Global Financial Watchdog Warns of Money Laundering Risks in Chinese Taipei
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A recent report by the Asia-Pacific Group on Money Laundering (APG) has highlighted the significant risks of money laundering in Chinese Taipei, with organized crime and corruption being major contributors to the problem.
Organized Crime and Corruption Contribute to Money Laundering Risks
The report found that Chinese Taipei is a major hub for organized crime, with drug trafficking, fraud, and smuggling generating significant proceeds. The authorities have identified corruption and bribery as other key predicate offenses, including tax and securities-related crimes.
Criminals are using various methods to launder money, including:
- Wire transfers to dummy accounts
- Cash couriers
- Underground remittance systems
- Shell companies
The high use of cash and a large informal economy in Chinese Taipei also increase the risk that illicit proceeds may be channeled into the formal economy.
Low Risk of Terrorism Financing
In contrast to the high risk of money laundering, the APG report found that the risks of terrorist financing are low overall. However, despite this, authorities have given a high priority to investigating and prosecuting cases of terrorist financing.
The report noted that there have been several instances where authorities have proactively and systematically investigated cases of terrorist financing alongside possible terrorism cases. The authorities have also developed well-developed investigation capacity and standard operating procedures to respond to possible cases of terrorism or terrorist financing.
Confiscation of Criminal Assets
Chinese Taipei has demonstrated its ability to recover assets across a range of crime areas, with approximately USD 457 million confiscated since 2014 using the Criminal Code and the Criminal Procedure Code. Tax authorities have also recovered considerable funds using their powers.
The report noted that competent authorities have well-developed asset tracing capacity and routinely pursue financial investigations to identify assets for the purpose of recovery. However, forfeiture applied in relation to breaches of the cross-border declaration system is not applied proportionately in all cases.
Conclusion
The APG report highlights the importance of continued efforts by Chinese Taipei to combat money laundering and terrorist financing. The authorities must prioritize the investigation and prosecution of these crimes, as well as enhance their capacity for asset recovery and forfeiture.
The report also emphasizes the need for international cooperation and information sharing to combat these global threats. As a major financial hub, Chinese Taipei plays a critical role in preventing and combating money laundering and terrorist financing.