Teresa Huang and Doris Hsu
Taiwan received the best evaluation outcome in the third round of mutual evaluation conducted by the Asia/Pacific Group on Money Laundering (hereinafter, the “APG”) in October 2019, which is “regular follow-up.” However, the third round of mutual evaluation still pointed out the deficiencies of Taiwan anti-money laundering regime and made recommendations. Therefore, to respond to the APG’s recommendations and improve the legal regime of money laundering control in Taiwan, the Ministry of Justice pre-announced the draft Amendments to the Money Laundering Control Law (hereinafter, the “Law”) on December 28, 2021. The three major highlights of the draft are summarized below:
1. Revision of the definitions in some provisions to clarify the application scope of “virtual asset services”
The “enterprise that operates a virtual currency platform and trading business” under Article 5 of the Law is changed into the “virtual asset service provider,” so that the usage of terms is consistent with that of the Financial Action Task Force (hereinafter, the “FATF”). Meanwhile, this also avoids the misunderstanding of the public that “virtual currencies” are only limited to “cryptocurrencies.” In fact, DeFi (decentralized finance) and NFT (non-fungible token) both fall within the scope of “virtual asset services.” Therefore, the modification of the definition in this subparagraph can further clarify the application of the Law to virtual asset services (Article 5 of the draft).
2. Probability of expanded cross-border cooperation and information exchanges
In reference to the FATF’s recommendation that the dedicated anti-money laundering units of countries can ensure the rapid exchange of information on money laundering or money laundering predicate crimes to enhance the efficiency of controlling money laundering and combating terrorist financing, it is specifically provided that even pursuant to treaties or agreements other than those on anti-money laundering and anti-terrorist financing, as long as the information is exchanged under the principle of reciprocity between the parties, such information, in principle, may be used for anti-money laundering or anti-terrorist-financing purposes, except for special prohibitions (Article 21 of the draft).
3. Increase of the penalty on juristic persons to up to ten times to enhance the supervisory liability of juristic persons
To enhance the liability of juristic persons, if a representative, agent, employee, or practitioner of a juristic person commits a money laundering conduct under Article 14 of this Law or receives or holds financial or property benefits derived from money laundering conduct under Article 15 of this Law when performing his or her duties of business, the juristic person shall be subject to a fine of up to ten times of the originally stipulated fine in order to enhance the supervisory liability of juristic persons (Article 16 of the draft).
 The APG evaluation results are divided into three levels, namely “regular follow-up,” “enhanced follow-up” and “enhanced (expedited) follow-up.” “Regular follow-up” is the best evaluation outcome, which means that the member countries have excellent anti-money laundering effect and only need to submit follow-up reports every other year in the future.