Sidelights | Seminar on Practical Responses in the Post-Dummy Account Era | Taichung Session

Introduction

The criminal liability for handing over dummy accounts has varied across different eras in our judicial practice. To cope with the enormous burden placed on Taiwan's judicial system by the soaring number of fraud cases, Article 15-2 of the Money Laundering Control Act (hereinafter referred to as the MLCA) regulates the act of handing over accounts, aiming to alleviate the judicial burden through case diversion. However, numerous practical issues have emerged, such as how this new provision interacts and conflicts with the old laws.

Report｜Wang Yen, Attorney-at-Law, Executive Committee Member of the Judicial Reform Foundation

• Offense of Aiding Money Laundering

1. Before the enforcement of Article 15-2 of the MLCA, judicial practice in Taiwan mostly handled the provision of accounts under Article 339 of the Criminal Code for fraud and Article 14 of the MLCA for money laundering. The Supreme Court Criminal Grand Chamber Ruling No. 3101 of the 2018 (108) year established that the act of providing accounts should be categorized as an accessory offense; for an offender with the intent to aid, this constitutes the offense of money laundering under Article 14 of the MLCA. The determination standard for aiding intent should take life experience into consideration and be determined by objective standards (Supreme Court Judgment No. 1075 of the 2022 (111) year).
2. Furthermore, because the money laundering offense under Article 14 of the MLCA carries a sentence of imprisonment for 7 years or less, pursuant to Article 41 of the Criminal Code, it cannot be commuted to a fine, but only to community service. However, based on the reporter's observation, a considerable number of defendants apply for commutation to community service. Whether the revision of Article 15-2 of the MLCA can improve this situation remains to be observed.

• Newly Added Offense of Handing Over Accounts

1. Elements: Looking at the legislative model of Article 15-2 of the MLCA—which prohibits as a rule and permits as an exception—providing accounts to others for use is prohibited in principle, unless there are other justifiable reasons. The aforementioned accounts are broadly defined, including cards, passwords, etc., and the act of "handing over to others" is prohibited. In cases with justifiable reasons as an exception, the legislative reasoning explicitly excludes applying for loans or job hunting as justifiable reasons. However, if a person is scammed and lacks subjective criminal intent, only then do they meet the criteria. Since the legislation does not positively list justifiable reasons, judicial practice must establish adjudication criteria.
2. Legal Effects: Violating paragraph 1 of Article 15-2 of the MLCA entails a warning issued by police authorities pursuant to paragraph 2 of the same Article. However, based on the reporter's observation, police authorities in practice have not fully issued warning dispositions in complete accordance with the statutory regulations. In addition, pursuant to the Regulations on Suspending and Restricting Functions or Directly Closing and Managing Deposit Accounts and Account Numbers (hereinafter referred to as the Account Closing Management Regulations) enacted pursuant to paragraph 5 of Article 15-2 of the MLCA, the restrictions can only be lifted after five years starting from the date of the warning, yet no relief mechanism is prescribed. If an offender subsequently obtains a disposition of non-prosecution or an acquittal, how should relief be sought? Moreover, how should the Account Closing Management Regulations apply concurrently with the Regulations Governing Deposit Accounts and Suspicious or Unusual Transactions?
3. Sentencing: If accounts are handed over and circumstances under paragraph 3 of Article 15-2 of the MLCA are met, a prison sentence of 3 years or less applies.
4. Application of Old vs. New Laws: Article 15-2 of the MLCA contains elements different from the old law; therefore, there are no issues regarding the application of old versus new laws or special versus general laws, and they operate separately. For the offender, in addition to the risks of aiding fraud and money laundering under the old law, there is the added risk of the dummy account offense.

Discussion｜Ch'en Hsin-lang, Chief Prosecutor of the Taichung District Prosecutors Office

Fraud cases account for over 30% of all criminal cases in Taiwan, with telecommunications fraud and dummy accounts experiencing the largest growth rates. However, in our investigative practice, the non-prosecution rate for dummy accounts is approximately 80%, meaning the prosecutorial system filters out the majority of such cases. In cases where sentences cannot be commuted to fines, prosecutors in the execution division also largely approve community service, exercising strict review of community service applications only when the criminal circumstances are relatively severe.

Although the draft proposed by the Ministry of Justice during the amendment of Article 15-2 of the MLCA differed from the legislation ultimately passed by the legislature, the legislative spirit of this provision lies in resolving evidentiary dilemmas, regulating the act of offenders handing over accounts, and requiring offenders to fulfill their duty of verification prior to handover. As mentioned above, the objective constitutive element of Article 15-2 is the handover; thus, as long as there is subjective awareness of the "handover," an offense is established. Furthermore, this provision adopts a pre-emptive legislative approach, meaning there is no issue of priority between old and new laws. The result of legal application may be:

1. Simultaneously establishing 3 offenses (aiding fraud, money laundering, and handing over accounts)
2. Establishing aiding fraud + money laundering
3. Establishing the offense of handing over accounts with criminal liability (paragraphs 1 and 3 of Article 15-2 of the MLCA)
4. Establishing the offense of handing over accounts with only administrative warning (if the police should issue a warning but fail to do so, the case may be returned)
5. No warning needed (justifiable reasons exist, such as triangular transactions, reliance based on family and friends, and other objective circumstances)

In practice, following the enforcement of Article 15-2 of the MLCA, fraud syndicates mostly evade detection by handing over 2 accounts. However, under current practical operations, even for cases under paragraph 1 of Article 15-2 of the MLCA that only require an administrative warning, because victims concurrently file charges for fraud, the cases are still referred by the police to the prosecutorial system, keeping case volumes high. The Taiwan High Prosecutors Office has promoted the National Unified Registration Project for Defendants to centralize cases for trial at the defendants' domiciles, thereby enhancing capacity and, through the Action Plan for Combating Fraud, increasing cooperation with administrative agencies to reduce crime volume.

Conclusion

Following the implementation of Article 15-2 of the MLCA, handing over accounts to others for use without justifiable reasons violates paragraph 1 of Article 15-2 of the MLCA, and an administrative warning disposition should be imposed by police authorities pursuant to paragraph 2 of the same Article. Where there is an agreement or receipt of counterparties, provision of three or more accounts, or re-offense within five years after being penalized, criminal liability of imprisonment for 3 years or less applies. Moreover, the elements of Article 15-2 are independent, presenting no issue of old versus new law application. Article 15-2 seemingly leaves the simple offense of handing over accounts to be handled by police authorities; however, in practice, victims in such cases mostly file concurrent charges for fraud, meaning the cases actually still enter the prosecutorial system. Therefore, the Taiwan High Prosecutors Office centralizes cases through the National Unified Registration Project to enhance the processing capacity of prosecutorial agencies. Meanwhile, the relief procedures for the Account Closing Management Regulations established under paragraph 6 of Article 15-2 still await clarification.