To improve the abilities and performance of the group's employees in AML/CFT, categories of AML/CFT education and training courses organized by FFHC, First Bank, First Securities, First Securities Investment Trust, and AMC in 2023 are as follows

First Bank began implementing the centralized suspicious transaction report (STR) project to effectively monitor suspicious transactions and implement reporting operations. The alerts produced in the SAR module of the AML system are now directed to the dedicated unit of the head office for investigation, identification, confirmation, and reporting to enhance investigations, improve the quality of reports, and ensure that there are no omissions.

The bank subsidiary conducts a customer due diligence (CDD) procedure (as shown in the chart on the next page) that has a similar effect to general CDD. Special and sufficient measures must be in place to mitigate risks and in principle, individual accounts must submit identification documents for the verification of identity, address, and to contact customers by phone or mail when necessary. In principle, non-individual accounts must submit business registration documents, operating permits, change of registration or similar documents, company policy, list of directors and shareholders, and evidence for the identity of substantial beneficiaries. Relevant specifications are set out in the "Group-wide AML/CFT Plan" and "Anti-Money Laundering and Countering Terrorism Financing Guidelines". Regulations on non-face-to-face account opening and transactions are explained below:

All aforementioned information shall require identity review, name review, and risk assessments in the account opening procedures by the branch.

Aside from reinforcing the identity verification mechanisms of the bank subsidiary, appropriate measures have been adopted in the conduct of CDD procedures such as verifying the purpose and nature of new customer accounts, primary source of funds, estimated number and amount of transactions, and an understanding of the involved scope of financial activities. Perform name authentication and risk assessment operations as well as regular annual verification of whether information of customers and substantial beneficiaries are comprehensive to ensure the authenticity and correctness of updated information.

In addition to using the 53 suspicious transaction representations in the "Annex: Red Flags for Transactions Suspected to Involve Money Laundering or Terrorism Financing" published by the Bankers Association to monitor criminal behavior, the Group's subsidiary bank also compiles statistics from cases provided in letters from external inspection agencies to identify the crime risks that it faces. It has also adopted corresponding mitigating measures. The top 3 threats associated with money laundering and terrorism financing that the Bank identified in 2023 were fraud, tax crimes and narcotics, which were consistent with the STR crime patterns that it declared.

The subsidiary bank has adopted the following control measures:

Recently, financial fraud incidents have occurred more frequently. To prevent pecuniary losses for its customers, First Commercial Bank has formulated the "list of goodwill questions to be raised for over-the-counter operations" as well as "notice for operating units to guard against fraud targeting deposit account customers & large over-the-counter cash withdrawals". When a customer wishes to make a cash withdrawal or remittance for a certain amount, applies for a new designated transfer account, or when an elderly customer wishes to withdraw a certain amount of cash, the Bank would raise goodwill questions when abnormalities or signs of fraud are detected. In the meantime, it has also enhanced educational training for employees to raise goodwill questions over the counter, in addition to increasing interception effectiveness by properly leveraging cases provided by the National Police Agency as well as the latest scam tricks as reported by the media. We achieved significantly greater results in terms of preventing financial fraud in 2023 than we did in 2022, with the number of cases and the amount of money involved up 58.7% and 63.4%, respectively.