Taiwan is reported to be investigating whether Mega Financial Holding Co and its banking unit, Mega International Commercial Bank, have broken local criminal laws, according to Reuters today, after New York authorities imposed upon Mega International Commercial Bank a $180 million fine for anti-money laundering violations.
Suspect Transaction
This is the first time in years that a Taiwan-based financial institution has been penalised by U.S. authorities for allegedly failing to report a 'suspect transaction'. The New York state's financial regulator said the anti-money laundering violations also included lax attention to risk exposure in Panama.
Although the company's chairman claimed the bank did not help customers launder money overseas, the allegations come as money laundering controls at China's banks face increasing global scrutiny after a series of high-profile judicial investigations and regulatory probes in the United States and Europe.
According to Reuters, authorities are currently examining documents from both Mega Financial and its banking unit as part of the investigation, and are also reviewing information from the island's finance ministry and Financial Supervisory Commission to establish whether there has been any violation of criminal law in Taiwan.
Further Violations
Mega International Commercial Bank is one of Taiwan's largest banks by asset size and is viewed by analysts as a well-connected financial group with its head appointed by the government.
Last year the U.S. Federal Reserve called on both Bank of China and China Construction Bank to improve their Anti-Money Laundering (AML) ) procedures.
As a result of the crackdown, many Chinese banks have focused on improving their Risk Management and compliance controls.
