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Money laundering evaluation may be used to punish Taiwan politically

Taiwan's third mutual evaluation by the Asia/Pacific Group on Money Laundering is scheduled for Nov., but there is concern China may attempt to distort the results to damage Taiwan

(Image from the Anti-Money Laundering Office of the Exec. Yuan)

(Image from the Anti-Money Laundering Office of the Exec. Yuan)

TAIPEI (Taiwan News) – In November this year, the Asia/Pacific Group on Money Laundering (APG) will carry out Taiwan’s third mutual evaluation since the country joined the organization in 1997.

As Taiwan prepares for the evaluation, concern has emerged that China, an influential member of the APG, along with Hong Kong, Macao, and other allies, may attempt to apply political pressure to distort results, or completely sabotage the evaluation.

Upon evaluation countries are designated to one of three categories, “passing,” “required basic monitoring” for states that exhibit minimal evidence of money laundering operations, and “accelerated monitoring” for states that exhibit a high-risk of money laundering.

Liberty Times notes that a recent mock evaluation revealed that Taiwan may be at risk of receiving poor marks in 12 of the areas that will be evaluated. In order to maintain its status as a “low-risk” country for money laundering, Taiwan must reduce the “at risk” areas to eight.

In preparation for the evaluation the Anti-Money Laundering Office of the Executive Yuan in May announced that it would be targeting eight areas to investigate for potential money laundering in order to ensure a positive report in November.

The areas are: drug trafficking, telecom fraud, organized crime, corruption, smuggling operations, crimes involving financial securities, third-party money laundering, and tax evasion.

However, given the current political climate between China and Taiwan, some have expressed worry that the APG evaluation may be seen as an opportunity by Beijing to discredit and damage Taiwan. Adding to worries is the fact that one of the two co-chairs of the mutual evaluation program this year is Macao, with the other being Australia.

If Taiwan receives a poor result and is determined to require “accelerated monitoring” this could put a heavy burden on parts of the public and private sectors, requiring compulsory evaluations every six months until the result improves.

If Taiwan is determined to be a “non-cooperative” state, then this may also lead to Taiwan’s financial institutions being blocked from forming partnerships abroad, and it could make foreign investors less willing to invest in Taiwan in the long term, reports Liberty Times.

The APG is headquartered in Sydney Australia, and is an international organization, founded to maintain international regulatory standards in order to prevent money laundering, tax evasion and international criminal activity, including the funding of terrorist organizations and human trafficking operations.