Last Updated: 23/11/2009
CENTRAL AUTHORITY FOR REPORTING
Anti-Money Laundering Division (AMLD), Investigation Bureau, Ministry of Justice, has been assigned the role of central authority for reporting since 2008.
OTHER ANTI-MONEY LAUNDERING REGULATOR(S)
The Financial Supervisory Commission (FSC);
Taiwan’s Central Bank;
The Ministry of Economic Affairs;
The Ministry of Finance;
The Ministry of Justice;
The National Police Administration;
The Coast Guard Administration;
The Bureau of Agricultural Finance;
The Directorate General of Customs
ARE LAWYERS COVERED BY ANTI-MONEY LAUNDERING LEGISLATION?
There are no specific AML requirements imposed on lawyers. The lack of detailed compliance requirements is because of several cultural and historical reasons: the idealized role of a lawyer is to be a sort of non-governmental jurist charged with the responsibility for safeguarding human rights, ensuring social justice and promoting democracy and the rule of law.
Therefore, unlike accountants or investment consultants, the idealized image of lawyers is; professionals arguing cases in the court rather than as financial experts who assist clients with their financial matters.
Further, historically it was common for Taiwanese clients to sometimes have only limited trust in their local attorneys, which – at least in the past - were more often mandated to implement structures and solutions upon detailed instructions by the client, rather than advising on and creating such structures and transactions from scratch, and providing respective advice. As a corollary, information provided by Taiwanese clients to their local attorneys was often limited, due to confidentiality concerns.
However, lawyers are subject to the Attorney Regulation Act and the Attorney Ethics Code and, even though there is no specific and direct AML legislation for lawyers, lawyers can still be disciplined by the competent bar association for their involvement in money laundering as ‘unethical behaviour of a legal professional’.
LIST THE LAWS REGARDING ANTI-MONEY LAUNDERING, INDICATING WHICH LAWS ARE APPLICABLE TO LAWYERS.
The main and direct regulation of AML is the Money Laundering Control Act (MCLA):
Money Laundering Control Act (MCLA)
, the MLCA has been amended several times, and the last amendment was made in June 2009. However, there is no article directly applying to lawyers.
The other laws related to AML are the following:
In addition, there are several guidelines or bylaws for the related industries to follow:
Points for Attention by Banks on Money Laundering Prevention;
Model Money Laundering Control Guidelines for Securities Firms;
Model Money Laundering Control Guidelines for Life Insurance Industry;
Model Money Laundering Control Guidelines for Non-Life Insurance Industry
ARE VISITING LAWYERS SUBJECT TO LOCAL LAWS REGARDING ANTI-MONEY LAUNDERING, AND, IF SO, TO WHAT EXTENT?
In the past, there have been money laundering cases involving foreign lawyers.
However, there has not been a case of any visiting foreign lawyer being subjected to Taiwanese money laundering laws.
LIST ANY MONEY LAUNDERING GUIDANCE FOR LAWYERS (FOR EXAMPLE, LAW SOCIETY OR BAR ASSOCIATION GUIDELINES) CURRENTLY IN PLACE.
As mentioned previously, the guidelines which have been released are for practitioners in public and financial institutions, such as banks, investment companies, trust businesses or future commission merchants. So far, there are no AML guidelines specific to lawyers.
IS THE LAW SOCIETY/BAR ASSOCIATION INVOLVED IN SUPERVISING OR ENFORCING COMPLIANCE WITH ANTI-MONEY LAUNDERING REGULATIONS?
The Bar Association(s) is not involved in supervising compliance of AML regulations. However, all lawyers are subject to the Attorney Regulation Act and the Attorney Ethics Code; any violation of the ethics codes, such as being involved in money laundering, may lead to disciplinary action.
DESCRIBE CLIENT DUE DILIGENCE REQUIREMENTS, INCLUDING WHEN IT MUST BE UNDERTAKEN BY LAWYERS.
Active client due diligence in respect to AML is not required by lawyers. However, in Article 31 of the Attorney Ethics Code, a lawyer shall terminate the mandate contract with the client when the lawyer finds out the representation of the client will as a result, violate the Attorney Ethics Code.
Therefore, in order to comply with Article 31, a lawyer should at least do some passive due diligence to a certain level.
DOES YOUR COUNTRY FOLLOW A RISK-BASED APPROACH TO CLIENT DUE DILIGENCE BY LAWYERS?
As mentioned in the previous question, client due diligence is not required to be undertaken by lawyers; therefore, there is also a no risk-based approach to client due diligence.
ARE THERE ENHANCED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, POLITICALLY EXPOSED PERSONS?
There are currently no enhanced due diligence measures that apply to lawyers.
ARE THERE SIMPLIFIED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, LISTED COMPANIES?
There are currently no specific simplified due diligence measures that apply to lawyers.
ARE LAWYERS PERMITTED TO RELY ON THIRD PARTY DUE DILIGENCE? IF YES, PLEASE DESCRIBE.
There are no specific laws and regulations in relation to whether lawyers are able to rely on third party due diligence.
WHEN IS A LAWYER UNDER AN OBLIGATION TO REPORT SUSPICIOUS TRANSACTIONS?
In Article 33 of the Attorney Ethics Code, a lawyer shall keep all information related to the mandate confidential, unless the client’s intention or plan of a crime or a criminal action is likely to danger a third party’s life or health. In that case, the lawyer shall report the information to a competent authority.
Therefore, unless the suspicious transaction could danger a third party’s life or health, there is no need for a lawyer to report suspicious transactions.
DOES ATTORNEY/CLIENT PRIVILEGE AND/OR DUTIES OF CONFIDENTIALITY PROVIDE A DEFENCE OR PARTIAL/TOTAL EXCEPTION TO THE REQUIREMENT TO REPORT SUSPICIOUS TRANSACTIONS
As mentioned in the previous question, unless the suspicious transaction could danger a third party’s life or health, there is no need for a lawyer to report suspicious transactions.
Therefore, attorney/client privilege and/or duties of confidentiality will not provide an exception for lawyers since lawyers do not have a general requirement to report suspicious transactions.
DOES LOCAL LAW PROVIDE ANY CRIMINAL AND/OR CIVIL INDEMNITY TO A LAWYER WHO HAS REPORTED A SUSPICIOUS TRANSACTION?
Obligated institutions are protected, if they can provide proof of acting in good faith when reporting a suspicious financial transaction. However, as lawyers are generally not under any obligation to report suspicious transactions, there is no criminal/civil indemnity.
ONCE A SUSPICIOUS TRANSACTION REPORT HAS BEEN FILED, IS A LAWYER ALLOWED TO PROCEED WITH THE LEGAL ADVICE/TRANSACTION, AND, IF SO, MUST CONSENT FROM AUTHORITIES BE OBTAINED FIRST?
There are no specific laws and regulations relating to this issue. The lawyer, who has filed a suspicious transaction report, has a ground to terminate the mandate contract with the client involved in a suspicious transaction.
IS THERE A TIPPING-OFF PROHIBITION? IF YES, PLEASE DESCRIBE.
A tipping-off prohibition exists under Taiwanese legislation, but it is solely applicable to the financial domain. The prohibition does not apply to lawyers directly.
DESCRIBE ANY RESTRICTIONS ON ACCEPTING A NEW CLIENT.
According to Article 26 of the Attorney Regulation Act and Article 30 of the Attorney Ethics Code, a lawyer can not accept a new client when there is a conflict of interest. Under Article 31 of the Attorney Ethics Code, an attorney cannot take on a new client where the purpose of the mandate is clearly for an illegal purpose.
However, it is worth noting that few potential clients would directly state their intention or an illegal purpose for the transactions being contemplated.
ARE THERE ONGOING MONITORING REQUIREMENTS FOR EXISTING CLIENTS? IF YES, PLEASE DESCRIBE.
There are currently no ongoing monitoring requirements that apply to lawyers.
DESCRIBE ANY OTHER WAYS IN WHICH LAWYERS ARE AFFECTED BY ANTI-MONEY LAUNDERING LEGISLATION.
In general, lawyers have rarely been affected by AML legislation directly.
HAVE LAWYERS IN YOUR JURISDICTION BEEN IMPLICATED IN MONEY LAUNDERING, INCLUDING ANY TYPE OF COMPLAINT, ARREST OR PROSECUTION?
There have been many money laundering cases in Taiwan, for example cases that have involved foreign lawyers visiting from overseas jurisdictions or cases that involve fact-scenarios in which their participation was within the attorney’s home jurisdiction.
However, Taiwanese attorneys have not been directly prosecuted or implicated in AML cases (regarding work on behalf of clients). Prosecutions are only common in instances where defendants or criminals have been involved in money laundering through their profession: a lawyer.
HAS THE FINANCIAL ACTION TASK FORCE (FATF) CONDUCTED A MUTUAL EVALUATION OF THIS COUNTRY, AND, IF SO, WHAT WERE THE FINDINGS CONCERNING LAWYERS’ COMPLIANCE WITH THE FATF 40+9 RECOMMENDATIONS?
The Asia/Pacific Group released a mutual evaluation report in July 2007. The report highlighted the need to expand AML obligations, including suspicious transactions reporting, to lawyers as well as other non-financial professions.
Additionally, the report argued for the enforcement of full compliance with the FATF requirements. It recommends that the bar association be designated as the competent authority responsible for implementing, monitoring and ensuring compliance with AML within the legal profession.
Information provided by:
Investigation Bureau, Ministry of Justice
US Department of State