Financial Crime World

Chinese Taipei’s Financial System Under Scrutiny: Efforts to Combat Money Laundering and Terrorist Financing

Background

In recent years, Chinese Taipei has faced a range of predicate offenses that generate significant proceeds, largely stemming from organized crime, including drug trafficking, fraud, and smuggling. The island nation’s financial system has also been linked to corruption and bribery, as well as specific types of fraud such as tax and securities-related crimes.

To combat these threats, Chinese Taipei has established a legal and institutional framework that is particularly strong in relation to technical compliance. However, the country still faces challenges in strengthening supervision and implementing preventive measures to prevent the misuse of legal persons and arrangements.

Progress and Challenges

According to a recent assessment by the Asia-Pacific Group on Money Laundering (APG), Chinese Taipei has made significant progress in understanding money laundering and terrorist financing risks, as well as pursuing domestic cooperation and coordination to combat these threats. The country’s Financial Intelligence Unit (FIU) is also well-developed, producing high-quality financial intelligence.

However, the assessment highlights several areas of improvement for Chinese Taipei, including:

  • Prioritizing the pursuit of money laundering cases
  • Enhancing the effectiveness of asset recovery efforts
  • Increasing focus on targeting cash couriers
  • Improving the proportionality of forfeiture applied in relation to breaches of the cross-border declaration system

Results and Achievements

Despite these challenges, Chinese Taipei’s financial system has shown signs of improvement in recent years. The country has confiscated approximately USD 457 million since 2014 using the Criminal Code and the Criminal Procedure Code, and has also recovered considerable funds using tax authorities’ powers.

Terrorist Financing

Chinese Taipei faces a low overall risk profile when it comes to terrorist financing, but authorities have given a high priority to investigating and prosecuting these cases. The country’s FIU is well-developed in investigation capacity, and standard operating procedures are in place to respond to possible cases of terrorism or terrorist financing.

Conclusion

While Chinese Taipei still faces challenges in combating money laundering and terrorist financing, the country has made significant progress in recent years and continues to work towards strengthening its financial system and combatting these threats.