The government announced that from June 28, laws against money laundering will expand to include measures covering relatives of politicians or even acquaintances and extramarital lovers.
The new rule implied that inspection and supervision would be intensified for people related to politicians under investigation for corruption and money laundering. The measures would no longer be limited to the spouse and children of the politician, who might have supplied domestic and overseas bank accounts to hide his financial shenanigans.
Under the new regulations, the investigators can also target people who have relationships with or who live in with the suspect politicians, or people who have a financial relationship with them.
At a Cabinet meeting Thursday, Premier Lin Chuan (林全) said the changes were needed to provide for a better enforcement of measures against money laundering and to “rebuild the order of financial flows.” Reform would not only improve the fight against corruption on the domestic front, but would also help Taiwan to pull itself up to international standards.
If the revisions were not made, the country’s foreign trade and industrial development might suffer, Lin said. At the Cabinet meeting, he encouraged government departments to hurry up with the drawing up of necessary regulations and with the promotion of the new system, making sure that the outside world was aware of the new rules.
The Asia/Pacific Group on Money Laundering (APG) would hold a general international review next year, one of the reasons why Taiwan should put its house in order and show it means business with the fight against corruption, according to the premier.
As he rightly pointed out, at least part of the responsibility for the success of the measures against money laundering lies with several government departments. Laws and amendments about international judicial cooperation against money laundering and about the legal identity of corporations still need to be passed. The Ministry of Economic Affairs was singled out as one of the departments still having to hurry up with establishing an improved legal basis for action against money laundering, according to Lin.
The revised legislation is not Taiwan’s first step against money laundering, since the Executive Yuan or Cabinet already established a special Office for the Prevention of Money Laundering, which coordinates government actions on the subject.
The office says the new measures will make the tracking down and prosecution of money laundering a lot easier, and allow money flows to become more transparent, improve international cooperation on the matter. It will also become less complicated to investigate customers, to report suspicious transactions to the authorities and to strengthen checks on the friends and relatives of politicians.
The new rules cover more than 700 government officials, from the president and vice president at the top to Cabinet members, top managers at state enterprises, senior military officers, the prosecutor general and senior judges.
As to the sectors expected to look out for money laundering, they will now also include attorneys, accountants, notaries and even real estate brokers.
The Office for the Prevention of Money Laundering is planning to expand the new measures to cover members of city and county councils, which would include a total of 900 individuals.
Now that Taiwan is fighting to hold on to its official diplomatic allies, after Panama’s departure having seen their number dwindle to 20, it is more than ever important that the island shows the world it should be a full member of the international community.
Receiving a positive review from the APG next year is one way of doing that. Taiwan was one of its founding members in 1997, but in 2007 it became a target for criticism itself, and in 2011 it was put on the same watch list as countries like Afghanistan, Myanmar and Laos.
Recent scandals show that Taiwan still needs to make efforts to fight money laundering and other signs of corruption. Within the past week there was the SinoPac Financial Holdings case where one of the country’s top businessmen, Yuen Foong Yu Group Chairman Ho Show-chung, was detained for a potentially illegal loan, which involved moving money from Taiwan to China. On Thursday, two senior officials of the Taoyuan City health department were investigated on suspicion of corrupt practices.
If Taiwan succeeds in passing the APG review next year, it will be allowed to speak up at the group’s meetings, despite the usual pressure from China, and train experts who can review other member states. The opposite could have a wide range of consequences, from Taiwan being regarded as a haven for money launderers and criminals, to problems occurring with the wiring of funds or with the value of the New Taiwan dollar.
Taiwan needs not only to look out for moves by its remaining allies, but it can also claim diplomatic victories that burnish its international image and attract more sympathy and support.