Private foreign currency exchange is illegal: lawyers

  • By Wu Sheng-ju and William Hetherington / Staff reporter, with staff writer

Exchanging foreign currency with others privately is a contravention of the Banking Act (銀行法), which could result in fines, a lawyer warned yesterday.

The act stipulates that only banks that are authorized by the government are permitted to conduct monetary transactions, including those involving foreign currencies, lawyer Ko Lin-hung (柯林宏) said.

Article 29 of the act states that “unless otherwise provided by law, any person other than a bank shall not accept deposits, manage trust funds or public property under mandate, or handle domestic or foreign remittances.”

Photo: Reuters

Those who contravene the act face a prison term of three to 10 years, and a fine of NT$10 million to NT$200 million (US$325,362 to US$6.5 million).

“Although it is considered a relatively minor crime — compared with other financial crimes like money laundering — it is a crime nonetheless, and carries potentially hefty penalties,” he said.

In some cases, if evidence shows that the suspect only infrequently exchanges currency, and only exchanges small amounts, they might be given a suspended sentence, but such an outcome is up to the judge, he said, adding that the penalties far outweigh the small potential savings of privately exchanging currency.

Keelung Police Department Deputy Police Chief Shen Jui-kun (沈瑞坤) said that those who privately exchange large amounts of currency and do so often would be specifically targeted by police under suspicion of organized crime.

“Generally speaking, if someone openly solicits foreign currency exchange services on the Internet, the police will be informed and will open an investigation,” he said.

A bank manager, who asked to be identified only by their surname, Hsieh (謝), said that privately exchanging currency also introduces the risk of being given counterfeit notes.

“The general public has little contact with foreign currencies and is not aware of the anti-counterfeit features of those currencies,” Hsieh said.

“If someone is really that concerned about transaction fees, they can speak with a bank clerk or manager who they frequently deal with to inquire about a preferential exchange rate.”

Banks often discount rates for frequent clients or those exchanging large amounts, Hsieh said.

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