TAIPEI (CNA) – The New York branches of Taiwan’s Hua Nan Commercial Bank (華南銀行) and Mega International Commercial Bank (兆豐銀) failed to pass the latest financial examinations related to compliance with U.S. money-laundering regulations, the Financial Supervisory Commission (FSC) said Monday.
In a hearing of the Legislature’s Finance Committee, FSC Chairman Wellington Koo (顧立雄) said the New York branches of eight Taiwanese banks passed the financial examinations, but Hua Nan and Mega Bank did not meet the terms of certain procedural regulations under U.S. law.
It does not mean, however, that the two banks were involved in any money laundering activities, Koo said in response to lawmakers’ questions.
He said Mega Bank is stepping up its efforts to meet all the terms of U.S. money laundering regulations by the first quarter of next year, while Hua Nan Bank will present an improvement plan to U.S. authorities.
On Saturday, Vice Finance Minister Su Jain-rong (蘇建榮) told CNA that the New York branch of Hua Nan Bank was being investigated by the New York State Department of Financial Services (NYDFS) for procedural shortcomings, not for money laundering activities.
In response to questions Monday on the probe, Koo said that until the NYDFS discloses the findings of its investigation, the FSC would be in no position to comment, as any information pertaining to the investigation would be confidential.
Taiwan’s financial authorities have asked all Taiwanese banks that have branches in New York to improve their efforts to comply with U.S. money-laundering regulations.
In August 2016, Mega Bank was fined US$180 million after it was found to have violated the U.S. Bank Secrecy Act, which is also known as the anti-money laundering law, by failing to report to U.S. authorities instances of suspected money laundering transactions by its customers.
The eight banks in New York that passed the U.S. financial examinations were Bank of Taiwan (台銀), First Commercial Bank (一銀), Chang Hwa Commercial Bank (彰銀), Land Bank of Taiwan (土銀), CTBC Bank (中信銀), Taiwan Cooperative Bank (合庫銀), Shanghai Commercial & Savings Bank (上海商銀) and Taiwan Business Bank (台企銀), according to the FSC. •
By Tsai Yi-chu and Frances Huang