Banks instructed to freeze 'high-risk' accounts of departed foreigners

Taipei, Feb. 3 (CNA) Taiwan's financial regulator has instructed banks to freeze suspected mule accounts held by foreign nationals who depart under certain circumstances, provided a review deems the action necessary to prevent fraud, an official confirmed Tuesday.

Bank accounts registered to foreign nationals who leave Taiwan under one of four designated scenarios will be flagged as high-risk for potential misuse as mule accounts, an official with the Financial Supervisory Commission (FSC) told CNA.

The situations include departing after the expiration or early termination of a work contract, being reported as missing or absconding, or being detained for illegal entry or unlawful employment, according to the official, who requested anonymity.

Starting in January, banks have been required to cross-reference accounts against a list of departed foreign nationals provided by the National Immigration Agency (NIA) and may exercise discretion to freeze those accounts following a review, the official said.

While the policy applies to all foreign nationals, in practice it is primarily aimed at migrant workers from Southeast Asian countries, in response to reports of fraud rings using the accounts of workers who have departed Taiwan to commit crimes.

The FSC's efforts to tackle this issue date back to at least 2024.

At a legislative meeting in April that year, Kuomintang (KMT) lawmaker Lai Shyh-bao (賴士葆) urged the FSC to mandate account closures for departing migrant workers, citing reports that some were selling their accounts before returning home.

At the time, the FSC expressed reservations, as the Ministry of Labor had noted concerns that migrant workers might still need their accounts after leaving Taiwan to receive payments such as tax refunds and government subsidies.

To address this issue, the FSC said Tuesday that outstanding payments can be issued via cashier's checks and delivered through labor brokerages, ensuring workers can receive their funds even after their Taiwan bank accounts have been frozen.

When asked how quickly accounts would be frozen after a holder leaves Taiwan, the FSC official did not provide a specific timeline, noting that the speed of account freezes depends on cross-referencing NIA lists and fraud risk reviews.