The Supreme Court rendered the 108-Tai-Shang-24 Criminal Decision of January 23, 2019 (hereinafter, the “Decision”) to elucidate the definition of the “foreign remittance business” in the “offense of conducting domestic and overseas remittance business” under the Banking Law.
Article 125, Paragraph 1 of the Banking Law provides for the criminal liability for violation of Article 29, Paragraph 1 of the same law. Article 29, Paragraph 1 of the Banking Law provides: “Unless otherwise provided by law, any person other than a bank shall not accept deposits, be entrusted to manage trust funds or public property or to handle domestic or foreign remittances.” In the reasons for this Decision, the Supreme Court specifically indicated that the so-called “remittance business” shall mean that an actor habitually handles the receipt and payment of funds between different places for its customers via funds clearing with its local affiliates or with specific persons without going through cash delivery in order to settle the debt relations between a customer and a third party or to complete the fund transfer.
According to the facts underlying this Decision, Interest Party B in this matter remitted the Renminbi amount earned from selling oil to a mainland China account designated by Party A in this case and, upon Party A’s confirmation, converted the amount into New Taiwan Dollars in cash by applying an applicable exchange rate in person or asked an unwitting person to do so before delivering the cash to Party B. As a result, the Supreme Court held that Party A had conducted remittance business between Taiwan and mainland China through fund transfers between different places and sentenced Party A to three years and six months in prison.
In conclusion, fund transfers between different places with funds clearing involved should be preferably handled by a bank to avoid legal violations.