Important Measures
Amendments to the “Banking Act of the Republic of China”
2019-06-14
The amendments to the Banking Act of the Republic of China were passed by the Legislative Yuan on a third reading on March 26, 2019 and promulgated by the President on April 17, 2019. 3 articles were added, 2 were deleted and 19 were amended. The main amendments were as follows:
1.Overall review of the chapter of penalties: with reference to legislative examples in Germany and Japan and the scale of banking in Taiwan, the maximum fine in the chapter of penalties has been increased from NT$10 million to NT$50 million to enhance bank legal compliance. Taking into account the difference in scale between banks, the minimum fine stays the same to allow space for discretion. To allow both strictness and lenience as appropriate, a provision was also added allowing the competent authority to decide not to impose a fine on a bank when the situation is relatively minor and instead adopt a suitable corrective measure.
2.Adding administrative dispositions to effectively correct violation of regulations by banks: with reference to Item 11 of the Basel Committee on Banking Supervision’s Core Principles for Effective Banking Supervision, the competent authority can use various supervisory measures to spur banks to take improvement action, to effectively correct violation of regulations by banks. Administrative dispositions that the competent authority can adopt have also been added, including restricting investment, forbidding the disposal or transfer of certain assets, ordering closure of a branch or a department within a prescribed period of time, ordering a bank to suspend a manager or employee from their performance of duties within a specific time period and ordering allocation of a reserve of a certain amount.
3.Requiring the responsible person of a bank to obey the basic due diligence requirements for non-competition: to ensure that the responsible person of a bank obeys basic due diligence requirements for non-competition so that he/she can effectively carry out the duties of his/her main position and concurrent position when holding concurrent positions, the related regulations have been added to authorize the competent authority to prohibit the responsible persons of a bank from involving in conflict of interest.
4.Enhancing Taiwan’s international cooperation on money laundering: with reference to Item 13 of the Basel Committee on Banking Supervision’s Core Principles for Effective Banking Supervision and Suggestion 40 of the Methodology for Assessing Technical Compliance with the FATF Recommendations and the Effectiveness of AML/CFT Systems, the legal basis for the competent authority engaging in international supervisory cooperation is stipulated. The government can sign cooperative treaties, protocols or agreement with foreign governments, institutions or international organizations and, based on the principle of reciprocity, request related agencies or institutions to, according to law, provide the necessary information to foreign governments, institutions or international organizations.
5.Strengthening management of credit card business: penalties for violation of credit card business related regulations have been added, and it is stipulated that institutions engaging in credit card business can be the subject of a penalty.
1.Overall review of the chapter of penalties: with reference to legislative examples in Germany and Japan and the scale of banking in Taiwan, the maximum fine in the chapter of penalties has been increased from NT$10 million to NT$50 million to enhance bank legal compliance. Taking into account the difference in scale between banks, the minimum fine stays the same to allow space for discretion. To allow both strictness and lenience as appropriate, a provision was also added allowing the competent authority to decide not to impose a fine on a bank when the situation is relatively minor and instead adopt a suitable corrective measure.
2.Adding administrative dispositions to effectively correct violation of regulations by banks: with reference to Item 11 of the Basel Committee on Banking Supervision’s Core Principles for Effective Banking Supervision, the competent authority can use various supervisory measures to spur banks to take improvement action, to effectively correct violation of regulations by banks. Administrative dispositions that the competent authority can adopt have also been added, including restricting investment, forbidding the disposal or transfer of certain assets, ordering closure of a branch or a department within a prescribed period of time, ordering a bank to suspend a manager or employee from their performance of duties within a specific time period and ordering allocation of a reserve of a certain amount.
3.Requiring the responsible person of a bank to obey the basic due diligence requirements for non-competition: to ensure that the responsible person of a bank obeys basic due diligence requirements for non-competition so that he/she can effectively carry out the duties of his/her main position and concurrent position when holding concurrent positions, the related regulations have been added to authorize the competent authority to prohibit the responsible persons of a bank from involving in conflict of interest.
4.Enhancing Taiwan’s international cooperation on money laundering: with reference to Item 13 of the Basel Committee on Banking Supervision’s Core Principles for Effective Banking Supervision and Suggestion 40 of the Methodology for Assessing Technical Compliance with the FATF Recommendations and the Effectiveness of AML/CFT Systems, the legal basis for the competent authority engaging in international supervisory cooperation is stipulated. The government can sign cooperative treaties, protocols or agreement with foreign governments, institutions or international organizations and, based on the principle of reciprocity, request related agencies or institutions to, according to law, provide the necessary information to foreign governments, institutions or international organizations.
5.Strengthening management of credit card business: penalties for violation of credit card business related regulations have been added, and it is stipulated that institutions engaging in credit card business can be the subject of a penalty.
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- Update: 2019-06-14