the Terrorism Financing
       Prevention Act to the Investigation Bureau,
       Ministry of Justice.
(3) The chief AML/CFT compliance officer mentioned in
    Subparagraph 1 hereof should report to the board
    of directors and the board of supervisors at least
    semiannually, or promptly report to the board of
    directors, the board of supervisors and the
    secretary-general whenever a major regulatory
    violation is discovered.

7. Rules regarding the implementation, audit and
   statement of internal AML/CFT control system are as
   follows:
(1) A credit department and its sub-departments shall
    appoint a senior manager to act as the supervisor
    to take charge of supervising the AML/CFT related
    matters and self-inspection conducted by the
    credit department and sub-departments.
(2) The internal auditors of farmers and fishermen’s
    associations shall audit the following matters and
    produce audit opinions:
    A. Whether the money laundering and terrorist
       financing risk assessment and the AML/CFT
       program meet the regulatory requirements and
       are vigorously implemented; and
    B. The effectiveness of AML/CFT program.
(3) The secretary-general of a farmers’or
    fishermen’s association should oversee that its
    credit department and sub-departments prudently
    evaluate and review the implementation of internal
    AML/CFT control system. The chairman,
    secretary-general, internal auditor and chief
    AML/CFT compliance officer shall jointly issue a
    statement on internal AML/CFT control (see
    attached), which shall be submitted to the board
    of directors for approval, and disclosed on the
    website of the farmers’ or fishermen’s
    association and filed via a website designated by
    the Council in three (3) months after the end of
    each fiscal year.

8. Rules regarding the employee hiring and training:
(1) A credit department should establish prudent and
    appropriate procedures for employee screening and
    hiring, including examining whether the
    prospective employee has character integrity and
    the professional knowledge required to perform
    their duties.
(2) The chief AML/CFT compliance officer and AML/CFT
    personnel of a farmers’ or fishermen’s
    association, and the AML/CFT supervisor of its
    credit department and sub-departments shall
    possess one of the following qualification
    requirements in three(3) months after appointment/
    assignment to the post and the credit department
    shall set out relevant control mechanism to ensure
    compliance with the provisions hereof:
    A. Having served as AML/CFT personnel on a
       full-time basis for at least three (3) years;
    B. Having attended not less than 24 hours of
       courses offered by institutions recognized by
       the Council or offered by Agricultural Bank of
       Taiwan, and passed the exams and received
       completion certificates therefor; or
    C. Having received a domestic or international
       AML/CFT professional certificate issued by an
       institution recognized by the Council.
(3) Personnel mentioned in the preceding subparagraph
    who are appointed/assigned to the post prior to
    December 31, 2017 may be deemed as qualified if he
    or she meets any of the qualification requirements
    below:
    A. Meeting the qualification requirement set out
       in Item A or Item C of the preceding
       subparagraph prior to December 31, 2017.
    B. Meeting the qualification requirement set out
       in item 2 of the preceding subparagraph within
       the time periods specified below:
     a. For the chief AML/CFT compliance officer and
        AML/CFT personnel of a farmers’ or
        fishermen’s association, meeting the
        qualification requirement before December 31,
        2017 or within six (6) months after
        appointment/assignment to the post.
     b. For the AML/CFT supervisor of credit
        department and its sub-departments, meeting
        the qualification requirement before December
        31, 2017 or within six (6) months after
        appointment/assignment to the post.
(4) The chief AML/CFT compliance officer and AML/CFT
    personnel of a farmers’ or fishermen’s
    association, and the AML/CFT supervisor of its
    credit department and sub-departments shall attend
    not less than 12 hours of training on AML/CFT
    offered institutions recognized by the Council or
    by the Agricultural Bank of Taiwan or internal or
    external training units accepted by the chief
    AML/CFT compliance officer mentioned in
    Subparagraph 1 of Point 6 herein every year. The
    training shall cover at least newly amended laws
    and regulations, trends and patterns of money
    laundering and terrorist financing risks. If the
    person has obtained a domestic or international
    AML/CFT professional certificate issued by an
    institution recognized by the Council in a year,
    the certificate may be used to offset the training
    hours for the year.
(5) A farmers’ or fishermen’s association shall
    arrange appropriate hours of training of suitable
    contents on AML/ CFT in view of the nature of its
    business for its directors, supervisors,
    secretary-general, internal auditors and business
    personnel of credit department to familiarize them
    with their AML/CFT duties and equip them with the
    professional knowhow to perform their duties.

9. If a farmers’ or fishermen’s association violates
   these Directions, the Council may take appropriate
   sanctions commensurate with the seriousness of the
   violations in accordance with Article 33 of the
   Agricultural Finance Act to which Articles 61-1 of
   the Banking Act applies mutatis mutandis as well as
   Subparagraph 2, Paragraph 2 of Article 50 and
   Article 51 of the Agricultural Finance Act.