Ministry of Finance Amends Law to Prevent Smuggling-Related Reward Fraud; Whistleblower Bonuses to Be Calculated Based on Actual Fines Collected

(Central News Agency reporter Tseng Yun-ting, Taipei, 14th) To prevent smuggling rings from colluding with enforcement personnel and using straw individuals to fraudulently claim rewards, the Ministry of Finance today announced partial amendments to the 'Regulations on Rewards for Reporting or Detecting Violations of Tobacco and Alcohol Regulations,' including three major measures: calculating whistleblower rewards based on actual fines collected, enabling direct recovery of fraudulently obtained rewards, and requiring enforcement agencies to establish internal control and internal audit systems.

Ma Hsiao-hui, Deputy Director-General of the Treasury Department at the Ministry of Finance, presided over a press conference today, stating that in the past, unscrupulous enforcement personnel colluded with smuggling rings, arranging straw informants and straw defendants to fraudulently claim reward money through pre-arranged violation cases. Under the current system, both enforcement agencies and whistleblowers can receive rewards according to regulations, so the Ministry of Finance has revised the system from the perspectives of whistleblowers, enforcement personnel, and agency internal controls to reduce incentives for illegal activities.

First, regarding whistleblower rewards, the previous system calculated rewards progressively based on the number of violations in tobacco and alcohol cases. If the offender was a repeat offender, the fine increased, and the reward for the whistleblower also increased accordingly. However, Ma Hsiao-hui stated that illegal groups could arrange asset-stripped straw persons as offenders, making high fines uncollectible in practice, yet whistleblowers could still receive rewards based on the assessed amount.

Therefore, the amended regulations now use 'actual collected' fines, penalties, and the value of confiscated or seized items as the basis for calculating whistleblower rewards. Ma said that if fines are not actually paid into the treasury, rewards cannot be calculated based on non-existent revenue. However, the valuation basis for confiscated and seized items is retained to balance fraud prevention with maintaining incentives for reporting.

Additionally, if a reported case is later found through judicial investigation to lack concrete evidence and is determined to be false or untrue, the amended regulations have added a basis for recovering the reward. Ma said that in the past, if criminal wrongdoing was involved, recovering already-issued rewards required complex administrative procedures under the Administrative Procedure Act to revoke a beneficial administrative decision before demanding repayment. After the amendment, administrative agencies can directly issue administrative orders to recover rewards under the reward regulations, shortening the process.

For unscrupulous enforcement personnel, the amended regulations also add mechanisms to deny rewards and recover them. Ma stated that if enforcement personnel are involved in illegal activities, and if the conditions specified in the regulations regarding judicial procedures and outcomes are met before the reward is issued, the reward can be denied. If the reward has already been issued and the related illicit gains have not been declared forfeited through judicial proceedings, they can also be recovered through administrative orders.

In addition to strengthening fraud prevention for individuals, the amended regulations also require enforcement agencies to establish internal control and internal audit systems for reward disbursement. Ma stated that enforcement agencies, including local governments, the Coast Guard, police, and customs, must submit their reward review principles and internal control and audit systems for rewarding whistleblowers and their personnel when applying to the Ministry of Finance for rewards in the future. (Edited by Pan Yi-ching) 1150714