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Taiwan’s Mega Bank Fined $180 Million for Money Laundering

Reading Time: 2 minutes by on August 22, 2016 Finance, News
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Taiwan’s Mega Bank was recently awarded a whopping US$180 million fine for their anti-money laundering failures. The fine was decided upon by Financial Services Superintendent Martia T. Vullo. Mega International Commercial Bank of Taiwan will also need to install an independent monitor for violating the New York AML laws. With Bitcoin, none of these violations would be possible, as there are no banks involved in the process.

Trouble started brewing for Taiwan’s Mega Bank when the Department of Financial Services (DFS) examined the institution. Several violations of anti-money laundering requirements were noted. In fact, the bank’s head office did not care all that much about the risks associated with transactions to and from Panama. This particular region is labeled as “high risk” when it comes to money laundering efforts.

But there is more, as the DFS uncovered several suspicious transactions between the New York and Panama Mega Bank branches. To make matters worse, several accounts have been opened through the Mossack Fonseca law firm. This particular entity is a law firm often associated with creating shell companies.

DFS Superintendent Maria T. Vullo told the media:

“The compliance failures that DFS found at the New York Branch of Mega Bank are serious, persistent and affected the entire Mega banking enterprise and they indicate a fundamental lack of understanding of the need for a vigorous compliance infrastructure. DFS’s recent examination uncovered that Mega Bank’s compliance program was a hollow shell, and this consent order is necessary to ensure future compliance.”

Dealing with a US$180m fine will not be overly difficult for Taiwan’s Mega Bank, though. The institution controls US$103 billion in assets, and should have no problem paying the fine whatsoever. However, they will also need to correct violations immediately, as well as engage in independent monitoring to address deficiencies.

Money laundering is a grave offense that has been plaguing the financial ecosystem for quite some time now. One possible way to circumvent these problems is by using blockchain technology, which creates more transparency. Several banks and financial players are exploring these options already. Distributed ledgers can be a powerful tool to prevent money laundering from being a problem in the first place.


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