Amendments to Taiwan’s Anti-Money Laundering Act: Criminalizing Unauthorized Transfer of Financial Accounts

On June 14, 2023, Taiwan’s Anti-Money Laundering Act was amended to introduce Article 15-2, Paragraph 3, which was later renumbered as Article 22, Paragraph 3, on July 31, 2024. This new provision imposes criminal penalties for individuals who provide or transfer their own or another person's financial accounts for others to use under any of the following circumstances:

1. Selling or receiving compensation in exchange for the account.

   
   

2. Providing or transferring three or more accounts in total.

   
   

3. Repeated offense within five years after being penalized by the police under this law.

Violators may face up to three years of imprisonment, detention, or a fine of up to NT$1 million (approx. USD 32,000), or both.

Purpose of the Amendment

Previously, individuals who transferred financial accounts without legitimate reasons often could not be convicted as accomplices to fraud or money laundering. The new law now directly penalizes such acts.

In most cases, police authorities will first issue a warning before pursuing legal action. However, those who intentionally sell their accounts or provide three or more accounts at once may immediately face criminal penalties under the new law.

Possible Legal Defenses

Despite these new regulations, individuals may have legal grounds for defense, based on the following:

1. Criminal liability requires intent

   
   

   • According to Article 12, Paragraph 2 of the Criminal Code, criminal responsibility is generally based on intent (either direct or indirect). Thus, unintentional acts should not be prosecuted under this provision.

     
     

2. "Providing or transferring accounts" refers to relinquishing control

   
   

   • The law targets individuals who completely transfer control of an account to another person.

     
     

   • If someone only allows another person to withdraw money on their behalf or shares an account for transactions where the funds still belong to them, this does not meet the definition of unauthorized transfer.

     
     

3. Exemptions for legitimate commercial, financial, or personal relationships

   
   

   • Article 22, Paragraph 1 of the Anti-Money Laundering Act provides exceptions for account transfers based on legitimate business, financial, or personal trust relationships.

     
     

   • However, courts may interpret what constitutes a “legitimate financial transaction” differently.

     
     

   • For example, in loan fraud cases, courts have ruled that individuals who provide accounts without undergoing proper loan verification procedures are not engaging in legitimate financial transactions.

     
     

   • On the other hand, individuals without banking or lending experience may not be aware of such procedures, making the legal interpretation complex.

Conclusion

With fraud tactics constantly evolving, individuals should remain cautious when handling their financial accounts. If you become involved in a financial fraud dispute, it is crucial to seek legal advice immediately to protect your rights.

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