FSC Audits Accounting Firms, Imposes NT$650,000 in Penalties for 6 AML Violations This Year

To prepare for the fifth round mutual evaluation by the Asia/Pacific Group on Money Laundering (APG) and in light of increasingly complex international money laundering techniques, the Financial Supervisory Commission (FSC) has enhanced its supervision of anti-money laundering (AML) compliance among non-financial 'gatekeeper' professionals, including accountants. The FSC’s Securities and Futures Bureau stated that during on-site inspections of 27 accounting firms, multiple deficiencies in AML implementation were identified. To date, administrative penalties have been imposed on six non-compliant individual accounting firms, totaling NT$650,000 in fines.

Huang Chung-hao, Deputy Director-General of the FSC’s Securities and Futures Bureau, emphasized that AML regulations are not limited to financial institutions—non-financial professionals such as accountants and lawyers also fall within the regulatory scope. With Taiwan scheduled to undergo an on-site APG evaluation in 2030, the FSC specifically reminded accountants that when providing services such as company registration, capital verification, asset management, or real estate transactions, they must strictly conduct Customer Due Diligence (CDD) and file Suspicious Transaction Reports (STRs), and must not become a loophole for criminal groups to launder money.

The FSC explained that joint inspections with the Institute of Certified Public Accountants targeted 27 accounting firms—including mid-to-large firms auditing public issuers and smaller firms—and revealed common deficiencies: failure to conduct risk assessments on clients and engagements; lack of understanding of client ownership and control structures; failure to identify and verify beneficial owners; absence of enhanced due diligence for high-risk clients; failure to assess suspicious money laundering transactions; inability to provide complete working papers during on-site inspections; inadequate execution of customer identification procedures and insufficient retention of related documentation.

Additionally, firms failed to use external databases or information sources to confirm whether clients or their beneficial owners were current or former politically exposed persons (PEPs) in domestic or foreign governments or international organizations. They also neglected to check against the Ministry of Justice’s announced sanctions lists.

Regarding these findings, Huang noted that the FSC has progressively issued administrative penalties this year under the Anti-Money Laundering Act, with statutory fines ranging from NT$50,000 to NT$5 million. Six cases have been finalized—all involving individual accounting firms—with total penalties amounting to NT$650,000, including a maximum single penalty of NT$250,000. All relevant penalties have been publicly announced in accordance with the law.

To assist accountants in improving their detection capabilities, the FSC has directed the Institute of Certified Public Accountants to review and revise the “Indicators of Suspicious Money Laundering or Terrorist Financing Transactions.” Examples now include abnormal sources of client funds or sudden luxurious lifestyles inconsistent with income levels, which are now included in the analytical framework.

Furthermore, the FSC mandates at least three hours of annual training and outreach activities. It emphasized that it will continue applying a Risk-Based Approach (RBA) to conduct annual AML inspections, focusing more intensively on high-risk firms and recurring violations. Non-compliance will be strictly punished according to law, aiming to strengthen the resilience of Taiwan’s overall AML regime.