The Executive Yuan passed the Anti-Fraud Act 4 on the 9th to strengthen the anti-fraud responsibilities of internet platforms, telecommunications, financial institutions, and increase the penalties for fraud. Premier Chen Jianren stated that the Anti-Fraud Act 4 will specialize anti-fraud policies, establishing a new legal milestone in Taiwan and leading the international community, hoping that the draft can be swiftly passed by the Legislative Yuan to protect the public’s property security.
The Executive Yuan passed the specialized anti-fraud law draft “Fraud Crime Harm Prevention Act,” along with legislative and amendment drafts for anti-money laundering laws, technology investigation and protection laws, communication safeguard and monitoring laws. The key points of the drafts include establishing accountability mechanisms for internet operators, exemption clauses, increasing investigation tools such as mobile surveillance cars, adding severe penalties for large-scale fraud, provisions for accomplice accountability, and raising the parole threshold.
Premier Chen Jianren, Vice Premier Zheng Wencan, and Executive Yuan Minister without Portfolio Luo Bingcheng held a press conference after the meeting, declaring the government’s stance against fraud.
Premier Chen mentioned that in the new era, internet fraud is on the rise, posing severe challenges to Taiwan and countries worldwide. The government has successively launched anti-fraud action plans and the Anti-Fraud Act 5, with concrete results since June last year, such as multi-tiered public awareness campaigns involving over 300 million people; prevention of fraud amounting to approximately NT$9.3 billion; interception of fraudulent calls by over 96%; introduction of government 111 SMS service adopted by 112 agencies; implementation of logistics encryption codes by operators, strengthened management of electronic payment accounts, and establishment of an anti-fraud platform for gaming points to reduce gaming point fraud.
He indicated that to counter evolving fraud patterns and techniques, the government needs to continuously review and improve anti-fraud policies. Therefore, taking into account international anti-fraud practices and legal norms, after collecting opinions from various sectors, Minister without Portfolio Luo Bingcheng led efforts across departments to propose a specialized law – the “Fraud Crime Harm Prevention Act” tailored for combating fraud.
Key points of the Anti-Fraud Act 4 include: increasing fraud penalties with the addition of the offense of large-scale fraud, those swindling amounts exceeding 10 million NT dollars may face imprisonment of 3 to 10 years and a fine of up to 30 million NT dollars; for groups of 3 or more offenders using online deception or impersonating government entities for fraud, penalties may be enhanced by 50%; introduction of a provision against parole, forbidding parole for repeat fraud offenders in the future.
The draft introduces a provision for leniency upon voluntary surrender by offenders, enabling the reduction or exemption of penalties by surrendering all ill-gotten gains. Additionally, in the protection of fraud victims section, measures such as counseling, referral, and legal assistance will be provided to victims.
Regarding the three accompanying laws, Premier Chen mentioned that they include the Ministry of Justice drafting the “Technology Investigation and Protection Act,” “Communication Safeguard and Monitoring Act,” empowering law enforcement agencies to utilize technological investigations through due process to combat fraud; amending the Anti-Money Laundering Act to criminalize emerging money laundering techniques, meeting international standards, thereby strengthening the legal basis for investigations and prosecutions.
In the “Technology Investigation and Protection Act” draft, due to criminal groups widely using communication software for crimes, the draft provides law enforcement with various technological investigation tools including GPS tracking for real-time location tracing, utilization of the “M Surveillance Online System” to locate fraud call centers, and infrared thermography for indoor temperature measurement, identifying hiding spots, or captive locations of victims, all subject to conditional use in the future.
Minister of the Interior Lin Youzhang emphasized the importance of preventing fraud at the source within the specialized law, particularly targeting key industries including financial institutions, virtual asset service providers, telecommunications, online advertising platforms, third-party payment services, e-commerce, and online gaming companies, requiring them to fulfill their anti-fraud obligations.
Lin also explained that in cases of non-compliance by operators, fines up to 10 million NT dollars may be imposed according to the severity of the offense, with continuous penalties until compliance is achieved. Penalties will vary based on the involvement of customers or users in fraud crimes, with severe cases facing service suspension.
In terms of disrupting financial flows, source prevention will be adopted, where the Financial Supervisory Commission stated that failure to provide relevant information about transactions, record-keeping, or cooperation in establishing joint prevention and reporting mechanisms could result in fines ranging from 200,000 to 2 million NT dollars, with a fivefold increase for severe cases.
Regarding financial institution supervision, the Financial Supervisory Commission mentioned that deposit accounts, electronic payment accounts, credit cards, virtual asset accounts, etc., will be regulatory subjects. To curb dummy accounts, measures will be implemented to strengthen customer identity verification and control measures, such as suspending transactions and denying services.
To proactively control suspicious accounts and prevent illegal transactions, financial institutions are required to retain transaction records and notify law enforcement agencies. Depending on police notifications, financial institutions may return remaining funds in the accounts, including virtual assets.
Furthermore, the amendment will incorporate virtual currency exchanges within regulations, mandating entities or personnel offering virtual asset services and third-party payment services to undergo anti-money laundering training and registry; failure to comply may lead to imprisonment of up to 2 years or a fine of up to 5 million NT dollars.
Deputy Minister of the Ministry of Justice Huang Mouxin mentioned that although virtual currency exchanges are currently regulated by the Financial Supervisory Commission administratively, the forthcoming amendment will align them with the Criminal Code. Virtual asset business operators will be held accountable for fraud prevention, requiring both individual and corporate cryptocurrency exchanges, including those overseas, to establish operations in Taiwan to offer services.
Deputy Commissioner of the Financial Supervisory Commission Chiu Shuzhen noted that there are approximately 60-70 virtual currency exchanges domestically and internationally, with 25 having completed compliance statements for anti-money laundering measures.