The Financial Supervisory Commission, Republic of China (Taiwan) (FSC) has amended the Rules Governing Offshore Banking Branches on May 9 to greatly enhance regulations on reviewing customers of offshore banking units (OBU). After this wave of amendments, the procedures for opening OBU accounts for companies or individuals in the future will be fully consistent with what is required onshore. The current situation that is easier for OBU to open accounts will not be seen again.

FSC demands that by the end of this year (2017), banks must require OBU customers to submit all relevant documents. If the documents are not complete, it will be considered as abnormal account transactions, and thus classified as money laundering and high-risk level for terrorist financing. The most serious may be forced to close the account.

According to the statistics of FSC, OBU has 150,000 customers, among which 75% are Taiwanese businesses. For the customers who have already opened accounts in OBU, they must submit all missing documents required by new regulations. The outsiders are worried that the new demand may cause trouble for the majority of Taiwanese business customers of the banks.

The deputy director of the Banking Bureau of FSC Lu, Hui-Jung has expressed that past laws and regulations were indeed looser on opening OBU accounts, which may affect the money-laundering evaluation results on Taiwan in the next year. Once the evaluation is unfavorable, and Taiwan is regarded as a high-risk country for money laundering, other countries will as a result not dare to have exchange of funds with Taiwan, which will seriously affect the efficiency of funds going in and out of Taiwan. It will become a serious matter.

Currently, the regulations on opening OBU accounts are more lenient. There are no "required documents" that are mandatory to be provided. It is the banks that decide what should be provided. As the international regulations on money laundering have become stricter, especially that Taiwan will be evaluated by the Asia/Pacific Group on Money Laundering (AGP) next year, FSC has started to strengthen the regulations of preventing money laundering. According to the announcement of amending the Rules Governing Offshore Banking Branches released on May 9, the regulations for companies and individuals to open OBU accounts have been adjusted to be fully consistent with those for opening accounts onshore.