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Taiwan Proposes Harsher Penalties Under New AML Guidelines

Taiwan Proposes Harsher Penalties Under New AML Guidelines

May 9, 2024

Taiwan Proposes Harsher Penalties Under New AML Guidelines

Taiwan’s Ministry of Justice has submitted a proposal to amend the country's AML regulations. The proposed changes are directed at virtual asset service providers (VASPs) and include the imposition of severe penalties for non-compliance.

The proposed amendments, which will be reviewed by Taiwan's national parliament, the Legislative Yuan, outline potential jail terms of up to two years for noncompliant firms, in addition to fines that could reach as high as $1.5 million. These measures are part of a broader initiative known as the "New Four Laws to Combat Fraud," introduced by Taiwan’s Executive Yuan.

The amendments encompass modifications to four key regulations: the fraud crime harm prevention regulations, the money laundering prevention law, the technology investigation and security law, and the communications security and supervision law.

One of the most significant changes is within the money laundering prevention law, which now targets VASPs more explicitly. The stricter penalties for violation include lengthy prison sentences for those providing services without proper registration.

The law has also been adjusted to include three specific alterations that affect registration requirements and restrictions for both domestic and international currency dealers. A new legal category has been introduced to address money laundering offenses associated with third-party payment and virtual asset accounts, with penalties for misuse including jail terms ranging from six months to five years and fines up to 50 million New Taiwan dollars (approximately $1.5 million).

Taiwan’s Deputy Minister of Justice, Huang Mou-hsin, stated that under the existing provisions, the authorities could only issue administrative penalties to "noncompliant cryptocurrency companies." The new proposed law would criminalize such behavior and enforce harsher consequences, including substantial fines and imprisonment.

Foreign platforms could also face criminal penalties under the new law unless they establish local entities and seek AML registration in Taiwan.

Proposed Amendment

Cointelegraph Article


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