Jenny Chen
The Taiwan high Court rendered the 104-Jin-Shang-Su-49 Criminal Decision of January 27, 2016 (hereinafter, the “Decision”), holding that the confiscation or recovery of criminal proceeds seeks to disgorge actual criminal proceeds; and even in case of a joint offense by over two individuals, they shall be liable for the amount of their respective proceeds and it is not true that they shall be joint and severally liable.
According to the facts underlying this Decision, the finding that the two defendants violated Article 28-2, Paragraph 1, Subparagraph 1 of the Securities and Exchange Law and shall be joint principal offenders for the offense of illegal buyback of shares under Article 175 of the same law in the original decision was affirmed.
With respect to the confiscation of criminal proceeds, however, it was pointed out in the Decision that confiscation is a sanction to deprive an owner of his ownership due to his offense and compel the transfer of the ownership to the state. The confiscation or recovery of criminal proceeds seeks to disgorge the actual criminal proceeds (original items or their substitution value and benefit) of offenders so that they cannot enjoy the fruit of their offenses. The focus is on the deprivation of criminal proceeds, which is both a criminal punishment and security measure by nature. Therefore, an actor who does not enjoy any proceed is certainly not subject to deprivation of property rights. With respect of the confiscation or recovery of criminal proceeds of joint principal offenders, although the Supreme Court has adopted a theory of joint and several liabilities of joint offenders, still legal precedents adopting such joint and several liabilities and the resolutions adopted in the First 1977 General Meeting of Criminal Department Judges on January 24, 1977 and in the 13th Meeting of Criminal Department of the Supreme Court in 2015 require that such legal theory shall not be cited or considered. Instead, the opinion that confiscation shall be limited to assets actually received by each individual and that recovery shall be limited to costs was adopted (compare the 104-Tai-Shang-2959, 3837 and 3937 decisions of the Supreme Court).
It was further held that the joint principal offenders jointly committed the offense of illegal buyback of shares under Article 175 of the Securities and Exchange Law twice. However, the criminal proceeds above were obtained exclusively by one of the defendants, while the other defendant did not actually receive any benefit. Therefore, there was no need to confiscate his criminal proceeds. The original decision which instructed that the criminal proceeds of the other defendant should be confiscated was erroneous. Therefore, such portion of the decision was reversed and modified.