Is Taiwan Heading into a Legal Nightmare Over the KMT’s Assets?

Is Taiwan Heading into a Legal Nightmare Over the KMT’s Assets?
Photo Credit: Reuters/達志影像
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The KMT’s ill-gotten assets may be difficult to reclaim if they have changed hands over the years, a London-based lawyer says.

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Taiwan last month passed an historic law to allow investigators to return assets acquired illegally by political parties – it will likely only apply to the opposition Kuomintang (KMT) – and return them to state coffers.

The Act Governing the Handling of Ill-gotten Properties by Political Parties and Their Affiliate Organizations will see the establishment of a special commission, which will operate under the executive branch of government, to investigate all party assets acquired since August 1945.

M. Bob Kao is a California lawyer and PhD candidate at Queen Mary University of London. He has taught law at the Judicial Yuan in Taiwan and Henan University in China.

Kao told The News Lens International that it might be difficult for investigators to reclaim assets that have passed through to different owners.

He notes that Article 6 of the law allows the commission to pursue compensation for property that has been sold off or transferred already, but Article 7 exempts situations where the buyer was innocent and unaware of the situation.

This scenario, he says, “will be difficult to determine.”

“The commission will have to try to figure this out based on, among other things, the relationship between the seller and the buyer before and since the transaction, other possible dealings, the price of the sale, the negotiation process, and whether intermediaries such as relatives and associates were used during the process,” Kao says. “Who has the burden of proof? What is the standard of proof?”

He adds that it will also “be interesting to see how well the commission functions,” given that it will be comprised of members from various parties – due to the stipulation that no one party can have more than one-third of the seats.

The KMT has pledged to use every legal instrument at its disposal, including the request for a constitutional interpretation, in order to challenge the legislation.

Kao in a recent blog post says that the decisions of the new commission can be appealed through Taiwan’s administrative court system – which has two levels, the High and the Supreme Courts.

The KMT has long been accused of exploiting its decades of one-party rule and building up a massive asset base, worth billions. The party earlier this year claimed the net worth of its assets was no more than NT$16 billion (US$500 million) – this figure is widely disputed and far below many other estimates.

▶︎ See also "A Catalyst for KMT Reform?"

First Editor: Olivia Yang
Second Editor: J. Michael Cole