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 7

A banking business and other financial institutions designated by the FSC shall be staffed with adequate number of AML/CFT personnel and resources appropriate to the size and risks of its business. The board of directors (council) of the banking business and other financial institutions designated by the FSC shall appoint a senior officer to act as the chief AML/CFT compliance officer and vest the officer full authority in coordinating and supervising AML/CFT implementation and shall ensure that its AML/CFT personnel and the chief AML/CFT compliance officer do not hold concurrent positions that may have a conflict of interest with their AML/CFT responsibilities. In addition, a domestic bank shall set up an independent, dedicated AML/CFT compliance unit under the president, legal compliance unit, or risk management unit of the head office and such AML/CFT compliance unit shall not handle businesses other than AML/CFT.The dedicated AML/CFT compliance unit or the chief AML/CFT compliance officer mentioned in the preceding paragraph shall be charged with the following duties:1. Supervising the planning and implementation of policies and procedures for identifying, assessing and monitoring ML/TF risks.2. Coordinating and supervising the implementation of the company-wide AML/CFT risk identification and assessment.3. Monitoring and controlling ML/TF risks.4. Developing an AML/CFT program.5. Coordinating and supervising the implementation of AML/CFT program.6. Confirming compliance with AML/CFT regulations, including the relevant specimen or self-regulatory rules formulated by the related financial services association and accepted by the FSC for recordation.7. Supervising the reporting on suspicious ML/TF transactions and on the properties or property interests and location of individuals or legal entities designated by the Counter-Terrorism Financing Act to the Investigation Bureau, Ministry of Justice.The chief AML/CFT compliance officer mentioned in Paragraph 1 hereof shall report to the board of directors (council) and supervisors (board of supervisors) or the audit committee at least semiannually, or whenever a major regulatory violation is discovered.Each foreign business unit of a banking business and other financial institutions designated by the FSC shall be staffed with an adequate number of AML/CFT personnel in view of the number of branches in that area, and the size and risks of its business, and appoint an AML/CFT compliance officer to take charge of the coordination and supervision of related compliance matters.The appointment of an AML/CFT compliance officer by the foreign business unit of a banking business and other financial institutions designated by the FSC shall comply with the regulations and requirements of the host country. The AML/CFT compliance officer shall be vested with full authority in AML/ CFT coordination and supervision, including reporting directly to the chief AML/CFT compliance officer mentioned in Paragraph 1 hereof, and shall not hold other positions, except for the legal compliance officer. If the AML/CFT compliance officer holds other concurrent positions, the foreign business unit shall communicate the fact with the competent authority of the host country to confirm the holding of other concurrent positions not resulting in or potentially leading to the conflict of interest, and report the matter to the FSC for recordation.