In Taiwan, fraud is rampant, and fraud rings regularly collect and use mule accounts to transmit the proceeds of crime. These accounts are used to create dead ends in criminal investigations and cause difficulty for law enforcement agencies in tracking the proceeds of crime. In practice, when law enforcement agencies do track down mule accounts used by fraud rings, because the proceeds of crime have often not yet been remitted into these accounts, the use of these accounts cannot be penalized.

 

To more effectively combat fraud and money laundering, the Legislative Yuan passed in its third reading amendments regarding Articles 15-1, 15-2, and 16 of the Money Laundering Control Act (the "Act") on May 19, 2023, adding criminal liability for mule accounts. The amendments on criminal liability for mule accounts are meant to deter fraud rings from using these accounts with impunity and to cut off channels for money laundering.

 

The Act's newly added Article 15-1 adopts criminal liability to penalize acts where "other people's accounts are collected" without a legitimate reason. According to the Legislature's reasoning for this provision, "collecting" refers to purchasing, receiving as a gift, or exchanging accounts, and all other related behaviors. If the collection of accounts fulfills common business or financial-transaction practices, is based on relationships of trust between relatives or friends, or is based on other legitimate reasons, these acts are considered legitimate and are not the target of punishment under Article 15-1.

 

The addition of Article 15-2 in the Act penalizes "the delivery or provision of accounts for the use of other people" without a legitimate reason. The Legislature's reasoning for this amendment stipulates that if an actor simply provides or delivers their debit card and password to another person so that funds can be withdrawn on their behalf or provides their account number to another person so that funds can be transferred to them, these acts are not classified as delivering or providing accounts for the use of "other people" as regulated under Article 15-2. These acts are acceptable because they are confined to the actor's personal payments. "Legitimate reasons" typically refers to those reasons that fulfill common business or financial-transaction practices or that are based on relationships of trust between relatives or friends. However, "common business practices" are not fulfilled if someone delivers or provides an account or account number for use by other people when applying for a loan or during job recruitment. This is because applying for a loan or participating in job recruitment only requires providing personal account number information so that loan funds or a salary can be deposited. In these cases, the delivery or provision of other items required to make payments is unnecessary.

 

Additionally, when performing their duties of business, if a representative, agent, employee, or employed personnel (e.g., a bank representative, manager, or staff member) for a legal entity collects the accounts of other people or delivers or provides accounts for the use of other people without a legitimate reason, these employed personnel will be subject to criminal punishment. Furthermore, according to the Act's newly amended Paragraph 1, Article 16, the legal entities for whom these employed personnel work will also face the criminal penalty of a fine.