Promoting legislation of special investigation techniques (Measure 43)

Measure 43：In relation to special investigation techniques, Taiwan is able to use controlled delivery mechanisms and has done so in successful investigations. However, unlike in many other countries, it is not yet legally able to use undercover operations or access computer systems in the investigation of corruption or other serious crimes. The committee encourages Taiwan to proceed with consideration of the draft Undercover Investigation Act and to consider legal means by which evidence and intelligence can be obtained from computer systems during authorized investigations.

(1) On August 6, 2019, the MOJ held the “Undercover Investigation Act Research and Discussion Meeting” with Coast Guard Administration (CGA) of the Ocean Affairs Council (OAC), Military Police Command (MPC) of the MND, National Police Agency (NPA) of the MOI, MJIB, AAC, Taiwan High Prosecutors Office, and Department of Civil Service. The meeting comes to the conclusion that “related entities are obliged to survey the opinions of basic-level employees and the needs for crime investigation before the next meeting.” During September 20-30, 2019, the NPA surveyed criminal investigators of all police departments of special municipality/county/city and the Criminal Investigation Bureau (CIB, subordinate to NPA) on their opinions regarding

“undercover investigation” (with a total of 7,359 responses). The NPA already submitted the “Summary Sheet of NPA Employee Opinions” and “Issues Relating to the Rights and Interests of Undercover Investigators” to the MOJ for reference. On January 30, 2020, the MOJ forwarded MJIB‟s practical advice to the NPA for analysis. On March 10, 2020, the NPA submitted the “Recommended Amendments to the Undercover Investigation Act”

to the MOJ for study and discussion.

(2) In response to legislation needs for scientific and technological investigation skills (e.g.

GPS tracking, telecommunication tapping, and other compulsory measures) required for combating serious crimes and preventing cybercrime, and in order to: (a) avoid that scientific and technological investigation approaches taken may interfere fundamental human rights and arouse legal disputes or executive obstacles, (b) prevent that

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investigation skills may not keep up with the development of technology; and (c) ensure the legitimacy of criminal investigation, the MOJ, referring to foreign legislative examples and practical needs of Taiwan, held over 10 consultation meetings with scholars and experts, field workers, and the Judicial Yuan (JY), prosecution, and law-enforcement entities (police) to draft “Scientific and Technological Investigation Act," which was announced to the public on September 8, 2020. The MOJ will continue to gather opinions and recommendations from society and discuss the amendment of the draft to optimize the legislation of scientific and technological investigation.

(II) Controlling money laundering (Measure 25).

Measure 25：Combating money laundering and to identify, trace, freeze and confiscate proceeds of crime (A. 31). Taiwan promulgated a revised version of the Money Laundering Control Act in December 2016 which aims to bring the legal basis for anti-money laundering into line with the FATF standards. In the view of the committee it largely accomplishes that objective, and this will provide a more comprehensive basis for anti-money laundering efforts including dealing with proceeds of crime derived from corruption and the seizure and confiscation of illegally acquired property.

1. The APG published the MER 3

The APG officially published the MER3 on June 28, 2019. For “Effectiveness Ratings”, Taiwan achieved “substantial” level in 7 items/Immediate Outcomes (including “Risk, policy and coordination,” “International cooperation,” “Financial intelligence,”

“Confiscation,” “TF investigation & prosecution,” “TF preventive measures & financial sanctions,” and “PF financial sanctions”) out of 11; and for “Technical Compliance Ratings”, Taiwan only got 4 PCs (partially compliant) out of 40 Recommendations, with no NC (non compliant) rated. Conclusively, Taiwan has reached the best ranking of

“regular follow-up” this time, much better than the “enhanced follow-up” ranking before.

2. Strengthening AML actions of accountants

Since June 2017, “Money Laundering Control Act” had requested accountants, when operating their business or practicing their profession, to undertake customer due diligence measures for verifying the identity of the customer and beneficial owner, and

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keep all information obtained through the customer due diligence measures as well as all necessary records on transaction. Accountants are also requested to report suspicious transactions to the MJIB to strengthen the AML actions of accountants. Taiwan‟s Accounting Research and Development Foundation has pronounced “Statements on Auditing Standards (SAS)” No. 72 “Consideration of Laws and Regulations in an Audit of Financial Statements”, which emphasizes that the auditor‟s responsibility is to obtain reasonable assurance that the overall financial statements are free from material misstatement. Therefore, when discovering an identified or suspected non-compliance in conducting an audit of financial statements, the auditor should take into account current laws and regulations (e.g. the Money Laundering Control Act”) or related ethical codes, and report to the competent authority when necessary or at an appropriate time.

3. Statistics on bribery and corruption cases involving confiscation

When investigating bribery and corruption cases, district prosecutors continues to seize or confiscate criminal gains from bribery and corruption. The table below shows the number of seizures/confiscations in the last 3 years.

Year Number of

Seizures/Confiscations

Seizured/Confiscated Amount (NTD, excluding foreign currencies)

2017 72 cases 91,037,124

2018 87 cases 70,673,697

2019 70 cases 54,409,285

4. Acceptance of financial intelligence

The MJIB accepts financial intelligence from financial institutions and designated non-financial institutions for money laundering control. The table below shows the status in the last 3 years.

Year

Suspicious Transaction Reports (STR)

Over-Amount Cash Transaction Reports

(CTR)

International Currency Transportation Reports (ICTR)

Financial Intelligence Requested to MJIB’s

Anti-Money Laundering Division

(AMLD) by Law-Enforcement

Entities for Investigation Needs

2017 23,651 3,543,807 196,822 61,515 entries

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Number of reports voluntarily analyzed and distributed to responsible units for reference: 1,328

2018

35,869 3,207,299 337,467

69,019 entries Number of reports voluntarily analyzed and distributed to

responsible units for reference: 1,942

2019

26,481 3,092,985 36,336

50,765 entries Number of reports voluntarily analyzed and distributed to

responsible units for reference: 2,512 January-May

2020

9,144 1,237,761 79,974

24,116 entries Number of reports voluntarily analyzed and distributed to

responsible units for reference: 910

5. Organizing education and training activities, meetings, and seminars for combating money laundering

(1) The MOJ invited experts and scholars from both academia and in the field relating to combating money laundering to actively organized education and training activities for combating money laundering at prosecution entities, including the “2019 Seminar on the Practice of Money Laundering Control Act: Applicability to Dummy Accounts and Assistance in Frauds” on June 11, 2019, and the “5th Financial Industries and Legal Affairs Training Seminar” on November 7 and 8, 2019 in collaboration with the Bankers‟

Association.

(2) From May 13 to June 25, 2019, the AMLD sent agents to give 18 traveling workshops at field stations for 955 agents to improve the capacity of MJIB officials in anti-money laundering and money flow investigation.

(3) The AMLD has constantly assisted declaration institutions in organizing legal compliance education and training activities such as forums and seminars:

A. In 2019, the AMLD assisted declaration institutions in organizing 81 education and training activities for 7,091 participants to improve the AML and corruption identification capacity of financial institutions and non-financial institutions or personnel designated by the “Money Laundering Control Act.” Major training activities included:

(A) The “2019 Seminar on Cashflow Analysis and Abnormal Transaction Patterns of Criminal Gains” co-organized with the Banking Bureau of the FSC on May 24, 2019 for 291 participants. By explaining the cash flow and abnormal transaction patterns of

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criminal gains reported by law-enforcement units, the organizers assisted representatives from financial institutions in strengthening the ability to identify illegal transactions in advance..

(B) The “2019 AML Practice and Case Study” legal compliance forum on November 6, 2019 in collaboration with the Bankers‟ Association of the Republic of China with 250 participants to share the cases and suspicious transaction patterns to enhance the AML/CTF effectiveness of the banking industry.

(C) The “AML/CTF for Securities Firms” legal compliance forum on November 29, 2019 in collaboration with the Taiwan Securities Association with 300 participants to share related feedback of suspicious reports reported by securities firms and help them improve declaration quality.

B. From January to May 2020, the AMDL assisted declaration institutions in organizing 7 education and training courses for 370 participants. On March 12, 2020, the AMLD assisted the Securities Investment Trust & Consulting Association in organizing the

“AML/CTF for Securities Investment Trust & Consulting Companies” legal compliance forum with 59 participants.

(III) Rewarding exposure to cases of corruption (Measure 28)

Measure 28：Providing rewards, under the Anti-Corruption Act, for people who help to expose cases of corruption.

In 2019 and 2020 the MOJ held the “Review Meeting of Rewards for Reporting Corruption and Malfeasance Cases” as shown in the table below:

Evaluation Meeting Number of Applications

Approved Applications

Amount of Approved Rewards

(NTD)

1st of 2019 6 cases 2 cases 1,466,667

2nd of 2019 10 cases 3 cases 6,833,333

3rd of 2019 10 cases 5 cases 8,850,000

1st of 2020 8 cases 6 cases 5,033,332

(IV) Strengthening systems for compensation for damage from acts of corruption (Measure 36)

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Measure 36：Strengthen systems for compensation for damage from acts of corruption (A. 35) through a draft amendment to the State Compensation Law.

1. Studying the amendments of the “State Compensation Law”

(1) The amendment to the “State Compensation Law” was promulgated on December 18, 2019. After the amendment, Article 3 stipulates: “The State shall be liable for damage to any person‟s life, body, physical liberty or property resulting from a defect in the installation or management of any public facility. (paragraph 1) Where the management of any facility set out in the preceding paragraph is delegated to a private organization or individual, the State shall be liable for damage to any person's life, body, liberty, or property resulting from a defect in the management of the facility. (paragraph 2) The compensating authority shall have the right to reimbursement from the said third person who is liable for the damage referred to in the first, second, and preceding paragraph.”

(paragraph 5)

(2) Regarding the illegal exercise of public power, the MOJ drafted the amendment to the

“State Compensation Law” and submitted it to the EY for evaluation, which is in progress. The state compensation and compensation claim are as follows: “The State or a local self-governance body shall be liable for any damage resulting from the intent or negligent act of any employee of the Government acting within the scope of his or her office or employment which infringes upon the freedom or right of any person. The same shall apply to damage resulting from the omission out of the intent or negligence of any employee of the Government.” (Amended paragraph 1, Article 3) “Should the damage referred to in paragraph 1 of Article 3 or paragraph 1 of the preceding article results from an act out of the intent or gross negligence of the employee of the Government, the compensating authority shall exercise the right to claim for compensation from the said employee of the Government. The same shall apply when the damage referred to in paragraph 1 of Article 5 results from an act committed out of the intent of a judge or prosecutor.” (Amended paragraph 1, Article 7)

2. State compensation and deprivation of corruption gains

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The purpose and elements of laws are inconsistent regarding the sanctions for corruption and the state compensation for the infringement of people‟s rights. According to paragraph 3 of Article 2, paragraph 5 of Article 3, and paragraph 2 of Article 4 of the

“State Compensation Law, the state‟s right to claim is determined by the state‟s liability for compensation. As corruption may not infringe the rights and interests of specific citizens to constitute state compensation, the state may not be able to claim compensation from those committing corruption according to the “State Compensation Law.” In addition, please refer to section B-IV-(V) Implementing a new system of asset confiscation in this report for the deprivation of illegal gains to stop crime.

(V) Implementing a new system of asset confiscation (Measure 45)

Measure 45：Taiwan has implemented a new system of non-conviction-based asset confiscation.

Taiwan is now able to confiscate assets that have been converted to cash.

1. The amendment to the “Money Laundering Control Act” and the “Criminal Code” for a new system of asset confiscation makes thorough forfeiture of the illegal gains from corruption the policy goal of combating corruption. In 2017 the MOJ promulgated and implemented the “Directions for Prosecution Entities to Claim Criminal Gains” and published the “Seizure and Confiscation Handbook.” The MOJ also urged the prosecution of all levels to form a task force for claiming criminal gains and train professionals to enhance the effectiveness of claiming criminal gains.

2. The MOJ constantly supervises the prosecution to establish a mechanism for seizing criminal gains, enforce the auction of seized articles, and establish a special account for recovering the criminal gains of major cases catching much social attention. Please refer to section B-IV-(II)-3 Statistics on bribery and corruption cases involving confiscation in this report for details.

V. International mutual judicial assistance and law-enforcement cooperation in criminal