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Title: Directions Governing Internal Controls of the Credit Departments of Farmers’ and Fishermen’s Associations for Anti-Money Laundering and Countering Terrorism Financing Ch
Date: 2018.12.27
Legislative: 1. Promulgated per Order of the Council of Agriculture No.
Nong-Jin-Zi-1045070340A dated April 30, 2015.
2. Amendment and name change promulgated per Order of the
Council of Agriculture No. Nong-Jin-Zi-1065074299A dated July
26, 2017.
3. The “Directions Governing Internal Controls of the Credit
Departments of Farmers’ and Fishermen’s Associations for
Anti-Money Laundering and Countering Terrorism Financing”
is rescinded effective December 29, 2018 per Order of the
Council of Agriculture No. Nong-Jin-Zi-1075074665A dated
December 27, 2018.
Content: 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 establish 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.
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