October 2020
When an actor intends to cover up the sources of a specific crime through direct consumption or to have other joint principal offenders hide illegal money flows through the appearance of false transactions, it is difficult to conclude that this is simply a disposal of loot after a crime is committed (Taiwan)
Elva Chuang
The Supreme Court rendered the 109-Tai-Shang-1641 Decision of April 16, 2020 (hereinafter, the "Decision"), in which an explanation was provided concerning the application of Article 14, Paragraph of the Money Laundering Control Law, which came into effect on June 28, 2017, (hereinafter, the "New Law"), and the application of this article and Article 15 of the same law.
1. Application of Article 14 Paragraph 1 of the New Law
According to the Decision, Article 14, Paragraph 1 of the New Law regulates general offenses of money laundering, whose establishment requires a linkage with the specific predicate offenses under Article 2 of the same law. Before Article 14, Paragraph 1 of the New Law was amended, the practical view in the past was that an actor's disposal act such as (1) direct use or consumption of the property or (2) gains obtained from a specific offense or mere delivery of the actor's property to other joint principal offenders was merely an act of disposing of the loot after the crime and was not a money laundering act regulated under this article. However, under the New Law the actor’s disposal act mentioned as the above involving the disposal of loot after the crime and such act would still constitute money laundering under Article 2, Paragraph 1, Subparagraph 1 or 2 of the New Law.
2. Application relationship between Article 14 and Article 15 of the New Law
Although Article 15 of the New Law regulates the offense of special money laundering, which is not preconditioned by any predicate offense, still the offense of special money laundering can be established only in case of a lack of reasonable sources for the property or assets so accepted, possessed or used, obvious incomparability with the income and the satisfaction of the property or asset benefits so obtained with the three scenarios enumerated under Article 15 of the New Law. In other words, the offense of special money laundering under Article 15 of the New Law applies only when specific illicit proceeds of a predicate crime cannot be substantiated and the offense of general money laundering under Article 14 cannot be penalized.
In this case, the Supreme Court held that when the victims wired the defrauded amounts to the dummy financial accounts managed and controlled by the fraud ring, the offense of fraud was established. Therefore, this calls into question as to whether the offense of general money laundering under Article 14, Paragraph 1 of the New Law was established when Defendant A cut off the trace points for money flows for proceeds of the fraud crime by withdrawing illicit money from ATMs with the ATM cards for such accounts and achieved the effect of hiding proceeds of crime since it was difficult for investigation authorities to investigate. Since the original second instance trial court failed to consider this point and elected to conclude that Article 15, Paragraph 1, Subparagraph 2 of the New Law does not apply, the original second instance trial court was unlawful for improper application of law.
The Supreme Court rendered the 109-Tai-Shang-1641 Decision of April 16, 2020 (hereinafter, the "Decision"), in which an explanation was provided concerning the application of Article 14, Paragraph of the Money Laundering Control Law, which came into effect on June 28, 2017, (hereinafter, the "New Law"), and the application of this article and Article 15 of the same law.
1. Application of Article 14 Paragraph 1 of the New Law
According to the Decision, Article 14, Paragraph 1 of the New Law regulates general offenses of money laundering, whose establishment requires a linkage with the specific predicate offenses under Article 2 of the same law. Before Article 14, Paragraph 1 of the New Law was amended, the practical view in the past was that an actor's disposal act such as (1) direct use or consumption of the property or (2) gains obtained from a specific offense or mere delivery of the actor's property to other joint principal offenders was merely an act of disposing of the loot after the crime and was not a money laundering act regulated under this article. However, under the New Law the actor’s disposal act mentioned as the above involving the disposal of loot after the crime and such act would still constitute money laundering under Article 2, Paragraph 1, Subparagraph 1 or 2 of the New Law.
2. Application relationship between Article 14 and Article 15 of the New Law
Although Article 15 of the New Law regulates the offense of special money laundering, which is not preconditioned by any predicate offense, still the offense of special money laundering can be established only in case of a lack of reasonable sources for the property or assets so accepted, possessed or used, obvious incomparability with the income and the satisfaction of the property or asset benefits so obtained with the three scenarios enumerated under Article 15 of the New Law. In other words, the offense of special money laundering under Article 15 of the New Law applies only when specific illicit proceeds of a predicate crime cannot be substantiated and the offense of general money laundering under Article 14 cannot be penalized.
In this case, the Supreme Court held that when the victims wired the defrauded amounts to the dummy financial accounts managed and controlled by the fraud ring, the offense of fraud was established. Therefore, this calls into question as to whether the offense of general money laundering under Article 14, Paragraph 1 of the New Law was established when Defendant A cut off the trace points for money flows for proceeds of the fraud crime by withdrawing illicit money from ATMs with the ATM cards for such accounts and achieved the effect of hiding proceeds of crime since it was difficult for investigation authorities to investigate. Since the original second instance trial court failed to consider this point and elected to conclude that Article 15, Paragraph 1, Subparagraph 2 of the New Law does not apply, the original second instance trial court was unlawful for improper application of law.
