Regulations Governing Internal Audit and Internal Control System of Anti-Money Laundering and Countering Terrorism Financing of Banking Business and Other Financial Institutions Designated by the Financial Supervisory Commission Article 3

Banking businesses and other financial institutions designated by the FSC shall establish specific policies and procedures for correspondent banking and other similar relationships, including:1. Gather sufficient publicly available information to fully understand the nature of the respondent bank’s business and to determine its reputation and quality of management, including whether it has complied with the Anti-Money Laundering and Countering Terrorism Financing (hereinafter referred to as the “AML/CFT”) regulations and whether it has been investigated or received regulatory action in connection with money laundering or terrorist financing (hereinafter referred to as the “ML/TF”);2. Assess whether the respondent bank has adequate and effective AML/CFT controls;3. Obtain approval from senior management before establishing new correspondent bank relationships;4. Document the respective AML/CFT responsibilities of each party;5. Where a correspondent relationship involves in “payable–through accounts”, the banking business shall be required to satisfy itself that the respondent bank has performed customer due diligence (hereinafter referred to as the “CDD”) measures on its customers who have direct access to the accounts of the correspondent bank, and is able to provide relevant CDD information upon request to the correspondent bank;6. The banking business is prohibited from entering into correspondent relationships with shell banks and shall be required to satisfy itself that respondent financial institutions do not permit their accounts to be used by shell banks;7. For a respondent bank that is unable to provide the aforementioned information upon request, the banking business or other financial institutions designated by the FSC may decline the respondent bank’s application to open an account, suspend transactions with the respondent bank, file a suspicious ML/TF transaction report or terminate business relationship; and8. The aforementioned provisions are also applied to the respondent bank that is a foreign branch or subsidiary of the banking business or financial institutions designated by the FSC.