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Sustainability(2020)

AML/CFT

To strengthen the Group's compliance with AML/CFT mechanisms, train subsidiaries to effectively identify and evaluate various ML/TF risks, implement AML policies and management systems, and meet requirements of international AML regulations, the subsidiaries referenced the 40 Recommendations of the Financial Action Task Force ( FATF) and domestic laws and regulations to set up comprehensive organization structures, policies, and procedures to effectively control and manage identified ML threats and vulnerabilities.

Mega Holdings requires subsidiaries to conduct the following consistent and specific measures for AML/CFT operations:

1. Establish the Anti-Money Laundering Committee, dedicated unit, or dedicated personnel
Subsidiaries establish the Anti-Money Laundering Committee, dedicated unit, or dedicated personnel based on the scale of business operations or set up sections or teams under related units and assign appropriate levels of manpower to take charge of related AML operations. Mega Holdings regularly organizes AML meetings for the Group and supervises the subsidiaries' implementation of AML operations. MICB's Anti-Money Laundering and Financial Crime Compliance (AML & FCC) Department has 167 employees. Domestic and foreign units appointed 142 AML/CFT supervisors.

2. Establish AML/CFT policies, strategies, and standards
Pursuant to the "Money Laundering Control Act", "Counter-Terrorism Financing Act", "Regulations Governing Anti-Money Laundering of Financial Institutions", and other regulations, Mega Holdings established the "Mega Financial Group ASubsidiaries established AML plans based on identified ML/TF risks and the scale of their business operations. The plans include AML/CFT plans, compliance test plans, independent test plans, and AML training plans. Financial Group Overall Anti-Money Laundering and Countering Financing of Terrorism Plan". The policies, strategies, and standards are applicable to the Company and subsidiaries specified in Article 5 of the Money Laundering Control Act including MICB, MBF, MS, CKI, MITC, and MLIA as well as overseas subsidiary companies, branches, or other foreign branch institutions and all their employees.
Subsidiaries established AML plans based on identified ML/TF risks and the scale of their business operations. The plans include AML/CFT plans, compliance test plans, independent test plans, and AML training plans.

3. Establish an AML system
The establishment of the AML system of subsidiaries includes at least three modules such as name screening and comparison (including the compliance list database), verification of customer identity (including CDD, customer risk assessment mechanisms, and ongoing CDD), transaction monitoring (including operating procedures for verifying suspected money laundering signs and alert messages).

4. Establish an information sharing platform for the Group
To provide the Group with consistent standards for ML risks for customers, Mega Holdings has established an information sharing platform based on the Group's information sharing categories, operating procedures, information security and confidentiality regulations. The platform provides information such as CDD data on existing customers (including beneficiaries), suspicious money laundering patterns, adverse news in the media, and national risk ratings.

5. Establish Group AML and risk appetite for sanctions
The Group's AML and sanction risk indicators include qualitative and quantitative indicators and subsidiaries are required to establish suitable risk appetites and indicators.

6. Organize regular training on anti-money laundering
MICB continues to intensify its AML/CFT compliance culture and organizes various types of AML/CFT training that focus on improving employees' AML awareness and recognition and provide different types of themes and length of training for different professional roles and business requirements.