Important Policies and Effect of Enforcement
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Telecom fraud is organized group crimes that take advantage of the security loopholes created by flourishing information technology and financial liberalization to set up call centers and conduct various fraud offenses within or outside the national border.
The perpetrators at call centers will call over to targeted victims, start the tricks and fraudulently lead the victims to send their money to designated dummy accounts. After some money laundering process, all the illegal proceeds are transferred among several dummy accounts before being finally distributed to the partners in the syndicate.
In the early days, some Taiwanese set up call centers in Taiwan and defrauded people in Taiwan. Later, they started to run call centers in foreign countries, defrauding people in Mainland China and having the money returned to Taiwan and picked up by their Taiwanese co-perpetrators. Recently, it becomes gradual that Taiwanese and Chinese mainlanders cooperate to operate call centers abroad to scam Chinese and Taiwanese people all over the world.
Taiwan government is fully aware that cross-border telecom fraud offenses have been rampant so all competent authorities have begun to revise their policy objectives and work plans in order to crack down on such kinds of crime in concerted efforts. Below we will demonstrate the important policies and the effect of enforcement at the present stage:
1. Improve the effectiveness of combating cross-border fraud via cooperation
To combat fraud, the MOJ has collaborated with the Judicial Yuan, Mainland Affairs Council, Ministry of Foreign Affairs, Financial Supervisory Commission, Ministry of Transportation and Communications, National Communications Commission, Ministry of Interior Criminal Investigation Bureau, Ministry of Justice Investigation Bureau (MJIB), Ministry of the Interior National Immigration Agency and Taiwan High Prosecutors Office to establish An “Inter-Agency Platform against Cross-Border Fraud” on June 3, 2016. The followings are some important resolutions passed by the Platform.
- To work out more conclusions of mutual legal assistance agreements with foreign jurisdictions and promote cooperation in individual cases.
- To adopt the “Mission-Based Police Liaison Officer for Combating Cross-Border Fraud Crime” program.
- To pass a Mutual Legal Assistance in Criminal Act with a view to completing relevant legal systems, facilitating the return of proceeds of crimes, and establishing a feasible mechanism of the restitution of assets.
- To establish a multiple-function data bank of cross-border telecom fraud crime.
- To reasonably regulate the sale of smartphone prepaid sim cards.
- To prevent the suspected telecom fraud from re-departing out of the border by appropriate enforcement.
2. Improving the legal framework and mechanism for combating telecom fraud
A. Amending Organized Crime Prevention Act (hereinafter referred to as OCPA) and Money Laundering Control Act (hereinafter referred to as MLCA)
The Amendment of OCPA came into force on April 19, 2017 and fraud rings could be punished severely under the current OCPA. Moreover, for helping deprive illegal proceeds of the fraud rings, the MOJ amended MLCA and added Art. 15 to punish offenders who collect money for the fraud rings. Art.18.2. of MLCA was amended as well to enlarge the range of confiscation. The amendment came into force on June 28, 2017. As a result, telecom fraud could not only be charged pursuant to Art.339-4 of the Criminal Code of the Republic of China but also under OCPA and MLCA. In recent years, major cross-border telecom fraud syndicates were successfully prosecuted and convicted with heavy penalties.
B. Enhancing external and international cooperation to combat cross-border crimes
Over years the principal legal basis for Taiwan’s cooperation with foreign countries with respect to mutual legal assistance was the “Law in Supporting Foreign Courts on Consigned Cases", apart from a handful of criminal mutual legal assistance agreements with some countries and the general "reciprocity principle" in international law. However, it is a law that lacked detailed provisions as well as predictability and stability, that it did not meet the needs of complex mutual legal assistance context in practice.
On April 10, 2018, Taiwan's legislature passed the Mutual Legal Assistance in Criminal Matters Act, which officially went into force on May 4, 2018. This Act provides a comprehensive set of statutes that governs the avenues and scope for making and taking mutual legal assistance requests, with a specific provision aiming at solving the current difficulty of executing incoming requests for recovering the seized assets as proceeds of crime. Taiwan has also established a single point of contact for receiving requests so that the agencies responsible for carrying out the requests may effectively control the time and quality of responses to the requests of mutual assistance. A foreign country's jurisdiction may also request assistance from the MOJ directly in emergency situations under the new law. This not only greatly reduces the response time but also ensures that the requesting countries will receive the necessary assistance in a timely manner. The Act is only part of our endeavor to provide other countries with stable, definitive, and prompt judicial assistance.
3. The accomplishment of law enforcement
A. The rate of telecom fraud charged against OCPA and MLCA increases
Since the amendment of OCPA, the total number of telecom fraud offenders charged under OCPA was 5,341 in 2019, accounting for 92.2% of persons charged with OCPA, and the number was decreased to 1,242 in 2018, accounting for 76.5% of persons under the charge alike. The number of persons who have been asked by prosecutors for compulsory labor was 402 in 2020.
Since the amendment of MLCA, there were 2972 fraud offenders charged with MLCA in 2019, accounting for 62% of persons charged with MLCA; and the number decreased to 2577 in 2020, representing 40% of persons charged with MLCA.
B. Strengthening the investigation of the criminal money trail
The MOJ set up “special task forces for the recovery of criminal proceeds” and established “the Guidelines for Prosecuting Authorities to Pursue Proceeds of Crime”. It is imperative to apply the new laws especially on telecom fraud and fraudulent fundraising offenses so as to prevent perpetrators from benefiting from the crimes. As such, it ensures that it does not pay to commit crimes, with a view to stemming these crimes eventually. In particular, the “Guideline for Prosecuting Authorities to Pursue Proceeds of Crime” has been applied successfully by both the MJIB and Agency Against Corruption Ministry of Justice in seizing and confiscating.
In addition, in order to enhance the capacity of an investigation into the monetary losses from frauds and to assist legal enforcement agencies in finding out criminal money trails, the police have established a linking mechanism with financial institutions so that necessary actions can be taken promptly in suspected fraudulent withdrawals, which will help prevent bank account owners from being deceived and taken advantage of. Apart from that, Taiwan has established the “Regulations Government the Deposit Accounts and Suspicious or Unusual Transactions” in 2006. The courts, the Prosecutors Offices, or the judicial police may notify a bank to place an account under criminal investigation on the watch list, and all transactions on that account will be suspended. Immediate outcome: to facilitate mutual assistance among members of the financial institutions, the financial institutions are now obliged to work together to combat fraud in accordance with the “Guidelines for Reporting Fraudulent Cases between Members of the financial institutions.
Lastly, the Taiwan government will continue implementing strict measures to fight against the fraud rings and make every effort to deprive the illegal proceeds of crimes pursuant to the newly-amended MLCA and Criminal Code of the Republic of China, in order to provide a well-secured living environment which is free from malicious frauds and other offenses alike.