Taiwan's Mega Financial says its bank branches overseas coming under greater scrutiny

Mega Financial Holding Co

28/09/2016 09:40

TAIPEI, Sept 28 (Reuters) - Taiwan state-controlled firm 
Mega Financial Holding Co's  2886.TW  chairman said overseas 
branches of its banking unit are coming under greater scrutiny 
by regulators overseas following critical lapses involving 
suspect transactions between its New York and Panama branches.  
    The heightened inspections come after the New York branch of 
Mega International Commercial Bank, known as Mega Bank, was 
fined $180 million last month by the New York State Department 
of Financial Services (DFS) for lax compliance and anti-money 
laundering violations, involving Panama transactions. 
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    "Currently, a lot of countries are closely inspecting Mega 
Bank's local branches," said Michael C.S. Chang, speaking at a 
news conference. 
    "These are regular annual inspections, but after this case 
happened, the authorities have become more stringent," Chang 
said, naming U.S., Canada and Panama authorities as among those 
stepping up scrutiny.  
    Mega Bank will "actively communicate" with regulators, said 
Chang, who is also the chairman of Mega Bank.  
    He said Mega is reviewing all operations and procedures at 
its overseas branches and may consider streamlining or closing 
branches in jurisdictions that are considered high risk.  
    He said the New York branch would remain intact.  
    The bank said in a statement issued Wednesday that it did 
not follow regulatory procedures in reporting suspect 
transactions between its New York and Panama branches and is 
currently conducting a full review of lapses that led to 
breaching anti-money laundering rules in the United States. 
    "There are, indeed, major deficiencies and shortcomings at 
the bank as pointed out by the DFS. As for the large volume of 
transactions in the past, we are still making inventory checks," 
according to Mega Bank's statement. 
 
 
 (Reporting by Liang-sa Loh; Writing by J.R. Wu; Editing by 
Kenneth Maxwell) 
 ((jr.wu@thomsonreuters.com; +886 2 2500 4881; Reuters 
Messaging: jr.wu.thomsonreuters.com@reuters.net)) 
 
Keywords: TAIWAN MEGAFINANCIAL/