Anti-Corruption In Taiwan

Legal News & Analysis - Asia Pacific - Taiwan - Regulatory & Compliance

9 September, 2016

 

1. Domestic bribery (private to public)

 

1.1       Legal framework

 

Bribery of public officials is regulated under Taiwan’s Anti-Corruption Act, Articles 4, 5, 6, 11; and Criminal Code, Articles 121, 122, 123, 131. The provisions in the Criminal Code dealing with anti-corruption and the defenses thereof are similar to those contained in the Anti-Corruption Act. However, bribing a public official to perform his official duties is not punished under the Criminal Code. When both the Anti-Corruption Act and the Criminal Code apply, the former, being a specialized law, shall govern.

 

1.2       Definition of bribery

 

Bribery can be committed both by public officials receiving and by private individuals who try to bribe a public official.

 

Bribery: ” . . . to offer, promise or give a bribe or other unjust benefits to a public official to perform his official duties or to procure a breach of his official duties.” Article 11 of the Anti-Corruption Act.

 

1.3       Definition of public official

 

The Taiwan Criminal Code has a broad definition of public official, and it includes those who serve an organization of the state or a local autonomous body with legal function and authority and others engaged in public affairs with legal function and authority, and those who, entrusted by an organization of the state or a local autonomous body, are engaged in the public affairs within the authority of the entrusting organization.

 

1.4       Consequences of bribery

 

(a)        For the individuals involved

 

The Anti-Corruption Act and the Criminal Code establishes different penalties for the public officials receiving and the individuals that bribe public officials. The penalties are as follows:

Public official who:

 

(1) breaches his official duties – imprisonment for life or a period of no less than 10 years and/or a fine of up to TWD100 million; or

 

(2) performs official duties – imprisonment for a period of no less than seven years and/or a fine of up to TWD60 million.

Individuals that corrupt public official to:

 

(1) breach his official duties – imprisonment for a period between one and seven years and/or a fine of up to TWD3 million; or

 

(2) perform official duties – imprisonment for up to three years, detention and/or a fine of up to TWD500,000.

 

(b)        For the company/legal entity

The Anti-Corruption Act and the Criminal Code do not provide for any corporate offense against the legal entity.

 

1.5       Political contributions

 

Contributions to political parties are regulated under the Political Donations Act. In general terms, contributions to political parties are allowed if they do not exceed a certain amount per year:

 

(a) For individual donators – TWD300,000 per political party and TWD600,000 in aggregate

 

(b) For corporate donators – TWD3 million per political party and TWD6 million in aggregate

 

1.6       Limitation applicable to hospitality expenses (gifts, travel, meals, entertainment, among others)

 

Hospitality accepted by a public official may only be allowed in the limited circumstances stipulated in the Integrity and Ethics Guidelines for Public Officials (公務員廉政倫理規範) (the “Guidelines”). Pursuant to the Guidelines, generally, the value of each gift should not exceed TWD500. For certain special occasions, such as an engagement, wedding, promotion, retirement and other specified occasions, the value of each gift should not exceed TWD3,000. The total value of gifts received from the same source in one year shall not exceed TWD10,000.

 

2. Domestic bribery (private to private)
 

2.1       Legal framework

 

Private bribery is regulated under the Taiwan Criminal Code, Article 342, and the Securities and Exchange Act, Article 171, paragraphs 1 and 2.

 

2.2       Definition of private bribery

 

Private bribery: “A person who manages the affairs of another, with intent to procure an illegal benefit for himself or for a third person or to harm the interests of his principal, acts contrary to his duties and thereby causes damage to the property or other interest of the principal.” Article 342 of the Criminal Code.

 

2.3       Consequences of private bribery

 

(a)        For the individuals involved

 

Damage of less than TWD5 million – imprisonment for up to five years, detention and/or a fine of up to TWD500,000

 

Damage of TWD5 million or more (applicable to a director, supervisor or officer of a public company) – imprisonment for between three years and 10 years and/or a fine between TWD10 million and TWD200 million

 

Amount gained TWD100 million or more (applicable to a director, supervisor or officer of a public company) –

imprisonment for not less than seven years and/or a fine between TWD25 million and TWD500 million 

 

(b)        For the company/legal entity

 

The Criminal Code and the Securities and Exchange Act do not provide for any corporate offense.

 

2.4       Limitation applicable to hospitality expenses (gifts, travel, meals, entertainment, among others)

 

The Criminal Code and the Securities and Exchange Act do not establish quantitative nor qualitative limitations on

hospitality expenses. Whether a hospitality expense could be considered bribery will need to be determined on a case-by-case basis, taking into account the facts and circumstances surrounding the case.

 

3. Corruption of foreign public officials
 

3.1       Legal framework

 

Corruption of foreign public officials is regulated under the Taiwan Anti-Corruption Act, paragraph 3, Article 11.

 

3.2       Definition of corruption of foreign public officials

 

Corruption of foreign public officials means to offer, promise or give a bribe or other unjust benefits to a foreign public official to perform his official duties or to procure a breach of his official duties in relation to international trade, investment or other business activities.

 

3.3       Definition of foreign public official

 

A foreign public official means a public official (as defined in the Criminal Code) in a foreign country, PRC, Hong Kong or Macau.

 

3.4       Consequences of Corruption of foreign public officials

 

(a)        For the individuals involved

 

Individuals that corrupt foreign public officials to:

 

(1) breach his official duties – imprisonment for a period between one year and seven years and/or a fine of up to TWD3 million; or

 

(2) perform official duties – imprisonment for up to three years, detention and/or a fine of up to TWD500,000.

 

(b)        For the legal entity

 

The Anti-Corruption Act does not provide for any corporate offense.

 

3.5       Limitation applicable to hospitality expenses (gifts, travel, meals, entertainment, among others)

 

The Anti-Corruption Act does not establish quantitative nor qualitative limitations on hospitality expenses. Whether a hospitality expense could be considered bribery will need to be determined on a case-by-case basis, taking into account the facts and circumstances surrounding the case.

 

4. Facilitation payments

 

The Anti-Corruption Act, the Criminal Code and the Securities and Exchange Act do not make exceptions for so called facilitation payments.

 

5. Compliance programs
 

5.1       Value of a compliance program to mitigate/eliminate the criminal liability for legal entities

 

The Anti-Corruption Act and the Criminal Code do not provide for any corporate offense relating to compliance programs.

 

5.2       Absence of a compliance program as a crime

 

The Taiwan Anti-Corruption Act and Criminal Code do not recognize the absence of having a compliance program as a crime.

 

5.3       Elements of Compliance Program

 

(a)        Legal framework

 

The Taiwan Anti-Corruption Act and Criminal Code do not recognize or regulate the elements of a Compliance Program.

 

(b)       Recommended practice

 

N/A

 

6. Regulator with jurisdiction to prosecute corruption

 

The Ministry of Justice, which has established the following supporting offices, has jurisdiction to prosecute corruption:

 

(a) Agency against Corruption (廉政署)

(b) Investigation Bureau (調查局)

(c) Prosecutors Office (檢察署)

(d) Special Investigation Division of the Supreme Court Prosecutors Office (最高法院檢察署特別偵查組)

 

 

For further information, please contact:

 

H. Henry Chang, Baker & McKenzie

henry.chang@bakermckenzie.com