Anti-Corruption in Taiwan

By Henry Chang*, (Baker McKenzie Taiwan)

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 defences 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; 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 TWD 100 million; or

(2) performs official duties – imprisonment for a period of no less than seven years and/or a fine of up to TWD 60 million.

  • Individuals that corrupt public official to:

(1) breach his official duties – imprisonment for a period between one year and seven years and/or a fine of up to TWD 3 million; or

(2) perform official duties – imprisonment for up to three years, detention and/or a fine of up to TWD 500,000.

(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 – TWD 300,000 per political party and TWD 600,000 in aggregate

(b) For corporate donators – TWD 3 million per political party and TWD 6 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 must not exceed TWD 500. For certain special occasions, such as an engagement, wedding, promotion, retirement and other specified occasions, the value of each gift must not exceed TWD 3,000. The total value of gifts received from the same source in one year must not exceed TWD 10,000.

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 TWD 5 million – imprisonment for up to five years, detention and/or a fine of up to TWD 500,000
  • Damage of TWD 5 million or more (applicable to a director, supervisor or officer of a public company) – imprisonment for a period between three years and 10 years and/or a fine between TWD 10 million and TWD 200 million (Subparagraph 3, Paragraph 1, Article 171 of the Securities and Exchange Act)
  • Amount of TWD 100 million or more gained (applicable to a director, supervisor or officer of a public company) – imprisonment for not less than seven years and/or a fine between TWD 25 million and TWD 500 million (Paragraph 2, Article 171 of the Securities and Exchange Act)

(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.

According to the Guidelines on the Relationship between Doctors and Suppliers (醫師及廠商間關係守則) with regard to doctors attending medical conferences hosted or sponsored by suppliers, the sponsorship that doctors accept must be limited to the registration fee, travel fee and meal fee, although the doctors can accept appropriate speech fee or hosting fee. In addition, with regard to doctors accepting hospitality from suppliers, doctors must not receive cash or voucher or securities equivalent to cash, and doctors must not agree or imply that they “will” use specific medical products or transfer the patients to specific places as a result of accepting hospitality.

Each hospital may also have its own rules on the value of permissible gifts (e.g., TWD 2,000).

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

“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 TWD 3 million; or

(2) perform official duties – imprisonment for up to three years, detention and/or a fine of up to TWD 500,000

(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

Subject to 1.6 and 2.4, 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 the 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 the 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, abolished after 31 December 2016)


Baker McKenzie
15th Floor, Hung Tai Center
No. 168, Tun Hwa North Road Taipei 105
Taiwan

H. Henry Chang

Focusing on the areas of corporate compliance and technology, media and telecom (TMT), H. Henry Chang has for over 20 years acted for both domestic and multinational corporations in their cross-border work. He sits on the steering committee of the Firm’s Asia Pacific Information, Technology and Communications (ITC) Practice Group.

henry.chang@bakermckenzie.com

Tel: +886 2 2715 7259