Taiwan’s 2026 Anti-Fraud Law Reform: New Three-Tier Penalties for High-Value Fraud
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Amendments to Taiwan’s Fraud Crime Hazard Prevention Act took effect on January 23, 2026.
The reform represents a significant change in Taiwan’s criminal law framework. It focuses on imposing heavier penalties for high-value fraud, strengthening compensation for victims, and allowing courts to consider extravagant spending when determining sentences.
Whether you are a defendant in a fraud case, a victim, or simply interested in Taiwan’s latest legal developments, it is important to understand the key changes introduced by the new law.
This article explains the four major areas of reform.
1. New Three-Tier Penalties for High-Value Fraud
Background of the Reform
In the past, courts sometimes applied different standards when determining the amount of “criminal proceeds,” which could result in significantly different sentences even in cases involving similar fraud amounts.
To address this issue, the amended Article 43 of the Fraud Crime Hazard Prevention Act establishes tiered penalties based directly on the amount of financial loss suffered by victims.
The reform substantially lowers the threshold for enhanced punishment and increases penalties for medium- and large-scale fraud.
The New Three-Tier Penalty System
Under the amended Article 43 of the Fraud Crime Hazard Prevention Act, high-value fraud is divided into three levels.
Level 1: Victim Losses of NT$1 Million or More
Imprisonment: Three to ten years.
Fine: A fine of up to NT$30 million may also be imposed.
The previous threshold of NT$5 million has been reduced to NT$1 million, significantly expanding the number of fraud cases subject to enhanced penalties.
Level 2: Victim Losses of NT$10 Million or More
Imprisonment: Five to twelve years.
Fine: A fine of up to NT$300 million may also be imposed.
This level targets larger-scale fraud and imposes substantially heavier imprisonment and financial penalties.
Level 3: Victim Losses of NT$100 Million or More
Imprisonment: At least seven years.
Fine: A fine of up to NT$500 million may also be imposed.
This is the most severe tier for extremely large-scale fraud cases.
Special Law Takes Priority Over the Criminal Code
Where conduct constituting aggravated fraud under Article 339-4 of the Criminal Code also reaches one of the high-value thresholds under the Fraud Crime Hazard Prevention Act, the special provisions of the Act take priority.
This means that the enhanced prison terms, larger fines, stricter confiscation rules, and special parole provisions under the Fraud Crime Hazard Prevention Act may apply instead of the ordinary rules under the Criminal Code.
2. Enhanced Penalties for Aggravated Fraud and Criminal Organization Leaders
Enhanced Penalties for Using Certain Persons to Commit Fraud
Under the amended Article 44, Paragraph 1, Subparagraph 3 of the Fraud Crime Hazard Prevention Act, punishment may be increased by one-half where a person instigates, assists, exploits, or jointly commits fraud with:
■ a person under 18 years of age;
■ a person aged 80 or older; or
■ a non-Taiwanese national.
This provision targets schemes in which fraud organizations use minors, elderly individuals, or foreign nationals to operational distance or make criminal investigation more difficult.
Harsher Penalties for Leaders of Criminal Organizations
Under the amended Article 44, Paragraph 3, a person who initiates, controls, directs, or commands a criminal organization while committing an offense under Paragraph 1 may face:
Imprisonment: Five to twelve years.
Fine: Up to NT$300 million.
The purpose of this provision is to impose greater responsibility on the leaders and organizers of fraud syndicates rather than treating all participants equally.
Corporate Liability
Under the amended Article 45 of the Fraud Crime Hazard Prevention Act, where a representative, agent, employee, or other worker of a legal entity or individual commits a fraud offense in the course of performing business duties, both the offender and the relevant legal entity or individual may be subject to statutory fines.
However, liability may not apply where the legal entity or individual was itself a victim or had exercised appropriate supervision and taken reasonable measures to prevent the offense.
3. Victim Compensation and Restrictions on Luxury Spending
1. Six-Month Deadline for Full Compensation
The amended law creates stronger incentives for defendants to compensate victims promptly.
Under Article 46, Paragraph 1 of the Fraud Crime Hazard Prevention Act, a defendant who voluntarily surrenders after committing the offense and, within six months from the date of surrender, fully pays the amount agreed upon in mediation or settlement with the victim may receive a reduced sentence or exemption from punishment.
Under Article 47, Paragraph 1, where a defendant confesses during the investigation and throughout all stages of trial, and fully pays the agreed mediation or settlement amount within six months from the date of the first confession to the prosecutor, the court may reduce the sentence.
■ First, the defendant must fully pay the agreed settlement or mediation amount within six months after surrender or confession.
Partial payment is generally insufficient to satisfy this requirement.
■ Second, the amended law changes sentence reduction from a mandatory rule to a discretionary one.
This means that even if the defendant satisfies the statutory requirements, the court may still consider the overall circumstances of the case in deciding whether to reduce the sentence.
2. New Restrictions on Extravagant Spending
The amended Article 50, Paragraph 2 of the Fraud Crime Hazard Prevention Act introduces a so-called “anti-luxury” provision.
Before a fraud offender has fully compensated the victim or fully paid an agreed settlement amount, the court should pay particular attention to whether the offender has engaged in unusually extravagant spending when determining the appropriate sentence.
Relevant conduct includes:
■ 1.Purchasing, leasing, or using goods or services beyond an ordinary standard of living.
■ 2.Using transportation beyond an ordinary standard of living.
■ 3.Making investments that exceed an ordinary standard of living.
■ 4.Spending money at high-consumption venues.
■ 5.Giving or lending property to others in amounts exceeding ordinary living standards.
Maintaining monthly living expenses significantly above ordinary standards.
The purpose of this provision is to prevent offenders from continuing to enjoy extravagant lifestyles while failing to compensate fraud victims.Such conduct may be taken into account as an unfavorable sentencing factor.
4. Expanded Confiscation and Stricter Parole Requirements
1. Expanded Scope of Confiscation
Under the amended Article 48 of the Fraud Crime Hazard Prevention Act, property used to commit a fraud offense may be confiscated regardless of whether it belongs to the offender.
In addition, where there is sufficient evidence that other property or financial benefits controlled by the offender were obtained from unlawful conduct, those assets may also be subject to confiscation.
The reform therefore expands confiscation beyond property directly owned by the defendant.
It also allows authorities to pursue other assets where sufficient evidence establishes that they originated from unlawful activity.
2. Higher Parole Thresholds
Under the amended Article 49, Paragraph 1 of the Fraud Crime Hazard Prevention Act, a person serving a prison sentence for fraud who demonstrates genuine rehabilitation may generally become eligible for parole only after serving more than two-thirds of the sentence.
For repeat offenders, more than three-quarters of the sentence must generally be served.
Parole is not available where:
➡︎ fewer than six months of imprisonment have been served; or
➡︎ a repeat fraud offender commits another fraud offense within the statutory period after parole, completion of imprisonment, or pardon, where the conditions specified by law are satisfied.
For ordinary fraud offenders, the parole threshold has increased from one-half to more than two-thirds of the prison term.
For repeat offenders, the threshold has increased from two-thirds to more than three-quarters.Certain repeat fraud offenders may be completely ineligible for parole under the new rules.
3. Practical Impact of the New Law
If you are accused of fraud, the amendments may significantly affect your case.
■ First, prison sentences may be substantially heavier. Where victim losses reach NT$1 million, the minimum sentence may be three years. Where losses reach NT$10 million, the minimum may increase to five years.
■ Second, parole is more difficult to obtain. Defendants may need to serve a greater proportion of their sentences before becoming eligible.
■ Third, timely compensation has become more important. Defendants seeking sentence reductions may need to fully pay agreed compensation within the statutory six-month period.
■ Fourth, extravagant spending before compensating victims may negatively affect sentencing.
4. Impact on Fraud Victims
The amendments also provide stronger protection for victims.
■ First, offenders face heavier penalties, which may strengthen deterrence.
■ Second, the new law provides stronger incentives for defendants to compensate victims promptly.
■ Third, the anti-luxury provision allows courts to consider extravagant spending by offenders who have not yet compensated their victims.
5. Broader Impact
The reform is expected to significantly change criminal litigation and compliance strategies in fraud-related cases.Lawyers handling fraud cases must now assess compensation timing, sentencing exposure, confiscation risks, and parole consequences much earlier in the proceedings.
Businesses and organizations should also review internal compliance systems to reduce the risk of liability arising from fraudulent conduct by employees or representatives.
Q1. Does the New Law Apply to Fraud Committed Before the Amendments Took Effect?
Under Article 2, Paragraph 1 of the Criminal Code, criminal laws generally do not apply retroactively where they are less favorable to the defendant.
Accordingly, harsher provisions introduced by the amendment generally do not apply to conduct committed before the amendment took effect.
If a later law is more favorable to the defendant, however, the more favorable law may apply in accordance with Taiwan’s principle of applying the law most favorable to the accused.
Q2. What Should I Do If I Am Accused of Fraud?
■ First, seek legal advice as early as possible.
An experienced lawyer can assess the evidence, potential sentencing exposure, and available defense strategies.
■ Second, where appropriate, consider mediation or settlement with the victim as early as possible.
Full compensation within the statutory period may be relevant to sentence reduction.
■ Third, avoid unnecessary extravagant spending before compensation has been completed, as such conduct may negatively affect sentencing.
Q3. Does the Anti-Luxury Provision Mean a Defendant Cannot Spend Any Money?
No.
The provision targets spending that exceeds an ordinary standard of living.
Ordinary daily expenses such as food, clothing, housing, and necessary transportation are not automatically prohibited.
However, purchases of luxury goods, expensive vehicles, high-end entertainment, or other unusually extravagant spending may be taken into account by the court.
Q4. What Happens If a Fraud Offender Commits Another Fraud Offense After Parole?
Repeat fraud offenses may lead to substantially stricter parole restrictions.
Depending on the offender’s prior convictions and the timing of the new offense, the person may face a higher parole threshold or may become ineligible for parole under the Fraud Crime Hazard Prevention Act.
5. How Chien Sheng International Law Firm Can Help
The 2026 amendments to the Fraud Crime Hazard Prevention Act significantly affect every stage of a fraud case, including investigation, defense strategy, settlement, sentencing, confiscation, and parole.
Whether you are accused of fraud, are a victim, or represent a business facing fraud-related compliance risks, understanding these changes is increasingly important.
For Defendants
Chien Sheng International Law Firm can help assess:
■ the applicable fraud offense and sentencing range;
■ whether the high-value fraud provisions apply;
■ potential defense strategies;
■ opportunities for sentence reduction;
■ mediation and settlement options; and
■ confiscation and parole risks.
Chien Sheng International Law Firm has extensive experience handling fraud and major criminal cases and closely follows developments under Taiwan’s Fraud Crime Hazard Prevention Act.If you are facing a fraud investigation, prosecution, victim compensation issue, or corporate compliance concern, our attorneys can evaluate the applicable law and develop an appropriate strategy based on the specific circumstances of your case.
Chien Sheng International Law Firm provides professional legal services in criminal defense and family law.Our attorneys regularly handle fraud, drug-related offenses, domestic violence matters, and other complex criminal and family cases.We are committed to providing practical legal strategies and protecting our clients’ rights throughout investigation, prosecution, and court proceedings.
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