To enhance the fight against fraud and prevent money laundering, the Fraud Crime Hazard Prevention Act and the Money Laundering Control Act were amended and announced for implementation on July 31, 2024. On November 29, the Ministry of Digital Affairs (the MODA) announced three regulations, including the Regulations Governing the Identification and Control Measures for Customers Suspected of Fraud for Third-Party Payment Service Providers, the Regulations Governing Anti-Money Laundering and Countering the Financing of Terrorism for the Third-Party Payment Enterprises and the Regulations Governing Anti-money Laundering and Service Capacity Registration for Enterprises and Personnel Providing Third-Party Payment Services. These regulations cover fraud prevention and money laundering control, further strengthening the management norms of the third-party payment industry and protecting users’ property safety.

According to the amended Article 6 of the Money Laundering Control Act announced by the Ministry of Justice, third-party payment providers must complete service capacity registration to operate. The MODA has added regulations for money laundering prevention and service capacity registration, raising the entry threshold for third-party payment services to prevent criminal groups from entering the industry and obtaining service capacity registration qualifications. It requires that responsible persons not have records of fraud or money laundering-related criminal offenses. Third-party payment providers must establish a sound internal control and audit system and implement customer identity verification mechanisms before providing services. When applying for service capacity registration, the MODA will simultaneously initiate corporate credit checks regarding whether the company has been refused transactions, dishonored bills  (including reasons for rejections), check accounts, and movable property guarantees, strengthening the review of financial statements.

Furthermore, to prevent third-party payments from becoming tools for illegal groups to launder money, the MODA has revised the regulations for preventing money laundering and countering terrorism financing, requiring providers to regularly verify the relevant documents of substantial transactions from seller customers (such as invoices) and to affirm the actual beneficiaries of seller customers. The MODA will continue to conduct checks for money laundering prevention and counter-terrorism financing to ensure that third-party payment providers fulfill their legal obligations for money laundering prevention.

On the other hand, the Ministry of Digital Affairs has added regulations for identifying and controlling suspected fraudulent customers to combat fraud crimes comprehensively. The regulations authorize third-party payment providers to take measures such as delaying disbursement or suspending services for suspected fraudulent accounts upon receiving reports from judicial police agencies, with a maximum control period of up to two years, preventing the rapid flow of money to fraud groups and giving victims more time to retrieve money.

The MODA emphasizes that these three regulations took effect on November 30 marks an important milestone in preventing crime from the source. In conjunction with relevant money laundering prevention and fraud combat measures, the MODA aims to further enhance the safety and transparency of the third-party payment environment, making transactions more reassuring for the public. In the future, the MODA will collaborate with relevant government agencies and third-party payment providers to create a safer and more trustworthy digital payment ecosystem.