Court declares asset seizures in two high-profile cases constitutional

12/02/2022 09:32 PM
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One of the six La Fayette-class frigates operated by the Navy, which has renamed the as the Kang Ding class. CNA file photo
One of the six La Fayette-class frigates operated by the Navy, which has renamed the as the Kang Ding class. CNA file photo

Taipei, Dec. 2 (CNA) Taiwan's Constitutional Court on Friday ruled that amended confiscation rules under the Criminal Code were constitutional following two requests for an interpretation from individuals linked to two high-profile criminal investigations.

One of the requests was made by deceased arms broker Andrew Wang's (汪傳浦) widow Yeh Shih-jun (葉秀貞) and their four children.

On July 1, 2016, the date the amended rules came into force, prosecutors requested court permission to confiscate US$960 million in assets and interest in the Swiss bank accounts of Wang's family members.

The controversy surrounding Wang stemmed from his role as a representative of France's Thomson-CSF (now Thales Group), which partnered with a French state-owned shipyard in 1991 to sell six La Fayette-class frigates to Taiwan's Navy for US$2.8 billion.

Prosecutors believe Wang doled out hundreds of millions of dollars in bribes to figures in both countries, including a US$17 million payment to former Taiwan Navy Captain Kuo Li-heng (郭力恆), who is currently eight years into a 15-year prison sentence.

After coming under suspicion, Wang fled Taiwan in 1993 for the United Kingdom, where he died in 2015, leaving millions still frozen in Swiss bank accounts.

In an effort to recover some of the funds, Taiwan passed a legal revision in 2016 that allowed a court to order the confiscation of suspected illegal profits without a criminal conviction.

Following the revision, the now-disbanded Special Investigation Division of the Supreme Prosecutors Office filed a request with the Taipei District Court to seize a total of US$960 million from Wang's widow, their four children, and three companies under their control.

The case eventually made its way to the Supreme Court, which, in 2019, approved the seizure of over US$300 million while ordering a second trial to determine the legal ownership of the remaining funds.

Following a retrial, the Taiwan High Court issued a ruling in July granting a request from prosecutors to confiscate another US$520.74 million in suspected ill-gotten assets from the family.

The Taiwan High Prosecutors Office said it uncovered US$400 million in previously unknown assets deposited into Swiss bank accounts by Wang's family members during the course of its investigation.

Wang's heirs, who claimed they had legally obtained the uncovered assets, filed an appeal against the High Court's approval of a request from prosecutors to seize the funds, while increasing the approved sum that the prosecutors could seize from the Wang family to US$487.19 million.

The Supreme Court dismissed the appeal and upheld the High Court's decision in August 2021.

The court did, however, acknowledge that the execution of the judgment would depend on the government's negotiations with the Swiss authorities.

The Constitutional Court based its ruling on Friday on Article 2 of the Criminal Code, which states that any disputes over a confiscation shall be governed by the law at the time the confiscation request is granted.

As a result, the Constitutional Court said that the approval of the confiscation did not contravene the doctrine that "the law does not operate retroactively" or legitimate expectation.

Confiscation is not a punishment because it was introduced to protect legally defined assets rather than depriving people of the property they had owned before alleged wrongdoing, the court stated.

In addition, previous confiscation rules allowed criminals or potentially complicit third parties to keep suspected ill-gotten assets permanently, which does not fit the definition of legitimate expectation, according to the court.

Former Ting Hsin Group and Wei Chuan President Wei Ying-chung (right) leaves a prison in Taoyuan in January 2021, after he was granted parole when serving a prison sentence of four years and eight months. CNA file photo
Former Ting Hsin Group and Wei Chuan President Wei Ying-chung (right) leaves a prison in Taoyuan in January 2021, after he was granted parole when serving a prison sentence of four years and eight months. CNA file photo

The Constitutional Court on Friday also declared constitutional the Intellectual Property and Commercial Court's seizure of NT$32.9 million in Wei Chuan Corp.'s revenue in connection to a cooking oil scandal.

In 2017, the court sentenced then-Wei Chuan President Wei Ying-chung (魏應充) to two years in prison on fraud charges after finding him guilty of ordering the percentage of olive oil and grape seed oil in a cooking oil sold by his firm be significantly reduced and replaced with low-cost palm oil, which constituted false advertisement.

In its request for a constitutional interpretation, Wei Chuan argued that the seizure ran counter to the doctrine that the law does not operate retroactively, given that the guilty verdict, first issued by the Taipei District Court in March 2016, predated the amended confiscation rules.

At the time of the Intellectual Property and Commercial Court's seizure of Wei Chuan's profits in April 2017, however, the new rules for confiscation had already gone into effect.

(By Lin Chang-shun, Sean Lin and Matthew Mazzetta)

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