Economic Crime Prevention

Scope of Economic Crime Prevention

The scope of economic crime prevention may be classified into economic crimes and ordinary crimes. Collection of information, research and analysis, investigation and prevention of such crimes consist generally of the following:

Convening of Board on Economic Crime Prevention

In May 1979, the Executive Yuan formulated effective prevention policies specifically regarding the existing status of economic crimes, financial measures, and major cases, with a view to comprehensively prevent economic crimes. The Executive Yuan also directed the Bureau to liaise with relevant units regarding the formation of a special project team and convened the "Board on Economic Crime Prevention" ("the Board").

The Board's composition underwent several changes over time. At present, its members (13 government authorities) consist of:

• Fair Trade Commission
• Financial Supervisory Commission ("FSC", including Securities and Futures Bureau, Banking Bureau, Insurance Bureau, and Inspection Bureau)
• Ministry of the Interior (National Police Agency and National Immigration Agency)
• Ministry of Foreign Affairs (Bureau of Consular Affairs)
• Ministry of Economic Affairs (Department of Commerce and Taiwan Intellectual Property Office)
• Ministry of Justice (Department of Prosecutorial Affairs, Taiwan High Court Prosecutor's Office, and Investigation Bureau)
• Ministry of Finance (Customs Administration, Taxation Administration)
• Ministry of Digital Affairs (Administration for Digital Industries)

In addition to conducting economic crime prevention work according to their respective roles, Board members also periodically convene meetings. Such meetings are chaired by the Director of the Bureau, with officers from the Executive Yuan, Judicial Yuan, and National Security Bureau attending as observers.

The Board's functions include:

Integrated Combat Against Economic Crimes

Combining financial and economic, judicial, and foreign affairs powers to effectively combat economic crimes as an integrated body.

Collecting information on economic crimes through the Board as a platform, in order to take preemptive prevention measures.

Key Functions

• Discussing existing major economic crimes to distill effective counter-measures for implementation.
• Examining the pros and cons of existing financial policies and economic measures in order to showcase government authorities' participation in improvement.
• Giving recommendations to competent authorities on revisions of existing law to cover loopholes.
• Coordinating and allocation of work involving prevention of economic and financial crimes specifically assigned by superior authority.

Implementation of Prevention Work

The Board implements its work in conjunction with government policy. Such work includes "stabilization of prices and discouragement of hoarding and causing prices to rise."

To strengthen its ability to combat criminal activities that affect everyday life and thus to remove fear from ordinary citizens, the Board has formulated "Implementation Plan of Prosecution Authority on Projects Combating Economic Crimes" and "Guidelines on Implementation Plan of Taiwan High Court Prosecutor's Office on Economic Crime Projects." It has also, since the formation on November 5, 2007 of the Materials Price Project team, requested all field offices and stations to report on instances of hoarding and artificially raising prices. The Board has also worked with competent authorities with respect to administrative inspection.

Reporting Mechanism for Hoarding

Beginning on December 6, 2011, the Board has assumed the role of the Executive Yuan's "window for lodging complaints on hoarding of goods," with toll-free number 0800-007-007 as the complaint hot-line. For the purpose of increased exposure, the Board has, in addition to coordinating dissemination of information by members of the "Executive Yuan Price Stabilizing Team," also carried out posting of on-line articles on outside networks, conducting joint-promotion at the respective field offices and stations, and coordinating propaganda by public and private units.

Compilation of Annual Reports and Research on Economic Crime Prevention

Compilation of annual report on its economic crime prevention work, topical research reports and establishment of archives for ease of reference during investigation

1. Research and Preventive Measures

With regard to the existing economic situation, irregular economic activities, new types of economic crimes, and key industrial and commercial enterprises in poor financial operating status, the Board takes the initiative to compile annual reports on economic crime prevention work and topical research reports to study preventive measures for reference by superior or relevant authorities. For completed cases, the Board also conducts in-depth discussions and examines the possibility of administrative oversight or legal loopholes, as well as the possible causes for such crimes. It then proposes specific improvements in order to prevent the recurrence of such cases.

2. Electronic Archiving

The Board establishes, on a sustained basis, an electronic archive for information on new-style major economic crimes for reference during prevention and investigation.

Prevention of Corruption and Examination of Financial Instruments

Prevention of corruption and negligence and examination of large-amount dishonored checks/bills for better advance awareness of economic crimes

Financial Oversight and Crisis Management

The Board seeks to gain an in-depth understanding of the financial operations of major domestic enterprises and financial and insurance institutions that incur serious operating losses and face financial crises, in order to uncover at first hand suspected embezzlement of funds by insiders, draining of corporate funds, or involuntary winding-up.

Market Surveillance and Warning Systems

The Board seeks to strengthen its ability to provide advance warnings regarding insider trading, rigging of share prices, and irregular settlements by listed or OTC companies or specific individuals using the stock market. It also monitors the use of financial derivatives by foreign (Mainland) enterprises and financial institutions to conduct irregular stock or foreign exchange market operations, or those involving real estate.

The Board uses all types of databases to establish a complete workflow process for the selective inspection of large-volume bill returns by companies and businesses. It then derives key groups and suspected check-sale groups from its analysis and forwards them to field units for further investigation.

Studies by and Discussions with Academics and Experts on Means of Preventing Economic Crimes

The Board periodically hosts discussion forums on the prevention of economic crimes. With respect to completed economic crimes and problems uncovered during the collation of financial and economic information, the Board invites experts and academics in relevant fields, prosecutors, and officers from competent authorities to speak at forums. They conduct in-depth analyses of causes, administrative oversights, regulatory loopholes, and other issues, as well as provide response measures and recommendations for improvement. The Board consolidates all relevant information and submits its views to superior and competent authorities for reference.

Promotion of Anti-Corruption and Corporate Governance

The Board promotes the exchange of anti-corruption experience by enterprises, establishes liaison windows, and assists in the promotion of corporate governance.

Anti-Corruption Exchanges

The Bureau and its field offices and stations conduct sustained exchanges of anti-corruption experience with enterprises through visits to enterprise groups, science and hi-tech industrial parks, and industrial and commercial organizations and societies. It assists enterprises in promoting corporate governance and establishes liaison windows to foster stronger partnerships between the Bureau and businesses.

Investigation of Economic Crimes

(I) Major economic crimes

"Guidelines of the Investigation Bureau on the Determination of Major Economic Crimes" states that:

The following crimes shall be treated as major economic crimes according to the number of victims or the amount of illegal interest involved:

Classification of Major Economic Crimes

• Crimes under Article 339 of the Criminal Code; Articles 154, 155 of the Bankruptcy Act.
• Crimes under Articles 335, 336 of the Criminal Code.
• Crimes under Article 342 of the Criminal Code.
• Crimes under Article 344 of the Criminal Code.

Determination of the aforesaid crimes based on the number of victims and amount involved defers from place to place depending on the local social and economic circumstances. They are set out as follows:

• District Prosecutor's Office of Keelung, Taipei, New Taipei, Shilin, Taoyuan, Taichung, Tainan, Kaohsiung and Ciaotou: That there are more than 50 victims or the amount of illegal interest involved exceeds NTD 20 million.
• In all other cases: That there are more than 30 victims or the amount of illegal interest involved exceeds NTD 10 million.

Major Economic Crimes with Threshold of NTD 2 Million

The following crimes shall be treated as major economic crimes if the amount of illegal interest involved exceeds NTD 2 million:

• Crimes under Article 2 of the Smuggling Penalty Act.
• Crimes under Articles 41 to 43 of the Tax Collection Act.
• Crimes under Article 71 of the Business Entity Accounting Act.

Crimes under Article 22 of the Foreign Exchange Regulation Act

Major Economic Crimes Based on Economic and Financial Impact

The following crimes shall be treated as major economic crimes if, according to the social circumstances at the time, they cause harm to economic growth and damage financial stability:

• Articles 195, 196 of the Criminal Code, Article 3 of the Penal Act of Offenses Against National Currency.
• Articles 201 and 201-1 of the Criminal Code.
• Articles 339-1 to 339-4 of the Criminal Code.
• Articles 13-1, 13-2 of the Trade Secrets Act.
• Articles 95 to 97 of the Trademark Act, Articles 91, 91-1, 92 of the Copyright Act.
• Articles 171 to 174 of the Securities and Exchange Act.
• Articles 112 to 116 of the Futures Trading Act.
• Article 29 of the Multi-Level Marketing Supervision Act.
• Articles 125, 125-2, 125-3, 127-1 and 127-2 of the Banking Act.
• Articles 57, 57-1 and paragraph 1 of Article 58 of the Financial Holding Company Act.
• Articles 58, 58-1, 59 and 60 of the Act Governing Bills Finance Business.
• Article 48, 48-1, 48-2, 49, 50 and 51 of the Trust Enterprise Act.
• Articles 38-2, 38-3, 39 and 40 of the Credit Cooperatives Act.
• Articles 167, paragraph 6 of Article 168, Article 168-2 and 172-1 of the Insurance Act.
• Articles 39, 40, 44 and 45 of the Agricultural Finance Act.
• Articles 108, 109 of the Financial Asset Securitization Act.
• Articles 105 to 109 of the Securities Investment Trust and Consulting Act.
• Article 38 of the Securities Investor and Futures Trader Protection Act.
• Articles 148, paragraph 1 of Article 149 of the Consumer Debt Liquidation Regulations.

Other acts that violate economic control laws and regulations or involve irregular means such as to damage social economic order in a serious manner.

Economic Crime Prevention and Corporate Corruption

Given that the substance and means of economic crimes continue to evolve along with society and economic changes, with some even attempting to circumvent the law from the outset, careful consideration should be taken not to limit oneself strictly to existing standards for economic crimes. Indeed, any criminal activities sufficient to damage social economic interests and order—or those that, despite initially involving amounts or numbers of victims below prescribed standards, are likely to spread if not effectively suppressed—should be actively investigated to prevent their proliferation at the source.

(II) Corporate Corruption Cases

At its 3402nd meeting held on June 12, 2014, the Executive Yuan directed the Bureau to actively and preemptively prevent corporate corruption and major economic crimes. Following that, the Bureau established an Anti-Corruption Section on July 16, 2014, to strengthen its ability to investigate corruption cases. The following sets out the types of crimes involved:

1. Crimes involving the stock market:

• Manipulation of stock prices (Article 155 of the Securities and Exchange Act).
• Insider trading (Article 157.1 of the Securities and Exchange Act).
• False financial reporting (Article 20, paragraph 2 and Article 174, paragraphs 1 and 2 of the Securities and Exchange Act).
• Fraudulent placement or issuance of shares (Article 20, paragraph 1 of the Securities and Exchange Act).
• Irregular trading (Article 171, paragraph 1, sub-paragraph 2 of the Securities and Exchange Act).
• Special breach of trust and misappropriation (Article 171, paragraph 1, sub-paragraph 3 of the Securities and Exchange Act).
• Illegal private placement (Article 43.6, paragraph 1 of the Securities and Exchange Act).
• Illegal merger and acquisition (Article 43.1, Paragraphs 2 and 3 and Article 43.5, Paragraphs 2 and 3 of the Securities and Exchange Act).

2. Crimes involving financial corruption:

Articles 125.2, 127 and 127.1 of the Banking Act; Articles 57, 58 paragraph 1 and 59 of the Financial Holding Company Act; Articles 58, 60 paragraph 1 and 62 of the Act Governing Bills Finance Business; Article 48.1 of the Trust Enterprise Act; Articles 38, 38.2 and 39 paragraph 1 of the Credit Cooperatives Act; Article 168.2 of the Insurance Act; and Articles 39, 43 and 44 paragraph 1 of the Agricultural Finance Act.

3. Draining of the company's assets:

A company's staff being involved in acts under Article 342 and Article 336, Paragraph 2 of the Criminal Code.

Infringement of business secrets

(Articles 13.1 and 13.2 of the Trade Secrets Act)

Ordinary Crimes

Pursuant to the Presidential Order dated December 19, 2007 under Hua-Zong-Yi-Yi-Zi No. 09600170531, the Organic Act for the Bureau has been revised to contain 20 areas of responsibilities. Paragraph 20 of the said Act ("National security and national interest-related investigations and infrastructure security upon special orders from higher-ranking authorities") specifies that crimes which do not fall under the maintenance of national security, clean governance, and anti-narcotics are considered ordinary crimes.

Pursuit of Criminal Fugitives

The Trend of Economic Crime Fugitives

There is an increasing trend of economic crime perpetrators absconding overseas in order to enjoy their illegal gains. If they are not caught and brought to justice, they would cause serious damage to the justice and reputation of public authorities.

Coordination Team for Arrest of Economic Crime Fugitives

In May 1984, at the 26th Meeting of the "Board on Prevention of Economic Crimes," a resolution was passed to form a "Coordination Team for Arrest of Economic Crime Fugitives." The Team's composition underwent several changes over time. At present, its members include:

• Ministry of Foreign Affairs (Bureau of Consular Affairs)

Ministry of Justice (Department of International and Cross-Strait Legal Affairs)

Mainland Affairs Council of the Executive Yuan

Ministry of the Interior (National Immigration Agency)

National Policy Agency (Criminal Investigation Bureau)

The Investigation Bureau (which undertakes the secretariat work)

The Team combines the powers of the respective authorities and actively conducts the pursuit of economic crime fugitives or plans for their return. The Team has also expanded the scope of responsibility to include fugitives involved in major corruption, drugs, firearms, organized crime, and other major criminal cases.

Since January 16, 2015, the Bureau began to handle cases involving fugitives in Mainland China, Hong Kong, and Macao, with their cases being transferred to the Bureau's International Affairs Department for follow-up.

Cross-strait Joint-action against Crimes and Judicial Cooperation

(I)

Our Straits Exchange Foundation and the Mainland's Association for Relations Across the Taiwan Straits (ARATS) entered into a "Cross-strait Joint Fight against Crime and Mutual Legal Assistance Agreement" on April 26, 2009, which took effect on June 25 of the same year. Pursuant to the Ministry of Justice Order dated August 10, 2009 (Fa-Jian-Zi No. 0980803292), the Bureau was authorized to establish official liaison channels with Mainland China's Ministry of Public Security, Supreme People's Procuratorate, Ministry of Justice, the People's Bank of China's Anti-Money Laundering Bureau, and the China Anti-Money Laundering Monitoring and Analysis Center. The Bureau's Economic Crime Prevention Department serves as the secretariat for these operations. When subordinate units of the Bureau require cross-border investigation of criminal activities, they must seek assistance from Mainland law enforcement authorities through the Bureau's Economic Crime Prevention Department.

(II)

Cooperation and Exchanges for National Security and Public Safety

To maintain national security, protect the public, and effectively address cross-border criminal activities, thereby fostering peace and stability across the Strait, the Bureau has engaged in cooperation and exchanges with law enforcement authorities in the Mainland, Hong Kong, and Macao. Periodic annual visits are conducted to facilitate the following:

• Exchange of information
• Joint investigation of cases
• Repatriation of convicts and suspects in criminal cases
• Reception of prison inmates
• Briefings on restrictions regarding the personal freedom of Mainland Chinese citizens in Taiwan
• Exchange of criminal investigation and authentication techniques
• Mutual visits by officers from both sides
• Convening of academic forums, seminars, and conferences

These initiatives serve to foster mutual trust, improve understanding of joint anti-crime actions and liaison channels, and enhance the professional capabilities of both sides in investigating cases.