(Jan. 22, 2019) On November 7, 2018, Taiwan’s Money Laundering Control Act was amended to strengthen the legal compliance requirements for the internal control and auditing of financial institutions and to include virtual currency platforms within the regulatory scope of the Act. (Money Laundering Control Act (enacted Oct. 23, 1996, last amended Nov. 7, 2018), Laws & Regulations Database of the Republic of China (in Chinese); David Tien & Lihuei Mao, Virtual Currency Being Regulated by the Money Laundering Control Act, LEXOLOGY (Dec. 27, 2018).)
The revised article 5 of the Act provides that the provisions regulating financial institutions also apply to virtual currency platforms and trading businesses. (Money Laundering Control Act art. 5.) The Act requires financial institutions to establish their own internal-control and audit systems to combat money laundering and the financing of terrorism in accordance with the money-laundering and terrorism-financing risk levels those institutions face. Under the revised article 6, financial institutions must prepare and periodically update their risk assessment reports on anti-money laundering and combating the financing of terrorism. A financial institution that fails to establish the internal-control and audit system or breaches the relevant rules is punishable by a fine of NT$500,000 to ten million (about US$16,180 to $323,600). (Id. art. 6.)
The amendment also expands the extraterritorial effect of the Money Laundering Control Act. Under the revised article 16, a money-laundering offense can be committed regardless of whether the conduct or result of such an offense takes place within the territory of Taiwan, unless the offense is not punishable under the laws of the place where it is committed. (Id. art. 16; Tien & Mao, supra.)
The amendment was made amid the visit of the Asia Pacific Group on Money Laundering to Taiwan on November 5, 2018, to commence the third-round assessment of Taiwan’s anti-money laundering practices. (Tien & Mao, supra.)