The challenges of setting up an effective AML/CFT compliance policy for a financial group

Yi-Chang Liu, CAMS-Audit

A domestic financial holding company with foreign subsidiaries or branches is facing regulations from different jurisdiction and regulatory authorities, which brings the complexity of establishing, complying, supervising and auditing programs to it. Each entity needs to meet its compliance level; for example, the banking AML/CFT regulations are much stricter then regulations of trust, which would probably direct illicit customers to invest through fund house, such as PE funds, instead of buying a large insurance policy from bancassurance that implements higher level on know-your-customer (KYC) process.

It is not just about what a financial holding company should do or should not do, but what a head office of the financial group can do to build a solid and effective compliance program for its entities as a whole. This white paper will be focused on the establishment of a group level policy in Taiwan, together with issues of risk assessment, identification, mitigation, communication and enhancement of AML/CFT compliance.

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