Taiwan's rating by the Asia/Pacific Group on Money Laundering (APG) could be hurt after Mega International Commercial Bank's New York branch was fined for violating anti-money laundering laws in the United States, a Ministry of Justice official said Wednesday.
The official, who declined to be named, said Taiwan fell short in the APG's second evaluation round, which began in 2005 and concluded in 2012, because its anti-money laundering laws were not fully aligned with international standards and did not criminalize terrorist financing.
By revising its laws in recent years, Taiwan is hoping to improve its rating in the APG's third evaluation round, which commenced in 2014, but the Mega Bank case could have a negative impact on Taiwan's rating, the official said.
Taiwan was scheduled to be assessed during the APG's third evaluation round last year, but the lack of assessors and other procedural adjustments led to a postponement of the assessment, according to the Ministry of Justice.
The APG, an international organization founded in Thailand in 1997, uses a mutual evaluation or peer review program to assess how well its members comply with the international anti-money laundering and combating the financing of terrorism (AML/CFT) standards.
New York State's Department of Financial Services (DFS) announced on Aug. 19 that it had fined Taiwan's Mega Bank US$180 million for its slack compliance practices, after identifying "a number of suspicious transactions" between the bank's New York and Panama branches.
The DFS said it discovered that "a substantial number" of the bank's customer entities were formed with the assistance of the Mossack Fonseca law firm in Panama, one of the law firms at the center of the formation of shell company activity.
Source: Focus Taiwan