regulations governing business crime in 18 jurisdictions.
1. What trends, in terms of activity or focus, have you seen in the prosecution of business crimes in your jurisdiction in the last 12 months?
Due to the vagueness of Taiwanese criminal laws regarding what government can do for business crime proceeds, the Legislative Yuan modified the Taiwanese criminal laws in relation to confiscation. This legal development will impact multinational companies when their employees or senior officers commit business crimes for the profit of companies. This will be elaborated on below.
In addition, since the new president took office in May 2016, it appears that enforcement agencies are starting to focus on business crimes. As of 16 May 2016, the new president, Ing-Wen Tsai, announced that she will be the leader for the judicial reforms. Since the current criminal laws against business crimes are not sufficient and consistent, it is anticipated that such laws will be further discussed in the meeting of the judicial reforms. That being said, multinational companies must pay more attention to the relevant modification of the laws.
2. Are enforcement agencies particularly focused on any specific industries or crimes?
Generally speaking, Taiwanese enforcement agencies are focused on fraud, securities fraud, violation of financial laws, tax evasion, and bribery. Around 2014, they were focused on food safety issues, so many food companies were investigated and charged for relevant fraud statutes. This resulted in a change to the criminal laws in relation to the system of confiscation because the profits of the food companies could not be confiscated under the Taiwanese Criminal Code. More details about the new system of confiscation will be elaborated on below.
3. Are enforcement agencies more or less focused on pursuing cases against corporations or individuals?
In Taiwan, the criminal laws focus on individuals rather than corporations because, in general, corporate liability is not admitted as a matter of law. Although corporations can be subject to fine under many laws in relation to business crime, the enforcement agencies obviously focus on pursuing the particular individuals for their violations. However, it does not mean that enforcement agencies neglect business crimes committed by corporations. Actually, agents, employees, or seniors officers of multinational companies are always targets for business crime investigations and the subsequent criminal procedures. It is just that corporate liability will not be the main topic when such crimes are being investigated and pursued in Taiwan.
4. Does the legal framework concerning the prosecution of business crimes allow for extraterritorial enforcement? Are such matters being pursued?
The answer is YES if such business crimes fall into the scope of the Taiwanese Criminal Code. Generally speaking, the Taiwanese authorities may pursue any Taiwanese nationals who may be subject to punishment for more than three years’ imprisonment as provided for by the Taiwanese criminal laws even if the crime is not committed in Taiwanese territory. Moreover, the Taiwanese authorities may pursue any foreigner who may be subject to the same punishment provided by the Taiwanese criminal laws if the crime is not committed in Taiwanese territory. Therefore, the legal framework does allow the Taiwanese authority to prosecute certain crimes in terms of extraterritorial enforcement. However, in practice, it is rare to observe such enforcement unless such crimes generate the public attention of Taiwanese people.
In addition, like the FCPA, the Taiwanese authority may pursue bribery of a foreign official. According to Article 11 of the Taiwanese Anti-Corruption Act, anyone who bribes a public servant of a foreign nation, Chinese mainland, Hong Kong or Macao in relation to trade, investment or other business activities shall be punished under the Taiwanese Anti-Corruption Act. If the bribe is committed in return for the public servant’s performance or omission of his or her official duties, it shall be punished by imprisonment of up to seven years and no less than one year and may also be punished by a fine not exceeding NT$3,000,000. If the bribe is not committed in return for the violations of such public servant’s duties, it shall be punished by imprisonment for no more than three years and may also be punished by a fine not exceeding NT$ 500,000. However, in reality, these statutes have never been enforced after they were enacted by Legislative Yuan (Congress).
5. What judicial or legislative developments have impacted the prosecution of business crimes in your jurisdiction in the last 12 months? Are there any significant proposals for reform of the legal framework that governs business crimes in your jurisdiction?
The Taiwanese Criminal Code in relation to confiscation has been modified and enacted as of July 1, 2016. It changes the whole picture of this legal field regarding business crime. In general, it stipulates that the court may confiscate the crime proceeds whether or not they belong to the defendants. In this regard, the profits earned by multinational companies may be confiscated when the employees or seniors officers of multinational companies commit business crimes for the interests of the company. In addition, the court may confiscate such crime proceeds in the absence of a guilty verdict. That being said, the profits earned by multinational companies may be confiscated even if the defendants flee back to the U.S. or other countries. The best practice for multinational companies is to make sure their legal compliance is good enough to avoid any misconduct of their employees and senior officers. The legal practitioners believe this will be the main and the most important topic in the next few years in terms of legal compliance.
6. How common is it for enforcement agencies in your jurisdiction to exchange information and cooperate internationally with other agencies? What are the consequences of cross-border cooperation on prosecutions of entities and individuals in your jurisdiction?
Due to the unique political situation in Taiwan, it is not common for enforcement agencies to exchange information and cooperate internationally with other agencies. Most international cooperation is executed under the framework of APEC’s mutual legal assistance. In other words, the official channel for international cooperation is very limited.
The Taiwanese authorities have already noted that many international criminals in relation to fraud and money laundering cases have been using this point and the relatively free financial regulations to commit business crimes in Taiwan. However, enforcement agencies of Taiwan are well-known for the investigation of crimes which occurred in the territory of Taiwan. For example, Taiwan is the only country where the suspects of ATM heist case from all over the world were successfully caught.
7. What unique challenges do entities or individuals face when enforcement agencies in your jurisdiction initiate an investigation?
The legal frame work for the defendants is similar to the U.S. laws. The defendant has a right to silence. The defendant has a right to his attorney when he is interrogated by any police officer or prosecutor. If the defendant is indigent, the defendant will be assigned a lawyer by the Legal Aid Foundation for legal services on a pro bono basis. For foreigners, almost in every case, the Legal Aid Foundation will grant the request for a lawyer.
However, for the employees or senior officers of multinational companies, the problem is that they may not be familiar with the rights under the criminal procedure laws or the Constitutional laws. They may not be able to assert their right when the investigation starts. Problems will arise when the police officers or the prosecutors who are not good at English record the wrong statements in the transcripts, which result in guilty verdicts. Therefore, legal education for the employees or seniors of multinational companies shall be considered a very important topic.
8. Do enforcement agencies in your jurisdiction provide incentives for individuals or entities to self-report a business crime or otherwise provide assistance to the government? If so, what factors should individuals or entities consider when assessing whether to self-report a business crime or cooperate with a government investigation?
Generally speaking, the answer is NO in terms of whistle blowers. Although most business crime laws provide for sentence reduction for those people who confess, it is hard to take advantage of the whistle blowers statutes for any exemption of the punishment. That being said, most statutes in relation to business crimes, provide that people who self-report a business crime can get further sentence reduction only when the accomplice is not known to the authorities. In most cases, the chances are small since the Taiwanese authorities have already started the investigation. And people who self-report will still not get a not guilty verdict. For people who would like to self-report a business crime or cooperate with a government investigation, the key point is to consult a lawyer as early as possible. Honesty is always the best policy, but self-reporting shall be considered only when a lawyer so suggests.
9. Do enforcement agencies in your jurisdiction use non-prosecution agreements ("NPA") or deferred prosecution agreements ("DPA")? If so, how do such agreements work in practice and what can entities or individuals do to reach an NPA or a DPA with enforcement agencies? If not, do you believe it is likely that such agreements will become part of the legal framework in the next five years.
Under Taiwanese laws, both NPA and DPA exist but NPA is rarely used. It is hard to convince a Taiwanese prosecutor to use NPA for a business crime investigation because the prosecutors do not have so much discretion as compared to the prosecutors of the U.S. They have to follow the laws strictly under the Taiwanese legal framework.
In order to take advantage the DPA, the first requirement is that the crime committed shall not be very serious. Under Article 253-1 of the Taiwanese Criminal Procedure Code, it provides that DPA can be considered only when the defendant has committed an offense other than those punishable with death penalty, life imprisonment, or with a minimum punishment of imprisonment for not less than three years. The prosecutor will consider the factors specified in Article 57 of the Criminal Code and public interest for using the DPA. In this regard, the lawyer may play a very important role in assisting the defendant for the DPA by arguing with the prosecutor.