Regulations Governing the Internal Controls and Audit System for Postal Remittances and Savings Article 7

Chunghwa Post shall establish three lines of defense in internal control system, including a self-inspection system, a legal compliance system and a risk management mechanism, and an internal audit system in order to maintain an effective and appropriate operation of the internal control system of the savings and remittances businesses:1. The self-inspection system: The self-inspection system shall be carried out by members of the various operations, finance, asset safekeeping and information units of Chunghwa Post by reviewing each other’s actual working circumstances. All departments shall designate assistants to the head of the department or personnel of at least a certain level to supervise the execution of this system, in order to discover operational flaws and take corrective actions as soon as possible.2. Legal compliance system: The compliance officers of the business and management departments of Chunghwa Post shall, in accordance with the compliance program and self-assessment items drawn up by headquarters, ensure that all employees are in compliance with the rules and regulations of regulatory agencies when carrying out their duties.3. Risk management mechanism: All relevant business departments and risk management departments of Chunghwa Post shall perform risk identification, measurement, monitoring and reporting according to their respective authorities and responsibilities, and implement the risk management check and balance mechanism.4. The internal audit system: The internal audit system shall be executed by Chunghwa Post’s audit department, which is responsible for auditing all savings, remittances and management departments as well as assessing on a regular basis the self-auditing performance of the savings and remittances business departments.