Amendment to Certain Articles of the Regulations Governing Deposit Accounts and Their Suspected Illegal or Obviously Abnormal Transactions

General Explanation of the Amendment to Certain Articles of the Regulations Governing Deposit Accounts and Their Suspected Illegal or Obviously Abnormal Transactions The Financial Supervisory Commission, in accordance with Article 45-2, Paragraph 3 of the Banking Act, enacted the "Regulations Governing Deposit Accounts and Their Suspected Illegal or Obviously Abnormal Transactions" (hereinafter referred to as "these Regulations"), which were promulgated and came into effect on April 27, 2006. They have undergone four amendments, with the most recent amendment date being August 20, 2014. To prevent and curb the improper use of financial services by criminals for illegal activities, and to comply with Articles 8 to 11 of the Fraud Crime Prevention and Control Act and its authorized sub-laws, as well as to incorporate the experience of law enforcement agencies in investigating illegal cases and the practical implementation suggestions from banking industry operators, these Regulations are hereby amended to strengthen relevant legal norms and meet practical operational needs. A total of six articles have been amended this time, with the key points of amendment as follows: I. The scope of Category 2 accounts is appropriately expanded to provide early warning for suspicious or abnormal deposit accounts. (Amended Article 4) II. The institution to be notified by banks after receiving, lifting, or continuing a warning account notification is changed from the Joint Credit Information Center to an institution designated by the competent authority, to allow for future flexibility in notification operations; it is stipulated that banks may strengthen review and refuse transactions for derivative control accounts at the counter; in coordination with the "Suspicious Account Early Warning Center System" promoted by the Taiwan High Prosecutors Office (hereinafter referred to as the High Prosecutors Office), a provision is added that if Category 2 accounts have significant or urgent suspected illegal or obviously abnormal circumstances, the High Prosecutors Office may be notified. (Amended Articles 5 and 10) III. Given that Chapter 4, Section 1 of the Regulations on Anti-Fraud Crime Prevention and Control for Financial Institutions and Virtual Asset Service Providers or Personnel, promulgated on November 29, 2024, already contains comprehensive provisions for the joint defense notification mechanism and fund freezing operations for deposit accounts, Article 7 is deleted to avoid duplication and potential legal application ambiguities. (Amended Article 7) IV. Given that the warning periods for warning accounts that had not been lifted before January 1, 2015, have all expired and lost their effect, the provisions regarding the warning period for such accounts are deleted. (Amended Article 9) V. Given that Chapter 5, Section 1 of the Regulations on Anti-Fraud Crime Prevention and Control for Financial Institutions and Virtual Asset Service Providers or Personnel already contains provisions for the return of remaining funds in warning accounts, Article 11, Paragraph 1 is accordingly amended, and Paragraphs 6 and 7 are added to clarify the application of new and old laws in cases of legal conflict. (Amended Article 11)

Comparison Table of Amended Articles of the Regulations Governing Deposit Accounts and Their Suspected Illegal or Obviously Abnormal Transactions

| Amended Article | Current Article | Explanation | |---|---|---| | Article 4 The criteria and classification for deposit accounts with suspected illegal or obviously abnormal transactions as referred to in these Regulations are as follows: I. Category 1: (I) Those involved in fraudulent account opening. (II) Those designated as warning accounts. (III) Those designated as derivative control accounts. II. Category 2: (I) Those who frequently apply to open deposit accounts or set up designated accounts within a short period and cannot provide a reasonable explanation. (II) The transaction functions applied for by the customer are clearly inconsistent with their age or background. (III) The contact information provided by the customer cannot be verified by reasonable means. (IV) Deposit accounts that have been notified by financial institutions or the public as being used by criminal perpetrators. (V) Deposit accounts that frequently have multiple small-amount transfer-in and transfer-out transactions, resembling testing behavior. (VI) Those who intensively use the bank's electronic services or equipment within a short period, which is clearly inconsistent with the customer's usual transaction habits. (VII) Deposit accounts that have been inactive for a long time but suddenly have abnormal transactions. (VIII) Non-nationals whose residence permits or other relevant identity documents provided at the time of account opening, as known by the bank, have been revoked before expiration or are overdue, or who have been reported as missing by the bank. (IX) The mobile phone number retained by the account holder is the same as the mobile phone number retained by the account holder of a warning account within the same bank, and is suspected of being used by a criminal perpetrator. (X) The virtual account linked to the deposit account has been repeatedly reported as a warning account within a certain period. (XI) Customers known by the bank to have been reported as missing persons. (XII) Domestic financial accounts listed by judicial police agencies as suspected of fraud. (XIII) Other deposit accounts deemed by the competent authority or the bank to have suspected illegal or obviously abnormal transactions. | Article 4 The criteria and classification for deposit accounts with suspected illegal or obviously abnormal transactions as referred to in these Regulations are as follows: I. Category 1: (I) Those involved in fraudulent account opening. (II) Those designated as warning accounts. (III) Those designated as derivative control accounts. II. Category 2: (I) Those who frequently apply to open deposit accounts within a short period and cannot provide a reasonable explanation. (II) The transaction functions applied for by the customer are clearly inconsistent with their age or background. (III) The contact information provided by the customer cannot be verified by reasonable means. (IV) Deposit accounts that have been notified by financial institutions or the public as being used by criminal perpetrators. (V) Deposit accounts that frequently have multiple small-amount transfer-in and transfer-out transactions, resembling testing behavior. (VI) Those who intensively use the bank's electronic services or equipment within a short period, which is clearly inconsistent with the customer's usual transaction habits. (VII) Deposit accounts that have been inactive for a long time but suddenly have abnormal transactions. (VIII) Transactions that meet the suspicious money laundering indicators listed in the bank's anti-money laundering guidelines. (IX) Other deposit accounts deemed by the competent authority or the bank to have suspected illegal or obviously abnormal transactions. | I. To provide early warning for suspicious or abnormal deposit accounts and take timely measures, and referring to Article 3 of the Regulations on Anti-Fraud Crime Prevention and Control for Financial Institutions and Virtual Asset Service Providers or Personnel and suggestions from law enforcement agencies based on their experience in investigating illegal cases, the scope of Category 2 accounts is appropriately expanded. Therefore, subparagraphs 8 to 12 are added to subparagraph 2, and subparagraph 1 is slightly amended. II. Considering that the general provisions of the current subparagraph 9 can still cover the provisions of the current subparagraph 8, subparagraph 8 is deleted, and subparagraph 9 is renumbered to subparagraph 13, with minor textual amendments. III. Currently, banks query missing persons one by one through online inquiries and cannot comprehensively compare all customers. Therefore, subparagraph 11 of subparagraph 2 specifies the scope known to the bank. | | Article 5 If a deposit account is identified as having suspected illegal or obviously abnormal transactions according to the classification criteria in the preceding article, the bank shall take the following measures: I. Category 1: (I) If the deposit account is involved in fraudulent account opening, the judicial police agency, the Anti-Money Laundering Division of the Investigation Bureau of the Ministry of Justice, and the Joint Credit Information Center shall be immediately notified. The bank shall immediately close the account, and the remaining funds shall be processed when the legally entitled recipient applies for payment. (II) If the deposit account is notified as a warning account, all transaction functions of the account shall be suspended, and incoming funds shall be returned to the remitting bank by means of remittance reversal, and the institution designated by the competent authority shall be notified in accordance with the competent authority's regulations. (III) If the deposit account is a derivative control account, the use of ATM cards, voice transfers, online transfers, and other electronic payment functions for the account shall be immediately suspended, and incoming funds shall be returned to the remitting bank by means of remittance reversal. When handling withdrawals, transfers, or outward remittances at the counter, the bank may require the customer to provide transaction-related information to prove the reasonableness of the transaction. If a reasonable explanation cannot be provided, the bank may refuse the transaction. (IV) Other measures stipulated by other laws and regulations. II. Category 2: (I) For such accounts, verification and continuous monitoring shall be conducted. If there is a suspicion of illegal or obviously abnormal transactions, in addition to notifying the judicial police agency, some or all of the measures in the preceding subparagraph may be taken. In cases of significant or urgent circumstances, the Taiwan High Prosecutors Office may also be notified. (II) Measures stipulated by the Anti-Money Laundering Act and other relevant laws and regulations. | Article 5 If a deposit account is identified as having suspected illegal or obviously abnormal transactions according to the classification criteria in the preceding article, the bank shall take the following measures: I. Category 1: (I) If the deposit account is involved in fraudulent account opening, the judicial police agency, the Anti-Money Laundering Division of the Investigation Bureau of the Ministry of Justice, and the Joint Credit Information Center shall be immediately notified. The bank shall immediately close the account, and the remaining funds shall be processed when the legally entitled recipient applies for payment. (II) If the deposit account is notified as a warning account, the Joint Credit Information Center shall be immediately notified, and all transaction functions of the account shall be suspended, and incoming funds shall be returned to the remitting bank by means of remittance reversal. (III) If the deposit account is a derivative control account, the use of ATM cards, voice transfers, online transfers, and other electronic payment functions for the account shall be immediately suspended, and incoming funds shall be returned to the remitting bank by means of remittance reversal. (IV) Other measures stipulated by other laws and regulations. II. Category 2: (I) For such accounts, verification and continuous monitoring shall be conducted. If illegal activities are verified, in addition to notifying the judicial police agency, some or all of the measures in the preceding subparagraph may be taken. (II) Measures stipulated by the Anti-Money Laundering Act and other relevant laws and regulations. | I. To adapt to changes in warning account notification operations and retain flexibility for adjustments, the notification recipient stipulated in subparagraph 2 of subparagraph 1 is amended. II. To strengthen the management of counter transactions for derivative control account customers, and referring to Article 6, Paragraph 1, Subparagraph 3 of the Regulations Governing the Suspension, Restriction, or Closure of Account Functions or Accounts under Article 22, Paragraph 6 of the Anti-Money Laundering Act, a provision is added at the end of subparagraph 3 of subparagraph 1, stipulating that banks may require customers to provide supporting documents or refuse transactions. III. For Category 2 accounts, banks, lacking public authority, may find it difficult to verify illegal activities. Therefore, the first part of subparagraph 1 of subparagraph 2 is amended to adjust the prerequisite for banks to take measures for such accounts. Furthermore, to coordinate with the "Suspicious Account Early Warning Center System" promoted by the Taiwan High Prosecutors Office, if Category 2 accounts have significant or urgent suspected illegal or obviously abnormal transaction circumstances, banks may notify the Taiwan High Prosecutors Office, to enable the Office to promptly integrate bank notifications and the capabilities and resources of prosecutor's offices for investigation and combating illegal activities. Therefore, the latter part of subparagraph 1 of subparagraph 2 is added. | | Article 7 (Deleted) | Article 7 If a deposit account is notified as a warning account by a court, prosecutor's office, or judicial police agency, the bank shall immediately inquire about relevant account transactions. If it is found that the reported fraudulent funds have been transferred to another account, the bank shall notify the recipient bank of the transfer details of these funds and the name of the original reporting agency, and also notify the original reporting agency. After the original reporting agency of the warning account verifies the information in the preceding paragraph, if it believes that such recipient accounts also need to be listed as warning accounts, the original reporting agency shall further notify the relevant banks to list them as warning accounts. The relevant recipient banks of fraudulent funds shall handle transaction inquiries and notification operations in accordance with the provisions of Paragraph 1. If illegal activities are verified in the recipient accounts, the measures listed in Article 5, Subparagraph 2 shall be immediately taken. The operational procedures for notification methods, scope, and required documents under this Article shall be stipulated by the Bankers Association of the Republic of China and reported to the competent authority for record. | I. This article is deleted. II. The Regulations on Anti-Fraud Crime Prevention and Control for Financial Institutions and Virtual Asset Service Providers or Personnel, promulgated on November 29, 2024, specifically Chapter 4, Section 1, already clearly stipulates comprehensive provisions for the joint defense notification mechanism and fund freezing operations for deposit accounts, which are more detailed than this article. Therefore, it is deleted. | | Article 9 The warning period for a warning account shall be calculated from the time of notification and shall automatically expire after two years. However, if there is a need to continue the warning, the original reporting agency shall re-notify before the expiration of the period, and the extension of the notification shall be limited to one time and one year. If the account holder of a warning account has doubts about their deposit account being listed as a warning account, the account holder shall contact the original reporting agency for handling, and the bank shall provide assistance when necessary. | Article 9 The warning period for a warning account shall be calculated from the time of notification and shall automatically expire after two years. However, if there is a need to continue the warning, the original reporting agency shall re-notify before the expiration of the period, and the extension of the notification shall be limited to one time and one year. For warning accounts that had not been lifted before January 1, 2015, the following provisions apply: I. The warning period shall be calculated from the time of each notification and shall automatically expire after three years. However, if there is a need to continue the warning, the original reporting agency shall re-notify before the expiration of the period, and its warning period shall expire from January 1, 2015. II. For warning periods that have exceeded two years but not three years, they shall automatically expire from January 1, 2015. III. For warning accounts that were re-notified before August 20, 2014, they shall automatically expire from January 1, 2015. IV. For warning periods that have not exceeded two years, the provisions of the preceding paragraph shall apply from January 1, 2015. If the account holder of a warning account has doubts about their deposit account being listed as a warning account, the account holder shall contact the original reporting agency for handling, and the bank shall provide assistance when necessary. | Given that the warning periods for warning accounts notified before January 1, 2015, have all expired and lost their effect, Paragraph 2 is deleted. | | Article 10 A warning account shall only be lifted by the bank in accordance with the notification from the original reporting agency or upon the expiration of the warning period. For derivative control accounts and deposit accounts identified as having suspected illegal or obviously abnormal transactions according to the criteria listed in Article 4, Subparagraph 2, if the bank verifies that such suspected illegal or obviously abnormal circumstances have ceased, the relevant restrictive measures shall be immediately lifted. If a warning account is lifted in accordance with the notification from the original reporting agency, or if the original reporting agency re-notifies the bank to continue the warning in accordance with Article 9, Paragraph 1, the bank shall notify the institution designated by the competent authority in accordance with the competent authority's regulations. | Article 10 A warning account shall only be lifted by the bank in accordance with the notification from the original reporting agency or upon the expiration of the warning period. For derivative control accounts and deposit accounts identified as having suspected illegal or obviously abnormal transactions according to the criteria listed in Article 4, Subparagraph 2, if the bank verifies that such suspected illegal or obviously abnormal circumstances have ceased, the relevant restrictive measures shall be immediately lifted. If a warning account is lifted in accordance with the notification from the original reporting agency, or if the original reporting agency re-notifies the bank to continue the warning in accordance with Article 9, Paragraph 1, the bank shall immediately notify the Joint Credit Information Center. | In coordination with the amendment to Article 5, Subparagraph 1, Subparagraph 2, the lifting or continuation of warning account notifications shall also be notified to the institution designated by the competent authority. Therefore, Paragraph 3 is amended. | | Article 11 If a deposit account is notified as a warning account before March 31, 2025, and the bank confirms that the reason for the notification is a fraud case, and there are still funds remitted (transferred) into the account by victims that have not been withdrawn, the bank shall contact the account holder based on the account opening information to negotiate the return of the remaining funds in the warning account. If the account holder cannot be contacted, the bank may request assistance from the police agency for one month to locate them. If the bank, after following the preceding paragraph, still cannot contact the account holder, it shall notify the victim through the remitting (transferring) bank. The victim shall provide the following documents, and the bank shall, based on the time sequence of remittances (transfers) and identifying the unwithdrawn portion of each transaction, calculate backward from the last amount until the account balance is zero, to return the remaining funds in the warning account: I. Identity verification documents. II. Proof of case handling or documents issued by a judicial police agency. III. A declaration stating that if the application is false and causes losses to the bank, the victim shall bear all legal liabilities. If the bank, in handling the return of remaining funds in a warning account in accordance with the preceding two paragraphs, encounters any of the following circumstances, it may directly close the account and transfer the remaining funds to other payables, to be processed when the legally entitled recipient applies for payment; however, the bank must wait until the warning is lifted or the warning period expires before lifting the warning effect on the account holder: I. The remaining funds are below a certain amount, making it uneconomical to process. II. The account holder or victim cannot be contacted for more than three months from the time of the warning notification. III. The victim is unwilling to report the case or unwilling to come forward to collect the funds. The bank shall designate a Vice President or a manager of equivalent level to supervise the handling of remaining funds in warning accounts. Cases deemed by the bank to be suspected transaction disputes or complex cases are not subject to the provisions for returning remaining funds in Paragraphs 1 to 3 and shall be handled through judicial procedures. If the bank contacts the account holder in accordance with Paragraph 1, and the account holder refuses to come forward, the bank may ask the victim to contact the judicial police agency to notify the bank in writing to process the return of funds in accordance with the Regulations on Anti-Fraud Crime Prevention and Control for Financial Institutions and Virtual Asset Service Providers or Personnel. If a deposit account is notified as a warning account after April 1, 2025, and there are still funds remitted (transferred) into the account by victims that have not been withdrawn, it shall be handled in accordance with the Regulations on Anti-Fraud Crime Prevention and Control for Financial Institutions and Virtual Asset Service Providers or Personnel, and the preceding six paragraphs shall not apply. | Article 11 If a deposit account is notified as a warning account, and the bank confirms that the reason for the notification is a fraud case, and there are still funds remitted (transferred) into the account by victims that have not been withdrawn, the bank shall contact the account holder based on the account opening information to negotiate the return of the remaining funds in the warning account. If the account holder cannot be contacted, the bank may request assistance from the police agency for one month to locate them. If the bank, after following the preceding paragraph, still cannot contact the account holder, it shall notify the victim through the remitting (transferring) bank. The victim shall provide the following documents, and the bank shall, based on the time sequence of remittances (transfers) and identifying the unwithdrawn portion of each transaction, calculate backward from the last amount until the account balance is zero, to return the remaining funds in the warning account: I. Police report triplicate for criminal cases. II. A declaration stating that if the application is false and causes losses to the bank, the victim shall bear all legal liabilities. If the bank, in handling the return of remaining funds in a warning account in accordance with the preceding two paragraphs, encounters any of the following circumstances, it may directly close the account and transfer the remaining funds to other payables, to be processed when the legally entitled recipient applies for payment; however, the bank must wait until the warning is lifted or the warning period expires before lifting the warning effect on the account holder: I. The remaining funds are below a certain amount, making it uneconomical to process. II. The account holder or victim cannot be contacted for more than three months from the time of the warning notification. III. The victim is unwilling to report the case or unwilling to come forward to collect the funds. The bank shall designate a Vice President or a manager of equivalent level to be solely responsible for supervising the handling of remaining funds in warning accounts. Cases of suspected transaction disputes or complex cases are not subject to the provisions for returning remaining funds in Paragraphs 1 to 3 and shall be handled through judicial procedures. | I. The Regulations on Anti-Fraud Crime Prevention and Control for Financial Institutions and Virtual Asset Service Providers or Personnel, promulgated on November 29, 2024, already clearly stipulates provisions for the return of remaining funds in warning accounts. In accordance with the consensus reached at the meeting between judicial police agencies and banking industry operators on March 6, 2025, for warning accounts notified before March 31, 2025, they shall generally still be handled in accordance with the provisions of this article. For warning accounts notified after April 1, 2025, banks shall, in accordance with the aforementioned Regulations on Anti-Fraud Crime Prevention and Control for Financial Institutions and Virtual Asset Service Providers or Personnel, return the remaining funds in the account upon notification from the judicial police agency. Therefore, Paragraph 1 is amended, and Paragraphs 6 and 7 are added. II. To align with the documents required from victims as stipulated in Article 53 of the aforementioned Regulations on Anti-Fraud Crime Prevention and Control for Financial Institutions and Virtual Asset Service Providers or Personnel, 'identity verification documents' are added to subparagraph 1 of Paragraph 2. The original subparagraph 1 of Paragraph 2, 'police report triplicate for criminal cases,' is amended to 'proof of case handling or documents issued by a judicial police agency' and moved to subparagraph 2. The original subparagraph 2 is moved to subparagraph 3. III. To avoid concerns that personnel supervising the handling of remaining funds in warning accounts at banks should be full-time, Paragraph 4 is slightly amended textually. IV. Given that in practice, whether a case constitutes a suspected transaction dispute or a complex case is determined by the bank, Paragraph 5 is slightly amended textually to clarify the meaning. |