Taiwan: An Examination of the Money Laundering Control Act
| Pages | 367-370 |
| DOI | https://doi.org/10.1108/eb027253 |
| Date | 01 February 2000 |
| Published date | 01 February 2000 |
| Author | Shazeeda A. Ali |
| Subject Matter | Accounting & finance |
Journal of Money Laundering Control — Vol. 3 No. 4
Taiwan:
An Examination of the Money Laundering
Control Act
Shazeeda A. Ali
The Money Laundering Control Act (MLCA) of
Taiwan' was promulgated on 23rd October, 1996
and came into force on 23rd April, 1997. To date
there have been 13 prosecutions and two convictions.
THE CRIME
The MLCA renders it an offence to launder the
proceeds of any 'serious crime'. Serious crimes are
defined by Article 3(1) as those carrying a minimum
penalty of five years' imprisonment, which covers
147 crimes. Article 3(2)—(11) covers a further 30
offences in contravention of the securities, banking
and bankruptcy legislation (including insider dealing
and securities counterfeiting), smuggling, kidnap-
ping, sexual offences against minors and offences con-
trary to the laws controlling weapons. The plethora
of predicate crimes is in accordance with the recom-
mendation of the Financial Action Task Force on
money laundering (FATF) that the offence of
money laundering covers the laundering of the
profits of all serious crimes.
The predicate offences captured by the definition
of money laundering under the MLCA are those
offences associated with organised crime in Taiwan.
For this reason, as drug trafficking remains the flag-
ship activity of most criminal organisations, the
laundering of such earnings is specifically attacked
under the legislation. By Article 5 Narcotics Eradica-
tion Statutes, certain drug offences committed in
Taiwan are punishable by a life sentence or by the
death penalty, and anyone who launders the proceeds
of these offences is automatically caught by Article
2(1) of the MLCA. Moreover, Article 3 extends the
scope of the legislation to embrace, in the definition
of serious crimes, the production and trafficking of
drugs extra-territorially, particularly in mainland
China and generally in any other territory where
such acts are a crime.
Under Article 2 MLCA, the offence of money
laundering is committed by disguising or hiding
'the property or interests in property' obtained in
the commission of a serious crime, where the
predicate offence was committed cither by the
person seeking to conceal the property or by
someone else. It is also the offence of money launder-
ing 'to receive, transport, store, intentionally buy or
act as a broker in the management of the property
or interests in the property of other persons' derived
from the commission of a serious crime. The
expression 'property or interests in the property'
refers both to property or interests in property
obtained directly from the commission of a serious
crime as well as to the remuneration received from
the commission of such crimes. A third party who
in good faith obtains such 'property or interests in
the property' is, however, specifically excluded
from the scope of the MLCA by Article 4.
Curiously, except for liability for 'buying' (and
perhaps 'acting as a broker of) the proceeds of serious
crime, where it must be shown that the offender acted
'intentionally', there appears to be no mens rea
requirement for the offence of money laundering
under Article 2(2). Liability is strict and apart from
the 'disguising/concealing' aspect of the offence,
which implicitly bears an element of conscious
culpability, the other ways of committing the offence
of money laundering may be done unwittingly.
Thus,
one may be convicted for transporting or
storing the property of another without knowledge
or even suspicion that it represents the proceeds of a
serious crime. While this illustrates the gravity with
which the Taiwanese authorities view money
laundering, for a common lawyer the concept of
one being subject to the severe penalties of the
legislation in circumstances where one may be
oblivious of the illicit origin of the property is
alarming.
Article 9 prescribes that a person who commits
the offence of money laundering will be liable on
conviction to a fine of up to NT$3,000,000
(US$110,000) and a maximum prison term of five
years.
A habitual money launderer (repeat offender)
could face a fine of between NT$1,000,000 and
NT$10,000,000 plus a prison sentence of one to
seven years. Where a fine imposed by the MLCA is
not paid within the prescribed time limit, Article
13 allows the case to be referred to the court for
Journal of Money Laundering Control
Vol 3. No 4, 2000, pp 367-370
© Henry Stewart Publications
ISSN 1368-5201
Page 367
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