Financial Crime World

Taiwan’s Anti-Money Laundering Laws: Bolstering Financial Integrity and International Cooperation

The Taiwanese legislature has implemented new Anti-Money Laundering (AML) laws to prevent money laundering activities, combat related crimes, maintain financial stability, increase transparency in money flows, and strengthen international cooperation. The Act, which took effect on January 1, 2023, includes the following key provisions:

Definition of Money Laundering

Article 2:

  • Money laundering is committed when a person knowingly conceals or disguises the origin of proceeds from specified unlawful activities, accepts, obtains, or uses such proceeds, or conceals their true nature or ownership.

Specified Unlawful Activities

Article 3:

  • Lists various offenses that constitute “specified unlawful activities.”
  • Offenses include crimes with a minimum punishment of six months imprisonment, offenses under the Criminal Code, and smuggling-related offenses.

Financial Institutions and Designated Non-Financial Businesses or Professions

Articles 4 and 5:

  • Financial institutions and designated non-financial businesses or professions (DNFBPs) like jewelry businesses, real estate agencies, lawyers, and accountants must establish AML systems.
  • They are required to train their employees in AML procedures.

Customer Due Diligence

Article 7:

  • Financial institutions and DNFBPs must conduct customer due diligence measures to identify and verify their clients’ identities and beneficial owners.

Transaction Record-Keeping

Article 8:

  • Financial institutions and DNFBPs must keep transaction records for at least five years.
  • They are required to report specific transactions to the Ministry of Justice’s Investigation Bureau.

Currency and Suspicious Transaction Reporting

Articles 9 and 10:

  • Reporting of currency transactions above a designated threshold.
  • Reporting of suspicious transactions to the Financial Investigation Bureau.

International Cooperation

Article 11:

  • Allows for international cooperation against countries or regions with high risks of money laundering or terrorism financing.
  • Implementing verification procedures, limiting or prohibiting transactions, and other preventive measures.

Penalties and Inspections

The AML laws include penalties ranging from fines to imprisonment for individuals and entities that fail to comply with the regulations. Financial institutions and DNFBPs are subject to inspections and must demonstrate the effectiveness of their AML systems to the central competent authorities.

This legislation is part of Taiwan’s continued efforts to combat financial crimes and contribute to global efforts in the fight against money laundering and terrorist financing.