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Credit insurance fee lowered to meet the needs of SMEs

2019.05.05

The Ministry of Economic Affairs has urged the CIIC Fund to pass Guarantee Fee Reduction at the most recent Standing Committee meeting. The annual fee rate will be reduced by 0.125 percentage points, that is, the minimum guaranteed handling fee rate will be reduced from 0.5% to 0.375%.  It is hoped that this will ease the financial burden of SMEs who use the credit guarantee mechanism, swiftly responding to their financing demands to reduce the credit insurance fee rate.

In order to assist new and micro-sized SMEs to upgrade, transform, take over and successfully obtain the funds needed for operation from financial institutions, the Sino-Singapore Fund also launched the “SMEs 100 billion financing guarantee project”,  this includes “microfinance expansion”. "Guarantee Measures" and "Batch Guarantee Extended Guarantee Measures" will be available until the end of 109, providing preferential financing for small and medium-sized enterprises with a paid-in capital of fewer than 30 million yuan and a profit-making business that only handles tax registration. And speed up the guarantee of the operation, with the principle of underwriting on the same day.

The "Minimum Loan Expansion Guarantee Measures" guarantees a maximum financing amount of 6 million yuan for a single business and provides a minimum of 80% guarantee. If the total credit amount is less than 500,000 yuan, the number of guarantees will be 9.5 per cent. The financial burden is guaranteed to be charged at 0.375%. In addition, speed up the review of application cases, based on the current day's underwriting principle.

"Batch Guarantee Extended Guarantee Measures", providing the same financial institution with maximum financing of 6 million yuan for a single business, raising the financial institution's compensation limit rate by 3%, and ensuring that the annual fee rate is calculated at 0.25%. The award-winning financial institution is guaranteed to receive an annual fee rate of 0.15%, and financial institutions applying for subrogation will be compensated.

In order to assist more SMEs to obtain working capital, the SME Credit Guarantee Fund has fully utilized its guarantee function since it was changed to the Ministry of Economic Affairs in 1992. It assists SMEs with insufficient collateral or lack of collateral to obtain bank financing. Approximately 1.3 trillion yuan of financing, stabilizing about 1.35 million jobs. In order to give play to the credit guarantee mechanism to promote the economic growth of the country, the Ministry of Economic Affairs actively implemented the instructions of the Executive Yuan, requiring the CIIC Fund to reduce the handling fee and increase the number of guarantees, and fully support the SMEs to improve financing issues to assist the development of SMEs.

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The U.S House of Representatives unanimously passes the “Taiwan Assurance Act of 2019”

2019.05.05

On Tuesday 7th May, the U.S House of Representatives unanimously passed the “Taiwan Assurance Act of 2019”, reaffirming its commitment to Taiwan and the implementation of the TRA. The Taiwan Assurance Act was passed with zero objections and 17 abstentions. Congress has emphasised Taiwan’s “key” role in the “Free and open Indo-Pacific Strategy” and also their commitment to strengthening Taiwan’s military capability. Additionally, Taiwan’s Minister without Portfolio told Liberty Times that the passage of Taiwan Assurance Act might “help lay the groundwork for a free-trade agreement (FTA) between Taiwan and the U.S”.

This act will advocate for Taiwan’s participation in international bodies. It is hoped that inclusion in international organisations will bolster efforts to improve global health, civilian air safety, responses to transnational crime and most notably, Taiwan’s security and its democracy. The aforementioned international bodies are the UN, the World Health Assembly, the International Civil Aviation Organization, UNESCO and Interpol.

If this legislation passes, it will require the US Secretary of State to review its current guidance regarding Taiwan and reissue any potential changes to the executive branch within 180 days of enactment. In order to foster this relationship, mutual visits between US and Taiwanese officials are encouraged, in accordance with the 2018 Travel Act.

The TRA and Six Assurances remain cornerstones of US relations with Taiwan. According to the Ministry of Foreign Affairs, the House of Representatives 273 and the H.R 2002 reaffirm U.S commitments to Taiwan and to the implementation of the Taiwan Relations Act.

As a response, China’s Foreign Ministry described the bill as a ‘gross interference” in China’s internal affairs. China has further urged the US to consider the “severe damages” to “peace and stability’ across the Taiwan Strait. The on-going trade talks could potentially impact this process; thus, it remains unclear when the Taiwan Assurance Act of 2019 might pass through the Senate.

Nonetheless, Xavier Chang, spokesman for the Taiwanese Presidential office has thanked the House for its support and states that Taiwan is committed to maintaining the “status quo” of regional peace and stability.

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Labour Standards Act and Labour Pension Act Amended to Safeguard the Right of Employees

2019.04.29

On April 26, the legislature passed the amendments to Labour Standards Act as well as the amendment to Labour Pension Act on third reading. According to the Ministry of Labour(MOL), the amendment will not only guarantee the stability of the work of dispatched labour and ensure their right to obtain wages, but protect Taiwanese workers' livelihood after retirement and strengthen the relations between workers and managements by the means of expanding the scope of application and tax incentives, increasing penalty and disclosing the name of illegal employers.

The Ministry of Labour stated that the Labour Standards Act amendments contain several provisions on the essential rights and interests of the dispatched workers for the first time, which set milestone of paramount importance for the government's goal of safeguarding the right of dispatched labours by preventing the business owners from treating them as “disposable tableware.” The MOL emphasized that protecting the right of dispatched labours is a major policy of the government authority. The work and the wage for dispatched workers could be effectively secure and stabilize as the relevant regulations are included in the Act for the first time. “This will not encourage the business to hire more dispatched worker and crowd out full-time employee”, stressed the ministry, which plans to implement administrative guidance and various measures to further secure the benefits of dispatched labours.

In the meanwhile, in order to protect the rights and benefits of workers' pensions, the parliament had enacted Labour Pension Act on July 2005, which required the management to pay at least 6% of the employee’s monthly wages as pensions. On the other hand, to encourage workers to prepare for retirement as early as possible, workers can also voluntarily pay pensions within 6% of their monthly salary and enjoy tax benefits. Until February 2019, more than 6.79 million workers have taken part in the new pension insurance. The newest amendments to the Labour Pension Act  intend to secure for the economic life of the workers after their retirement and has positive impact on the society. The focus of the amendments include:

  1. Expanding the scope of applicable objects.

The foreigners who have obtained permanent residence will be included in the application of this Regulation to guarantee the retirement life in Taiwan.

  1. Widening the applicable scope of pension tax benefits.

Self-employed operators, employers concurrently engaged in labouring services and appointed personnel who voluntarily pay the pensions in the execution of their business, can also enjoy tax incentives that encourage them to pay and accumulate retirement income early.

  1. Authorizing the labours to open the designated account.

Labours, who apply to the lump sum payout provided by the act, may present the proof of documentation the insured has issued to open a designated account at a financial institution exclusively for depositing the annuity payout. The deposit held in this designated account may not be used as the instrument for offsetting, seizure, or as guarantee or court seizure.

  1. Lengthening the statute of limitations for a personal pension claim.

The statute of limitations for the survivor or designated claimant’s pension claim extended from 5 years to 10 years after the death of labour.

5.  Strengthening the protection of labour claims.

(1) Those who violate the provisions of the Regulation and fined for administrative fine or delinquency charges, the authority will reveal the name of the employer, the owner or the trustee, the name of the person in charge, the date of the administrative injunction, the provisions which was violated and the amount of the administrative injunction.

(2) When a company fails to pay a pension or delinquency charges in accordance with the Labour Pension Act, and its property is insufficient to pay off, its representative or responsible person shall be liable for liquidation.

(3) Pensions and delinquency charges have the priority right for claim.

(4) Labour pensions are not subject to the discharge in reorganization under Company Act, the liquidation of the consumer debt under Statute for Consumer Debt Clearances, and the bankruptcy under Bankruptcy Act.

6.  Increasing penalties.

Based on Article 78 of the Labour Standards Act, employers failing to give severance pay or pensions in accordance with the criteria or timelines set forth in Labour Pension Act and Labour Standards Act shall be subject to fines between NTD$300,000 and NTD$1,500,000.

7. Cooperating with the Executive Yuan to reorganize the government institution.

The MOL will be in charged with the supervision of the labour pension fund in the future, while the Bureau of Labour Funds under the Ministry of Labour is responsible for the operation and the management of the fund.

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MOHW Responses to Medical Workers Demonstrations

2019.04.29

In reply to the protest march held by several labour unions consisted with medical workers this week, the Ministry of Health and Welfare(MOHW) said that it has undergone a number of amendments and administrative measures to improve the medical practice environment and protect the labor rights of medical personnel in recent year, which are:

1. Strictly prohibiting medical violence.

On May 10, 2017, the amendments to Article 24 and 106 of the Medical Care Act are amended to aggravate the criminal responsibility for medical violence, stipulating that no person may obstruct medical treatment by violence, coercion, intimidation, blatant insult or other illegal methods. Those on-going acts or situations shall be prevented or eliminated by the police; if criminal responsibility is involved, it shall be transferred to the judicial organ for investigation. Besides, the ministry also strives for promoting anti-hospital violence measures, implement medical violence notifications, and cooperate with the prosecutor’s investigation.

2. Promoting the reform of medical disputes to reduce medical litigation cases.

On January 24, 2018, Article 82 of the Medical Care Act are amended to clarify that medical personnel who cause damage or even death to patients because of performing medical services, the criminal liability shall be determined by the violation of the necessary duty of care and beyond the reasonable clinical professional discretion. Additionally, the ministry has the inclination to promote the Medical Accident Prevention and Dispute Resolution Act (draft) with the three major principles, which are “immediate care after the medical accident", " obligation to conduct mediation first for medical disputes", "notification of disclaimer”. The bill was reviewed on an article-by-article basis by the Legislative Council of the Legislative Yuan on May 24, 2018. The second and third reading procedures is estimated to be completed soon after the consultation of the political party in the congress.

3. Systemizing the right of employed physicians.

According to MOL, resident doctors will be subject to the Labor Standard Act in September this year. On the other hand, the MOHW has drafted amendments to Medical Care Act which augment a chapter that contains the provisions on the protection of labor rights and interests of physicians, and include work contracts, annual expenditures, occupational disaster compensation, pensions, and medical business risk protection into the bill. It is under review by the Executive Yuan and is expected to be sent to the Legislative Yuan for consideration.

  1. Putting nurse-to-patient ratios in law.

On February 1, 2019, the Article 12-1 of Standards for Medical Institutions were augmented to regulate nurse-to-patient ratios. The law stipulated the nurse-to-patient ratios shall be 1 to 9 in a medical center; 1 to 12 in a district hospital, 1 to 15 in a regional hospital. The regulation will be officially take into effect on May 1, 2019.

 

The Department of Medical Affairs under the MOHW claimed that relevant measures such as hospital evaluation and supervision by the department of health under local government will be implemented to ensure the enforcement of the protection of medical personnel’s rights and interests.

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Amendments to Patent Act Extend Protection Term for Design Patents

2019.04.22

In response to the adjustment of international intellectual property regulations to and ameliorate the practice of patent examination, the Intellectual Property Office proposed a amendment bill and it was later approved by the Executive Yuan at the end of last year. The amendments to Taiwan’s Patent Act received its third reading by the Legislation Yuan on April 16, 2019.

The main focus of the bill is the extension of the protection term for design patents to 15 years, which is expected to support the development of design industry, robust the island’s patent protection system and enhance the efficiency of reviewing patent application. In short, a total of 17 revised articles were made in this amendment. Highlights are as follows:

1. Relaxing divisional patent applications of intentions and utility models for longer duration and wider applicable scope (Article 34, 46, 71, 107, 119 & 120)

Under the previous act, divisional patent applications, only allowable for eligible inventions, shall be filed within 30 days after the original patent application is approved. The new amendment relaxes the effective application time limit to 3 months upon receiving the approval or reexamination decision. Not only inventions but utility models are subject to this relaxation.

2. Improving the efficiency of patent invalidation proceedings (Article 73, 74&77)

To avoid parties continuously complementing reasons, evidence or making corrections during the procedure and may result in undue delay, the revised provision required the grounds and evidence for invalidation must be submitted within 3 months. Any submission after the 3-month period shall not be taken into consideration. In addition, the patentee may apply for corrections during the invalidation procedure.

3. Amending regulation for filing a post-grant amendment of utility model patents (Article 118)

Since the patent application for utility models are conducted in formality examination in the first place, the provision not only adjusted the time limit for post-grant amendment of utility model patents but regulated that the amendment shall be rendered only after substantive examination.

4. Extending the term of design patents from 12 to 15 years since the filing date (Article 135

Owing to the fact that Hague Agreement Concerning the International Registration of Industrial Designs set a term of 15 years as the validity term of a design application, the new patent law revised the validity term, which is 12 to 15 years from the date of filing, to be in line with international standard.

5. Solving the problem of insufficient storage space for patent filesArticle 143

In the past, patent files must be permanently stored in the office of the competent authority; more than 2.1 million files have been accumulated to date. Due to insufficient storage space and following international practices, those without preservation value can be deleted to control the preservation of patent-related records.

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FSC to Allow Taiwanese Customers Using E-payment Aboard

2019.04.22

Recently, the Financial Supervision Commission (FSC) released an interpretive rule pursuant to Article 4I(6) of "Regulations Governing Cooperating with or Assisting Foreign Institutions in Engaging in Activities Associated with Electronic Payment Business within the Territory of the Republic of China". The interpretation stipulated that electronic payment institutions providing customers in foreign countries with the service of collecting funds through an E-payment account for real transactions conducted at physical channels belong to other related activities approved by the competent authority. That is to say, the FSC has opened online to offline (O2O) outbound business to apply for service that provides Taiwanese customers using e-payment aboard.

Previously, foreign e-payment business could provide physical channels for real transactions that allow overseas customers to use electronic payment in authorized stores in Taiwan. For instance, tourists from Mainland China could use Alipay and WeChat pay when visiting the island. These O2O Inbound business must be granted by FSC in advance.

As electronic payments such as Line Pay become more and more popular in Taiwan, FSC decided to turn green light on O2O Outbound business which benefits customers from using e-payment service, linked with Taiwanese account, in foreign countries.

According to the deputy of Banking Bureau under FSC, Li-qun Wang, the policy is initiated by the suggestion of the e-payment industry. After the revelation of administrative order, e-payment business could cooperate with their foreign counterpart and send the application to FSC. The following documents shall be enclosed with the application.

(1) The feasibility analysis explaining the reason for the electronic payment being used in that specific overseas region, the local applicable laws and regulations, and whether the plan meets the local requirements.

(2) The legal opinions issued by the local government of the overseas institution; if there is no local competent authority that supervises the O2O service, the local lawyer may issue a legal opinion on the implement of e-payment instead.

After obtaining the approval from FSC, e-payment business shall properly introduce measures to protect the right of costumes and to solve the disputes in the written agreement.

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FSC Urges TWSE to Check Independent Director Qualification Owing to Apple Sidra Disputes

2019.04.15

The head of Financial Supervision Commission(FSC), Wellington Koo, confirmed that Drinks maker Oceanic Beverage Co., Inc. was suspicious in the matter of the financial statements due to the disclaimer of opinion from the auditors. In addition, some doubt remains with regard to the qualification of independent director of this beverage cooperation.

The Oceanic Beverage Co., Inc. one of the biggest drink producers in the country, is famous for manufacturing apple-flavored soft drink, Apple Sidra. Oceanic Beravage spent NT$640 million last year to carry out real estate and fund loans and transactions with Cathay Beverage. The transaction price and repayment terms are unreasonable. As the three transactions could not obtain “sufficient and appropriate evidence”, auditors are reluctant to endorse and issue a rare “disclaimer of opinion” as a result.

 It is the certified public accountants’ duty to act pursuant to laws or regulations of the competent authority with the relevant jurisdiction and carries out the audit, review, secondary review, or special audit, prepares an opinion based thereon, and affixes his or her signature or seal to the opinion. What the CPA of Oceanic Beverage did is correct, Koo said. Since the company cannot provide adequate evidence to clarify the integrity of several real estate transactions between Oceanic and Cathay Beverage, it is reasonable that the auditor issued a disclaimer as he cannot certify the fair-presentation quality of the financial statements. The Oceanic Beverage Co., Inc. shall elaborate on the doubtful transaction.

FSC’s Chairman Koo pointed out there were problems with the identity for independent directors of the Apple Sidra’s manufacturer. As a matter of fact, two of the independent directors are the employee of the business partner, Cathay Beverage, which is the supervisor of the Apple Sidra's manufacturer in the meanwhile. This violates Article 14-2 of Securities and Exchange Act. Many condemned that it was rather absurd as the Taiwan Stock Exchange(TWSE) failed to realize the defect in the first place.

On April 14, the general manager of Oceanic Beravage, You-ying Sun, allegedly hollowing out the company, was detained by the court’s judgment. Chairman Kuo-kuei Chiang was released on bail of NT$150,000, while four independent directors were bailed on bonds of NT$34,000 to NT$400,000 after questioning, the prosecutors said. The company’s board of directors yesterday held an emergency meeting and dismissed Chiang and Sun.

The FSC has strongly request TWSE and other competent authorities to strengthen the supervision and review the qualification of independent director in the future. The Oceanic Beravage has been banned from stock trading by TWSE. The chance of delisting is fairly high.

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Laws Amended to Accelerate Renewable Energy Development

2019.04.15

On April 12, the Legislative Yuan approved the largest revamp with regard to Renewable Energy Development Act since the enactment of legislation on 2009, which aimed to reach a total of capacity of 27 gigawatts of the nation’s renewable energy sources by 2025.

According to the revision of the bill, the regulations on the development of renewable energy were enlarged by adding the goal of improving energy makeup and reduce greenhouse gas emissions. In order to activate existing water conservancy facilities for power generation, small hydropower facilities of less than 20,000 gigawatts will be included in the scope of renewable energy power generation equipment after the amendment, and the definition of ocean energy will also be widened, referring to ocean temperature difference energy, wave energy and current flow.

Meanwhile, to strengthen corporate responsibility, large-scale electricity users consuming a certain amount of electricity has the obligation to install renewable energy power generation and storage equipment in the future or purchase a certain amount of renewable energy certificates. Those who fail to comply with regulations shall pay the commissions to the development of renewable energy. Couple with this, the Ministry of Economic Affairs(MOEA) should set up a renewable energy development fund for the development of renewable energy.

Local governments, in their jurisdiction, shall evaluate the potential for developing renewable energy sources, and may establish power generation facilities with an installed capacity of up to 2,000 kilowatts, the act says. On the other hand, power generation facilities with an installed capacity of greater than 2,000 kilowatts should be authorized by the MOEA.

If the premises of the public agencies, schools or state-run enterprises undergo expansion or renovation, or if new structures are erected, they should be equipped with renewable energy generation facilities as long as sites meet the requirements. The parliament hopes the amendments would bring Taiwan clean energy, boost its economy and improve its global competitiveness.

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FSC to Restrict Inappropriate Directors and Supervisors from Rehirement

2019.04.08

The Financial Supervisory Commission (FSC) pre-announced the draft amendments to Securities Investor and Futures Trader Protection Act on April 3 to safeguard the rights and interests of securities investors and futures traders and promote the sound development of the securities and futures markets.

Following the trend of internationalization and liberalization of the capital market, it is essential for the government to provide a fair and secure trading environment. As the SFIPC has been established for 15 years, the FSC found it necessary to have a complete class actions and derivative suits legal framework and promote corporate governance, and therefore amend the Securities Investor and Futures Trader Protection Act.

The official of FSC explained that the amendments to the Protection Act have revised three clauses and add two new ones.

First of all, the new law will include the directors or supervisors of Over the Counter Company in the scope of the litigation and dismissal of litigation represented by the SFIPC.

Secondly, in case a director or a supervisor has committed any act resulting in material damages to the company, he might face a lawsuit filed by SFIPC as well, regardless the act is in the course of performing his/her duties or not. That is to say, directors or supervisors committed insider trading and manipulation of stock prices and other market transactions that result in the loss of the company or the investors within the scope of such legislation.

Third, when the company has filed a lawsuit for the dismissal directors, and the SFIPC has the authority to subrogate the lawsuit.

Fourth, the reason for dismissing the dismissal of the directors or supervisors is not limited to the ones that occurred during the term of the prosecution. This means that even if directors have resigned, once the SFIPC finds that it has harmed the company’s actions while in office, it can still file the complaint. However, such complaint may not be made where two years have elapsed after the discovery of the fact, or ten years have elapsed after the conclusion from the damage caused.

Fifth, when the SFIPC represents the litigation procedure, it could participate in litigation as an independent intervener. And most importantly, once removal of directors by court order is determined in the final judgment, the person may not take the office of a director, supervisors of a listed or OTC company within three years after he leaves his post.

The FSC declared that the notice period is 60 days, while a public hearing will be held during that period. The fearing will discuss whether the managers shall be the contesting party when the Securities and Futures Investors Protection Center(SFIPC) bringing class actions and derivative suits on behalf of investors and listed companies in a derivative action or lawsuits with regard to the removal of directors.

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Legislature Set Up National Transportation Safety Investigation Council After Puyuma Train Accident

2019.04.08

As the 2018 Yilan train derailment killed 18 people and injuring 187, a major amendment to Aviation Occurrence Investigation Act was introduced into the legislation by the Executive Yuan. On April 2, the parliament passed the amendment on third reading and renamed the Act as Transportation Occurrence Investigation Act.The amendment stipulated that Aviation Safety Council will be replaced by the National Transportation Safety Investigation Council (NTSIC) to independently investigate major aviation, railway, water and highway transportation accidents to safeguard the transportation safety of the people.  It is possible that the Puyuma Accident happened last October will be re-investigate after the establishment of the NTSIC, according to the press.

The new council, estimated to be set up by the Executive Yuan this August, it will expanded from 25 to approximately 100 personnel, including 5 full-time members and 6 concurrent members who are distinguished experts in the field of transportation, aviation, waterway, railway, highway, management, legal, psychological, medical, meteorological, mechanical, electronic, engineering or other transportation accident investigations.

The Act restricted that committee member with the same political party membership shall not exceed one-third of the total. The core member will also be barred from taking up posts at entities that could create conflicts of interests during active service and within three years of leaving their posts, with the Commissioner and the deputy as well as prohibited from serving as a director, supervisor, manager or consultant of the transportation company they investigate while on the council.

Based on the Act, the Transportation Safety Investigation Council will be responsible for tackling notification, investigation, identification and analysis of major transportation accidents, suggestions for investigation and remediation plan of transportation safety; trend analysis of transportation accidents, tracking of transportation safety remediation plan and transportation safety project research; transportation accident investigation technology Research and development, energy establishment, recorder interpretation and engineering analysis. In addition, the formulation, revision, and the abolition of transport accident investigation and decree, coordination and contact between domestic and foreign transportation accident investigation organizations and transportation safety organizations; and other investigations concerning major transportation accidents are the duties which NTSIC shall carry out independently according to law.

After the release of the transportation accident investigation report, if new facts or new evidence, which the Committee find it important and might affect the investigation report, the accident shall be re-investigated.

The report must consider its impartiality, demand, and professionalism. The council may seek assistance from foreign counterparts if it is necessary to uphold the impartiality and professionalism of an investigation.

Eventually, the act forbids any personnel who operate aircraft from tampering with the flight recorder or risk a fine of between NTD$1.2 million and NTD$6 million. If the obligor does not notify the government without proper reasons, it can be fined for NTD$ 500 thousand to 2.5 million. The notification obligor must notify within 2 hours of the incident, and the suspected situation must be notified within 24 hours.

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Draft Amendment to Statute for Industrial Innovation Extends Tax Preference to 2029

2019.04.01

The Executive Yuan approved the draft amendment to Statute for Industrial Innovation proposed by the Ministry of Economic Affairs(MOEA) on March 21. The draft bill confirms that the tax preference will be extended for another ten years. In addition, undistributed surpluses from substantial investment are entitled to 5% of business tax deduction to cater to the need of industry development.

After the approval from Executive Yuan, the draft will be sent to Legislative Yuan for review. Considering the current tax incentive policy will expire by the end of this year, Primer Su instructed the Ministry of Economic Affairs and Ministry of Finance to negotiate with the Congress and complete the revision as soon as possible.

The MOEA pointed out that the three key points of this Statute for Industrial Innovation includes extending the preferential tax policy for a decade, improving the motivation for firm investment and strengthening the tax incentives.

According to MOEA, to encourage industry to innovate and invest long-term investment programs, the tax preference policy will apply to current research and development deduction, technology or inventors’ investment and employee stock rewards. Limited partnership ventures can be applied to personal taxation and angel investors could enjoy a preferential tax rate. Along with the 5% deduction for undistributed surpluses investment, all types of investments mentioned above will continue to implement until December 31, 2029.

To spur speculation, enterprises making substantial investments with undistributed surpluses, such as building or purchasing plant, software, and hardware equipment or technology for self-production or business use for a certain amount, could be exempt from 5% of business tax, MOEA said.

Personal technology stocks or allotment of share to patent owners can apply to the tax rate based on the selling price or allotment price of the stock, depending on which price is lower. The government also relax the restriction to allow employees receiving treasury shares or new share warrants as retention bonus from parent/subsidiary company may lower the tax liability by taking the price of parent/subsidiary company stocks or the price of employed company stocks as the tax base, depending on which of that is lower. The new regulation would advance the firm’s ability to keep its essential staff.

Finally, MOEA also loosened the regulations for the limited partnership ventures that have been raised a large number of funds at once, which permit the natural person as the subject to tax.

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Civic Groups Call For Rational Legislation on Preventing Drunk Driving

2019.04.01

The Congress passed a portion of Road Traffic Management and Penalty Act with regard to drunk driving on third reading on March 26. The new amendment not only increases the fine for violators but differentiate the penalties for motorcyclists and car drivers caught driving under the influence. In addition to this, the passengers of the same drunk driving vehicle will be punished as well. Ignition Interlock will be compelled to install on dunk-drivers vehicles in the future.

As for increasing the criminal liability of drunk driving, the Judicial and Legal Committee of the Legislative Yuan is currently reviewing the case, while consensus is yet to be reached. In the meanwhile, the several civic organization, including Covenants Watch, Taipei Bar Association, Judicial Reform Foundation, Taiwan Association for Human Rights released a joint statement to call for rational legislation on the preventing drunk driving. Details are shown in the below paragraph.

 

1.  With "increasing the penalty" as a countermeasure against drunk driving, there should be empirical research support

Article 185-3 of the Criminal Code, regulating the offense of unsafe to drive, was amended in 2008, 2011 and 2013 to increase the penalty in the hope of curbing drunk driving. In fact, many lawmakers propose to have stricter punishment, for instance, life imprisonment or even death sentence.

Nevertheless, in both theory and practice, criminal law has a rigorously examining criteria. Whether the drunk driving behavior has subjective murder intention shall be ruled by the court in accordance with the fact and the subsumption of requisite elements.  Secondly, drunk driving has its historical and social background. The function of criminal punishment has its limit and cannot replace a criminal policy based on empirical study. It is questionable that criminal legislation which lacks an empirical basis and merely pursues severe punishments could really deter drunk driving behavior. Simply imposing heavier punishment will create more social problems. For example, the prison may become unbearable, and it is more difficult for the prisoners to return to society after long-term imprisonment. Pre-existing and prudent research and evaluation are required before legislation.

 

2. Excessive punishment may make it difficult to apply between cases

If increasing the punishment to life imprisonment or even the death penalty for alcohol-impaired driving to death, the result will be no different from the crime of intentional homicide. Without a doubt, it will confuse the theoretical basis of modern criminal law and trouble judicial interpretation and the application of requisite elements. Furthermore, when dealing with a specific case, the court shall rule according to circumstances. If the law is to increase the statutory penalty for drunk driving to death, which is equivalent to intentional homicide, then it might contradict to the Balance Theory of Crime and Punishment. Finally,  the capital punishment for crimes other than murder of intentional criminal acts is in violation of article 6 International Covenant on Civil and Political Rights.

The Civic groups demand the lawmaking department to enact the law on an empirical basis and conform to the principle of proportionality and the principle of the punishment fitting the crime as the measure to curb drunk driving and meet up the standard of international human rights. Legislators should exercise their powers rationally and prudently adopt the most appropriate legislation,  precisely because Taiwanese people have attached significance to alcohol-impaired driving.

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Maximum Penalty Raised to NTD$50 Million under Banking Act Admendments

2019.03.25

Intending to strengthen the legal compliance of banking industry on the island, several legislators from the three biggest parties in the parliament and the Executive Yuan proposed the draft amendment to The Banking Act of The Republic of China. The amendment passed the third reading this week.

The focus of this revision is to have a comprehensive review of the upper limit of the penalty, with reference to the legislation of Germany, Japan and other countries, as well as the size of the domestic bank. The maximum penalty will be raised from NTD$10 million to NTD$50 million, in order to deter violation of the law. But on the other hand, the additional provision is added in the amendment as well. If the offenses are slight or committed under pitiable circumstances, the punishment may be remitted. The authorities will have the discretion to adopt appropriate corrective measures.

On top of this, in order to strengthen the management of the credit card business and comply with the principle of legal certainty, the amendment also added the penalty clause for violators in credit card business; the credit card business institutions are regulated under the Banking Act from now on.

Also, in view of the aggressive global layout of banks, another provision approved in the third reading authorized the government or its authorized institutions may exchange information,  promote technical cooperation, assist in investigations, sign cooperation treaties or agreements with foreign governments, institutions or international organizations on the Principle of Reciprocity.

One of the proposed lawmakers, Ming-zong Zeng, pointed out that, by greatly increasing the amount of fine and penalties and expanding the supervisory authority of the government, the amendment aims to deter the illegality, and urged the banking industry to not to overlook importance to the internal control and legal compliance system and protect the rights of depositors. The Financial Supervision Commission has also assessed that the revision of the Banking Act will help strengthen the compliance of banks with laws and regulations, enhance the effectiveness of financial supervision, jointly combat transnational illegal activities, and maintain the order and security of transaction in Taiwan's financial markets.

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Securities and Exchange Act Revised to Strengthen Governance

2019.03.25

For the purpose of boosting morale, retaining outstanding talents, implement corporate governance, and strengthen the management of the securities services and related institutions, the Executive Yuan proposed draft amendments to some provisions of the Securities Exchange Act. The legislators also proposed a draft to implement the financial supervision mechanism. Along with the revision the Banking Act , the legislative department passed the third reading of the amendment to the Securities and Exchange Act to help the enterprises in retaining talents on the same day.

Where the buyback is for transferring shares to its employees, a public offering company may buy back its shares from the centralized securities exchange market or over-the-counter market without being subject to the provisions of paragraph 1 of Article 167 of the Company Act. The lawmakers allowed the shares bought back, also known as the treasury stock, to be transferred within five years(instead of three years regulated before the revision) from the date of the buyback.  Corresponding to the revised clause, the Securities and Exchange Act, therefore, stipulated shareholders holding more than 10% of the total shares, as well as their spouses, minor children, or shares held in the name of other persons shall not be sold during the buyback period.

Moreover, the amendment also doubled the administrative penalty limit for public offering companies from NTD$2.4 million to NTD$4.8 million. If the violation is minor, the competent authority may order the violator to take corrective measures within a prescribed period of time and may exempt it from punishment if it completes the corrective measures.

Another revision is that shareholders owning more than 10% of the total shares of any public offering company shall declare to the competent authority, which may prescribe rules governing internal control systems of companies or enterprises based on the authorization of the amended Securities and Exchange Act, in order to effectively manage a large number of acquisitions of equity and transaction and in line with the Principle of the Explicit Delegation.

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TDCC Kicks off Bilingual IR Platform to Facilitate Foreign Investor Decision Making

2019.03.18

To be in line with country's latest corporate governance guideline - the Corporate Governance Blueprint 2018~2020, the Taiwan Depository & Cleaning Cooperation(TDCC) held the launching ceremony of Investor Relations(IR) Platform, followed by an international forum with regard to Environmental Social Governance (ESG) this month. In addition to promoting the new Investor Relations Platform, TDCC has invited foreign and domestic lecturer to discuss issues such as shareholder, ESG and investor relations practices. Approximately 200 representatives of listed companies and over-the-counter companies, as well as investors from major domestic funds, insurance companies, domestic and foreign investment companies, has attended the forum, which is believed to have a positive effect on the development of the island’s capital market.

Wellington L. Koo, the Chairman of Financial Supervisory Commission(FSC), pointed out that a good cooperation-investor relationship helps companies understand the needs of investors, provide more information to investors, and open a dialogue mechanism between the two parties to obtain long-term support from investors for the company's operations, as an important part of promoting corporate governance.

The Chairman of TDCC, Xiu-ming Lin, stated that since the establishment of the electronic voting platform in 2009, TDCC has been working on relevant measures to facilitate investors. For instance, in 2014, it has cooperated with Broadridge, the world's largest electronic voting platform to provide the Straight Through Processing(STP) platform, a cross-border direct voting service for foreign investors of Taiwan. Efforts have been made to turn voting procedures into an automated process that makes sub-custodians execute votes more efficiently. In 2016, the laws have stipulated that listed companies with more than 10,000 shareholders or over NTD$2 billion of capitals are mandatory to adopt an e-voting service. By 2018, all the listed companies and OTC companies in Taiwan are able to cast their votes through the electronic voting mechanism, STOCKVOTE.

Originated from the e-voting platform, the newly-launched bilingual IR platform developed by the TDCC intends to provide updated corporate governance policies, contact persons and details of all listed companies. Communications, ESC and International Cooperation, Lin said, will be the axis scheme of the platform’s development. It is hoped that English-language financial reports, annual reports, and shareholder meeting agendas, which companies obliged to provide under Company Act and Securities and Exchange Act, on the platform would allow international investors to better understand their investments, as well as the risks.

TDCC will continue to launch more innovative services based on electronic voting system and expand the cooperation with more top overseas research institutions and service providers to help create corporate value and strengthen Taiwan's corporate governance, to achieve the ultimate goal of integrating with global capital market.

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Fiscal Discipline Act Receives Third Reading

2019.03.18

The Legislative Yuan approved a new bill, the Fiscal Discipline Act, this Tuesday on third reading which comprehensively consolidated the fiscal disciplines that were scattered in various regulations in the past. In short, the main points of the revision include: (1) the government at all levels needs to disclose the taxation expenditure assessment operation, (2) implement the public debt law, and (3) under the circumstance where a legal bill will result in government expenditure increase or income reduce substantially, it is necessary to specify the source of the funds. The new bill is expected the serve the function of stabilizing national finance.

With the inclination of maintaining a moderate scale of expenditure and ensure the sound development of the country's finances in the long term, both the ruling party and the opposing parties believed it is essential to establish a comprehensive fiscal discipline system in legal point of view. Although regulations and mechanisms for fiscal disciplines such as the Budget Act, the Public Debt Act, and the Public Debt Committee exist, the little practical effect was reckoned by the parliament. As a consequence, KMT lawmaker, Ming-zong Zeng and Shiz-bao Lai, as well as Rong-zhen Wang from DPP proposed the Draft for Fiscal Discipline Act and eventually received its third reading.

The Fiscal Disciplinary Act has five major points. The first is to regulate governments at all levels to implement the assessment of public tax expenditures in order to facilitate the supervision of public representatives. The second is to set up the conditions for the establishment exit mechanism for non-operating special funds; the measure is believed to solve the problem of remaining “Tiny Treasury” on a certain obsolete government project.

The third key point, borrowed the idea from the Maastricht Treaty, is to stipulate the regulation of debt financing. “Debt financing should be executed in accordance with the provisions of the Public Debt Act”, Wang said, “while the budgetary debt limit should not exceed 15% of the total amount of the total budget and special budget within a year.”

Wang went on to elaborate the early-warning mechanism as fourth key point of the bill. “The local government shall set up control mechanism for abnormal fiscal discipline,” he added, “which means government at all levels, that is, central government, special municipalities, counties, and townships, are obliged to regularly reveal public debt statements and debt repayment plans, moreover, the transfer to special funds shall disclose to the public.”

The last focus of the Fiscal Discipline Act is that, if a draft legal bill will significantly increase the financial pressure, the proposers of the bill, regardless from the executive or legislative department, must specify the financial source. “When the legislator or the ministry proposes a bill that will increase the financial burden or reduce the income, he must state in the bill where the financial resources are,” Zeng explained.

The KMT legislator Lai pointed out that the bill has its significance as legislation completed by this cross-party cooperation. The ruling and opposition legislators hope to supervise the central and local finances through a clearer and more centralized legal system in order to maintain the integrity of national finance and support national development needs.

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MOL: Night Shifts to be Regarded as Working Hours for Overtime Pay after 2022

2019.03.11

The Ministry of Labor (MOL) issued the revision of "Instructions for Institutions to Regulate Day or Night Shift Workers ". In addition to correcting some common doubts, it also set the sunset clause of the administrative rules, declaring the instruction would be abolished in 2022. To elaborate, so far, if the worker of day and night shifts is engaged in receiving calls, patrolling, etc., it is legal for employer only pay the allowance instead of the overtime, but from 2022 onwards, workers on day and night shift are entitled to claim it as working hours and received overtime pay as a result.

The deputy director of the Labor Conditions and Employment Equality Department of the Ministry of Labor, Wei-sen Huang, explained that the Instructions for Institutions to Regulate Day or Night Shift Workers was established in 1985. If an organization arranges labors on days or night shifts, conducting works such as receiving urgent documents, answering calls, patrolling business sites and emergency accident notification, contact or handling, ect., as the work density is comparatively low; so it has not been recognized as working hours over the years. No statutory overtime pay or holiday attendance pay, but only grants have been given to the employee.

According to Huang, besides the abolition if the instruction, the focus of this amendment is the adding the minimum amount of the recommended daily and night allowances, which shall not be less than the 1/240 of monthly basic salary per hour. For example, if one is on duty 6 pm until 8 am the next day and the current monthly basic salary is NTD$2,3100, then he shall be given (23,100/240)*14hrs= NTD$1,374.5 of allowance for the night shift.

In addition, if the institution asks female labor for the night shift, it is also necessary to refer to the requirements of the Labor Standard Act, based on which the employer is obliged to provide the necessary safety and sanitation facilities or measures. For pregnant or lactating periods, night shifts are prohibited.

The Ministry of Labor explained that even if the workers are in the day or night shift, it is still under the command and supervision of management empirically. Therefore, the government will gradually have the shift duty return to the concept of "work time" under the Labor Standard Act, but based on the consideration of the health and well-being of the workers and the manpower needs of the institutions, an appropriate grace period is required for the management to make the adjustment. Consequently, the MOL decided to set the date as the sunset clause; the Instructions for Institutions to Regulate Day or Night Shift Workers will become a thing of past from January 1, 2022.

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New Restrictions for Residential Chartering and Subletting Contract Revealed

2019.03.11

For the purpose of promoting the fairness and reasonableness of the lease contract and further protect the interests of the tenants from sublessors and landlords , the Ministry of Interior(MOI) recently revealed the “Mandatory Provisions to be Included in and Prohibitory Provisions of Residential Charter Contract” as well as the “Mandatory Provisions to be Included in and Prohibitory Provisions of Standard Form Contract for  Residential Subletting". The new restriction will be hit off on the first day of June  this year. In the future, chartering industry, landlords (or landladies) and tenants shall negotiate the contracts under the restriction of these two provisions to decrease disputes and secure transaction safety.   

Based on the press release by the Ministry, rental housing subletting business plays the role of middleman, which rent the house from the landlord or landlady and then sublet it to the tenant and is generally responsible for managing. The first recently made Provision mentioned above applies to contract between the owner of the house and the subleasing business, who, in addition to the obligations of the general lessee, responsible for the management, including implementation of daily maintenance and keeping records of rental place’s status. Furthermore, within 30 days after signing the sublease contract, the owner should be notified in writing of the scope of the sublet, the lease, the name of the tenant, etc. The subletting business shall assist the lessor in handling the lease, so that the landlord can save time and effort, and the rent collection is more secure.

To encourage the house owner to entrust the charter business, the “Mandatory Provisions to be Included in and Prohibitory Provisions of Residential Charter Contract” offers a tax concession. For instance, when the charter period is more than one year, the landlord is entitled to enjoy a maximum t of $6,000 tax free allowance per month, and the necessary depletion cost between NTD$6,000 to 20,000 will be applied to a 47% off tax discount. Evidently, the time and money saved are making it more cost-effective than directly renting out to the tenant, the MOI said.

On the other hand, the second Provision mentioned in paragraph one applies to the contract between the rental housing subleasing business and the tenant. The “Mandatory Provisions to be Included in and Prohibitory Provisions of Standard Form Contract for Rental Residence Subletting” not only included the relevant provisions of the general lease contract but also required the subleasing business to bear the responsibility of the business operator, including the obligation to provide the written document that the landlord agrees to sublease, the confirmation of the status of the lease, and the contents of the lease when signing the contract with the tenant. Carry out routine repairs and maintenance records as shall be always available and accessible to the tenants. If the landlord terminates the chartering contract in advance, the chartering industry is obliged to assist the tenant to preferentially rent other houses. Moreover, the tenants are not allowed to sublet the leased residence or transfer the lease to others.

To avoid the high electricity cost of collected by the chartering industry, and to seek improper benefits, if the electricity fee is paid by the tenant, the calculation shall not exceed the maximum amount of electricity used by the Tai-power Company in summer. The Ministry of the Interior also reminded the tenants that the electricity billing of the Tai-power Company is based on the electricity rate and the progressive rate. The renter can negotiate the rate with the landlord according to the shared electricity, suggested the MOI.

In terms of subletting contracts, in order to prevent the chartering industry from using the terms of the contract to restrict or deprive the tenants of their rights and interests, there are clauses that cannot be written, including provision to prohibit the tenants declaring the rental expenses, moving into the household registration, and transferring the tax burden, so that the two mandatory provisions could protect the rights of renters.

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Offshore Funds with 40% Chinese Holdings Permanently to be on Taiwan Market this October

2019.03.04

After October 2019, it is expected that the offshore funds which can permanently invest in Chinese stocks up to 40% of their net value will be available on the island’s market. The Financial Supervisory Commission(FSC) announced on the 26th of February that the offshore funds institutions qualifying "Plan to Encourage Stronger Business Ties in Taiwan for Offshore Funds" in June this year will have the alternative to choose one single offshore fund to permanently relax the investment in the mainland ceiling to 40%, or, they have the option to maintain the status quo, which is open all the offshore funds to invest up to 40% of the mainland within a year.

The FSC has adopted the “Plan to Encourage Stronger Business Ties in Taiwan for Offshore Funds” since February 2013. Under the terms of the Plan, if an offshore fund entity meets the assessment criteria for (a) increasing its investment in Taiwan; (b) assisting in upgrading the scale of asset management in Taiwan; and (c) improving the quality of its services to Taiwan investors, it will benefit from the related incentive measures. The key incentives under the plan include the following: (1) requirements regarding the minimum size of a master agent's staff can be relaxed; (2) reviews of applications to launch offshore funds can be expedited; (3) limits on the permissible number of offshore funds per application can be relaxed; and (4) an offshore fund institution is allowed to introduce new types of funds to the Taiwan market.

The FSC has relaxed upper limit for ordinary offshore funds from 10% to 20%of their net asset value in the Chinese equities market this January. For those participated in “Plan to Encourage Stronger Business Ties in Taiwan for Offshore Funds” last year, the government granted the ceiling from 30% to 40%. Yet as the seven offshore funds institutions, including Alliance Bernstein Taiwan Ltd, Allianz Global Investors Taiwan Ltd, Schroder Investment Management Taiwan, Eastspring Investments, JPMorgan Asset Management Taiwan Ltd, Fidelity Investment Taiwan Ltd and Franklin Templeton Investments, permitted to join the plan already enjoyed the 30% rate since last October, the new fund consisting 40% preferential rate of their net asset value in the Chinese market permanently will hit on the road this October at the earliest. Funds that apply for Plan to Encourage Stronger Business Ties in Taiwan for Offshore Funds this year in June and obtain the permission in September will entitle to benefit from the new policy.

According to the deputy of Securities and Futures Bureau under FSC, the policy is initiated by the suggestion of securities industry. As the FSC originally turned a green light on permitting offshore funds institutions under Plan to Encourage Stronger Business Ties in Taiwan for Offshore Funds to invest mainland China for 40% within a year, if the institutions fail to meet the condition of this incentive program in the forthcoming year, all offshore funds that invest more than 20% in China must be removed, in other word, to suspend the acceptance of new purchases. Hence, the industry hope the government can allow a single fund that can permanently invest in the mainland ceiling to 40%.

Meanwhile, to encourage small-and-medium Funds to take part in the Plan to Encourage Stronger Business Ties in Taiwan for Offshore Funds, the FSC relax three thresholds. The first is the size of the money market fund will not be considered when calculating the top one-third of the management assets. This could remove the barrier of large domestic investment institutions which foreign fund players find it difficult surpass in the short term.

The second measure is asking the original offshore fund institutions to maintain a positive growth rate of the market scale within a year, while the old standard required the institutions to have a 5% or more of the growth rate of the market scale on average.

The third is to add a condition that the overseas fund institutions manage assets of more than 10 billion NTD in Taiwan and exceed the average investment amount of the overseas funds of the institution for within a year. That is to say, if a foreign fund agency manages over of 12 billion NTD of offshore funds form Taiwanese investor, the agency then meets the standard and enjoy the benefit that the government has offered under Plan to Encourage Stronger Business Ties in Taiwan for Offshore Funds.

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FSC Amends “Incentive Plan for SITE” to Motivate Small-and-medium Size Investment Enterprises

2019.03.04

In order to encourage investment institutions jointly participate in the development of the asset management market in Taiwan, and to enhance the quality and scope of services provided in Taiwan, the FSC issued another ruling on February 26, under which the restriction imposed on the applying Incentive Plan for Securities Investment Trust Enterprise (SITE) is amended to be more flexible. In summary, those who meet the criteria may apply for raising a credit fund that is not subject to the current investment securities and other restrictions, so can even apply for issuing ETF links funds other than Taiwan Stock. FSC hopes to spur the interest of small-and-medium size investment institution to apply for the plan.

A securities investment trust enterprise meeting the conditions set forth in the Incentive Plan for SITE may specify the types, scope, and a ratio of domestic/offshore securities in its trust deed upon the FSC’s approval for its own investment strategy purpose. This will not be subject to relevant investment restrictions set forth in the said regulations. For example, an emerging market bond fund can invest 40% of the high-yield debt limit, and this is not subject to the restriction.

The FSC has now allowed investment enterprise to apply for issuing the ETF Link Fund under Incentive Plan for SITE. The ETFs that have been invested in the investment business are no longer limited to the domestic component ETF, that is, for example, the bond ETF can also be linked to the fund.

Another the key point of amendment is the adjustment of R&D evaluation index. Adding a condition that the staff number of investment research teams must account for 20% of the company's total number of employees will benefit small-and-medium size securities investment trust enterprise when applying for the incentive project. Couple with this, the FSC deleted the previous requirement of an annual growth rate of 5% for market scale and simply requires them to grow year by year.

Regarding the evaluation index for self-investment ability, for those who have a certain economic scale and a significant number of investment research teams, the FSC set up the benchmark of having 75 personnel investment research team on average in three years. However, the requirements for the growth of the number of personnel and the fund's are deleted. Enterprises having the asset size of the rank the top 1/4 of the investment industry in Taiwan in the latest one year are all eligible to apply for the Incentive Plan for SITE.

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J.Y. Interpretation No. 775: Unconstitutional to Increase Punishment for Recidivist Criminals in any Case

2019.03.05

On February 22, the judicial department issued J.Y. Interpretation No. 775, where the Grand Justices found regulation of the principal punishment for any kind of recidivism shall be increased up to one half under Article 47 of Criminal code has contradict to the Constitution because it violated personal liberty severely and the constitutional principle of proportionality excessively.

One of the KMT lawmakers, Zhi-yang Wu, thus claimd that the J.Y. Interpretation No. 775 is logical yet it injures the sense of justice as the public often condemn light sentence against the recidivists offenders. Wu also questioned whether the new J.Y. Interpretation will affect the calls for increasing punishment for drunk driving and child abuse recently. The Secretary-General of Judicial Yuan, Tai-long Lu gave out negative answer firmly.

Another legislator, Mei-Nu Yu, stated the J.Y. Interpretation No. 775 is very difficult to understand because of the existence of various legal terms. She suggested the Judicial Yuan go with the flow and publish for dummies propaganda or try online streaming in order to convey correct information to the general public, like the way Executive Yuan did to unveil “The Enforcement Act of Judicial Yuan Interpretation No. 748”

“The time period from the announcement of the constitutional interpretation to the press conference is very short, we will try our best to do it” Lu replied; he took some cases as an example to explain the Interpretation during the press conference held on February 22.

Lu emphasized that the Grand Justices believes that increasing punishment for those who intentionally commits an offense with a minimum punishment of imprisonment within five years after having served a sentence of imprisonment did not violate the principle of double jeopardy, hence it is constitutional. However, increasing punishment against recidivist under any circumstances on the basis of Article 47 of Criminal code, even if the recidivist is entitled to apply for Article 59, which stipulated that a punishment may be reduced at discretion if the circumstances of the commission of the offense are so pitiable that even the minimum punishment is considered too severe, has contradicted to the principle of proportionality and considered as a severe violation to personal liberty.

On top of that, Article 48, regulating that after the judgment has been finalized and an offender is found to be a recidivist, his punishment shall be increased in accordance with the provisions of the preceding article unless the fact is revealed after his sentence is fully served or his punishment is pardoned, violate another fundamental legal doctrine, ne bis in idem. It is a legal concept originating in Roman law that no legal action can be instituted twice for the same cause of action. 

The Ministry of Justices shall revise the provision of the law within two years while the judges shall discrete on a case-by-case basis to decide whether to increase to punishment for recidivists violators, before the amendment to Article 47, according to the constitutional interpretation.

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Cabinet Unveils Draft Bill on Gay Marriage

2019.03.05

The Executive Yuan has examined and approved the draft bill of same-sex marriage on the 20th of February, officially titled  “The Enforcement Act of Judicial Yuan Interpretation No. 748,”, in order to avoid causing disputes between supporters and opponents of same-sex marriage. This is the first bill named after a constitutional interpretation.

The draft bill, initiated by the Ministry of Justice, consists of 27 articles on same-sex unions designed to protect the rights of same-sex couples to pursue a common life and permanent, intimate relationship.

The bill first stipulates legislative purpose mentioned above and defines gay marriage, then restricts that both parties to same-sex unions must be at least 18 years old, while the civil code requires that the female party in a marriage need only be age 16 currently. Minister of Justice, Tsai Ching-hsiang, indicated that the specific part of the civil code would be altered to set the same legal marriage age for men and women. Article 4 to 18 regulated the requisite procedure, elements, and effect with regard to the establishment and termination of homosexual union respectively.

When asked by reporters at an Executive Yuan news conference why the law did not provide equal adoption rights for same-sex couples, said the topic of adoption was not covered under the high court’s interpretation, Tsai answered that, though adoption is not included in the scope of the judge’s interpretation of the constitution, as a practical concern, one same-sex partner might have biological children, so the Ministry wrote conditional adoption of a partner’s children in the bill.  It is noteworthy that same-sex couples are still unable to adopt non-blood relatives so far. Moreover, the legal relationship to a partner’s relatives, or in-laws, is different from heterosexual couples under the civil code.

On the other hand, most of the regulations are similar to opposite-sex marriage guaranteed in the Civil Code. Provisions for the use of civil law general rules, obligation and other regulations other than civil law regarding spouses, or relationship built on spouse were written in Article 22 to 24. Therefore, like heterosexual marriage, polygamy, bestiality, and incestuous relationships are prohibited. Liability for criminal adultery may also be expanded to same-sex marriages in the future amendment.

Finally, in Article 26, there is a vague reference to “religious freedom” that the supporters of gay marriage fears may permit employment discrimination and it is yet to be discussed.

The draft bill has also received massive criticism from advocacy groups on both parties of the marriage equality debate. Without a doubt, the details of the bill will face stiff opposition in Legislative Yuan. There is a long road to marriage equality on the island.

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MOEA Focuses on Three Types of Bill Promotion for Legislative Yuan’s New Session

2019.02.21

As the new session of the Legislative Yuan started on February 15, the Ministry of Economic Affairs (MOEA) revealed three directions on promoting bills, which are the draft amendments to the Renewable Energy Development Regulations, Comprehensive and Progressive Agreement for Trans-Pacific Partnership and Industrial Innovation Regulations.

Minister of Economics, Rong-jin Shen, revealed the sorts of the three major promotion bills before the Lunar New Year Holiday.  Shen said that revised draft of the Renewable Energy Development Regulations proposed last year, relaxed the regulation on installing small hydraulic power and the third type of solar photovoltaic plant; such non-large-scale devices can be applied to less complicated procedures. Moreover, major electric users are obliged to install a certain portion of the renewable energy power plant, which will help promote the construction of related devices. The draft also opens up the renewable energy industry to freely convert, use,  purchase or trade with private enterprises, so that the industry is more willing to sell electricity to the relatively short-term private enterprises under the contract, and activate the green energy market transactions. At present, the draft has passed first reading and it is still pending for negotiation between parties.

To be in line with the preparations for joining CPTPP, MOEA previously promoted 12 amendment bills. The remaining four are still pending before the Legislative Yuan, including the Patent Act, the Copyright Act, the Trademark Act and the Digital Communication Act, among which the Patent Act, the Copyright Act and the Trademark Act are waiting for second reading, and the digital communication law is still pending for negotiation.

The draft amendment to the Industrial Innovation Regulations is in response to the original bill which will lost effect at the end of this year. The Ministry of Economic Affairs revised part of the provisions in January, extended the implementation period for another 10 years, and added smart machinery, 5G and talent cultivation deduction projects into the bills. Additionally, the current research and development would enjoy a 5% of deduction rate based on the MOE’s version of the draft. However, the Ministry of Finance, in charge of taxation, still have discrepancies with MOEA. In fact, the Ministry of Finance opposing the increase in talent cultivation offsetting, and the R&D investment deduction was yet to be discussed.

The two ministries were invited to negotiate in the first joint session of the new year held by Executive Yuan and the Ninth Legislative Yuan on February 18 to discuss priority legislative bills. Besides the aforementioned bills proposed by MOEA, around 40 high-priority bills were discussed, including drafts regarding the implementation of same-sex marriage, increased punishments for drunk driving, and preventing child abuse. 

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Paired Living Kidney Donations Exchange Legalized in Taiwan

2019.02.21

The Ministry of Health and Welfare (MOHW)  announced new regulations regarding living kidney exchanges between two pairs of incompatible donors and recipients who are bloody related in order to increase the possibility of successful transplant for recipients waiting for kidney transplants and to improve the survival rate and quality of life of patients with end-stage renal disease. Appropriate kidney donors, under their own will, could exchange and undergo donation transplant surgery after obtaining the organ transplant medical ethics committee’s approval.

According to the statistics, 7,460 Taiwanese candidates have been waiting for kidney transplants last year. Nevertheless, there were only 181 deceased kidney donors and 163 living donations between family members. Despite the trend of living donation increases gradually, thousands of patients have struggle waiting for transplants. It is believed that the new regulations increase patients’ chances of receiving kidney donations, as relatives who were willing to donate their kidneys but were incompatible with the patient had to give up the opportunity to help family members in the past.

Following an amendment to the Human Organ Transplantation Act  stipulating that living-donations are limited to fifth-degree relatives in 2015, an exception to the rule was made for kidneys that permits more than two pairs of living kidney donors and recipients who do not have matching blood types to exchange donors, so that each recipient can get a kidney from the donor with a compatible blood type.

The two pairs of donors-recipients living kidney donations from non-family members will be strictly reviewed by the hospital to prevent money transaction behind the scene.

Prior to performing the operation, each patient shall report to the medical ethics committee of the hospital for the first medical review and complete the registration form in the organ donation transplant registration system.

If the match is found, the hospitals of two or multiple parties will conduct a cross-assessment, which is in line with the donation and the person to be transplanted, and the second review will be conducted by the medical ethics committee of the hospital at the same time.

After being reviewed and approved by the hospital's medical ethics committee twice, the case will be sent to the central competent authority for final approval.

The paired exchange kidney donation surgeries must take place at the same time, donors and recipients may change their minds and withdraw their consent at any point before the surgery.

The registration and matching operation of the live kidney exchange donation transplant operation will be handled by the Taiwan Organ Registry and Sharing Center’s platform, where the relevant operation standards and implementation details can be consulted.

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Shih-lin District Court Opens Online Sign Up for Mock Jury Trials

2019.02.11

To be in line with Judicial Yuan’s policy on promoting the jury system, the Taiwan Shih-lin District Court in Taipei has planned to hold the first mock court of the year in April. Online registration has been available since February 1 for the public to participate in the selection.

The draft of the National Jury Act was announced by the Judicial Yuan on November 30, 2017. On January 16 last year, the Judicial department officially turned a green light on the laws of lay participation in the criminal trial system. It was later approved by the Executive Yuan April 25 and sent to Legislative Yuan afterward.  The nation’s jury system is comprised of three professional judges and six jury members. The applicable cases are the crime of imprisonment for the minimum penalty of 7 years, and the intentional crime resulted in death.

Shih-lin District Court has previously held two criminal trial mock court for Taiwanese jury to participate in. Seven celebrities, including actor Chang Ting-hu and director Yee Chin-yen, were invited as “Celebrity Group” to observed the quasi- jury system and gave out opinions from different perspectives.

According to Shih-lin District Court, the first mock court of 2019 will hold its selection process on 24 of April, then the trial procedures and seminars will be held on the 25 and 26 of the same month. The registration would be open on the Internet, telephone, fax from February 1st. Six national juries and two backup juries, randomly chosen by the computer, is obliged to attend the trial and the discussion afterward.

The press release mentioned that, R.O.C. citizens, aged above 23, with at least high school degree or equivalent diploma, residing in the jurisdiction of the local court for more than 4 months, and capable of speaking and listening Mandarin, are qualified to enroll as the jury of the mock court. Yet ex-convict, military, police officers and lawyers are exceptions to the rules based on the provisions of the draft of National Jury Act. The selected jury would be given an NTD$2,500 of attendance fee per day.

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National Development Fund Refines “Startup Entrepreneur Angel Investment Program”

2019.02.11

For the sake of ameliorating the investment environment of new ventures and improving the domestic angel investment, the National Development Fund(NDF) of the Executive Yuan launched the “Startup Entrepreneur Angel Investment Program” on March 2017 and invested NTD$ 1 billion for 5 years to provide initial working capital for start-ups in partnership with angel investors, hoping that angel investors could provide their counseling and networking experiences for new ventures. To assist with the start-up business to obtain the funds needed for the operation, the NDF adjusted the project in several manners on January 30, 2019.

1.  Increasing the investment amount for individual cases:  from NTD$10 million to 20 million.

2.  Relaxing the subject of application:  if the review committee agrees, the startups no longer require to find angel investors in order to apply for the program.

3.  Simplify the small-scale investment process: if the angel investor applies for an investment amount of less than NTD$3 million and the investment amount is not lower than the national development fund, the national development fund will directly invest in it and there is no need to send the application to the review committee for approval.

4.  Adjusting the withdrawal period of the fund: before the refinement , the withdrawal period of the fund is 7 years. The period could be extended in the future after review committee’s approval.

The Startup Entrepreneur Angel Investment Program has reviewed 16 new ventures so far, and approve of 11 new ventures (through a rate of 68.75%). The amount of investment by the National Development Fund has reached NT$98.2 million, while the folk angel investors have invested around NT$89 million. Seven of the ventures invested are domestic companies while the other 4 are overseas businesses. The industries include electronic technology, e-commerce, biotechnology, and leisure industries.

To maximize the implementation efficiency of this program, the NDF, linked with domestic and foreign angel investors, accelerators or nurturing institutions, will keep on inviting investors and entrepreneurs to apply for the project. It is hoped that the investors will break industrial and geographical restrictions and invest the essentials funds for initial operations for new ventures. It is believed that the program, as an incentive for angel investors to invest, would be a key enabler to help new ventures become sustainable enterprises.

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