Pursuant to Paragraph 1 of Article 25 of the Financial Technology Development and Innovative Experimentation Act (hereinafter the "Experimentation Act"), any financial technology innovative experimentation shall not be excluded from the application of the Money Laundering Control Act and the Counter-Terrorism Financing Act during the experimentation period. Pursuant to Paragraph 2 of the Experimentation Act, the Financial Supervisory Commission and the Ministry of Justice jointly promulgated the "Regulations Governing Anti-Money Laundering and Counter-Terrorism Financing for Financial Technology Innovative Experimentation" (hereinafter the "FTIE AML/CFT Regulations") on May 15, 2019. The key contents and explanations for the Regulations are as follows:  

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1. If the entity applying to the competent authority for approval of innovative experimentation (hereinafter the "Applicant") is a "financial institution" as defined in Article 2 of the Regulations Governing Anti-Money Laundering of Financial Institutions (“Financial Institution AML Regulations”), such Applicant shall comply with the Financial Institution AML Regulations and other relevant AML/CFT regulations, and the FTIE AML/CFT Regulations does not apply. If the Applicant is not a "financial institution" as defined above, e.g. a financial leasing enterprise, when conducting financial innovative experimentation, the Applicant shall comply with the FTIE AML/CFT Regulations for the AML/CFT practices.

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2. The Applicant shall conduct measures for customer due diligence (hereinafter "CDD") and establish an ongoing due diligence measures with respect to the participant of the innovative experimentation (hereinafter the "Participant"), and the extent to which CDD measures and ongoing due diligence measures specified in the FTIE AML/CFT Regulations should be conducted shall be determined through a risk-based approach.

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3. Upon the CDD, if the Applicant finds the Participant is engaged in any illegal activity or provides any false information, the Applicant shall refuse to establish business relationship or conduct transactions with the Participant.

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4. When conducting cross-border remittance business, the Applicant shall adhere to relevant policies and procedures and shall prepare and save the sender and beneficiary information.  

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5. Using a risk-based approach, the Applicant shall establish a name verification procedure and a trade monitoring policy for the Participant and other parties involved in a transaction.

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6. The Applicant shall save all transaction records involving the Participant.  The scope, method, and term of such record-keeping are specified in the FTIE AML/CFT Regulations.

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7. The Applicant shall establish an AML internal control and audit system. The competent authority may appoint its personnel or commission an agency (institute) to audit the Applicant from time to time.

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