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Compliance

公司治理 公司治理

Regulatory Compliance Management Mechanism

BOT has incorporated "Enforcement Rules for Bank of Taiwan Regulatory Compliance System." Chief Compliance Officer is the designated Chief Compliance Officer for the Head Office of the Bank, who presides over, supervises, and reinforces the overall matters and report to the Audit Committee and the Board. Starting from the fourth quarter of 2022, the long-running HQ Management Compliance Meeting has been institutionalized, and a compliance working group was set up under the Compliance and AML/CFT Committee. In order to establish an effective horizontal communication mechanism, all business managing units will be invited to attend the Compliance Meeting regularly.

We conduct compliance risk assessments on a regular and ad-hoc basis. We propose the weakness of the compliance risk management, and the improvement plans and schedules and the subsequent follow-ups to the Audit Committee and the Board in order to reinforce a sound "Regulatory Compliance Risk Management and Supervision Framework".

Compliance Management System

In response to the increased intensity of financial supervision and legal compliance requirements, we have launched the Compliance Management System since 2022, introducing digital technology into regulatory compliance operations, and using the system to manage and supervise daily compliance operations. The current paper-based compliance risk assessment, compliance self-assessment, collection of compliance risk alerting events, etc. will be conducted online, in order to improve compliance management efficiency and optimize current operating procedures continuously, and implement energy conservation and carbon reduction as well as reducing paper consumption.

The Compliance Management System consists of a number of functions, ranging from tracking of legislative and regulatory information, implementation of compliance self-assessment, management of compliance personnel; compliance risk assessment (CRA); and compliance risk alerts. The first phase has been launched in October 2023, including platform functions, regulatory changes management, and internal and external regulatory databases. Staffs from various business managing units and overseas branches have conducted daily legal compliance operations through the system and received corresponding education and training. The second phase of functions have been launched in the early 2024, covering the legal compliance self-assessment module, management of compliance personnel qualification and training; compliance risk assessment (CRA); and compliance risk alerts module.

The application of the Compliance Management System enhances efficiency with simplified procedure, and enables digital transition. The implementation reduces paper usage, and manpower and operational risk. We are driving the successful digital transformation and enhancing technology-based supervision through such systems.

Establishing a Culture of Legal Compliance

We emphasize the importance of legal compliance, and have launched a number of classes and trainings to raise employees' awareness of legal requirements and anti-money laundering. Employees are required to complete online learning and tests to maximize learning results.

To advance the competence of the Legal Compliance Team, we organize on-the-job trainings and provide the required amount of training hours applicable to different positions. To ensure all employees are on board with legal compliance work, the "Audit and Legal Compliance Work Forum" saw a discussion across north, central, and south Taiwan to familiarize domestic business units with BOT's friendly service measures and cases, common types of fraud, anti-money laundering issues, and legal compliance updates.

To enhance the competence of management and unit members in legal compliance and money laundering, a number of trainings and forums are organized to raise awareness and improve performance.

Anti-Money Laundering and Counter terrorism Financing Framework

Our "Anti-Money Laundering and Counter terrorism Financing Policy" and "Directions Governing Anti-Money Laundering and Countering the Financing of Terrorism" are in place as required by law, and frontline employees follow these policies accordingly to identify and verify customer identities, screen customer names, monitor suspicious transactions, and assess risks.

To ensure AML and CFT practice, the Board has assigned a SEVP and Chief Compliance Officer as chief AML/CFT compliance officer. The "Compliance and AML/CFT Committee" manages and coordinates relevant work across all departments. Under the Department of Compliance, the "Anti-Money Laundering Center" is responsible for matters related to anti-money laundering and counter terrorism financing.

Roles Description
Board of Directors The Board has assigned the SEVP and Chief Compliance Officer as the chief AML/CFT compliance officer. The officer reports to the Audit Committee and the Board semiannually.
Compliance and AML/CFT Committee

The committee is convened quarterly by the president, with the SEVP and Chief Compliance Officer as deputy convener, and the HQ Department heads as members. The practice focuses on the review and supervision of compliance and AML/CFT issues.

Under the committee, the AML/CFT Team conducts regular inspections to improve practices against money laundering and financing of terrorism across all business units.
Department of Compliance The "Anti-Money Laundering Center" has been set up and is in charge of money laundering and combating the financing of terrorism.

Anti-Money Laundering / Combating the Financing of Terrorism

  • Supervision to ensure overseas branches follow AML/CFT. In addition to the quarterly Unified Communication online, there are liasons for each overseas branch, assisting to communicate and update information and regulations on anti-money laundering and combating the financing of terrorism in a timely manner. Moreover, we have established a mechanism to review and reflect common deficiencies discovered by inspector in overseas branch, allowing other non-examined branches to scrutinize whether similar situations exist and assisting them in making improvements to prevent the same errors.
  • Regular review of countries logged in the suspected sanctions evasion database; enhancing transaction monitoring for trade finance through " Maritime Intelligence Risk Suite " and " Global Trade Atlas ".
  • We have adjusted and expanded the functions of the BOT AML system to optimize management. In order to retain the effectiveness of account and transaction monitoring module as well as name screening module embedded in BOT AML system, we have engaged independent consultant to complete BOT AML system verification in 2023, improving the function of examination and monitoring competence.
  • To ensure our AML/CFT management remain current, we have entrusted professional consultants to keep track of and advise on improvements, enhancing our AML/CFT risk management efficacy.
    Note: AML/CFT: Anti-Money Laundering / Combating the Financing of Terrorism

Branch onsite visit
Branch onsite visit The Anti-Money Laundering Center conducted inspections of branches regarding beneficiary owner requisitions, name checks, customer risk ratings, and suspicious transaction monitoring. The practice helps the branches to properly comply with domestic AML/CFT regulations, reinforcing the first line of defense. The improvements proposed following the inspections have been implemented under supervision. The branches that failed to comply with AML/CFT regulations have been evaluated according to the inspection report to ensure future compliance with AML/CFT.