Taiwan, China find common cause – in battling organized crime

The Chinese government has launched a crackdown on international phone fraud rings, and its implications are posing a new challenge to Taiwan’s claim to independence.

The fraud rings, operating from around the globe, are Taiwanese. Their victims are mostly mainland Chinese. Beijing is using its economic and political clout to insist that mainland courts have jurisdiction in such cases. And Taiwan appears to be bowing to that demand.

When Kenya deported 45 Taiwanese fraud suspects last month, sending them not home but to Beijing, the government in Taipei cried kidnap. But when Malaysia last Saturday sent a separate group of Taiwanese suspects to China, the government here changed its tune, nodding its support.

In a press statement, Taiwan’s cabinet said it looked “positively” at Beijing’s invitation to cooperate on the case.

The turn from anger to tentative acceptance reflects a growing recognition in Taiwan that local criminals have fanned across the world, and that Beijing can help stop them.

Nathan Liu, an international affairs professor at Ming Chuan University in Taiwan, says that most people believe that mainland China should be allowed to punish the criminals.

But the diplomatic price would seem to be high. “Of course if China has jurisdiction over these cases, that means Taiwan is not an independent country at all,” says Shane Lee, political scientist at Chang Jung Christian University in Taiwan.

Beijing claims sovereignty over Taiwan despite seven decades of the island’s self-rule. By that logic, it says, Taiwanese citizens are Chinese so they are subject to the mainland’s jurisdiction.

Kenya and Malaysia, which maintain diplomatic ties with Beijing, not Taipei, appear to have been persuaded by this argument. And public anger here about the fraud rings, who preyed on local citizens for years before venturing abroad, means people are readier to cede jurisdiction to China than they might normally be.

“Taiwanese really hate these people. We’ve gotten [fraud] calls like that. We have fresh experience,” Mr. Liu says. Taiwan’s public will probably accept China’s prosecution of local fraudsters under its tough criminal code and hope China’s role inspires a stiffening of local laws, he adds.

Mainland courts can hand down life sentences for fraud, while the punishment in Taiwan ranges from one to five years imprisonment. Many Taiwanese find such terms too light, political experts say. 

Phone fraud emerged in Taiwan around the turn of the century, with a boom in new household telephone lines. Criminals would call random numbers, claiming, in one scam, to be government officials and telling victims their national health insurance files had been stolen. Only by transferring funds to a “safe” government account could their case be resolved.

Publicity campaigns warning about such scams, and a complaints hotline to the police, helped cut peoples’ losses from a peak of $575 million in 2006 to a fifth of that last year, according to a police spokesman.

The criminals have now turned their attention to fresh pastures on the mainland, according to Chinese police. Phone fraudsters cheat mainland Chinese out of hundreds of millions of dollars a year, the state-run China Daily newspaper reported recently; Taiwanese suspects account for about half the caseload, the report said.

The fraud networks, which are backed by organized crime, spread internationally after 2009, when China and Taiwan signed a pact to share information on criminal cases,  says Liao You-lu, a criminal investigation professor at the Central Police University near Taipei.

The fraud rings now operate from 25 countries, targeting mainland China from Paraguay to Greece, Africa and Southeast Asia, according to a map published by the People’s Daily.

Often hiring mainland Chinese to make the calls, the fraudsters play on Chinese ignorance and fear of the authorities. Commonly, investigators say, a caller will pretend to be a Chinese policeman warning a victim that he is liable to be involved in a criminal investigation unless he pays a sum of money. 

The Chinese police recently began pressuring governments in countries from which the fraudsters operate, according to one foreign diplomat familiar with the situation, demanding that they close down the fraud networks and deliver suspects to Chinese justice.

When Malaysia sent its 20 Taiwanese suspects home last month, rather than hand them over to China, Beijing fumed because after questioning the deportees the Taiwanese police set them free for lack of evidence.

Taiwanese police can hold suspects for only 24 hours without cause and Taiwanese courts require more evidence to convict than do their mainland counterparts. Such evidence is hard to compile without close cooperation from police in the country that has deported suspects; that requires diplomatic relations that Taiwan does not have, since most countries recognize only Beijing as the government of China.

Just two weeks ago, Malaysia put a further 32 fraud suspects on a flight to Beijing. The Chinese government appears to have won Taiwanese approval for this move by inviting the Taiwanese police to help crack the underlying case during talks in Beijing last month.

“Both sides working together is a good thing because both have evidence and without both there might not be enough evidence,” Mr. Liao says.

Taiwan can offer information on the background of its citizens and common methods used to cheat victims, says Chen Wen-chi, a Justice ministry official in charge of international issues. The two sides plan to work together on the Kenya and Malaysia cases and eventually form a cooperation “plan” that would cover new incidents, she says. 

Taiwanese officials, keen to avoid the impression they are outsourcing their justice system, are demanding that any Taiwanese found guilty of phone fraud abroad should serve his or her jail time in Taiwan, whichever court hands down a conviction. Beijing has yet to agree to this. 

The joint anti-fraud effort may be a last laurel for Taiwanese President Ma Ying-jeou, who since taking office in 2008 has signed a series of deals with China to assuage decades of hostility.

Taiwan’s President-elect Tsai Ing-wen, who will take office May 20, rejects Beijing’s requirement that both sides hold talks on any topic as if they are both part of “one China.” But she says she is otherwise open to cooperation if the Taiwanese people show broad support.