Top Tai­wan bank linked to Panama Pa­pers un­der probe

The Myanmar Times - - International Business -

TAI­WAN is in­ves­ti­gat­ing a bank linked to the Panama Pa­pers scan­dal in the wake of a US$180 mil­lion fine levied by US au­thor­i­ties for “fla­grant dis­re­gard” of anti-money-laun­der­ing laws, of­fi­cials said.

Amer­i­can reg­u­la­tors last week said Tai­wan’s Mega In­ter­na­tional Com­mer­cial Bank showed in­dif­fer­ence to­ward trans­ac­tions car­ried out through Panama, which it calls a “high-risk ju­ris­dic­tion for money laun­der­ing”.

The US De­part­ment of Fi­nan­cial Ser­vices (DFS) said it had iden­ti­fied “sus­pi­cious trans­ac­tions” be­tween Mega In­ter­na­tional’s New York and Panama branches.

“DFS will not tol­er­ate the fla­grant dis­re­gard of anti-money-laun­der­ing laws,” Fi­nan­cial Ser­vices Su­per­in­ten­dent Maria T. Vullo said.

The DFS said some of the bank’s cus­tomer ac­counts were formed with the help of Mos­sack Fon­seca – the Pana­ma­nian law firm at the cen­tre of a huge data dump in April this year.

A trove of leaked pa­pers re­vealed murky off­shore fi­nan­cial deal­ings that used shell com­pa­nies to help politi­cians, celebri­ties and sports stars to skirt taxes.

Though off­shore com­pa­nies are not in them­selves il­le­gal, they can be used to en­gage in il­le­gal ac­tiv­i­ties such as tax eva­sion or money laun­der­ing.

Mos­sack Fon­seca in­sists that it did noth­ing wrong.

Mega In­ter­na­tional, which counts Tai­wan’s Min­istry of Fi­nance and the Na­tional De­vel­op­ment Fund among its share­hold­ers, agreed to fix an in­ter­nal com­pli­ance sys­tem that the reg­u­la­tor called “a hol­low shell”.

Tai­wan’s Fi­nan­cial Su­per­vi­sory Com­mis­sion (FSC) said it has formed a com­mit­tee to in­ves­ti­gate the case and or­dered Tai­wanese banks with over­seas branches to tighten their anti-money laun­der­ing con­trols.

It added that the US or­der does not spec­ify whether Mega In­ter­na­tional ac­tu­ally en­gaged in money laun­der­ing.

Shares in the bank’s par­ent com­pany Mega Fi­nan­cial slumped 6.3 per­cent in Taipei yes­ter­day.

“The FSC will ac­tively con­tact the New York DFS, and we have de­manded Mega Bank to give an ex­pla­na­tion as soon as pos­si­ble,” the fi­nan­cial reg­u­la­tor said in a state­ment.

Of the bank’s $103 bil­lion in as­sets, $9 bil­lion is held at its New York branch, ac­cord­ing to the DFS. –

Photo: EPA

Mega Bank of Tai­wan has ad­mit­ted neg­li­gence in its New York branch, and agreed to pay the fine and in­stall com­pli­ance con­trols.

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