April 2024
New Enforcement Alert: Severe Consequences for Providing Dummy Accounts in Taiwan from March 1, 2024!
April 2024
Elva Chuang and Elesha Wang
To prevent fraud, the government has strengthened efforts to crack down on dummy accounts, fundamentally disrupting the money flows for scam syndicates. Since 2023, the government has not only amended laws to include crimes related to providing dummy accounts but has also gradually formulated supporting measures to enhance financial order.
1. Article 15-2 of the Money Laundering Control Act ("the Act") stipulates admonition and crime offenses for delivering or providing accounts without justifiable reasons.
Article 15-2 of the Act, amended on June 14, 2023, expands the scope of penalties for providing dummy accounts. Those who unreasonably deliver or provide dummy accounts, even without money laundering or illegal intent, shall be reprimanded by police authorities. Additionally, any person for providing or delivering with quid pro quo, providing or delivering three or more accounts at once, or repeating the crime offenses within five years after admonition shall be sentenced to imprisonment of up to three years, detention, and/or a fine of up to NTD 1,000,000.
2. Those who are reprimanded will have their account functions affected for at least five years to deter the incentive of providing dummy accounts.
In addition to admonition, the Ministry of Justice promulgated the Regulations on Suspension, Functional Restriction, or Immediate Closure of Accounts under Paragraph 6 of Article 15-2 of the Money Laundering Control Act ("the Regulation"), which came into effect on March 1, 2024.
3. According to the Regulation, individuals who violate Paragraph 1 of Article 15-2 of the Act ("Violators") shall not only be reprimanded by police authorities but also face the following significant impacts on their existing or newly opened accounts for a period of five years from the date of admonition:
(1) For each financial account, the daily limit for transfers or withdrawals is NTD 10,000. Additionally, online banking or deposit accounts linked to various payment platforms are prohibited. Financial institutions may refuse over-the-counter transactions or open new accounts. For electronic payment accounts, the daily cumulative limit for domestic and international small-value remittances is NTD 10,000, and the monthly cumulative limit for proxy-enabled payments is NTD 30,000.
(2) Virtual currency platform accounts will be closed immediately after settlement, and no new accounts may be permitted thereafter.
(3) Even if Violators are permitted to apply as sell-side customers of third-party payment service providers after undergoing due diligence, they may be prohibited from using virtual account services thereafter. Additionally, they will be restricted to opening only one account with the same provider. The natural person is limited to representing only one juridical person in the same provider. The payment period must be at least 20 days from the transaction request date. The daily collection limit is NTD 20,000, and the monthly cumulative collection limit is NTD 200,000.
(4) Violators will be regarded as high-risk customers. During the verification period, financial institutions may suspend their accounts or all or part of their account functions upon discovering suspected money laundering or illegal transactions.
(5) The restriction or closure period specified in the Regulation will be reset for another five years if the violation occurs again within five years.
Elva Chuang and Elesha Wang
To prevent fraud, the government has strengthened efforts to crack down on dummy accounts, fundamentally disrupting the money flows for scam syndicates. Since 2023, the government has not only amended laws to include crimes related to providing dummy accounts but has also gradually formulated supporting measures to enhance financial order.
1. Article 15-2 of the Money Laundering Control Act ("the Act") stipulates admonition and crime offenses for delivering or providing accounts without justifiable reasons.
Article 15-2 of the Act, amended on June 14, 2023, expands the scope of penalties for providing dummy accounts. Those who unreasonably deliver or provide dummy accounts, even without money laundering or illegal intent, shall be reprimanded by police authorities. Additionally, any person for providing or delivering with quid pro quo, providing or delivering three or more accounts at once, or repeating the crime offenses within five years after admonition shall be sentenced to imprisonment of up to three years, detention, and/or a fine of up to NTD 1,000,000.
2. Those who are reprimanded will have their account functions affected for at least five years to deter the incentive of providing dummy accounts.
In addition to admonition, the Ministry of Justice promulgated the Regulations on Suspension, Functional Restriction, or Immediate Closure of Accounts under Paragraph 6 of Article 15-2 of the Money Laundering Control Act ("the Regulation"), which came into effect on March 1, 2024.
3. According to the Regulation, individuals who violate Paragraph 1 of Article 15-2 of the Act ("Violators") shall not only be reprimanded by police authorities but also face the following significant impacts on their existing or newly opened accounts for a period of five years from the date of admonition:
(1) For each financial account, the daily limit for transfers or withdrawals is NTD 10,000. Additionally, online banking or deposit accounts linked to various payment platforms are prohibited. Financial institutions may refuse over-the-counter transactions or open new accounts. For electronic payment accounts, the daily cumulative limit for domestic and international small-value remittances is NTD 10,000, and the monthly cumulative limit for proxy-enabled payments is NTD 30,000.
(2) Virtual currency platform accounts will be closed immediately after settlement, and no new accounts may be permitted thereafter.
(3) Even if Violators are permitted to apply as sell-side customers of third-party payment service providers after undergoing due diligence, they may be prohibited from using virtual account services thereafter. Additionally, they will be restricted to opening only one account with the same provider. The natural person is limited to representing only one juridical person in the same provider. The payment period must be at least 20 days from the transaction request date. The daily collection limit is NTD 20,000, and the monthly cumulative collection limit is NTD 200,000.
(4) Violators will be regarded as high-risk customers. During the verification period, financial institutions may suspend their accounts or all or part of their account functions upon discovering suspected money laundering or illegal transactions.
(5) The restriction or closure period specified in the Regulation will be reset for another five years if the violation occurs again within five years.
