VZCZCXRO9309
RR RUEHGH
DE RUEHIN #1185/01 1500039
ZNR UUUUU ZZH
R 300039Z MAY 07
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 5405
RUEATRS/DEPT OF TREASURY WASHDC
INFO RUCPDOC/USDOC WASHDC
RUEHBK/AMEMBASSY BANGKOK 3705
RUEHBJ/AMEMBASSY BEIJING 6841
RUEHUL/AMEMBASSY SEOUL 8678
RUEHGP/AMEMBASSY SINGAPORE 6915
RUEHKO/AMEMBASSY TOKYO 8811
RUEHML/AMEMBASSY MANILA 0068
RUEHJA/AMEMBASSY JAKARTA 4079
RUEHKL/AMEMBASSY KUALA LUMPUR 3747
RUEHHI/AMEMBASSY HANOI 3319
RUEHBY/AMEMBASSY CANBERRA 4519
RUEHWL/AMEMBASSY WELLINGTON 1790
RUEHHK/AMCONSUL HONG KONG 8090
RUEHGH/AMCONSUL SHANGHAI 1117
RUEHGZ/AMCONSUL GUANGZHOU 0288

UNCLAS SECTION 01 OF 02 TAIPEI 001185 
 
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:  Amendments to Anti-Money Laundering Law 
 
REF: (A) TAIPEI 360, (B) TAIPEI 1163 
 
SUMMARY 
------- 
 
¶1.  In response to the Asia-Pacific Group on Money Laundering 
(APG)'s 2007 assessment, Taiwan has drafted a bill to amend its 
Money Laundering Control Act (MLCA).  The bill will reclassify some 
crimes as felonies and put a new agricultural bank, trust companies, 
and currency exchanges under regulation of the MLCA.  The bill is 
designed to combat financing of terrorism (Ref B), strengthen 
reporting of cross-border cash and securities transport (ref A), and 
promote information sharing.  END SUMMARY. 
 
APG Assessment and Recommendation 
--------------------------------- 
 
¶2.  Early this year, the APG concluded its assessment of Taiwan's 
anti-money laundering mechanisms and made 49 recommendations for 
improvement.  In order to comply with the recommendations and 
reinforce money laundering controls, Taiwan decided to amend its 
MLCA.  On May 8, the Executive Yuan submitted the proposed MLCA 
amendments to the Legislative Yuan (LY) for review. 
 
Coverage of Money Laundering Expanded 
------------------------------------- 
 
¶3.  The bill will add new crimes to the scope of the law and 
reclassify some violations of the MLCA as felonies (defined as 
subject to a jail term longer than five years).  The crimes added 
include offences against the Public Procurement Law, Banking Law, 
Securities Transaction Law, Bills Finance Management Law, Insurance 
Law, Financial Holding Company Law, Trust Law, Credit Cooperative 
Association Law, and Agriculture Financing Law. 
 
¶4.  The bill will include the National Agricultural Bank (NAB), 
trust companies, and currency exchanges (which include hotels, 
jewelry stores, postal offices, temples, and bus/railway stations) 
in its list of financial institutions regulated by the MLCA. 
 
¶5.  The number of agencies with money laundering responsibilities 
will be expanded from just the Ministry of Justice (MOJ), Ministry 
of Transportation and Communications, and Ministry of Finance (MOF) 
to include the Financial Supervisory Commission (FSC, established in 
July 2004), Ministry of Economic Affairs, Council of Agriculture 
(supervising NAB and the credit departments of farmers' and 
fishermen associations), and Taiwan's Central Bank (TCB, monitoring 
currency exchanges). 
 
Currency and Other Bearer-negotiable Instruments 
--------------------------------------------- --- 
 
¶6.  The bill will reiterate the current requirements for both 
inbound and outbound passengers to declare local and foreign 
currencies as well as gold.  Currencies and gold are subject to 
separate limits (see ref A for the limits).  Currencies exceeding 
the limits without declaration will be confiscated.  For gold 
exceeding the limit, passengers are required to obtain prior 
import/export permission in addition to the declaration.  False 
declarations can lead to confiscation and fines. 
 
¶7.  The bill will also restrict carrying bank checks, traveler 
checks, and other securities across borders.  A declaration is 
required for amounts exceeding a limit set jointly by the MOF, MOJ, 
FSC, and TCB.  According to the bill, TCB will be authorized to set 
penalty guidelines for violations. 
 
 
TAIPEI 00001185  002 OF 002 
 
 
Financing Terrorism 
------------------- 
 
¶8.  The Ministry of Justice has shifted three articles on financing 
terrorism to this MLCA bill from the proposed Anti-Terrorism Act, 
which has been stalled due to concerns that expanded police powers 
might impinge on civil rights.  The articles prohibit funding 
terrorist activities such as homicide, kidnapping, hijacking, etc. 
Violators face a jail term of 1-7 years and/or a fine of up to NT$10 
million (US$303,000). 
 
Information Sharing 
------------------- 
 
¶9.  Taiwan will share information obtained from the MLCA with 
countries with which it has signed a mutual legal assistance 
agreement (MLAA).  The bill will also authorize Taiwan agencies to 
share the information with law enforcement agencies in countries 
without an MLAA arrangement on a reciprocal basis. 
 
YOUNG