The Company regards compliance as the core of its internal control system. To fulfill compliance, the Company has established the compliance system and appointed an executive equivalent to the executive vice president as the chief compliance officer (CCO) for the head office to conduct the compliance-related tasks in accordance with the Implementation Rules of Internal Audit and Internal Control System of Financial Holding Companies and Banking Industries. The chief compliance officer shall report to the Board of Directors and the Audit Committee semiannually.
Mega Holdings has convened communication meetings for compliance officers of the Group since 2017 to strengthen the compliance of subsidiaries. The Company discusses the implementation status of the compliance system in each company, audit opinions in internal and external audit, compliance training, and related matters. A total of 4 Group Compliance Committee Meetings were held in 2019.
The Group provided comprehensive compliance training for employees, directors, and supervisors in 2019 and the training completion rate was 100% in all categories.
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 and dedicated unit, or assign 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.
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 Anti-Money Laundering and Countering Financing of Terrorism Policy", "Mega Financial Group Anti-Money Laundering and Countering Financing of Terrorism Information Sharing Procedures", and "Mega Financial Group Overall Anti-Money Laundering and Countering Financing of Terrorism Plan". The policies, strategies, and standards are applicable to Mega Holdings 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 or branches.
3. Establish an information sharing platform for the Group
To provide the Group with consistent standards for ML risks of 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 beneficial owner), suspicious money laundering patterns, adverse news in the media, and national risk ratings. The Company shall continue to optimize the functions of the information sharing platform and the quality of information in 2020.
4. Establish Group AML and sanctions risk appetite
The Group's AML and sanction risk indicators include qualitative and quantitative indicators and subsidiaries are required to establish suitable risk appetites and indicators.
Mega Bank encouraged employees to obtain domestic and foreign professional licenses and become corporate members of the Association of Certified Anti-Money Laundering Specialists (ACAMS) to improve their professional skills and capacity for AML operations. As of the end of December 2019, 3,420 employees have obtained the Certified Anti-Money Laundering Specialists (CAMS) certification which account for approximately 49% of all employees of Mega Bank while 400 employees have obtained the "domestic AML/CFT professional certificate".
MICB continues to review reports of suspicious transactions and remains committed to improving the quality of reports, helping the government fight crime, fulfilling corporate social responsibilities, and improving the AML system. MICB forwards case studies of caring services for blocking frauds over the counter at financial Institutions to help employees in domestic business units provide care to customers over the counter, successfully prevent fraud, and reduce losses of customers. The information is also placed in the Q&A part of the "AML section" on the employees' website. AML supervisors are required to increase employees' awareness, incorporate the information in training programs, and report the implementation status to manage the implementation results.