Chapter 1 General Provisions
This Act is enacted to achieve a sound management of pawn business and serves as operation guidance. The regulations of other laws shall apply to those matters not regulated by this Act.
The competent authority hereinafter used in this Act refers to the Ministry of the Interior at the national level, municipal government at the municipal level and the county (city) government at the county (city) level.
The terms hereinafter used in this Act are defined as follows:
1. Pawnshop: the company or business exclusively engaging in pawn business after having obtained a license according to this Act.
2. Pawnbroker: the person in charge of pawnshop according to the Company Act or Business Registration Act.
3. Pledgor: a person pledging his property as security for a loan from a pawnshop.
4. Pawning: the act of a pledgor pledging his property as security for a loan from a pawnshop and paying interest.
5. Pawn transaction: the act of a pawnshop lending money to a pledgor on the security of pledged items.
6. Repawn: the act of a pawnshop pledging the pledged items which has accepted as security for a loan from another pawnshop.
7. Redemption: the process of redeeming pledged items from a pawnshop after having settled a debt.
8. Pledged items: a tangible personal property provided by a pledgor to a pawnshop as security for a loan.
9. Unredeemed pledged items: the pledged items not redeemed or not extended for a continuous pawning within 5 days following the original maturity date.
10. Pawn ticket: the receipt issued to a pledgor for safekeeping after the goods in pawn and with which to redeem the item later.
11. Amount of cash advanced: the amount of money loaned to the pledgor by a pawnshop after pledged items appraised.
12. Maturity date: the last day originally fixed to redeem pledged items.
Chapter 2 Registration and Management
Any person, before opening the business of running a pawnshop, shall file an application with an application form to the local competent authority for establishment. However, none of the pawnshop branches are allowed to be established.
The application form prescribed in the preceding paragraph shall be specified with the following:
1. The name of the company or business.
2. The name of the pawnbroker.
3. The location of the business facility and the storeroom where pledged items are stored and its security equipment.
4. Aggregate limits of liability insurance and a summary of the insurance policy.
5. Registered capital.
The name prescribed in the subparagraph 1 of the preceding paragraph shall include the word “Pawnshop.”
The number of pawnshops approved to be established is based on the criterion that an additional pawnshop may be established each time when the local population increases by 30,000 people for the first year and 20,000 people from the second year in the municipality, county (city) after this Act is enforced. The pawnshops whose establishment has already been approved by the competent authority prior to the enforcement of this Act, however, will not be included in the calculation.
The application for establishment as prescribed in the paragraph 1 shall be reviewed and approved by the local competent authority before issuing an establishment permit.
The applicant who has been granted an establishment permit shall complete the establishment by a given deadline and report to the local competent authority for inspection. If the inspection is satisfactory, a license will be issued to the applicant, who shall complete company or business registration within six months after obtaining the license.
If the inspection is not satisfactory and the applicant fails to make an improvement and apply for re-inspection by a given deadline, the establishment permit shall be revoked by the local competent authority.
If the establishment, business registration or improvement for pawnshop as prescribed in the preceding two paragraphs cannot be completed by a given deadline on a justifiable ground, the applicant shall apply for an extension with specific excuses to the local competent authority, but the extension is limited to only one time.
If the pawnbroker fails to comply with paragraph 6 to complete registration within six months and apply for extension within six months or fails to complete registration after having applied for extension, the local competent authority shall revoke the license.
The operating procedures for application review, permit issuance review, inspection, approval, and revocation as prescribed in paragraph 1, paragraph 2, and paragraph 5 to 7 shall be regulated by the national competent authority.
Any person with one of the following conditions may not serve as the pawnbroker of a pawnshop. If they have already served as the pawnbroker, they shall be relieved of their positions and the competent authority shall notify the authorities governing businesses or companies to revoke registration of the pawnbroker.
1. A person who has ever violated the provisions of the Organized Crime Prevention Act and has been finally convicted.
2. A person who has ever violated the provisions of the Anti-Corruption Act and Money Laundering Control Act, or committed larceny, grab and snatch, robbery, kidnapping, offenses relating to stolen goods, fraud, breach of trust, embezzlement or usury and has been finally convicted, has not served the sentence yet, has not finished serving the sentence or has finished serving the sentence for less than five years.
3. A person who declared bankruptcy has not been reinstated yet.
4. A person whose checks are still dishonored.
5. A person used to be a pawnbroker and his/her license was revoked for violation of the Article 28 of this Act.
If the license is damaged or lost, an application shall be submitted to the local competent authority for renewal or reissuance within 15 days.
Prior to its dissolution, discontinued operation, or after its license is revoked, the pawnshop shall submit its license and establishment permit to the local competent authority to be cancelled.
The minimum registered capital required for a pawnshop shall be stipulated by the national competent authority.
A pawnshop shall have a fixed business facility and storeroom to store pledged items. The standards for establishing the abovementioned facilities shall be regulated by the national competent authority.
A pawnshop shall run its pawn business at the registered business facility and store pledged items at the registered storeroom.
In the event that the storeroom used to store pledged items as prescribed in the preceding paragraph needs to be added to meet the operational needs, the additional ones may be built with prior reporting to the local competent authority.
A pawnshop shall act as a good-will manager to keep the pawned items and not to repawn them.
Any pawnshop, after having started its business operation, planning to change the following information shall apply to the local competent authority for license change:
1. The name of the company or business.
2. The pawnbroker.
3. The location of the business facility, the storeroom where pledged items are stored, and security equipment.
4. Aggregate limits of liability insurance and a summary of insurance policy.
5. Registered capital.
When a pawnshop plans to discontinue its business for more than a month, it shall submit the discontinuation application to the local competent authority for review. The pawnshop shall follow similar procedures before resuming the business.
In the event that there are pledged items yet to be redeemed prior to the discontinuation of the business prescribed in the preceding paragraph, the pawnshop shall notify the pledgors five days prior to the discontinuation and shall not charge interest during the discontinuation period, and shall extend the date for as long as the discontinuation.
A pawnshop shall post the following information in a conspicuous area at its operation site:
2. Name of the pawnbroker or the clerk.
3. Annual interest rate.
4. Interest rate formula.
5. Business hours.
The annual interest rate prescribed in subparagraph 3 of the preceding paragraph shall not exceed 30%.
A pawnshop shall purchase liability insurance from insurance companies approved by the Financial Supervisory Commission. The aggregate limits of insurance shall be determined jointly by the national competent authority and the Financial Supervisory Commission.
The liability insurance prescribed in the preceding paragraph shall be purchased prior to the commencement of the business operation and shall continuously remain effective.
When a pawnshop experiences force majeure disasters that result in damage or destruction to pledged items, it shall notify pledgors immediately, prepare a detailed list of the affected items and inform the local competent authority, the insurance company, and the local pawnshop association for a joint inspection. The remaining pledged items shall be sealed and handled according to an agreement reached by the affected parties.
If the pawnshop and the pledgor have had an agreement that the pledgor shall waive his/her right to claim damages when pledged items are destroyed, damaged, or stolen for reasons attributable to the relevant parties, the agreement shall be void.
A pawnshop shall prepare a pawn ticket that must specify the following information:
1. The name, quantity, and characteristics of the pledged items.
2. The amount of money advanced.
3. The interest rate and required cost.
4. Maturity date.
5. The name and the number of national ID, driver’s license, passport, or Alien Resident Certificate of the pledgor.
6. The license number and address of the pawnshop.
7. Procedures to be followed in case of losing this pawn thicket.
8. Contents of the liability insurance policy.
9. Other requirements imposed by other competent authorities.
The pawn ticket prescribed in the preceding paragraph shall have a duplicate. The original ticket shall be given to the pledgor while the duplicate one shall be kept for record. All tickets shall be numbered and used sequentially.
Chapter 3 Operation Management
When a pawnshop accepts an item to be pawned, it shall verify the pledgor’s ID and have the pledgor affix his/her fingerprint on the duplicate copy of the pawn ticket.
The fingerprint prescribed in the preceding paragraph shall be a clear rolled fingerprint of the left thumb. If the left thumb is incomplete, another digit of either hand shall be affixed and the name of the finger shall be specified unless the pledgor does not have any digits.
No pawnshop shall accept the following items:
2. Securities or various deposit certificates.
3. Institutional seals or other property managed by government agencies.
4. Police and military uniforms and other accessories.
5. Government-issued licenses and certificates and personal identity documents.
6. Other items whose trading is prohibited and restricted by the government.
When a pawnshop finds any items prescribed in subparagraph 1, 3, 4, and 6 of the preceding paragraph or other illicit items, it shall report its findings to the local police authority.
No pawnshop shall accept items from people without legal capacity or with limited legal capacity. This restriction shall not apply to people with limited legal capacity if they have consent from the legal representatives.
A pledgor with a pawn ticket shall be entitled to redeem the pledged items at any time during business hours before the maturity date. To redeem a pawned item, the pawn ticket shall be returned to the pawnshop and the pledgor shall indicate that the pawned item has been redeemed on the duplicate ticket.
The pledgor shall notify the pawnbroker of a lost or damaged pawn ticket. If the pledgor fails to do so, the pawnshop will not be held liable for compensation in the event that the pledged items have been redeemed by a third party with the pawn ticket.
When the pledged items are redeemed within a month, the interest and fees shall be charged for one month.
There will be no charge for the first five days after one month. When it is more than five days, an additional half month of interest and fees will be charged. When it is more than fifteen days, an additional month of the interest and fees will be charged. Interest and fees, however, shall not be deducted in advance.
A pawnshop shall not collect fees other than interest and storage cost.
The storage fees prescribed in the preceding paragraph shall not exceed 5% of the amount of money advanced.
The maturity date given by a pawnshop shall not be shorter than three months. When it is shorter than three months, it shall be regarded as three months. It is allowed to redeem the pawned item or pay off the interest to extend the maturity date within five days after the loan period expires. Failure to redeem the pawned item or extend the expiration date within five days after the expiration, the ownership of the pledged item shall be transferred to the pawnshop.
A pawnshop shall prepare its own registration book that records information about the pledgors and pawned items. Two photocopies of the records shall be submitted to the competent authority for reference every two weeks.
When pawned items are five days past the maturity date and are not redeemed or the maturity date has not been extended, a detailed list of unredeemed items shall be made and be sent to the competent authority for inspection.
The unredeemed items may be auctioned or displayed for sale.
The local police authority may inspect pawnshops, if it is considered necessary.
When a pawnshop suspects the identity of the pledgor or the item to be pawned, it may refuse to accept the item and shall report it immediately to the nearby police authority.
When a pawnshop receives lost and found data from police, it shall carefully check it against the pawned items in its inventory. In case of finding similar or suspicious ones, it shall notify the nearest police authority immediately.
When a pledged item accepted by the pawnbroker or the clerk of a pawnshop in accordance with the provisions of this Act is found to be stolen, the owner of the item may redeem it with the original pawned value.
When a pledged item accepted by the pawnbroker or the clerk of a pawnshop not in accordance with the provisions of this Act is found to be stolen, it shall be returned to the original owner free of charge. If the original owner has already redeemed the stolen item, the money he/she has paid shall be refunded.
Chapter 4 Penalty
When a pawnshop is run without a license or with a revoked license or established branches without permission, discontinuation of the business shall be ordered and the pawnshop shall be fined between NT$ 30,000 and NT$ 150,000.
When a pawnshop violates the provisions of Article 22, it shall be fined between NT$ 20,000 and NT$ 100,000 and shall remedy the violation by the given deadline. Having failed to do so, it shall be subject to continuous fines and, if necessary, suspension of business operation or revocation of the license.
Pawnshops circumventing, obstructing, or refusing inspection as provided in Article 23 shall be fined between NT$ 20,000 and NT$ 100,000 .
Pawnshops which violate Article 5, 15, or 16 shall be fined between NT$ 20,000 and NT$ 100,000.
Any pawnshop with any of the following conditions shall be fined between NT$ 10,000 and NT$ 50,000 and shall remedy the violation by the given deadline. Having failed to do so, it shall be subject to continuous fines
1. Violation of the provisions in paragraph 1 of Article 8 for not establishing a fixed operation site or storeroom or violation of Article 9 for not applying for change in license.
2. Violation of the provisions in Article 11 for not posting the said information.
3. Violation of the provisions in paragraph 2 of Article 12 for canceling an insurance policy.
4. Violation of the provisions in Article 14 for failure to prepare pawn tickets or using an improper format.
Pawnshops with any of the following conditions shall be subject to a fine between NT$ 10,000 and NT$ 50,000 :
1. Violation of the provisions in paragraph 4 of Article 8, paragraph 2 of Article 10, or Article 19 to 21.
2. Violation of the provisions in paragraph 1 of Article 13 for failure to notify the pledgor, to prepare a detailed list, to notify the competent authority for a joint inspection, or to seal remaining pawned items.
Pawnshops with any of the following conditions shall be subject to a fine between NT$ 6,000 and NT$ 30,000
1. Violation of the provisions in paragraph 1 of Article 6 for failure to apply for license renewal or reissuance.
2. Violation of the provisions in paragraph 1 of Article 10 for failure to submit an application for review prior to suspension or reinstatement of the business.
The fines prescribed in this Act shall be administered by the local competent authority.
Failing to pay the fine as prescribed in the preceding paragraph after having been imposed a deadline, the pawnshop shall compulsorily submit to an enforcement of the unpaid fine in accordance with the law.
Chapter 5 Supplementary Provisions
Pawnshops that have been licensed or have registered prior to the enforcement of this Act shall prepare the original license to apply to the local competent authority for license renewal within two years after the effective date. Their registered capital and liability insurance shall comply with the provisions as prescribed in this Act.
Failure to comply with the provisions prescribed in the preceding paragraph shall be subject to revocation of the license previously issued.
Provisions promulgated herein in this Act shall apply to public pawn institutions that have been established by respective municipal governments prior to the effective date of this Act. Any additional establishment of public pawn institutions shall not be allowed.
The public pawn institutions as prescribed in the preceding paragraph shall be responsible for all profits and losses and shall not cover the costs of personnel, business operation, and rent with government budgets
The fees for issuance, renewal and reissue of a pawnshop’s license shall be determined by the national competent authority.
The formats of various forms prescribed herein are to be regulated by the national competent authority.
This Act shall come into force from the date of promulgation.
The effective date of the amended articles of this Act on November 07, 2008 shall be determined by the Executive Yuan.