The draftamendment for the Money Laundering Control Act was announced and put intoeffect by the President on June 14th of this year (2023), mainly addingcriminal liabilities of "collection of accounts" and "provisionof accounts" to complete the provisions for different types of the moneylaundering offenses. A person who, without justifiable cause, collects otherpeople's bank accounts, virtual currency transaction accounts, or third-partypayment accounts, is subject to imprisonment of up to five years and a fine ofup to NTD thirty million. A person who provides his or her own account foranother person's use without justifiable cause is subject to imprisonment of upto three years and a fine of up to NTD one million.

■Adding the offense of “collection of accounts” to combat money laundering

Due tothe progress in today’s information and communication technologies and theconvenience of financial services, it is often possible for criminal syndicatesto collect the accounts of other people to be used as tools for moneylaundering of their illegal gains. Yet, in practice, even if the accounts ofother people collected by members of criminal syndicates are found, it is stilldifficult to hold the perpetrators criminally liable for money launderingaccording to the provisions on the types of money laundering offenses beforethe amendment when no proceeds of crime have been remitted into the accounts collected,held, or used.

Inthis regard, in order to effectively combat money laundering at the source, theoffense of "account collection" has been added to penalize the act ofcollecting others’ financial accounts, virtual currency trading accounts, or third-partypayment accounts through "certain means" without a legitimate reason.The " certain means" of collecting accounts of others include "usingthe name of a government agency or civil servant," "usingcommunication media to disseminate information to the public," "usingtechnological methods to create fake images and sound recordings ofothers," "offering quid pro quo," and "using impropermethods, such as coercion or fraud.” Therefore, if a scammer syndicate usesimages of celebrities on social media, such as Facebook, to entice others toprovide accounts, the current new legislation already has the offense of"account collection" that can handle it. There is no need to wait forthe criminal proceeds to be actually deposited in order to convict the perpetratorof the offense so that the loophole in the punishment can be fixed.

Inaddition to the account collection offense above, this amendment also adds theoffense of "account provision" for those who provide an account inorder to punish those who provide their own financial accounts, virtualcurrency trading accounts, or third-party payment accounts for use by anotherperson without a legitimate reason. The main reason for adding this new penaltyis that if the account provider provides his/her account for use by anotherperson without a legitimate reason, it is tantamount to assisting such personin circumventing the provisions of the Money Laundering Control Act, whichmakes it difficult to combat money laundering crimes in the judicial system.

■Providing accounts for no legitimate reason will be a crime.

Beforethe amendment, in practice, the court mostly attempted to treat the person whoprovides the account as another co-perpetrator or helper in criminal acts. Forexample, criminal groups involved in counterfeit goods may sell counterfeitproducts through online trading platforms, violating trademark laws, andcollect proceeds of crime through dummy accounts. While individuals directlyengaged in selling counterfeit goods should indeed be punished for violatingtrademark laws, those providing the dummy accounts, before the legal amendment,could only be charged as accomplices or for aiding, based on their roles inassisting or participating in the trademark law violation.  However, in many cases, the account provider pleadedthat he/she only provided the account and did not know that the person who collectedthe account used the account to trade counterfeit goods and thus did not havethe intent of violating the Trademark Act.

Assuch, in the absence of legislation on the "offense of account provision,"judicial practice often fails to directly punish the account provider for violationof the trademark law due to insufficient evidence, which makes it impossible topunish those who provide accounts to assist in the commission of crimes.However, if a person can provide his/her account for another's use without legitimatereasons (e.g., not in line with general business and financial transactionpractices, or not based on the trust relationship between friends andrelatives), it will make money laundering more rampant and increase thedifficulty in combatting money laundering. The addition of the offense ofaccount provision in this amendment will be able to fix this loophole.

As forthe case of providing one's own bank account information for the purpose ofapplying for a loan or a job, the account information is only provided forone's own use to receive a loan or paycheck but is not "made available foruse by the other party (e.g., by giving the password to the account so that theother party can receive money).” Therefore, it does not constitute the “offenseof account provision." In addition, there are circumstances where friendsand family members provide their bank accounts for the other’s use. If the specificcircumstances are reasonable, the offense will not be established. However, sincefinancial accounts are sensitive personal information about a person's financesafter all, even if there is a reason for a legitimate use of such information,one should still pay close attention to the use of one’s accounts in order toavoid having them being used as criminal tools.

This article was published in the Expert’sCommentary Column of the Commercial Times. https://www.ctee.com.tw/news/20230911700074-431305