Financial Crime World

Money Laundering Crimes and Enforcement in Taiwan: A Look at the Legal Framework

Taiwan, an essential economic hub in China, has a robust legal framework in place to combat money laundering. In this article, we explore the national laws and regulations that govern the prosecution of money laundering crimes, the roles of various authorities, and the penalties for offenders.

Prosecuting Money Laundering Crimes

1.1.1 Prosecutors: Prosecutors in Taiwan have the legal authority to prosecute money laundering offenses at the national level, with support from the Ministry of Justice Investigation Bureau (MJIB) and local police during investigations.

1.1.2 Money laundering predicate offenses: To establish money laundering as a criminal offense, the following activities must be proven under the Taiwan Money Laundering Control Act: * Concealing the origin of ill-gotten gains. * Disguising the true nature of proceeds from unlawful activities. * Transferring, converting, or otherwise dealing with such proceeds.

The following activities are considered money laundering predicate offenses under Taiwan’s Anti-Money Laundering (AML) laws:

  • Any offense with a minimum punishment of six months of imprisonment or more
  • Tax evasion
  • Bribery
  • Fraud
  • Offenses under the Smuggling Penalty Act
  • Certain offenses under the Securities and Exchange Act and the Futures Trading Act (Article 3 of the Taiwan AML Act)

Extraterritorial Jurisdiction and Foreign Crimes

The Taiwan AML Act covers money laundering offenses committed by Taiwanese citizens outside the country’s territory (Article 16). However, the punishability of money laundering of foreign crimes under Taiwan’s laws is uncertain, as the AML Act mainly deals with predicate offenses under Taiwanese criminal law.

Authorities in Charge

Prosecutors and the Ministry of Justice Investigation Bureau

1.1.1 Prosecutors: Prosecutors play a pivotal role in Taiwan by handling money laundering cases at the national level, collaborating with the MJIB and local police.

1.1.2 Ministry of Justice Investigation Bureau (MJIB): The MJIB’s functions include analyzing and disseminating Suspicious Transaction Reports (STRs) and Currency Transaction Reports (CTRs) and coordinating/contacting foreign counterparts regarding money laundering investigations (Section 2 of the Taiwan Money Laundering Control Act).

Corporate Criminal Liability and Penalties

Under Article 16 of the Taiwan AML Act, a legal person can be charged with a criminal fine if any of its employees, agents, or representatives commit a money laundering offense while performing their duties for the company.

  • The maximum penalty for individuals is imprisonment for up to seven years and a fine of up to NTD5 million (Article 14 of the Taiwan AML Act).
  • Legal entities face similar fines under the regulations.

Statute of Limitations and Settlements

  1. Statute of Limitations

The prosecution of money laundering crimes is subject to a twenty-year statute of limitations under Taiwan’s Criminal Code (Article 80).

  1. Settlements

There is no concept of a criminal “settlement” in Taiwan, but there is a deferred prosecution mechanism in the Code of Criminal Procedures that can suspend criminal proceedings for individuals subject to specific conditions (Article 253-1).

Anti-Money Laundering Regulatory and Administrative Requirements

The Ministry of Justice is the primary competent authority for AML-related matters. Regulatory authorities like the Financial Supervisory Commission oversee the AML compliance of specific industries, including finance.

    • An AML-internal control and auditing system
    • Know-Your-Customer (KYC)
    • Record keeping
    • Continuous monitoring
    • Large-amount reporting
    • Suspicious transaction reporting

  2. Relevant rules

Various self-regulatory organizations and professional associations often issue relevant rules to help businesses comply.

Money Laundering Enforcement Priorities

  1. New payment methods concerns

As the financial world evolves, new methods of money laundering, such as crypto-related transactions and third-party payment systems, have emerged as concerns for Taiwanese authorities.

  1. Regulatory response

Responding to the challenge of regulating these new payment methods, the government has issued regulations for:

  • Third-party payment business operators
  • Crypto-related business operators