VZCZCXRO5137
RR RUEHGH
DE RUEHIN #1163/01 1440916
ZNR UUUUU ZZH
R 240916Z MAY 07
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 5368
RUEATRS/DEPT OF TREASURY WASHDC
INFO RUCPDOC/USDOC WASHDC
RUEHBK/AMEMBASSY BANGKOK 3703
RUEHBJ/AMEMBASSY BEIJING 6819
RUEHUL/AMEMBASSY SEOUL 8661
RUEHGP/AMEMBASSY SINGAPORE 6910
RUEHKO/AMEMBASSY TOKYO 8797
RUEHML/AMEMBASSY MANILA 0063
RUEHJA/AMEMBASSY JAKARTA 4077
RUEHKL/AMEMBASSY KUALA LUMPUR 3745
RUEHHI/AMEMBASSY HANOI 3316
RUEHBY/AMEMBASSY CANBERRA 4517
RUEHWL/AMEMBASSY WELLINGTON 1788
RUEHHK/AMCONSUL HONG KONG 8075
RUEHGH/AMCONSUL SHANGHAI 1107
RUEHGZ/AMCONSUL GUANGZHOU 0278

UNCLAS SECTION 01 OF 02 TAIPEI 001163 
 
SIPDIS 
 
SIPDIS 
 
STATE PLEASE PASS USTR 
STATE FOR EAP/RSP/TC, EAP/EP 
USTR FOR ALTBACH and Stratford 
USDOC FOR 3132/USFCS/OIO/EAP/WZARIT 
TREASURY FOR OASIA/LMOGHTADER 
TREASURY ALSO PASS TO FEDERAL RESERVE/BOARD OF 
GOVERNORS, AND SAN FRANCISCO FRB/TERESA CURRAN AND NY FRB MARIA 
BOLIS 
 
E.O. 12958: N/A 
TAGS: EINV EFIN ECON PINR TW
SUBJECT:  Legislation against Financing Terrorism 
 
 
SUMMARY 
------- 
 
¶1.  Taiwan is racing to pass new legislation against financing 
terrorism which the Egmont Group (an umbrella group of international 
Financial Intelligence Units) has required its members to complete 
prior to the end of May 2007.  The pending legislation would impose 
heavy penalties for financing terrorism.  END SUMMARY. 
 
Legislation Delayed 
------------------- 
 
¶2.  Following 911, Taiwan's Ministry of Justice submitted a draft 
"Anti-Terrorism Act" (modeled on the U.S. Patriot Act) to the 
Executive Yuan (EY) in November 2002 which was forwarded to the 
Legislative Yuan (LY) in December 2003.  However, the opposition KMT 
and PFP Parties have not allowed the bill to pass. 
 
Concern over Human Rights Abuse 
------------------------------- 
 
¶3.  The opposition parties have been concerned that the bill's 
expansion of the administrative branch's authority could lead to 
human rights abuses.  Some opposition party legislators allege the 
bill was written primarily to please the United States. 
 
Pressure on LY 
-------------- 
 
¶4.  On May 21, the Ministry of Justice Investigation Bureau (MJIB) 
issued a press release that the Egmont Group requires its members to 
complete legislation against financing terrorism prior to the end of 
May 2007, and that the Egmont Group may expel Taiwan as a member if 
Taiwan fails to meet the May 31 deadline.  Publicizing the deadline 
puts heavy pressure on legislators who will be held responsible 
should Taiwan lose its Egmont Group membership.  In 1998 Taiwan 
acceded to the Egmont Group, which is one of the very few 
international organizations in which Taiwan is allowed membership. 
 
¶5.  An official at the Ministry of Justice (MOJ) told AIT/T that the 
MJIB issued the press release to speed up LY action on the 
legislation, but that the Egmont Group is unlikely to expel Taiwan 
from the organization while another 24 members still don't have any 
anti-terrorism law.  However, he added, the MOJ will try its best to 
push relevant bills through the legislature prior to the deadline of 
May 31. 
 
Convenient Way 
-------------- 
 
¶6.  To separate the effort against financing terrorism from the 
concerns about expanding police powers, the MOJ decided in early May 
to move three articles related to financing terrorism from the 
proposed Anti-Terrorism Act to a separate bill designed to amend the 
Money Laundering Control Act (MLCA), already submitted to the LY on 
May 8. 
 
Definition and Penalties 
------------------------ 
 
¶7.  Article 2 of the MLCA defines "financing terrorism" as funding 
terrorist activities (including homicide, kidnapping, hijacking, 
etc.) to intimidate the public based on political, religious, 
tribal, and other beliefs.  Article 3 makes "financing terrorism" as 
a felony.  According to Article 11, violations can be subject to a 
jail term of 1-7 years and/or a fine up to NT$10 million 
(US$303,000). 
 
TAIPEI 00001163  002 OF 002 
 
 
 
YOUNG