Financial Crime World

Money Laundering Crimes and Anti-Money Laundering Regulations in Taiwan, Province of China

Criminal Offenses and Enforcement

In Taiwan, the legal battle against money laundering is spearheaded by the nation’s prosecutors, who hold the authority to prosecute money laundering offenses at a national level with assistance from the Ministry of Justice Investigation Bureau (MJIB) and local police.

Money laundering is defined as the act of concealing or disguising the origin of criminal proceeds. According to Taiwan’s Money Laundering Control Act, or the Taiwan Anti-Money Laundering (AML) Act, money laundering criminal offenses include:

  • Disguising or concealing the origin or true nature of proceeds from unlawful activities.
  • Transferring or converting proceeds of unlawful activities to help individuals avoid criminal prosecution.
  • Disguising or concealing the sources, movement, location, ownership, or disposition of proceeds from unlawful activities.
  • Accepting, obtaining, or using proceeds of unlawful activities.

Specified unlawful activities, or predicate offenses, include offenses with imprisonment terms of six months or more. These also include bribery-related, fraud-related, and certain customs offenses, among others.

Extraterritorial Jurisdiction

Taiwan’s AML Act extends to situations where Taiwanese citizens commit money laundering offenses outside Taiwan’s territory. However, it does not explicitly account for offenses involving proceeds from crimes committed under foreign criminal laws.

Government Responsibilities in Investigating and Prosecuting

Prosecutors are responsible for the prosecution of money laundering offenses in Taiwan, aided by the MJIB and local police during investigations. The MJIB’s functions and duties include:

  • Researching AML strategies
  • Receiving and analyzing suspicious and currency transaction reports
  • Cooperating with foreign counterparts and coordinating money laundering investigations
  • Other related tasks

Criminal Liability and Penalties

Convicted individuals face imprisonment for up to seven years and a fine of up to NTD 5 million. Legal entities face criminal fines based on their violation of the AML Act. Penalties for attempted offenses also apply.

Corporate Criminal Liability

Under Taiwan’s AML Act, legal entities can be held liable for offenses committed by their representatives, agents, employees, or other personnel during the course of their business duties.

Statute of Limitations

The criminal code in Taiwan states that a prosecution for any crime is barred by the statute of limitations if not exercised within a certain period. For offenses with sentencing terms of up to seven years, the statute of limitations is twenty years.

Provincial or State-level Enforcement and Forfeiture authorities

There is no parallel provincial or state-level enforcement for money laundering crimes in Taiwan. The central government, particularly the Ministry of Justice, maintains the primary authority for imposing AML requirements on financial institutions and other businesses.

Confiscation and Forfeiture

Properties generated from or used in the commission of money laundering offenses are subject to confiscation. Confiscation may occur after a conviction, as well as through non-criminal confiscation or civil forfeiture mechanisms under specific circumstances.

Regulatory Requirements and Enforcement

Financial institutions and other businesses in Taiwan are primarily subject to AML requirements set forth by the Ministry of Justice, enforced by the Financial Supervisory Commission. Requirements include:

  • Implementing an AML control system
  • Customer due diligence (KYC)
  • Record keeping
  • Continuous monitoring
  • Large-amount reporting
  • Suspicious transaction reporting

Additional AML Requirements from Self-Regulatory Organizations and Professional Associations

Depending on the specific industries, self-regulatory organizations and professional associations may have additional rules in place to enforce AML regulatory compliance for their members. For example, the Taiwan Bankers Association issues SRO AML Rules that may provide more detailed instructions for financial institutions.

Regulatory Priorities in Anti-Money Laundering

Recent attention in Taiwan’s financial sector includes the emergence of new money laundering methods, such as activities involving “third-party payments” and cryptocurrencies. The government has issued regulations to ensure that third-party payment operators and crypto-related businesses comply with relevant AML obligations.