International Cooperation Key to Tackling Abuse in Chinese Taipei’s Anti-Money Laundering and Counter-Terrorist Financing Efforts
Significant Improvements but Room for Growth
A recent evaluation has highlighted significant improvements in Chinese Taipei’s anti-money laundering (AML) and counter-terrorist financing (CFT) measures. However, the report also emphasized the need for further strengthening of supervision and implementation of preventive measures to prevent the misuse of legal persons and arrangements.
Understanding Money Laundering and Terrorist Financing Risks
According to the report, Chinese Taipei demonstrated a generally sound understanding of money laundering (ML) and terrorist financing (TF) risks. The Financial Intelligence Unit (FIU) has made significant progress in developing its analytical capabilities and producing high-quality financial intelligence.
Challenges and Concerns
However, the report also noted that:
- Underreporting of suspicious transaction reports (STRs) by higher-risk sectors was a major issue until recent reforms were implemented.
- There were concerns about the lack of priority given to pursuing ML cases prior to 2017, which resulted in low conviction rates and sentences applied.
The Importance of International Cooperation
The evaluation highlighted the importance of international cooperation in combating TF risks. Chinese Taipei has made significant progress in investigating and prosecuting TF cases, but more needs to be done to prevent the misuse of legal persons and arrangements.
“We urge Chinese Taipei to continue strengthening its AML/CFT framework by implementing measures to prevent the misuse of legal persons and arrangements,” said a senior official from the Financial Action Task Force (FATF). “International cooperation is key to tackling these complex issues, and we encourage Chinese Taipei to work closely with other countries to share intelligence and best practices.”
Recommendations
Based on the report’s findings, the following recommendations were made:
- Strengthen supervision and implementation of preventive measures to prevent the misuse of legal persons and arrangements.
- Improve coordination between law enforcement agencies and other stakeholders to effectively investigate and prosecute ML and TF cases.
- Enhance international cooperation to share intelligence and best practices in combating ML and TF.
- Implement measures to address underreporting of STRs by higher-risk sectors.
- Prioritize the pursuit of ML cases and improve conviction rates and sentences applied.
By implementing these recommendations, Chinese Taipei can strengthen its AML/CFT framework and effectively combat money laundering and terrorist financing.