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Taiwan and Japan United Through Similar Challenges

2019.11.25

An aging population, low birth rate, and a small domestic consumer market are challenges that are not unique to Taiwan, but also to one of its closest trading partners, Japan. However, rather than this being an obstacle for the two states, these similarities have allowed for greater collaboration.

 

Over the past few years, exchanges and cooperation between Taiwan and Japan have increased dramatically with Japan being Taiwan’s third largest trading partner and Taiwan being Japan’s fourth largest. Historically manufacturing based, the trade links between the two countries would continue to grow through looking at a greater range of markets including technology and services. One such developing area is making use of an increasingly elderly population.

 

Last week, on the 8th November, the Commerce Development Research Institute (CDRI), a Taiwanese government sponsored think tank, held the ‘2019 Taiwan-Japan Commercial Service Industry Cooperation Forum’ for Taiwanese and Japanese businesses in the service industry to explore emerging markets. It saw over 150 members of different corporations from across the service industry such as chain restaurants.

 

Following this, on the 18th of November, Xu Tiancai, Chairman of the Business Development Research Institute, (a division of the CDRI) and Sato Seiji, general manager of Tokyo Star Bank, signed a Memorandum of Cooperation (MoC) during the Third Asian Business Seminar in Japan which saw over 170 Japanese companies in attendance. The focus of this MoC was to conduct joint research and analysis into how an aging population can be seen as an untapped market, as well as to host events for potential industry relevant firms. These events would be aimed at highlighting to investing firms that an aging population is not an economic burden but, through “an innovation ecosystem” of joint ventures, could bring about new business models and contemporary markets.

 

One major example of these new markets is the introduction of AI, big data, and the internet-of-things to tackle aspects of the economy that have previously been regarded in a negative way. These technological developments have been promoted as providing modern catering services, nursing homes, and facilities for the elderly. Xu Tiancai explained this during the forum as transforming social structure to change consumer behavior and thereby increase productivity and economic growth.

 

Taiwan has already indicated their dedication to using this technology in infrastructure development; helping to develop related industries. This week Premier Su Tseng-Chang stated at the weekly Cabinet meeting that a public internet-of-things information network is underway to monitor air quality, seismic activity, water resources, and natural disasters. Lon-Fa Hsieh of the CDRI has highlighted that by sharing research such as this, Taiwan is engaging in international business service industry that take advantage of the regions key issues.

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More Links: [1], [2]

Taiwan’s Competitive Renewable Energy Markets Attracts U.K. Investment

Hot Topic: Taiwan is fast becoming the new battleground for the world’s top offshore wind developers seeking a stronger footing in Asia. Its success in Europe has contributed to a desire for expansion.

 

Taiwan’s geography makes it an ideal hub for green energy. For European developers, this is one of the main reasons Taiwan is the key to Asian markets in Japan and South Kora.

 

The U.K Export Finance (UKEF) approved NT$9.2 billion in support of a large-scale wind farm off the coast of Taiwan, the Formosa 2. Forty-seven turbines are to be constructed, generating 367 megawatts of green energy.

 

Led by lead sponsor Macquarie's Green Investment Group and the Swancor Renewable Energy, Formosa 2 aims to reduce Taiwan's reliance on fossil fuel energy, in line with government targets to generate 20% from renewable sources by 2025.

 

UKEF will invest in Taiwan dollars, one of over 60 currencies in which UKEF can offer. The British Office indicates that this decision was made to protect the buyer from market fluctuations. Furthermore, it would make sourcing from the U.K. "more attractive".

 

The U.K. is one of the world's largest generators of offshore wind energy and is home to the largest offshore wind farm in the world which provides over 44 per cent of Europe's offshore wind energy. As new opportunities emerge in markets such as Japan, South Korea and Vietnam, this could enhance international cooperation in green energy.

 

According to the British Office, Taiwan is currently developing 5.5GW of offshore wind energy up to 2025 and plans a further 5GW up to 2030.

 

Currently, offshore wind power only accounts for 3.5% of the global wind energy capacity and is slightly more expensive than other sources of renewable energy such as solar power and onshore projects.

 

The 2011 Fukushima disaster highlighted the risks associated with using nuclear energy in a region prone to earthquakes. The government considered these risks when they committed to aggressive renewable energy targets. Generally, in recent years, the Government has adopted a policy of deregulation to increase the transparency of laws related to foreign investment.

 

Current Legal and Regulatory Framework

 

Taiwan's renewable energy sector is governed by the following regulations:

 

•           The Electricity Act (“EA”) EA covers the establishment of power plants and the transmission and distribution of electricity.

•           The Renewable Energy Development Act (“REDA” covers the power purchase agreement and government subsidies in connection with the renewable energy sector.

•           In addition to the EA and the REDA, there are various other legislative instruments that govern the implementation of offshore wind farm projects such as, Electricity Enterprise Registration Rules and Environmental Impact Assessment Act.  Please contact Asiallians for further information

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More Link: [1], [2]

Taiwan and Japan Sign Two Mutual Cooperation Memorandums

2019.11.04

The Taiwan-Japan Relations Association and the Japan-Taiwan Exchange Association signed a memorandum of cooperation on "Patent Review Highway (PPH)" and "Electronic Exchange of  Design Patent Priority Documents".

 

Taiwan and Japan have previously entered into the PPH pilot project, and it was revised to the advanced type (PPH MOTTAINAI) and extended. As of September this year, the number of applications for the PPH pilot program in Taiwan and Japan rose to 3,426, the highest in comparison with the PPH projects in five other countries.

 

Given the excellent performance of the implementation of the PPH pilot program in Taiwan, the IP Office and the Japan Patent Office agreed to change to a permanent cooperation plan from May 1, 2020, after the trial project period to continue to provide Taiwanese applicants with a stable and convenient PPH service.

 

In October 2013, Taiwan signed an electronic exchange memorandum on patent priority documents, which was applied for invention patents and new patent applications. Since its implementation, applicants from both countries have used it extensively. To expand the service, the Intellectual Property Office and the Japan Patent Office decided to include the design patent in the scope of electronic exchange of the priority certification documents, which can save the design applicants labour time for paper delivery, simplify the multinational application process, and prove the priority. The exchange mechanism for documents will be more complete.

 

At present, both parties are actively carrying out system development and testing. It is expected that this service will be officially available in April 2021.

 

Taiwan-Japan economic and trade relations have remained close. Japan has applied for the most patents for foreigners in Taiwan. It won 14,017 in 2018 years, and 12,871 and 1,224 invention patents and design patents ranked first.

 

The number of applications for Japanese patent applications is also nearly 3,000. Through these two Taiwan-Japan cooperation projects, Taiwan looks forward to opening up a deeper international development space for Taiwan’s related industries, and more applicants can benefit from it.

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The Launch Ceremony of the Start Up Terrace

2019.10.28

 Hot topic: Startup Terrace is an international startup hub. Premier Su-Tseng Chang visits New Taipei City’s Linkou District for the launch ceremony of Start Up Terrance

 

The Startup Terrace began recruiting companies in December 2018. So far, over 132 companies have moved in,99 of which are startup businesses, 13 digital transformation companies, 15 accelerators, four lifestyle service companies and one joint innovation center. These companies are local Taiwanese, American British, French, German, Dutch, Russian, Indian, Indonesian, Samoan and South Korean. Notably, with the help of the Ministry of Economic Affairs (MOEA), Amazon Web Services (AWS) has established a joint innovation center there. MOEA largely contributed to the success of the Startup Terrace, offering tenants one-stop services and rent discounts and exemptions. The Startup Terrace began recruiting companies in December 2018.

 

At the opening ceremony, The Premier unveiled two new incentives:

  1. 15 per cent investment tax credit to offset business income taxes for audiovisual, cultural creativity, and digital economy companies within five designated zones
  2. Doubling of the National Development Fund's outlay for startups to NT$2 billion (US$65.2 million)

 

It is hoped that these policies will "jumpstart" the Terrance and encourage industrial and urban development in the Linkou area. 

In data from the National Development Council, the Business Angel Investment Program launched in 2016, initially had a five-year budget of NT$1 billion (US$32.9 million).

In 2019, the budget was doubled to NT$2 billion (US$65.2 million). Additionally, individual project investments have been increased from NT$10 million (US$326,000) to NT$20 million (US$652,000), with cumulative investments approved for up to NT$100 million (US$3.3 million).

Along with the increased funding, the general scope of the program has been expanded to cover more applicants. To date, the fund has approved investments in 57 startups, anticipated to generate over NT$2.2 billion (US$71.7 million).

Furthermore, at the cabinet weekly meeting on Thursday (24), Premier Su Tseng-chang pledged the governments continued and ongoing support for startups through financial assistance and stronger regulatory framework. 

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The Ministry of Labor Classifies Food Delivery Drivers as Employees

2019.10.21

Background

 

Several driving incidents involving delivery riders have spurred questions about the labor standards of food delivery services. Taipei City police department has report 30 traffic incidents involving food couriers from October 1-13, killing one and injuring 20. Among seven platforms operating in Taiwan, UberEATS, Lalamove and Foodpanda claim they do not have " employment relations" with their delivery people.

 

Alternatively, they suggest that their riders are "independent contractors", who, among other employment rights, are not covered by labor insurance. The remaining four platforms classify their drivers as employees. In response, the Ministry of Labor (MOL) held a press conference on the 14th of October. In the press briefing, the MOL discussed the need for food delivery platform operators to "fulfil their corporate and social responsibilities" and consider the labor rights of consumers and delivery workers.

 

Definitions

 

The Labor Standard Act defines a "worker" as "a person hired by an employer to do a job, for which wages are paid". An independent contractor is not considered an employee unless the language of the contract or the substance of the relationship implies otherwise. Employees and Independent contractors are subject to different statutory protections. Notably, independent contractors are not covered by company insurance.

 

For employees, labor insurance is mandatory for all workers in Taiwan. It compensates for disabilities or death sustained on the job and provides a pension. Where an employee is misclassified as an independent contractor, one can bring a civil action against the employer and claim all statutory entitlements.

 

Contractors are not subject to the same legal obligations as employers. UberEATS and Foodpanda claim to be contractors.

 

UberEATS is classified as an information services firm, working with local logistics companies to contract the deliveries. Their workers are covered by compulsory automobile liability insurance. Logistics operators in Kaohsiung, Pingtung and Taoyuan also cover their workers with employer’s compensation insurance.

 

Foodpanda is a logistics operator with "insurance policies better than fellow service providers." Its insurance policy covers all of its food delivery workers with compulsory automobile liability insurance and employer’s compensation insurance. Foodpanda claims to have insurance policies covering the losses of a third party involved in an accident.

 

The MOL recently invited all platform operators to explain their practices and ensure the safety of their delivery drivers. After consideration, the two companies are determined to have an employment relationship with their delivery staff. The same applies to other food delivery platforms. Despite the legal relationship between the food delivery platform and its delivery staff, platform operators should operate ethically.

 

Furthermore, labor authorities said that the definition of an "employee" is to be defined by authorities, not companies.

 

If the delivery staff are confirmed to be employed, their rights and interests, such as labor and health insurance, should be handled in line with relevant regulations.

 

Following this finding, the administration has not yet issued a formal directive requiring Uber eats and Foodpanda to classify their couriers as employees. Their pressure should encourage these companies to improve conditions.

 

Fines

 

·        On 15th October, the three food delivery companies were fined NT$9,000 for "poor management of food courier traffic safety".

 

·        If improvements are not made, they will face further fines of up to NT$90,000.

 

·        UberEATS and Foodpanda will also be fined for failing to report the deaths of two of their food delivery drivers in line with relevant laws. According to the Occupational Safety and Health Act, the timeframe for violating such accidents is eight hours, and the fine for violating this range from NT$30,000 to NT$300,000.

 

·        Further fines could be administered for failure to keep adequate work records. The two companies have submitted relevant data and documents, including, work records, payroll rosters and attendance records to local governments. If the documents meet legal requirements, the companies will not be subject to further fines.

 

·        According to the Labor Standards Act, employers must keep work records, worker payroll rosters and worker attendance records for five years or face a fine of up to NT$1.75 million.

 

·        Under the same law, an employer is required to pay compensation in the event of a worker's death. If they fail to compensate, the company could face a fine of NT$20,000 to NT$1 million.

 

Mixed reactions

 

In response, Foodpanda rejected MOL's definition of the term "employee" due to the flexibility of the work. They suggest there is no legal basis for this claim.

 

UberEATS published a statement which discussed their willingness to "create regulations to protect delivery workers" and also "allow innovative service to prosper". They also offered compensation in "excess of labor insurance" to the family of the deceased contractor.

 

The reaction amongst riders is mixed as some are relieved that the government might offer them more protection, but they worry about the cost to UberEATS and Foodpanda and the possible impact on the bonus system.

 

According to the job search website 104 Job Bank, food delivery drivers earn on Average NT$42,000 a month (NT$10,000 higher than the average monthly salary). There is also concern about the potential impact on flexibility as couriers average age is 26.

 

Drivers can join a professional trade union to gain access to labor insurance if they cannot afford commercial insurance. It is important to note that there are no rider-specific trade unions in Taiwan. Creation of such could lead to improved working conditions.

 

California recently passed a bill mandating app-based employers to treat their workers as employees. The legal battles are long and expensive, but this could be a long-term solution.

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22nd Britain -Taiwan Trade Talks Held in London on the 1st October

2019.10.09

Taiwan and the UK held their 22nd trade talks in London on the 1st October. According to the British Office Taipei, agriculture, energy, science, technology and pharmaceutical industries were key topics of discussion. The talks were presided over by UK Trade Policy Minister Conor Burns and Taiwan's Deputy Minister of Economic Affairs Wang Mei-hua (王美花). The talks were said to be “extremely constructive”.

Mr. Burns highlighted the fact that for Britain, Taiwan is one the fastest growing export markets. In 2018,  export growth rate was 40%. This is an opportunity for British businesses, particularly those interested in offshore wind, financial services , food and beverages.

Furthermore, Wang Xiaochang reaffirmed that the UK continues to expand its investment in Taiwan. More than 18 UK companies have invested in Taiwan, much of which seek to participate in the offshore wind power project.

According to Taiwan’s customs statistics, the UK is Taiwan’s third largest trading partner in the EU. From January to August 2019, the trade volume reached 3.714 billion US dollars. After the Netherlands, the UK ranks second in terms of investment from EU countries. In total, UK-Taiwan Bilateral trade amounted to US$ 8.2 billion in 2018. The British Office Taipei notes the import of British pork products made a considerable contribution. From August 2018 to date,  £4.58 million worth of pork products were exported to Taiwan.

Both sides have also committed to cooperate in Fintech, green finance and to upholding “the rule0based multilateral trading system”.

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Bubble Milk Tea is a Billion Dollar Industry

2019.10.09

According to Taiwan External Trade Development Council, bubble milk tea is expected to create US$1 billion in business opportunities for Taiwanese suppliers and vendors. They are set to lead a delegation to Japan of drink suppliers, ingredient makers, packaging material providers and tea making equipment to look for more business opportunities.

TAITRA will lead a delegation to Japan of drink suppliers, ingredient makers, packaging material providers and tea-making equipment Thursday to look for business opportunities. It will be the first bubble milk tea delegation organized by TAITRA to go to Japan, according to the trade group.

According to TAITRA, the delegation will visit Tokyo, Osaka and Fukuoka, and in each of the cities, the delegation members are expected to meet with more than 70 potential buyers. In Osaka, potential buyers who have been enrolled in the meeting will top 100.

As early as in 2017, TAITRA set up the Taiwan Bubble Tea Alliance, and so far, a total of 125 bubble milk tea vendors and related firms have signed up for membership of the alliance to boost their collective strength.

One of the largest bubble milk tea brands in Taiwan, Chatime, runs outlets in 38 countries worldwide, including the United States, Canada, Japan, the United Kingdom, Australia, the Philippines and Indonesia.

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Amendment of the Patent Examination Benchmark and the Management of Patent Rights Chapters 13, 17 and 20, 21 and 22

(26th September) The Ministry of Economic Affairs and the Intellectual Property Office announced amendments to the Patent Examination Benchmark and the Management of Patent Rights will take effect on November 1st, 2019.

The amendments are as follows:

 

Amended content

Pre-correction

Amendment Rationale

Chapter (page number)

1

After the initial examination of the invention patent, the re-examination of the quasi-examination, and the division of the new patent approval, the invention shall be split from the invention disclosed in the original application specification or schema and not the same as the request for approval. As to whether it is the same creator. It will be reviewed in accordance with the law at the time of entity review.

n/a

Amended in accordance with Article 34, item 6 of the amended Patent Law promulgated on May 1, 2019

Chapter 13 1. Application Split

2

The division of the invention patent application shall be made within 3 months after the original application is re-examined or examined, or within the first month after the original application is filed and the re-examination and approval of the examination and approval is served. Dividing the new patent application, shall prepro application disposition, or approval within 3 months after the original disposition application service book application.

The division of the invention patent application shall be made within 30 days after the original application is reviewed and approved, or within 30 days after the original application is approved. The division of the new patent application shall be applied before the original application.

Amended in accordance with Article 34, Item 2 of the amended Patent Law promulgated on May 1, 2019

Chapter 13 1.2 Legal Period for Application (1-13-1)

3

The application for re-segmentation from the divisional case shall still be the filing date of the original application; and the statement of the original application shall be invoked, and the matters declared in the application at the time of application shall also be declared in the case of re-segmentation. If you use it, you must not use it afterwards.

The application for re-segmentation from the divisional case shall still be the filing date of the original application; and the declaration of the original application shall be invoked.

The relevant provisions of the original application declaration are invoked in the case of the addition of the sub-segment.

Chapter 13 1.4 Relevant provisions after the application of the divisional application (1-13-2)

4

The applicant for the invention patent shall apply for the division within 3 months after the initial application of the original application and the re-examination and approval of the examination and approval, and the divisional application filed after the initial examination shall be continued.

The preliminary review process is reviewed, and the split application file submitted after the approval is reviewed and the review process is reviewed. The new patent applicant shall apply for the split within 3 months after the service of the original application form approval and continue the formal examination procedure.

n/a

Amended in accordance with Articles 34 and 107 of the amended Patent Law promulgated on May 1, 2019

Chapter 13 1.4 Relevant provisions after the application of the divisional application (1-13-3)

5

The design (new style) patent term expires 15 years from the date of the application; the derivative design (joint new style) patent term expires at the same time as the original patent term.

The design (new style) patent term expires 12years from the date of the application date; the derivative design (joint new style) patent term expires at the same time as the original patent term.

Amended in accordance with Article 135 of the amended Patent Law promulgated on May 1, 2019

Chapter 17 2. The duration of patent rights (1-17-2)

6

Design of the invention and the patent granted a patent by the announcement, specifically patent rights person may apply corrections specification, or the scope of the patent drawings. However, if the applicant applies for correction before the payment of the patent application to the notice, the application has not been announced. In order to prevent the patentee from repeatedly submitting the application procedure for correction, the application will be suspended, and the correction procedure will be continued after the announcement.

 

After the new patentee obtains the patent right through the announcement, it may only apply for correction in the case of accepting the application for the new patent technology report or in the case of the litigation case. If the application is not corrected within the pre-opening period, it shall not be accepted.

If the patent application is approved or disbursed, if the applicant applies for correction before the payment of the certificate, the applicant shall not be accepted because it has not obtained the patent right. In addition, the patentee applies for correction after the patent right is of course eliminated. Since there is no correction, the corrected application shall be rejected. The patentee may only apply for correction during the review of the case during the review of the case, the supplementary reply or the application. However, if a patent or civil litigation case is in the middle of the case and there is a need for correction, it may also apply for correction during the trial of the case and is not subject to the above three periods.

After the patentee has of course eliminated the patent right, because the interested party has a legal interest in the revocation of the patent right, the patent right may be revoked and then raised. At this time, the patentee still has to issue the case. Apply for correction during the trial.

After obtaining the patent right by the patent, the patentee may apply for a correction of the specification, the scope of the patent application or the schema.

If the patentee applies for correction after paying the license in the patent application to the announcement, the application has not been announced yet. However, in order to prevent the patentee from repeatedly practicing the correction application procedure, the application will be suspended, and the correction procedure will be continued after the announcement. If the patent application is approved or disposed of, the applicant shall apply for correction before payment of the certificate.

Amended in accordance with Articles 74 and 118 of the amended Patent Law promulgated on May 1, 2019

 

 

 

 

 

If the patent has not been obtained, the application for correction shall be rejected. The patentee applies for correction after the patent right is of course eliminated. Since there is no correction, the application for the correction shall not be accepted; but if the interested party has a legal interest in the cancellation of the patent right, the patent may be obtained. Of course, the right is lifted, and the law is filed. At this time, the patentee still has to apply for correction.

Chapter 20 2. Timing of Correction (1-20-1)

7

B. The reason for the correction shall be that the invention patent shall state the section of Article 67, paragraph 1, of the applicable Patent Law, and the new patent shall state the section of Article 67, paragraph 1, which is applicable to Article 120 of the applicable Patent Law.

B. Corrective reasons and should state the section of Article 67, paragraph 1, of the applicable patent law.

Add instructions as indicated to match the current practice.

Chapter 20 3.1 Invented New Type Patent (1-20-2)

 

8

4) If the patent right has been filed in the case review and the new patent right is applied for correction during the period of the litigation case, the supporting documents of the civil or administrative litigation case related to the patent right shall be filed.

n/a

Amended in accordance with Article 74, Item 3, Article 118 of the amended Patent Law promulgated on May 1, 2019

Chapter 20 3.1 Inventions and New Patents (1-20-2)

9

... the extension of the patent right is determined by the withdrawal, and the period of the original approval extension is deemed to have not existed from the beginning. However, the period during which the approval is extended exceeds the period during which it cannot be implemented, and the period of the establishment of the approval is deemed to be unextended.

... the extension of the patent right is determined by the withdrawal, and the period of the original approval extension is deemed to have not existed from the beginning. However, the period during which the period of approval is extended beyond the period of inability to implement or the period of approval approved by the foreign country during the period of the approval of the license exceeds the approval of the foreign patent authority, and the period exceeding the period is deemed not to be extended.

Amended in accordance with Article 57 of the amended Patent Law promulgated on May 1, 2019

Chapter 21 (1-21-1)

10

If the application for the issuance does not specify the statement of the issuance, the reason for the issuance, the evidence without the evidence, or the fact that the basis for the issuance is not specified, the informant will be notified to make corrections within one month from the day following the issuance of the application. For certification, according to Clause or states denounced those who according to still continue the program. However, if the statement of the issuance is not stated at the time of the issuance or the reason for the issuance is not stated and there is no evidence attached, the application shall not be accepted if the notice is corrected without rectification.

If the application for the issuance does not specify the statement of the issuance, the reason for the issuance, the evidence without the evidence, or the fact that the basis for the issuance is not specified, the informant will be notified to make corrections within one month from the day following the issuance of the application. The evidence or the person who did not specify the basis for the issuance will continue the procedure. However, if the statement is not stated at the time of the issuance; the reason for the issuance is not stated and the evidence is not attached. If the notice is corrected without rectification, the application for the application shall not be accepted.

Text correction

Chapter 21—Proceeding documents and items to be recorded (1-21-3)

11

After accepting the application for the issuance, if the statement, reasons and evidence procedures attached to the sender are complete, the copy of the application and the attached evidence shall be sent to the patentee for a period of one month from the day after the copy is served. In addition to the reasons for the patentee to first affirm the reasons and grant the extension, the period will not be defended and will be reviewed. If the issuer has a supplementary reason within 3 months of the application,

The evidence shall be sent to the patentee for supplementary reply within the specified period. The patentee does not supplement the respondent during the term and is subject to review. However , if the applicant has filed an application for more than three months to submit additional reasons and evidence, it will not be considered in accordance with the law , nor will it be delivered to the patentee for a reply (see the fifth chapter for the examination of the first chapter of the patent right).

After accepting the application for the issuance, if the statement, reasons and evidence procedures attached to the sender are complete, the copy of the application and the attached evidence shall be sent to the patentee for a period of one month from the day after the copy is served. In addition to the reasons for the patentee to first affirm the reasons and grant the extension, the period will not be defended and will be reviewed. If denounced people afterward they have additional grounds, the evidence should be sent together

The patentee shall provide a reply within the specified period. The patentee does not add a reply to the respondent during the term and is subject to review. But when to give hair the review, in order to avoid procedural delays, such as what evidence giants clear or denounced people have delayed reviewing danger of those who ,for reasons or evidence denounced people make mention of, could not be delivered patentee A debate, diameter be reviewed For details, please refer to the fifth section to review the first chapter of the patent right. Section 3.2 supplementary reply).

Amended in accordance with Article 74 of the amended Patent Law promulgated on May 1, 2019

Chapter 21: 5. Delivery of patentee's reply (1-21-3)

13

1. Patent rights are eliminated

The legal reasons for the extermination of patent rights are as follows: (1) When the patent right expires, it will be destroyed after the expiration: The term of the patent is expired in the invention from the filing date of 20 years, and the new type is calculated from the filing date. The expiration of 10 years and the design (new style) will expire in 15 years from the date of application.

 

1. Patent rights are eliminated The legal reasons for the extermination of patent rights are as follows:(1) When the patent right expires, it will be destroyed after the expiration: The term of the patent is expired in the invention from the filing date of 20 years, and the new type is calculated from the filing date. The expiration of 10 years and the design (new style) will expire in 1215 from the date of application.

Amended in accordance with the amended Patent Law promulgated on May 1, 2019

Chapter 22- Elimination, Cancellation and Reply of Patent Rights

1-22-1

 

The “2019 Taiwan United Online Shopping Festival’s” Upcoming Debut

2019.09.23

For the first time, Taiwan will participate in MYCYBERSALE ASIA. This cross-border cooperation sales event will be held between September 24th and October 3rd. A joint international launching ceremony was held in conjunction with Malaysia. This enables Taiwanese based firms to access and sell high-quality Taiwanese products to the international market.

MYCYBERSALE ASIA signifies the first e-commerce cooperation between Taiwan and Malaysia. The Ministry of Economic Affairs (MOEA) described it as the " touchstone of Taiwan in the international emerging market". In the future, the MOEA hopes to expand cooperation with other South Asian countries to eventually create a regional online shopping festival for Taiwan. It is also hoped that this will foster cross-border exchanges and development between Taiwanese and Southeast Asian countries.

The Commerce Department in the MOEA suggests that this will provide Taiwan's specialty businesses, beauty, homeware, fashion and food industries, centuries-old stores and restaurant operators with much needed international market access. However, due to the general lack of cross-border sales experience, it could take some time to implement.

Malaysia has held the "Malaysia Online Shopping Festival" for five consecutive years. In this time, the total transaction volume has increased from NT$500 million in 2014 to NT$2.9 billion in 2018, attracting more participants from Asia, the Middle East, Europe and the United States.

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ManpowerGroup: “Mining and Construction sector expects strong hiring pace”

2019.09.23

According to the ManpowerGroup Employment Outlook Survey released this month, Taiwan’s hiring outlook for the fourth quarter of the year is the second strongest in the world. Thus, Taiwan maintains its position as one of the two strongest forecasts in the Asia Pacific region, behind Japan.

 

Taiwanese employers were asked “How do you anticipate total employment at your location to change in the three months to the end of December 2019 as compared to the current quarter?”. It was subsequently found 25% of the employers forecast an increase in payrolls, 5% anticipate a decrease and 70% are expecting no change.

 

The Ministry of Economic Affairs attribute this confidence, in part, to the “invest at home” program. From its inception, employer confidence appears to be growing gradually. However, the global economic climate was reflected in the latest outlook, particularly the hiring outlook for the restaurant and hotel industry, which is down 5%.

 

Transport and Utilities forecasts the weakest intentions, with employers reporting a 7-percentage point decline when compared to the last quarter. This is the weakest reported by manpower in 3 years.

 

Local manufacturing sector also reports a moderate outlook, +18%, which although is a 1 percentage point increase quarter-over-quarter, it signifies a decline of 5 percentage points year-by-year.

 

On the other hand, the strongest hiring plans are reported in Mining and construction with an Outlook of +33%. This is an increase of 5 percentage points quarterly.  The sector has been a key beneficiary of the government’s infrastructure program.

 

Modest job gains are expected in the Finance, Insurance and Real-estate sector, where employers repot a New Employment Outlook of +29%. Hiring needs in the financial sector are mainly in the fields of financial technology while the service sector retains a strong demand for experts in emerging technologies (AI, data computing and electronic payment).

 

ManpowerGroup also found that job seekers can expect positive hiring climate in the Service industry, which has remained unchanged compared to the previous quarter, but improves by 4 percentage points year-on year.

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Taiwan Responds to India’s Tech Tariffs

2019.09.12

Taiwan initiates dispute proceedings in response to India's tariffs on information and communications goods.

 

Dispute consultations were presented to the World Trade Organization (WTO) on Monday.  In a statement, the WTO announced Taiwan has requested consultations regarding duties imposed on phones, amplifiers, digital cameras, base stations, optical fiber cables and electronic integrated circuits.  This request was circulated to WTO members on September 9th. 

 

According to the WTO, Taiwan alleges that despite India's legally binding commitment in the WTO that it would not charge import duties on ICT products, India has been applying duties ranging from 7.5% to 20%, thus, violating global trade rules. Under WTO rules, India must respond to Taiwan's request by September 12th. By this date, Taiwan will be aware of India's position and perhaps begin to resolve the tariff dispute.

 

The "request for consultations" formally initiates a dispute in the WTO. Consultations allow parties to discuss and resolve the dispute without litigation. If consultations have failed to resolve the dispute, the complainant may request adjudication by a panel, after 60 days.

 

The mission outlines that these tariffs have been rising incrementally since 2014. Taiwan is not the first to raise concern over the tariff hikes. In April, the European Union challenged similar measures by initiating WTO dispute proceedings; this dispute is yet to be resolved. Similarly, Japan challenged this issue in May. Finally, Canada, Thailand, the US and Singapore have also raised the same concerns.

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Google Unveils Plans to Open Second Data Center in Taiwan

2019.09.12

The Ministry of Economic Affairs (MOEA) announced Google's Taiwan expansion plan in a statement published on Wednesday.  According to the MOEA, Google's land purchase at Tainan Science and Technology Industrial Park will respond to their "operational needs".  Google engaged with the MOEA, The Tainan Municipal Government, Tainan Science and Technology Industrial Park and Taiwan Power Company during the site selection process.

 

When outlining the reasons behind this decision, google notably mentioned Taiwan's competitive, international high-tech industry and also its advantageous position in the heart of Asia. These are also the advantages that Google cited when launching the data center in Changhua in 2013.

 

Environmental commitments were also outlined during this announcement. Google will be investing in several environmental protection initiatives, including waste management plans and electric vehicle charging stations. At the beginning of 2019, Google committed to a long-term commitment to adopting renewable energy in Taiwan by purchasing 10MW (million) renewable energy power from a solar power plant located in Tainan City.

 

Over the past few years, Google has continued to support the development of neighboring communities in the Taiwan Data Center through the Datacenter Community Grant Program. From 2015, there have been more than 40 public schools and non-profit organizations and more than 50 projects to help local communities develop a total of $430,000 (about NT$13.5 million) in grants. The program is designed to support STEM education, assist in the digital divide, and develop actions to maintain regional ecology.

 

The Ministry of Economic Affairs states that it will "continue to work with Google to expand investment and cooperation in Taiwan".

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Preferential Tariffs Between Taiwan and Paraguay to Take Effect

2019.09.06

Preferential tariffs between Taiwan and Paraguay took effect on the 5th of September. According to the Bureau of Foreign Trade (BOFT), Taiwan is to remove or reduce tariffs on 31 categories of Paraguayan products. In return, Paraguay agreed to reduce tariffs on 14 categories of Taiwanese products. This is a continuation of the bilateral economic agreement which took effect in February. 

 

The 14 categories of Taiwanese products include rice noodles, woven fabric products, knitwear and handbags, as well a s a variety of iron, steel, machinery and motors. In turn, Taiwan will allow up to 60,000 tons of tariff-free sugar from Paraguay. Other Paraguayan products that will enjoy tariff-free exemption, immediately or in phases, include pork tendons and mate tea. 

 

Tariff reductions were initially discussed during the first joint committee meeting, held in June 2018, to review the implementation of the Taiwan-Paraguay Economic Cooperation Agreement (ECA). This decision is based on numerous studies which prove that Paraguayan imports have no immediate impact on Taiwanese local businesses. 

 

There is also an opportunity to boost bilateral trade and enhance diplomatic ties. As Paraguay is a member of the Mercosur trade bloc, lower tariffs for products entering Paraguay can facilitate easier access to South American markets for Taiwanese products. 

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Ministry of Finance Urges Foreign Profit Seeking Enterprises to File Tax Returns

2019.09.06

The National Taxation Bureau of Taipei (NTBT), and The Ministry of Finance (M.O.F.) communicated that foreign profit-seeking enterprises, with neither permanent establishments nor business agents, selling cross-border electronic services and obtaining Taiwanese source income (not within the withholding tax scope) should file income tax returns and execute tax payments. Failing to do so may result in delinquent reporting surcharges.

 

According to the NTBT, since 2017, foreign profit-seeking enterprises without permanent establishments or business agents selling cross-border electronic services to buyers within Taiwan and obtaining income (not within the withholding tax scope under Article 88 of the Income Tax Act, i.e. income derived from B to C transactions) must file profit-seeking enterprise income tax returns and submit tax payments during the declaration period of the taxable year in accordance with Paragraph 1, Article 73 of the Income Tax Act and Article 60 of the Enforcement Rules of the Income Tax Act.

 

Furthermore, where a taxpayer fails to file an annual income tax return within the prescribed period, the tax authority shall serve a "delinquent notice", requesting the taxpayer to complete an annual income tax return and submit tax payments within 15 days from the date on the notice.

 

If the taxpayer files the requested income tax return and submits payments within the time limit, the tax authority shall levy a delinquent reporting surcharge amounting to 10%.  The amount payable will not exceed NT$30,000 but not be less than NT$1,500.

 

However, if a taxpayer fails to file an annual income tax return within the time limit, the tax authority shall levy a delinquent reporting surcharge of 20%. In this instance, the payable amount will not exceed NT$90,000 but not less than NT$4,500.

 

If additional taxation data is discovered prior to the determination of taxable income based on new data or the profit standard of the same trade, the M.O.F  shall impose a fine of no more than three times the amount of tax determined as payable alongside tax determined payable in accordance with Paragraph 2, Article 110 of the Income Tax Act.

 

Finally, the National Taxation Bureau of Taipei (NTBT), and the Ministry of Finance (M.O.F.)urge enterprises who are yet to file income tax returns to do so at their earliest convenience through the eTax Portal.

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China Adopts Resource Tax Law to Protect Environment

2019.08.30

On Monday this week (August 26, 2019), China’s first Resource Tax Law was adopted at the five-day bimonthly session of the 13th National People’s Congress Standing Committee (the “Law”), which will enter into force on September 1, 2020. The Law will formally replace the Interim Regulations on Resource Tax effective as of November 1, 2011, aiming at formally legalizing taxation on resource exploitation to better protect environment nationwide.

We hereby draw your attention to the following:

(1) Tax rates for 164 categories of natural resources

The Law lists tax rates for almost all minerals and salts found in China, in which some of the natural resources apply fixed tax rates and others have floating tax rates.

Examples for fixed tax rates:

Note: According to the 2019 Negative List, the exploration and development of oil and natural gas are not limited to joint venture operations anymore. In addition, prohibition on foreign investment in exploration and mining of molybdenum has been abolished.

Examples for floating tax rates:

(2) Tax scope adjustment: Pilot reform on water resource tax

The Law expands the scope of the resource tax by including surface water and underground water into the tax collection scheme on a trial basis to curb the overexploitation. Accordingly, the previous charging items on water administration fees shall be cancelled. In addition, the Law also clarifies that it is at the local governmental authorities’ discretion to decide specific tax rate and the tax rate shall be based on the conditions of the water resources, type of the water resources, as well as the economic development situations in specific regions.

(3) Tax exemption and reduction policies

The law stipulates that enterprises who exploit resources in an environmental-friendly manner are entitled to enjoy resource tax exemption or a reduced tax rate.

It is also reported that detailed implementation rules are on the consideration process now. 

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The Repatriation of Overseas Taiwanese Businesses

2018.09.03

On the 3rd of July, the Legislative Yuan finalized readings of a bill on the repatriation, use and taxation of overseas funds. The bill incentivizes and rewards Taiwanese companies and investors to return and invest in Taiwan. 

The Ministry of Finance[1] outlines the key provisions as follows:

Scope

a. Individuals can repatriate funds from abroad (including from the People’s Republic of China)

b. The investment income from profit-making enterprises that have been transferred and remitted from overseas (including the People’s Republic of China) with its control ability or significant influence. 

 

Applicable Principles 

a. Companies and individuals can elect to be taxed under the provisions of this Bill. Those who choose to do so shall be exempted from the basic tax and income tax[2], the People's Relations Regulations of Taiwan and the Mainland and the Income Tax Law. This election is, however, irreversible.

b. The implementation of the Bill shall comply with the Money Laundering Prevention Act, the Danger Prevention and Control Act and related laws and regulations. The XYZ have all agreed to participate to ensure the standard is upheld.

 

Application Procedures 

To register, one must apply to the competent authority, who will then conduct preliminary examinations on the applicable requirements and contact the relevant bank for review[3]. Upon successful application, the applicant will then open a “Foreign Capital Foreign Exchange Deposit Account[PLT1] ” and remit the tax incentive into the account. 

 

Restrictions on capital use

1. Remittance funds shall not be used for the purchase of real estate and the beneficiary securities issued or delivered under the Real Estate Securitization Ordinance. Unless one gains approval from the Ministry of Economic Affairs to allow for the construction or purchase of buildings for self-production or business use. 

2. The repatriation of overseas funds must be deposited in the “Foreign Capital Foreign Exchange Deposit Account” and ought to be managed in the following ways:

 

a. Substantial investment: Direct investment in the industry or investment in key policy industries through venture capital or private equity funds approved by the Ministry of Economic Affairs

b. Free use: 5% limit

c. Financial investment: 25% limit

Thus, funds for free use and a substantial investment, financial investment and any remaining funds not engaged in the investment shall be deposited into the “Foreign Capital Foreign Exchange Deposit Account” for 5 years.

Applicable tax rate

a. General tax rate: The tax will be deducted from the receiving bank when the funds are remitted to the foreign exchange deposit account. The repatriation rate is 8% in the first year and 10% in the second year. 

b. Preferential tax rate: The actual investment is completed within the prescribed time limit, and the Ministry of Economic Affairs shall issue a certificate of completion of the issuance and may apply to the collection authority for a refund of 50% of the tax (i.e., the actual tax rate is 4% or 5%). 

c. The following cases are not managed according to the regulations, and the different tax shall be paid at the rate of 20%: 

 i. In violation of the regulations, the funds shall be withdrawn from the special account of foreign exchange     deposits, trust account or securities. 

 ii. In violation of the regulations, the funds are used for other purposes or as a basis for quality loans, guarantees or otherwise reduce their value. 

 iii. Violation of regulations for the purchase of Real Estate. 

 

Additional Mechanisms 

During the period of the actual investment, the individual or the profit-making enterprise shall report the investment to the economy yearly. For future reference, the receiving bank shall report the use of funds within the special account to the Ministry of Finance and the Financial Management Committee for reference yearly.

Implementation period: Following the implementation of these Regulations, the Executive Yuan must verify the date of implementation of the profit-making business and individual CFC system within a year. All funds remitted within 2 years of the implementation of these Regulations shall be subject to the provisions of these Regulations. 

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China Revises Drug Administration Law to Regulate Pharmaceutical Sales

2019.08.30

This Monday, PRC Drug Administration Law was also revised (the “Amendment”) at the 12th session of the Standing Committee of the 13th National People’s Congress, which will enter into force as of December 1, 2019. 

The Amendment stipulates the following changes:

(1) Online sales of prescription drugs

The Amendment clearly gives a green light to the prescription drugs to be sold online. However, vaccines, blood products, anesthetic and radioactive drugs and so forth are not permitted to be sold online.

(2) Re-definition on counterfeit drugs

Currently, drugs not approved by Chinese drug authorities but legally available in overseas markets are considered counterfeit drugs and one who sells such drugs is subject to severe punishment. The Amendment finally re-defines the counterfeit drugs by adding if one imported only a tiny amount of such drugs that do not cause any health damage/delay or interfere with any existing treatment, then it can be exempted from punishment. It is said that further details (how to define tiny amount?) will be clarified soon.

(3) Punitive damages

The Amendment also increases the punitive damages for counterfeit drug producers. For example, counterfeit drug producers will be fined up to 30 times the value of drugs produced or sold, compared to the fine up to 5 times the value before the Amendment released. 

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China Revises Land Administration Law to Further Clarify the Land Property Rights

2019.08.30

At the 12th session of the Standing Committee of the 13th National People’s Congress, another law, PRC Land Administration Law, has been amended as well (the “Amendment”), which will enter into force as of January 1, 2020. We hereby highly the following two changes:

(1) Reform of government land requisition

The Amendment reforms the land requisition system by narrowing the applicable situations for land expropriation. Previously, it stipulates that the land can be expropriated for public interest, which seems to be quite vague. According to the Amendment, only under the following situations, the land can be expropriated: Military and diplomatic reasons, infrastructure and public construction organized by the government, relocation of residents in poor areas, and government-subsidized housing projects.

In addition, the Amendment also improves the transparency of the land requisition. Specifically, the government shall publish the plan of land requisition 30 days in advance, and in case of receipt of any different voices, a hearing shall be arranged accordingly to listen to the opinions of local people involved in the land requisition.

(2) Protection of basic farmland

The Amendment also enhances the protection of basic farmland and a new definition of “permanent basic farmland” has been introduced. It clarifies that no organizations or individuals can occupy the farmland or put it into other use without permission, and permanent basic farmland shall account for 80% of the cultivated land in the respective administrative areas. 

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Taiwan and Thailand Ink Business MOUs in Bangkok

2019.08.29

The annual Thailand-Taiwan Industrial Collaboration Summit concluded Tuesday 20th. The National Federation of Industries (Taiwan) and The Federation of Thai Industries (FTI) the Federation of Thai Industries signed seven Memorandums of Understanding (MOU). The MOUs will generate new opportunities to cooperate across several industries such areas as the Internet of Things and smart city solutions.

 

Close cooperation between Taiwan and Thailand could prove advantageous, helping maintain and boost current orders amid ongoing trade disputes. Taiwan and Thailand can better cooperate in the food, textile, machinery and unmanned aerial vehicle sectors.

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The Constitutional Court Rules Pension Amendments Unconstitutional

2019.08.29

The Constitutional Court concludes that changes made to public employee pension laws in 2018 violate the Constitution. This announcement succeeds the issuance of constitutional interpretations on three pension reform petitions filed by Kuomintang legislators.

 

The disputed pension reforms targeted civil servants, public school teachers and military personnel and took effect on July 1, 2018. The policy cut pension benefits to public-sector workers in an attempt to extend the life of the pension programs.

 

The petitions claimed that:

1.  The legislation overrules past legal facts;

2. The new legislation violated the principle of "non-retroactivity";

3. The legislation denies pensioners benefits initially promised as conditions of employment they expected to receive.

 

The petitions had argued that the new laws overruled past legal facts and violated the principle of "non-retroactivity" and also denied pensioners benefits that had been promised as conditions of employment and that they could legitimately expect to receive. Justices of the Constitutional Court were asked to determine whether the revisions violated the principle of non-retroactivity, the doctrine of legitimate expectations, and the right to own property.

 

Ruling

The Constitutional Interpretations, No. 781, No. 782 and No. 783 were available to the public at 4 p.m. on Friday.

 

The court found the laws consistent with the Constitution, except for regulations stipulating that "pensions would be suspended if public sector pensioners are hired by private schools".

 

The Act of Military Service for Officers and Non-commissioned Officers of the Armed Forces (陸海空軍軍官士官服役條例) states that pensions for retired military officers and sergeants will be stopped if they are employed as full-time teachers at private universities or colleges and paid a monthly wage higher than Grade 1 (the most basic level) plus a professional stipend.

 

The court found this provision violates the right to equality, as guaranteed in the Constitution, as it limits the working rights of pensioners and limits them from accessing opportunities available to others. The court also states that pensions are not to be treated as deferred salary payments so their pensions should not be stopped, even if they earn a salary

 

This ruling extends to regulations in the Act Governing Retirement, Severance and Bereavement Compensation for the Teaching and Other Staff Members of Public Schools (公立學校教職員退休資遣撫卹條例) and the Act Governing Retirement, Severance and the Civil Servant Retirement and Severance Pension Act (公務人員退休資遣撫卹法). These laws took effect on August 2017.

 

However, the court also determined that while retired public-sector workers will receive lower pensions, they are still receiving a pension, therefore, the revisions did not overturn a legal fact and are thus, non-retroactive. The revisions do not violate the principle of "legitimate expectations" because the payments were reduced, not completely revoked. In percentage terms, the revised pensions are in line with international norms.

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The Basic Wage Review Committee concludes, Raising the monthly minimum wage by 3%

2019.08.20

The minimum monthly wage increased by 50% since 2011. Following several hours of deliberation with labor, capital, academic and political groups, The Basic Wage Deliberation Committee of the Ministry of Labor (MOL) agreed to raise the national minimum wage. The hourly and monthly rate will increase by 5% and 3%, respectively. 

 

The overall socio-economic situation, consumer price index, annual growth rates, domestic economic growth rate and the capacity of SMEs and micro-enterprises were key considerations.  During deliberations, representatives from employer groups outlined the necessity to consider current global market conditions when raising the national minimum wage. They also expressed the need to consider potential strain caused by international trade disputes. On the other hand, the chairman of the Labor Party and the National Federation of Trade Unions stated: "Taiwanese workers deserve better treatment." Labor groups advocated for workers’ rights, specifically citing the need to improve conditions for “grass-root workers”, considering recent price fluctuations in commodities. 

 

The monthly minimum wage increases from NT$23,100 to $23,800. As for the hourly minimum wage, it increases from NT$150 to NT$158. 

In line with the Labor Standards Act, foreign workers in Taiwan will be entitled to this pay raise.  Altogether, 2.31 million laborers will benefit from this change; 1.36 million Taiwanese, 430,000 migrant and 520,000 part-time workers. 

 

The R.O.C General Chamber of Commerce expressed concerns that this measure could result in an increase in commodity prices, raise the cost of living, reduce real purchasing power and affect domestic demand.

 

Several business groups expressed concerns that the increase in hourly wages and monthly salaries may significantly increase labor costs by 20 billion. The share of all enterprises in Taiwan held by SMEs is roughly 96.49%, 80% of which are micro-enterprises. Such businesses may not have the capacity to shoulder the cost in the current global climate.

 

If one assumes labor markets are competitive and perhaps an increase in the national minimum wage encourages lower employment, then rising unemployment will harm aggregate demand. People who become unemployed would spend less, leading to lower aggregate demand. Critics of this decision point to Korea as a cautionary tale. The minimum wage salary increased by nearly 30% over three years. Despite measures adopted to prevent this, unemployment in Korea reached 1.52 million and many small and medium-sized enterprises have closed down.

 

Alternatively, if workers receive a pay rise, there could be a rise in consumer spending. Thus, low-income workers are likely to have higher marginal propensity to consume. A pay rise could also cause a multiplier effect, causing knock-on effects elsewhere in the economy; this should encourage economic growth.

 

The proposed changes have now been sent to the Cabinet for approval. Once approved, this would mark the fourth time the monthly minimum wage has been increased since 2011.

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Taipei District Court Rules in Favor of Same-Sex Couple

2019.08.20

On 14th August, Taipei District Court ruled in favor of a man who lost his partner before the legalization of same-sex marriage in Taiwan.

 

Background

 

The couple in-question registered their same-sex partnership at a New Taipei household registration office in June 2017. This allowed them to sign medical consent forms for each other. One of them died in November of the same year. His partner consequently applied to the Bureau of Labor Insurance for a funeral subsidy. The application was reviewed and subsequently rejected because the people concerned were in a same-sex partnership but were not legally married at the time. The Bureau stated that only married couples are entitled to this benefit. Despite several appeals, he was continuously denied on the same basis.  Therefore, he filed an administrative lawsuit with the Taipei District Court.

 

The claimant’s partner had died before the implementation of the Interpretation Act No. 748. This law took effect on May 24, 2019. It not only gives same-sex couples the right to get married, but also entitles them to the rights originally reserved for married heterosexual couples.

 

Ratio decidendi

 

The Taipei District Court believes that the interpretation of the Interpretation Act No. 748 should be applied to treat the "same-sex couple notes" during the transition period as "marriage registration" and to apply the provisions of Article 62, paragraph 1, "spouse" of the Labor Insurance Ordinance.

 

The Judgment states that in accordance with Articles 2 and 4 of the Interpretation Act of Articles 982 and 748 of the Civil Code, whether it is a heterosexual marriage or a permanent combination of intimacy and exclusivity, it is "written" or "more than 2 persons". The signature of the witness and the "marriage registration" are formal requirements.

 

Verdict

 

The court agreed that the couple had established a permanent and exclusive relationship. Albeit not a legal marriage, their partnership was formal, endorsed by two or more witnesses, and recorded by the Household Office for same-sex couples. The Labor Insurance Bureau did not dispute whether the couple were following the formal requirements for marriage as defined in Article 982 of the Civil Law, except for the registration of marriage by the household administration.

 

The Court relied on the interpretation of the purpose of guaranteeing the freedom and equality of same-sex marriage, and the analogy applied to the provisions of Article 4 of the Interpretation Act No. 748 and the previous paragraph of Article 24, Item 2, and the couple during the transition period. "Same-sex couple notes" is regarded as "marriage registration" and is subject to the provisions of Article 62, paragraph 1, "Spouse" of the Labor Insurance Ordinance.

 

The judge also believes that the term "spouse" is applicable to their relationship at the time of death.

As a result, the claimant was awarded the funeral allowance according to the provisions of Article 62, paragraph 1, of the Labor Insurance Regulations. The initial judgment and the dispute review were all revoked.

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Taiwan and the Republic of Nauru sign a Mutual Assistance Treaty on August 7, 2019

2019.08.13

International mutual legal assistance treaties and agreements assist Taiwanese procuratorates to fight crime. On August 7th, 2019, the Minister of Justice of the Ministry of Justice announced the signing of the "The Republic of China (Taiwan) Government and the Republic of Nauru Criminal Mutual Assistance treaty". This marks the sixth criminal mutual legal assistance treaty signed by Taiwan; others include Poland, South Africa and the U.S. This is also the second treaty approved by the Ministry in the past two months.

Concluding two years of consultations, both parties reached a consensus on the joint efforts of the Ministry and the Ministry of Foreign Affairs and the Taiwanese Embassy in Nauru. After it's ratification, Taiwan and Nauru will be able to collaborate in criminal investigations, prosecutions, court trials and crime prevention efforts.

 

Scope:

 

  1. Obtaining testimonies or confessions; 
  2. Providing documentary evidence;
  3. Confirming the location and identity of the person concerned;
  4. Performing searches and seizures;
  5. Assisting in freezing, seizing and executing fines;
  6. Any other assistance per the law of the requested State;
  7. Use of video interrogations;

 

Furthermore, the requesting party may be present for the witness/ defendant statement, allowing case handlers to form a substantive Joint Investigation Team. Both parties have also expressed the benefits of science in tackling cross-border crimes.  The use of science and technology greatly reduces the time and labor required for cross-border evidence acquisition and improves the overall efficiency of a criminal investigation. According to the Ministry of Justice (Taiwan), judiciary and law enforcement agencies will be able to establish direct and rapid links to effectively curb cross-border crimes such as drug trafficking and telecom fraud in the Pacific region. 

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Taiwan To Ban Imports and Exports of Products Containing Mercury

2019.08.13

On Wednesday, The Environmental Protection Agency (EPA) restated its plans to further restrict imports and exports of products containing mercury, including mercury thermometers and tubes. This marks the largest step towards limiting mercury supplies for environmental protection and constitutes a progression from the 2017 ban on the production of mercury products, according to the head of the EPA's Toxins and Chemical Substances Bureau.  These changes we will comply with the Minamata Convention on 31 December 2020, unless the convention is subsequently updated. Under Article 4 of the convention, all signatories agree to ban the manufacturing, importing and exporting of "mercury-added products".  As Taiwan cannot formally ratify this convention, they have incorporated the following changes into domestic law:

  • A ban on the manufacture of various mercury-added products listed in Annex A of the convention. This includes batteries, switches and relays, fluorescent lamps, mercury vapor lamps and various measuring devices such as barometers, thermometers and blood pressure monitors. It is important to note that these bans will be effective except in circumstances where no feasible mercury-free alternative for replacement is available. This is effective on 1st January 2021;
  • The use of mercury to manufacture mercury-added products will no longer be permitted. There is an exemption for the manufacture of calibration instruments, in line with exclusions listed in Annex A of the convention.  This will be effective by 31st December 2020.

 

The EPA will have also stated that they require manufacturers and importers who use 106 listed chemical substances to register with the government.

 

EPA chief also highlighted that the chemical industry was a key contributor to early periods of Taiwan's economic development. Nonetheless, the potential environmental damage was a key consideration in the ratification of the convention.

 

To further counter this form of pollution, the EPA co-operated with other relevant government agencies, such as the Ministry of Economic Affairs, to formulate measures to strengthen pollution controls. The challenges and opportunities facing the environment require a global effort and this is will form part of the foundation for long-term mutual exchange and cooperation.

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FSC issues Taipei Fubon Bank and First Commercial Bank 6 and 2 million NT$ Fines

2019.08.05

Within 9 days, the FSC fined nine banks a total of NT$53 million. South China Bank, Federal Bank, Taishin Bank, HSBC (Taiwan) Bank, Shin Kong Bank, CITIC Bank and Cathay Pacific Bank were fined on July 30th for “misappropriation of client funds”. On August 1, 2019, First Commercial Bank and Taipei Fubon Bank were issued NT$2m and NT$6 million fines, respectively, for inadequate money laundering operations.  The FSC found that the banks were in violation of the following:

 

First Commercial Bank

 

•           Failure to establish a proper money laundering prevention system and control transaction monitoring mechanism. The handling of customer due diligence, customer identity measures and review mechanisms were not implemented, and the account and transaction continuous monitoring operation were found to be inadequate.

•           The bank was in receipt of a nominal cash remittance greater than NT$ 500,000 which was not sufficiently checked. The bank were unable to confirm the identity of the customer, triggering a Ministry of Justice investigation.

•          Inconsistency with Article 13 (3) of the Money Laundering Prevention Act and the provisions outlined in Article 13 of the Financial Institutions' Measures against Money Laundering.

•           According to Article 129, paragraph 7, of the Banking Act, the bank is subject to a fine of NT$2 million.

 

Taipei Fubon Bank

 

  •         Failure to implement KYC(know your customer) to understand customers and conduct risk assessment. The FSC committee determined that Taipei Fubon bank had not properly established and implemented adequate internal control systems to prevent money laundering.

•        This was in violation of Article 7 of the Money Laundering Prevention Act and Article 1 of Article 45 of the Banking Act.

•        The provisions  mandate that sound management will be subject to a NT$6 million fine and corrected in line with Article 1 and Article 129, Paragraph 7 of the Banking Act.

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Taiwan Q2 GDP Growth Beats Expectations

2019.08.05

The Directorate General of Budget, accounting and Statistics (DGBAS) reported GDP growth higher that surpassed previous predictions. It was suggested that the economy likely grew by 2.41 percent during the second quarter, surpassing the estimation of 1.78 percent. On Wednesday, it was reported that the annual growth of the year will likely reach 2.19 percent as Taiwan’s exports and domestic investment surpassed an earlier estimate.

In the first half of 2019, GDP grew by 2.07 percent and consumption also increased by 1.57%(yoy). This is higher than the 1.32% growth in the previous quarter, mainly reflecting the sales growth of cars and electric scooters and partly offset by a decrease in sales of information and communications equipment, and the slump in financial services.

Investment also increased by 6.04%(yoy), following the 6.90% growth in the first quarter, primarily due to the increase in machinery and equipment investment as well as transport equipment. Additionally, real exports of goods and services grew by 4.11%(yoy), an improvement from 0.97% growth in the previous quarter, mainly driven by strong international demand for information, communication and audio-video, as well as refined petroleum products. Finally, imports also increased by 3.69%(yoy).

The DGBAS said it will release an updated GDP growth forecast for 2019 on August 16 but have cautioned to consider “numerous unpredictable factors” including exchange rates, politics and oil prices.

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The Executive Yuan Approves Draft Act that will allow employers to offer new contracts to workers over 65

2019.07.29

On the 25th July, the Executive Yuan approved a draft act that will enable employers to offer new contracts to workers aged 65 and older. The draft Law on the Promotion of Employment of the Middle And The Elderly  will relax existing regulations surrounding the mandatory retirement age which is currently 65. According to Executive Dean Su Yuchang, the working population, aged 15 to 64, has been decreasing annually since 2015. In order to counter any potential implications to the labor market, the government has adopted a variety of policies, programs and practices to improve the labor participation rate of all age groups.  Law maker, Dean Su pointed out that the current retirement age encourages people to leave the workplace or retire prematurely, regardless of their physical strength, skills, experience and willingness to remain in the workplace. The government aims to empower people in this age bracket to continue to invest in national development needs by staying in the workforce, if possible. 

This law also aims to protect employment rights, offer fair employment opportunities, and affords employers increased flexibility.  After the law was submitted to the Legislative Yuan for deliberation, the executive contacted the Ministry of Labor ensure that the legislative process is completed as soon as possible. 

The new provisions are as follows: 

  • Employers should provide a friendly employment environment in accordance with the needs of senior citizens and senior citizens employed. (Article 5 of the draft) 
  • The competent authority shall monitor labor conditions, handle relevant investigations and shall consult relevant agencies to determine employment plans for middle-aged and elderly people; (Sections 6 and 7 of the Bill) 
  • The competent authority may employ employers, employers, academic experts and representatives of government agencies to discuss and consult matters concerning the employment rights of middle-aged and elderly people. (Article 8 of the draft) 
  • An employer may not discriminate on the grounds of age. This draft also outlines the burden of proof, the grievance procedure, the liability for damages, and penalties in such circumstances. (Sections 12 to 17, 41 and 42 of the Bill) 
  • To encourage people to stay in work, employers must adopt on-the-job training and re-employment (Articles 18 to 22 of the draft) 
  • The competent authority shall assist middle-aged and elderly people in employment or entrepreneurship, and may issue relevant allowances, subsidies or awards. (Sections 23 to 27 of the Bill) 
  • To support re-employment after retirement, employers may offer workers over 65 relaxed contracts.  Employers can also provide retirement assistance or re-employment assistance for one year before retirement. The central competent authority may also provide relevant subsidies and establish a database of retired personnel. (Articles 28 to 32 of the draft) 
  • The central and local competent authorities may promote the service of previously retired talent. The local competent authority shall regularly submit implementation result reports to the central competent authority and accept the supervision and assessment of the central competent authority. (Sections 33 to 35 of the Bill)

It will be submitted to the Legislative Yuan for consideration at a later stage. 

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The Ministry of Economic Affairs Announces the "Industrial Upgrade and Innovation Platform Coaching Program"

2019.07.29

On the 22nd July, the Ministry of Economic Affairs (MOEA) announced the "Industrial Upgrade and Innovation Platform Coaching Program" thematic R&D project- engineering experiment wafer mask support program.

The main objective, as outlined by the MOEA, was to aid Taiwan’s competitive semiconductor industry. The MOEA have also described the semiconductor industry as Taiwan's "national industry", the pillar of Taiwan's economy, and the most important foundation for the government to promote 5+2 industry innovation. However, the high R&D cost of IC advanced processes is one of the main obstacles for Taiwan's small and medium-sized companies when they seek to develop innovative products. In order to encourage domestic newly created small and medium-sized enterprises, the program is designed to assist Taiwan's small and medium-sized start-up companies to master key technologies/products. 

The main objectives are as follows: 

  1. To assist local industries, in line with national policies, in the Internet of Things (IoT), artificial intelligence (AI), AloT, 5G, AR/VR/MR, security, medical power, and vehicle power. 
  2. Reducing the high R&D cost of Taiwan's small and medium-sized start-up companies to develop advanced IC products, subsidizing the cost of engineering test wafer masks in the research and development and trial production stages, and reducing investment pressure. 

Review focus (including performance indicators) 

1. Technical energy: The enterprises should have the human and project execution and management capabilities required for research and development and have access to the experience of working in IC design innovation services. Conduct industrial technology research and development for the application plan. 

2. Technical content, implementation method and product development plan: wafer function, wafer development time, engineering experiment wafer mask under-line planning during the project and the associated wafer foundry. The description of the chip function includes: 

  • Describe the function of the chip to be developed from the product or system    application.
  • It is expected to develop a circuit block diagram of the wafer. 
  • Process technology expected to be used on the wafer. 

Innovation or difference in the plan / Operational planning

The current product line and related patents and technical energy of the company should be specified, and the business model of the applied products, domestic and international market operation plans and medium and long-term operation strategies should too be specified. 

The overall benefits of the project 

  • the promotion of the estimated output value of the innovative application products and services, direct or indirect investment and other relevant indicators. 

Eligibility for application:

The enterprise concerned shall meet the following application qualifications: 

(1) It shall be a wholly owned, partnership or company that is legally registered and established in Taiwan. And one of the following: 

1. The turnover in the fiscal year before the application plan is less than NT$100 million and the number of employees is less than 100. 
2. New venture (company established under the company law, and the establishment is under full Five years). 

(2) The non-bank refuses to the current household, and the company's net worth (shareholder equity) is positive. 

(3) It shall not be a land-invested investment enterprise (in accordance with the latest land-based investment business directory published by the Investment Review Committee of the Ministry of Economic Affairs).

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The Ministry of Economic Affairs predicts Factory Law will Boost Investment by approx. NT$2 Trillion

2019.07.22

On the 27th of June, the Legislative Yuan passed amendments to the Factory Management Act. In a statement on Tuesday(15th), the Ministry of Economic Affairs(MOEA) anticipates in ten years, the new amendments will create up to NT$2 trillion (US$ 64.52 Billion) in investment and the number of registered factories will reach 45,000.

The new amendments provide a path to legality for unregistered factories. Unlicensed low pollution factories have a two-year time frame to submit a proposal to the MOEA. This proposal must be aimed at improving pollution and strengthen safety within three years. The factories will then be considered "special factories".   Complementary rules to provide further guidance are to be introduced by the MOEA later this year.

It is also hoped that the amendments will solve problems arising from illegal factories. The MOEA expressed that many factories "hidden in the countryside" are "invisible champions" of Taiwanese Industry and have enormous potential to contribute to the economy.  Thus, through management and guidance, these factories will be able to make a bigger contribution to the economy.

 It is estimated that there are 38,000 unregistered factories in Taiwan; 14000 hectares of farmland nationwide and 7,000 factories with temporary operational licenses. Some unlicensed factories in Taiwan, such as REPON, are well known and visible in the market. Each is expected to invest NT$30 million-NT$50 million over the next ten years, which amounts to 1 to 2 trillion investment.

The amendments will ensure plants are better managed and improve working conditions and safety standards across Taiwan.  They will also provide a path to legality, which is expected to encourage more investment, particularly from key market players who are already operating in the market.

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Taiwan and France ink fintech agreement to boost technology cooperation

2019.07.22

The FSC has concluded its negotiations regarding the FinTech cooperation agreement. The agreement was signed by the Financial Supervisory Commission of Taiwan and French Prudential Supervision Regulation Authority of France, on July 9th. This marks the third agreement between the FSC  agreement with a foreign party since 2017, following Poland and U.S Arizona.

Under the framework, Taiwan and France will share information with each other about their respective fintech institutions, services, and commercial opportunities. This will help secure a footing for both sides in a new era of fintech innovation.  The agreement includes a referral mechanism which enables information sharing between supervisory agencies of both parties. After signing, the two parties will be able to refer financial technology start-ups to each other through mutual financial technology departments.

Providing assistance to understand the regulatory systems in both jurisdictions and sharing information on their respective market and financial services innovations will promote mutual supervision of financial technology and create more opportunities for financial technology players in Taiwan and France. This is also expected boost both France and Taiwan’s involvement in the international market. 

FSC has also expressed their long-term desire to push for collaboration on financial regulation with Germany and the U.K. Taiwan and Germany have established presences in banking and insurance on each other’s territories. Furthermore, Taiwan is expected to engage in talks with the UK about implementing measures as the country braces for Brexit.

The Financial Management Association will bolster these efforts by promoting exchanges with financial supervision institutions of various countries on financial supervision and financial science and technology cooperation, promote the integration of Taiwan’s financial regulations with international standards, and enhance the international competitiveness of Taiwan’s financial industry.

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EVA Air and The Union Reach Settlement

2019.07.12

 Taoyuan City Air Service Professional Trade Union and Eva Airlines reached a collective agreement on July 6th to end labor strikes. Following the most recent negotiations, the Taoyuan City Government and the Ministry of Labor oversaw the settlement agreement, signed on Saturday evening. This concludes the 17-day long strike; the longest in Taiwanese aviation history. It is set to cost the airline over US$97 million. The strike itself is scheduled to conclude on July 10th at 12am. Initially, the strike was due to end a week earlier but due to difficulties in the negotiation process, it was extended. The primary concern was the threat of retaliation. On the 8th, it was announced that 2,000 flight attendants (1,050 of which are non-union members) are to receive double pay for not participating in the labor strikes.

At the beginning of the strike, the airline had only 37% of its flight attendants on duty, which gradually increased to 50% and to date, is currently at 70%.  Consequently, it is expected to take a few weeks to restore flights to their normal schedule. The government has estimated that customers may still feel the effects of the strike until July 20th at the latest.  

Nonetheless, EVA Airways has affirmed that they will pursue the lawsuit against TFAU, asking for NT$34 million (US$1 million) a day from the heads of the union to compensate for loss of earnings. NT$680 million is the current estimate of the losses suffered by Eva Air, the exact figure is yet to be finalized; it will be calculated upon commencement of the court case.

Furthermore, Eva Air has pledged not to retaliate against the union if its actions during the strike are considered lawful. They have inferred that they believe there is a chance that all actions were not lawful as the lawsuit is based on the Union’s breach of Act for Settlement of Labor-Management Disputes. The TFAU however, has expressed certainty that all actions were protected by the Act for Settlement of Labor-Management Disputes.

Despite this, The Ministry of Labor expresses optimism that the end of the strike action will be the beginning of positive interaction between the two sides. They have also reminded EVA Airways to avoid improper labor practices for employees participating in strike operations.

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Taiwan Enters the South Indian Ocean Fisheries Agreement

2019.07.12


On July 9th, Taiwan successfully joined the “Southern Indian Ocean Fisheries Agreement" (SIOFA). This is expected to safeguard Taiwan’s  fisheries rights and interests in the Indian Ocean and assist Taiwan in the development of their Fishing Industry, according to the Ministry of Foreign Affairs.  All members of the agreement unanimously welcomed Taiwan’s accession, indicating recognition of Taiwan’s offshore fishing industry. The Meeting was held in Flic-en-Flac, Mauritius, from the 1st- 5th July 2019.

The SIOFA is an international agreement designed to promote conservation and sustainable fishing practices. It enters into force on June 21, 2012.

Taiwan’s membership is vital as it is a big player in this region. In recent years, the number of fishing boats, mainly catching oil fish, has surpassed 100. In recent years, Taiwanese fishing boats have caught, on average,  17,000 metric tons. As Taiwan’s fishing and fishing interests in the Indian Ocean region increase annually, her accession to the "South Indian Ocean Fisheries Agreement" will consolidate fishing rights in the Indian Ocean. It will also help the offshore fishing industry to develop and guarantee the interests of Taiwanese fishermen.

The Ministry of Foreign Affairs has stated that they will continue to work closely with the Fisheries Department in the Agriculture Committee of the Executive Yuan to strive for and safeguard the rights and interests of Taiwan’s participation in regional fisheries management organizations. 

The Secretariat is based in la Réunion. Its members include Taiwan, Australia, Cook Islands, the European Union, France (on behalf of the French Indian Ocean Territory), Japan, South Korea, Mauritius, and Cyprus and Thailand. In the future, Taiwan can now work with other members of the agreement to promote sustainable fishing practices in the Indian Ocean, and actively make concrete contributions through professional and substantive participation. 

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Amendments to the Criminal Procedure Law Enacted to Uphold Judicial Prestige and Restore Public Confidence

2019.07.05

 In view of recent high-profile cases, the Chief Executive of the Security Council has concerned himself with the potential damage to judicial prestige following instances where criminal defendants have been able to flee Taiwan.

The Security Council has reassured the public that in the future, it will actively seek to prevent the escape of criminal defendants from the system. The new amendments are part of this attempt.

After examining the current system, it was concluded that anti-fleeing methods including the detention of defendants by the court and monitoring of suspects by the police personnel were not only lacking in the law, but also costing unsustainable manpower and material resources. Consequently, it has been difficult to effectively prevent the defendant from escaping the country.

Research conducted by the Ministry and the Judiciary led to a draft amendment to the anti-evasion mechanism of the Criminal Procedure Law. The proposal was sent to the Legislative Yuan for deliberation and then amended in the third reading this week.

The anti-evasion mechanisms have been extended to include the addition of a variety of alternatives to custody, when expressly authorized by judges and prosecutors. These measures include the introduction of appropriate technical equipment monitoring (such as electronic pedals), home imprisonment, suspension of passports and travel documents, prohibition of travel, seizure of property and other custody substitutions. Also, depending on the circumstances of the defendant, the prosecution may be executed before the file is sent to the magistrates’ court to close the escape window. These provisions are likely to be applied to homicide cases or other crimes with sentencing that could amount to death, life imprisonment or more than two years in prison.

Nonetheless, is also important to consider that the prosecutor or the judge orders the defendant to be monitored or restricts their movement, they must examine the defendant’s human rights protection. This particularly applies to technological monitoring, which can occur for a considerable period of time. This type of monitoring will allow authorities to be aware of the defendant’s whereabouts at all times. It is anticipated that this will act as a deterrent to prevent escape and also, limit opportunities to do so. 

This revision attempts to rationalize national penal power and a strong judiciary, with the protection of human rights. They achieved this by strengthening the current criminal procedure law and the alternative punishment and the relevant referee enforcement system.

The Ministry of Justice has also stated that the criminal justice system can help limit instances where defendants escape before or during a trail by ensuring that everything is conducted in in a timely manner, considering the circumstances of the case. In the future, the MOJ will cooperate with the court to effectively prevent the accused from escaping and uphold the notion of law and order.

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Taiwan Extends Visa Free Access Program for Passport Holders from the Philippines, Thailand, Russian and Brunei

2019.07.05

Taiwan has experienced significant growth in tourism from the Philippines, Thailand, Brunei and Russia over the last few years. This is in part due to the expansion of the New Southbound Policy and the following visa-free access for passport holders from these nations.

In order to aid the progression of the “New Southward Policy”, the Ministry of Foreign Affairs and the Executive Yuan agreed to extend the free visa access program. Other departments also held inter-ministerial meetings to jointly study and adjust visa treatment for the target countries of the "new southward policy" and Russia. The case was then reported to the Executive Yuan to seek their approval.

As it is increasingly closer to the expiry date (July 31st, 2019), it was agreed that visa-free measures for Thailand, Brunei, the Philippines and Russian nationals will be extended.

Since 2016, Taiwan has successively granted visa-friendly treatment to the target countries of the “New South-South Policy”. From inception, the number of new southbound nationals continues to steadily grow.

In the 2018, the population in Taiwan reached 2,607,982, an increase of 312,489 from 2,295,493 in 2017 (reflecting a growth rate of 13.61%).  This could be as a result of the policy.

On the other hand, Taiwan and Russia only reinstated direct flights in May this year, extending the trial visa to Russia. It is expected to attract more Russian tourists to visit Taiwan and expand the interaction and exchanges between the two nations.

In addition to continuing to review the effectiveness of the measures, the Ministry of Foreign Affairs has stated that they will continue to engage with the relevant government to improve the visa treatment of Taiwanese people in order to promote the overall interests of the country.

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EVA Air to cancel over 300 flights next week as Labor strike continues

2019.07.01

 EVA Air and the Taoyuan Flight Attendants Union (TFAU) held the third meeting at Renaissance Hotel in Taipei today after the two parties resumed dialogue following the union’s vote to strike. Minister Hsu Ming-Chun of the Ministry of Labor (MOL) came in person and delivered the speech. The meeting was co-chaired by MOL Deputy Minister Liu Shih-Hao, Lawyer Jessika Ko and Professor Fan Yu, both experts of labor relations. The Ministry of Communications, Civil Aeronautics Administration, and Taoyuan City Government’s Department of Labor also sent representatives to attend the meeting, which was broadcast live to the public.

The conclusion of this meeting was Eva air confirming that 54 out of 93 flights departing from Taiwan will be cancelled, affecting 11,600 passengers.  59 flights returning to Taiwan will also be canceled, impacting a further 13,000 passengers, according to Eva Air.

Eva immediately deployed response team as soon as they were aware of TFAU strike action. The airline has been able to maintain 40 percent of its entire flight capacity over the weekend, with 122 out of 177 flights canceled on Saturday.

Nonetheless, the deadlock between labor and management is yet to be resolved and the likelihood of a speedy resolution is dwindling. On 29th June, the union said it will hold another vote for its 3,200 EVA air flight attendants to decide whether the strike will continue. According to the union, 1900 flight attendants have surrendered their passports, their Mainland Travel Permit for Taiwan Residents and their EVA Air employee identification cards to commit themselves to remaining on strike until a settlement is reached. Therefore, it is likely that this strike will continue.

Consequently, Eva air has announced that it will no longer accept new bookings before June 29th and has cancelled at least 670 flights between Saturday 22nd and 29th June.  

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European Union removes Taiwan from Illegal Fisheries watchlist

2019.07.01

On the 27th the European Union (EU) announced on that it has canceled the “correction recommendation” (also known as the Yellow Card) of illegal, unreported and unregulated (IUU) fishery which was issued to Taiwan. The yellow card was received in October 2015 and Taiwan was warned to take effective action to resolve this matter. Upon failure to do so, the EU will issue a red card and it will no longer be possible to export seafood to the EU. The yellow card was of concern to foreign traders and had a negative impact on price. This is why the government deemed it necessary to work with fishermen and companies to strengthen fishery management.

The EU’s decision to lift Taiwan's yellow card follows 3.5 years of constructive cooperation between Taiwanese authorities and the European Commission. This cooperation led to the structural reforms of distant-water fisheries, legal framework and control systems. These mechanisms provide Taiwanese authorities with a broad range of modern and efficient tools to fight IUU fishing.

The new measures include:

  • Comprehensive review of the distant-water fisheries legal framework
    • to align with the International Law of the Sea – including though the establishment of a deterrent sanctions scheme.
  • Strengthening of the distant-water fleet monitoring and control tools, including a reinforced Vessel Monitoring System (VMS), the obligation to be equipped with electronic logbook, observer coverage in line with RFMOs requirements and the development of an inspection scheme for both domestic and foreign ports.
  • Implementation of the FAO Port States Measures Agreement to foreign-flagged vessels calling in Taiwanese ports.
  • Enhanced traceability system covering the whole supply chain.
  • Enforcement of the revised legislation and of the new sanctions scheme.
  • Significant reinforcement of the financial and human resources dedicated to the fight against IUU fishing. 

The IUU Regulations do not specifically address working conditions on board fishing vessels. Nonetheless, improvements in fisheries control and law enforcement are likely to have a positive impact in the control of labor conditions in the fisheries sector.

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Taiwan and Poland sign Agreement of Criminal Judicial Cooperation

2019.06.24

On June 17, Taiwan and Poland signed the "Agreement on Criminal Judicial Cooperation between the Polish Representative Office and the Polish Taipei Office" in Taipei. This establishes mutual assistance in international criminal justice between the two jurisdictions.

The "Taiwan Criminal Justice Cooperation Agreement” was negotiated for four years. Its scope extends to criminal mutual legal assistance; extradition; transfer of prisoners; legal and practical insights of crimes and information sharing for crime prevention. It, therefore, is a broad criminal justice mutual assistance agreement.

Because the commensurate democracy and legal system, social security and human rights protection, future cooperation should be seamless. Therefore, this agreement was signed as a result of mutual trust, in the hopes of closer cooperation between the two countries, so that the two sides can strengthen the effectiveness of combating transnational crimes through various cooperation matters provided by this Agreement.

It is an important milestone in Taiwan-Poland cooperation in criminal justice.  The "Taiwan Criminal Justice Cooperation Agreement" is the first broad criminal justice mutual assistance agreement signed between Taiwan and EU member states. Prior to this, Taiwan signed a bilateral cross-border transfer of prisoners with Germany and the United Kingdom, facilitating for the transfer of seven German and one British prisoner home to continue serving their sentences.

Aside from the transfer of the inmates, the agreement also includes narrow criminal justice mutual assistance and extradition, a breakthrough development.

The provisions of this Agreement for mutual assistance in the narrow sense of criminal justice mutual assistance include:

 

•    Obtaining testimony or statements

 

•    Providing documents, records and articles as evidence.

 

•    Determining where the person is located or confirm his or her identity.

 

•    Delivery of documents.

 

•    Performing search and seizure requests.

 

•    Investigating items and premises.

 

•    Assisting with procedures prohibiting disposition or confiscation of property.

 

Among them, the first two points allowed the two sides to conduct substantive "Joint Investigation Teams" to break through the restrictions of the International Criminal Judicial Mutual Assistance Law and obtain the basis of the law.

This Agreement is the fifth criminal mutual legal assistance agreement signed by Taiwan. The other four agreements are signed with the United States, the Philippines, South Africa and mainland China. The first three are narrow criminal mutual legal assistance agreements, that is, they do not include extradition and the transfer of prisoners; the cross-strait joint crimes and mutual legal assistance agreements signed between Taiwan and mainland China do not include extradition.\

 

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Amendments to The Referendum Act Enacted

2019.06.21

  On Monday, the Legislative Yuan amended The Referendum Law. Key revisions include:

 

•    Referendums will be held once every two years, on the fourth Saturday in August

 

•    The time for checking the book changed from 30 to 60 days

 

•    Referendums must be announced 90 days prior (previously 28 days before polling)

 

•    Relevant legislative or administrative organs must submit their opinions within 45 days. Simultaneously, the competent authorities are urged to implement the electronic linkage as soon as possible.

 

Henceforth, there will be no contentious referendums held alongside elections. It separates referendum years from election years in the future, as the presidential and local government elections are all held in even-numbered years.

The Executive have explained that the rationale behind this is to limit confusion during election years and further legislative and political stability.

Taiwan’s referendum law was also revised in 2017, drastically reducing the threshold for succession and adoption. This paved the way for 10 referendums coupled with local elections in 2018, resulting in public criticism. Voting was too long and complicated. It even amounted to contested results, most notably the Taipei Mayoral election.  the table. These amendments seek to resolve disputes surrounding the adoption of the marriage act whereby the results of the referendum are still being disputed.

Some civic groups advocated the content of the revision of the law to include more citizen review mechanisms, so that people have the opportunity to discuss the legal effects of the proposal itself and have more substantive discussions.

 

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Government to Fund 5G Development in Taiwan

2019.06.14

On Thursday, the Executive Yuan spokesman Kolas Yotaka confirmed that the "Taiwan 5G Action Plan." has been approved. It is hoped that Taiwan's investment in 5G will now be " fast, not slow".

Government steps towards this in 2017, which saw the government approve the "Digital National Innovation Economic Development Plan" in October 2017, followed by the 2018 directive "Taiwan 5G Action”.

The Executive Yuan is expected to invest 20.466 billion NT$ between 2019 and 2022, hoping to become a major partner in the global 5G supply chain. Premier Su Tseng-chang noted Taiwan’s mobile and information telecommunications prowess, alongside her professional training systems as strong grounds for Taiwan’s position as a global competitor.

The Cabinet have expressed their refusal to allow Taiwan to “miss the chance of hegemony in the era of Internet of Things and virtual and integrated services’.

The Action Plan promises to provide strong support for 5G core technologies, system test platforms and provide a 5G application test environment to help manufacturers cross the 5G technology threshold.

Furthermore, in the "Taiwan 5G Action Plan", the Ministry of Economic Affairs, the National Development Committee, the Ministry of Education, the National Communications and Communications Committee, the Ministry of Communications, the Ministry of Science and Technology, the Ministry of Culture, and the Ministry of Health and Welfare will all work together.

The government perceive a “future” society which places great emphasis on smart manufacturing, smart families, smart transportation, smart campus, smart medical care, smart disaster prevention and self-driving cars. If such a future exists, Taiwan aims to be at the forefront.

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Growth in Free Trade Zones in Taiwan

2019.06.14

Since 1998, the operational performance of Free Trade Zones (FTZs) has increased steadily with an average annual growth rate of 11% (trade volume) and 13% (trade value). Between January and April 2019, the value and performance of FTZs have increased by 21.2% (value) and 6.5% (quantity). This is largely due to the presence of 115 new businesses. Additionally, the trade volume and value of Taoyuan Airlines FTZ increased by 26.7% and 30.6%, compared with the same period of last year.

According to the Ministry of Communications, the improved performance can also be attributed to the recent growth of Freeport operations; the increase in non-ferrous metal storage capacity; the export of machinery and equipment in the port of LME; and the new electronics industries entering the FTZs.

Business decisions to move production lines back to Taiwan for development are also contributing to this growth. For instance, a new business launched this year aims at engaging in the production of international pressure vessels and fan equipment. It is expected to drive the international competitiveness of Taiwan’s wind power related industries.

FTZs are closely related to international trade and economics, thus, still, need to be handled with caution. In response to the rapid changes in the global economic and trade situation, the Ministry of Communications and its affiliated agencies have amended development goals and strategies accordingly.

They have also expressed the need to continue to loosen regulations in order to promote new business models, through coordination and cooperation between the ministries. This includes encouraging foreign businessmen coming to Taiwan to engage in cargo storage and value, taxation and levy clarification and rationalization, improving cross-border e-commerce, sea and air transport, etc. It is also important to cooperate with the development of innovative technology, actively introduce the construction of free port area to become a smart logistics leader, Through the improvement of laws and regulations, the expansion of re-exports and transhipment efficiency, the country's overall logistics industry will develop new business opportunities.

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Ministry of Finance outlines Tax Incentives for High Earners

2019.06.06

To enhance international competitiveness and move towards internationalization, the government awards considerably preferential taxation measures to high-earning foreign professionals working in Taiwan. Such incentives are known as “Foreign Professional Tax Incentives”. 

The Southern District Internal Revenue Service Office suggests that the scope of application is limited to the provisions of the individual employment contract. If an employer pays for a foreign professional and their relative's travel, rent, household bills, cleaning, and telephone charges, the income of the foreign professional is not included in the taxable salary (i.e., it is regarded as tax-free income) and the profit-making business can be accounted for.

The Institute pointed out that professionals outside the scope of application mentioned above are limited to 18 jobs, such as camping, transportation, finance and real estate brokerage. This applies to those currently in Taiwan, but holders of Taiwanese nationality cannot apply.

The Institute particularly emphasizes that foreign professionals must be in Taiwan for a total of 183 days during the year of assessment and earn a domestic and overseas salary of NT$1.2 million or more. If the employer is approved by the Ministry of Finance of China, the amount of taxable funds for the whole year is not restricted.

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Land Purchases soar in Taiwan, according to CBRE

2019.06.06

CBRE Taiwan launched an evaluation and advisory service to advance in the local market.

Data compiled by CBRE indicate that in the first four months of 2019, local commercial and land deals rose to NT$119.3 billion (US$3.8 billion), up 70% from last year, countering a slowdown in GDP growth at internally and overseas. The rise in land purchases for the construction of plants or office buildings for factory use in rural areas is in part due to returning Taiwanese firms returning to invest in Taiwan. According to CBRE, this has boosted the demand for land suitable for industrial use.

For the past 10 years, Taiwan's transactions of land for industrial use peaked at NT$46.8 billion in 2016 but fell to NT$26.9 billion in 2017 and NT$20.3 billion in 2018. Additionally, in 2018, transactions for factories and office buildings reached NT$58.5 billion, up 88.1%  from the previous year upon the return of Taiwanese firms.

CBRE Taiwan aims to facilitate revenue growth and extend the services offered in Taiwan, according to Tom Edwards (the head of CBREs global valuation and advisory services).

The expansion in Taiwan will take advantage of its position in the heart of Asia, providing comprehensive services in every market in North Asia.

CBRE Taiwan appointed Winston Shih as director to localize its business and Jonson Lee as the associate director.

Shih has expressed the need to meet the demand for evaluation and advisory services in Taiwan. The use of technology in property is increasing, as digital reforms have accelerated globalization and continue to do so. They have also increased accountability and transparency in property deals. CBRE Taiwan has suggested that they will use technological innovations such as artificial intelligence and big data but promise they will not abandon all traditional approaches. The 2018 PwC Artificial Intelligence (AI) Study shows that AI will become the world’s largest source of business opportunities in 2030. This new investment could prove a beneficial in Taiwan’s AI capability.

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Taiwan Ranked 16th in IMD World Competitiveness ranking 2019

2019.05.31

On Tuesday, Switzerland based IMD released the 2019 world competitive rankings, naming Taiwan as 16th most competitive in the world. Taiwan remained Asia’s fourth most competitive economy, behind Singapore (1st), Hong Kong(2nd) and China(3rd). The 10 most competitive economies listed were Singapore, Hong Kong, the U.S., Switzerland, the UAE, the Netherlands, Ireland, Denmark, Sweden, and Qatar.

The IMD ranks 63 economies based on: economic performance, government efficiency, business efficiency and infrastructure.

For these factors, Taiwan ranked 12th in government efficiency, 14th in business efficiency, 15th in economic performance, and 19th in infrastructure. The greatest improvement was seen in business efficiency, where Taiwan was named 20th in 2018 and is now 14th this year.

Consequently, Taiwan has featured among the top 20 performers for the past 9 years

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Taiwan Power Co. and American company General Electric Co. reach a settlement

2019.05.31

In order to safeguard the company's rights and interests, Taipower reached a settlement with the court, agreeing to pay US$22.5 million (about NT$711 million). Taipower stressed that the payment has been budgeted will not affect the current (2019) profit and loss.

 

This began in 2015. The Taiwanese government announced its intention to postpone the Lungmen Nuclear Power Plant in Gongliao District, New Taipei City in April 2014. These procedures were completed in July 2015. GE alleged that Taipower stopped paying bills in accordance with their contractual obligations. Under this contract, GE was commissioned to build a nuclear reactor system and offer equipment and services for the Lungmen plant, known as the fourth nuclear power plant.

 

GE proceeded to file two arbitration cases against Taipower at the International Chamber of Commerce (ICC) secretariat’s Hong Kong office in September 2015, following failed negotiations. The first arbitration ruling from the ICC ordered GE to pay US$158 million, under the terms of the original contract.

In the second arbitration case of 2017, GE had claimed more than US$66 million from Taipower for the termination of the contract.

To reduce the costs of compensation and lawyers, the company conducted an out-of-court consultation with the GE on this arbitration case. The settlement was finally settled with an original claim amount of approximately $22.5 million. The results of the consultation were approved by the board of directors of Taipower on the 29th.

Taipower stressed that they have budgeted this cost, therefore, it will not have a significant impact on the company's 2019 profit and loss, nor will it affect the electricity price.

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Singapore based Certis Group Teams up with Taiwanese Universities

2019.05.31

AI R&D centres from National Taiwan University and National Chiao Tung University have signed memorandums of understanding with Singapore-based Certis Group for cooperation in artificial intelligence. The agreements were signed by Chen Hsin-hsi, director of NTU's AI innovation Research Center and Ted Kuo, chief executive officer of National Chiao Tung university's pervasive AI Research Labs, with Joseph C. P. Tan, senior managing director of Certis Group. 

The Ministry of Science and Technology introduced 5-year financial support to 4 universities. The Universities established their own AI innovation R&D centres, focusing on different areas.

Certis is a wholly owned subsidiary of Singapore's Temasek Holdings, 100% owned by Singapore's Ministry of Finance. It successfully provides security services for Changi Airport, hospitals, transportation hubs, large commercial facilities and government/private institutions in Singapore.

Certis actively sought cooperation with NTU's and NCTU's AI innovation R&D centres. This is a testament to Taiwan's strong ICT capability and abundant AI talent.

Under these new arrangements, the facilities operated by NTU and NCTU will collaborate with Certis Group in big data privacy, Internet of Things data analysis, natural language processing and video image recognition.  It was also agreed to share R&D resources and promote talent cultivation and exchanges.

According to the Ministry of Technology and Science, the cooperation will provide opportunities for the two R&D centres to experiment with innovative AI solutions abroad, paving the way for more international connection for Taiwan's AI researchers.

International collaboration is a key component of the government's AI innovation development strategy. Certis is an ideal partner given its leadership in intelligent security technology.

Cross-Border collaboration represents a mutually beneficial approach for both Taiwan and Singapore.  The facilities will undoubtedly gain invaluable R&D expertise, while Certis can capitalize on Taiwan’s quality talent pool and robust industrial infrastructure.

 

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The Mutual Benefits Of The New Southbound Policy

2019.05.24

Launched in 2016, The New Southbound Policy (NSP) aims to reduce Taiwan's economic dependence by consolidating ties with South and Southeastern Asia countries, Australia and New Zealand.

On Thursday 23rd May, during weekly briefings from the Executive Yuan's Office of Trade Negotiations, Premier Tseng-chang announced the progress of the New Southbound Policy.

Since the introduction of NSP, Taiwan has observed growing opportunities due to cooperation with regional neighbors.  Taiwan has signed 29 agreements, covering trade, education, environmental protection, science and technology, training for high-level officials, health care, agriculture and other topics.

Regarding bilateral economic trade, the total volume between Taiwan and NSP countries grew by 22% to US$117.1 billion; inbound investments grew by 66%; exports increased from US$59.5 billion to US$68.4 billion; imports increased from US$ 36.6 billion to US$48.7 billion. Additionally, Direct Foreign Investment flows from the 18 countries to Taiwan grew from US$253.91 million to US$391.54 million.  The NSP also promotes two-way study abroad programs to build understanding and cultivate specialists for different fields. The number of Taiwanese students travelling to NSP nations for academic or internship programs surged 34.7 per cent from 2016 to 2018.  The government has also reported sustained growth in resource sharing. NSP members seeking medical treatment in Taiwan grew from 75,800 visitors in 2016 to 154,800 visits in 2018.

 John Deng, head of the Trade Negotiation Office, blames the annual 10.9% drop in export volume to "drastic changes in the international arena" and reassured room for "optimism". Since last year, neighboring countries have been shifting their policies to other areas. The NSP is a well-timed response to Asia's new political and economic structure and supports the regional visions of other nations, such as the Indo-Pacific strategy, advocated by the U.S. and Japan.  Nonetheless, demand for Taiwanese products remains stable in 10 ASEAN member states, six South Asian countries, Australia and New Zealand, which are listed in the government's New Southbound Policy.

For the new year, the government will draw concrete plans to facilitate greater cooperation in health, given interest expressed by some of the 18. The office has also vowed to push for major investment projects with the target countries. 

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Cabinet approves draft amendments to Foreign Trade Act

2019.05.24

To counter the practice of illegally re-labelling goods and obtaining fraudulent certificates of origin, the Cabinet approved draft amendments to the Foreign Trade Act as drafted by the Ministry of Economic Affairs (MOEA).

The draft amendments will increase fines for violations and introduce rules governing rewards for whistle-blowers. These changes will hopefully protect trade and uphold the reputation of “Made In Taiwan" in global commerce. The draft revisions will also call for increased criminal and administrative fines to provide protection for the export of strategic high-technology goods, to the degree required.

Importers from western countries are adopting stricter approaches in identifying the country of origin. Premier Su directed the MOEA and the Ministry of Finance to take the initiative in conducting inspections and enhancing management techniques to effectively suppress illegal transshipments. Such efforts to seek to preserve positive impressions of the MIT brand and safeguard the nation's export competitiveness.

The draft amendments will now be forwarded to the Legislature for review.

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Taiwan’s Parliament becomes The First In Asia To Legalize Same-Sex Marriage

2019.05.17

In 2017 the Chief Justice of the Court published Interpretation No. 748. It decided that same-sex couples have the legal right to marry, a constitutional right not guaranteed under the law. Thus, the Court called upon competent authorities to amend the law within two years.

The initial constitutional court hearing was fraught with controversy which pressured the government into holding a series of referendums.  The referendum results showed that a majority of voters in Taiwan rejected legalising same-sex marriage, preferring conservative “pro-family’ groups.  

The government expressed that the referendum results would not affect the changes required by the court ruling.  They also expressed the need to reach consensus. Thus, instead of amending the definition of marriage in the Civil Code, they created a special law for same-sex marriage.

On May 17th, the Legislative Yuan passed the third reading of the "Interpretation of the act No 748 on the interpretation of the draft law", making Taiwan the first country in Asia to legalise same-sex marriage.  With support from the DPP, the government's bill passed by 66 votes to 27.

 

The new relevant provisions are as follows:

 

Division Court Interpretation No. 748 Interpretation Act

Relationship registration

Marriage Registration

Minimum age

18

Property system

Applicable civil law husband and wife property system

Invalid relationship and cancellation

Applicable civil law regulations

Relationship cancellation method

Consensus, judgment, mediation or settlement

Have to adopt

Got to adopt

Can you be the guardian of the other party?

Cohabitation obligations and support obligations

Daily housework

Mutual agent

Heritage inheritance

Mutual heirs

Other legal rights and obligations

Principle of use

Dispute Resolution

Applicable family event law

Date of implementation

108.5.24

Out of the three bills debated by lawmakers, the most progressive passed. The law allows same-sex couples to apply for marriage registration at The Household Administration and offers limited adoption rights. The other bills, submitted by conservative legislators, were rejected based on semantics.  They expressed concerns about the use of the word "marriage" and deemed phrasing such as “same-sex family relationships” or ‘same-sex unions” more fitting.

Ahead of the controversial vote, Chief coordinator of rights group Marriage Equality Coalition Taiwan told Reuters news agency that the government’s bill was already their “bottom line” and any further “compromise” will not be accepted.

President Tsai Ing-wen is expected to pass it into law on May 24, 2019. She thanked the legislators and the relevant administrative departments, urging people to "let go of their differences".  A sentiment echoed by the Ministry of Justice who hope that people from "all walks of life will be able to accommodate each other, respect differences and maintain a peaceful and progressive country and society. "

Many, including Ms. Tsai, have taken to social media to celebrate marriage equality. Phil Robertson, deputy Asia director at Human Rights Watch, expressed his hopes that this “tremendous victory for LGBT rights” will contribute to a movement across Asia to “ensure equality for LGBT people”. 

However, conservatives have been disappointed with this result.  Tseng Hsien-yin, from the Coalition for the Happiness of Our Next Generation, told AFP News Agency the vote "trampled on Taiwanese people's expectations" and disregarded the referendum.

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The Financial Security Council Reiterates the Importance of Basic Insurance

2019.05.17

Residential Earthquake Insurance is not compulsory in Taiwan. However, Residential Fire Insurance policies automatically include protection lasting one year.  The insured amount under the residential earthquake insurance program shall be computed based on the replacement cost, which is limited to NT$1.5 million per dwelling. Additional payments to cover the cost of temporary accommodation in the event of the total destruction of the insured dwelling shall be limited to NT$200,000 per dwelling.

 

At the time of the 921- earthquake, residential insurance coverage rate in Taiwan was at 0.2%. Insurance claims were equally low. The Basic Insurance System for Residential Earthquakes has been operational since April 1, 1991. By March, the insurance coverage rate was at 34.77%. Insurance coverage increased significantly, encouraging the public to examine earthquake risk awareness. However, there are still many uninsured homeowners despite recommendations for uninsured homeowners to get basic earthquake insurance to minimise property damage caused by earthquakes.

 

The Financial Security Council has said that basic insurance for residential earthquakes can protect against damaged caused by earthquakes, earthquakes, fires, explosions, and other dangerous accidents.

 

The amount of compensation and temporary accommodation expenses varies. The current is based on the replacement cost. The maximum amount of insurance is NT$1.5 million, and temporary accommodation expenses are 200,000 yuan. Based on the insurance amount of 1.5 million yuan, the annual premium for each policyholder is 1,350 yuan.

 

In response to the demand for diversification of earthquake insurance products, property and casualty insurance companies expand earthquake insurance (real estate increased insurance, movable property separately agreed). Excess earthquake insurance and light earthquake insurance are also available for the public.

US-China Trade Dispute and its impact on the Taiwanese economy

2019.05.10

As talks between Beijing and Washington continued beyond the initial deadline of 10th May, the US raised tariffs to 25% from 10% on goods from China.  China retaliated with "deep regrets" and later introduced "necessary countermeasures" in the form of $60 billion tariffs on American products from June 1st 2019. 

 

Concerns regarding the potential impact of this dispute stem from Taiwan's export-oriented oriented economy. Exports account for around 70% of total GDP and its composition has changed from predominantly agricultural commodities to industrial goods (now 98%) during the past 40 years.

 

The main exports products are:

1.Electronics (33.1% of total)

2. Information, communication and audio-video products (10.8%), base metals (8.8%)

3. Plastics & rubber (7.1%)

4. Machinery (7.5 %).

 

Taiwan's main exports partners are China and Hong Kong (40% of total), ASEAN countries (18.3%), USA (12%), Europe (9%) and Japan (7%).

 

The Ministry of Finance on Tuesday (7th May) released its preliminary statistics on import and export trade data for April. Exports fell 3.3% from last year to USS$25.83 billion, with exports to Taiwan's major trading partners ASEAN, China, Japan, and the European Union declining 9.3%, 8.8%, 5.7%, and 5.3% respectively, as reported by CNA.

 

On the other hand, US export numbers have seen a yearly increased of 21.5%.  This is a potential incentive to Taiwanese companies returning their overseas supply chains to Taiwan.

 

On Friday 10th May, President Tsai Ing-wen encouraged such businesses to return to Taiwan. She also insisted that Taiwan's ''economic fundamentals'' are secure enough to withstand the impact of this trade dispute.

 

As the goods covered by the current U.S tariffs do not include Taiwan's main export products, the impact is expected to be limited. Taiwan's clothing, shoe and textile manufacturers are unlikely to be affected by these new tariffs because of the recent move to South East Asian countries, prior to the trade war, according to the ITRI.

 

The potential impact on the Taiwanese economy is likely to stem from the proposed tariffs on electronics. On Monday, the US released a new list of US$300 billion worth of Chinese products, including information technology and communications products, which it threatened with tariffs of 25%. The Taiwan World Trade Organization and Regional Trade Agreements Center of the Chung Hua Institution for Economic Research have warned that the effects on telecommunications companies will be "grimmer" than the first round of U.S. tariffs on US$200 billion worth of Chinese goods last year.  China-based Taiwanese manufacturers such as Hon Hai are likely to be the first to suffer if the trade dispute exacerbates. This list targets products spread over 3,805 categories in Taiwan's largest export markets.

 

Potential risks decrease if the Trade War does not escalate. The potential impact on US electronics and agricultural produce and the upcoming election will encourage U.S President Donald Trump to end the trade war as promptly.

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Welcoming Overseas Taiwanese Businesses back to Taiwan

2019.05.10

The Executive Yuan is promoting a three-year (2019-2021) plan to encourage overseas Taiwanese businesses to return and invest in Taiwan.  It is expected to add over 27,000 new jobs for the local market, according to the Ministry of Economic Affairs. The “Action Plan for Welcoming Overseas Taiwanese Businesses to Return to Invest in Taiwan” implements a customized single-window service regarding land, water and electricity, manpower, taxation and capital. The Plan will drive joint development of local industries and restructure industrial supply chains, so as to ensure Taiwan’s future industrial competitiveness and boost economic growth.

The key elements of the plan are:

A. Customized single-window service

The InvesTaiwan Service Center of the Ministry of Economic Affairs serves as the single-window service, providing dedicated customized service and shortening administrative procedures, and facilitating speedy returns.

B. Integrated implementation of five main strategies

 

The Plan integrates the resources of different ministries and implements five strategies of:

1. Satisfying land acquisition

2. Providing ample industrial human resources

3. Facilitating swift access to financing

4. Ensuring stable water and electricity supplies

5. Offering dedicated tax services.

 

The contents and contact information for the five strategies are as follows:

 

(1) Satisfying land acquisition

•    Providing rent concessions: Providing rent-free benefits for the first two years after a company sets up operations in industrial zones developed by the Ministry of Economic Affairs.

•    Enhancing land use efficiency: In accordance with the Program for the three-dimensional Renewal Development of Urban Industrial Zone, the floor area ratio of existing urban planning zone will be increased to speed up the renewal and three-dimensional development of industrial zones.

•    Providing guidance for the plant expansion of registered business: Registered businesses who have plant expansion needs will be given guidance in accordance with existing regulations

•    Expanding industrial-use land: Expansion of science park industrial land will be promoted, and the establishment of industrial parks by local governments is also encouraged with subsidies provided from the Forward-looking Infrastructure Development Program

•    Inventorying land supply: At present around 435 hectares of industrial land can be supplied immediately according to an inventory carried out by the Ministry of Economic Affairs and Ministry of Science and Technology; industrial land supply will be increased by an estimated 873 hectares from 2019 to 2021.

 

(2) Providing ample industrial human resources

•    Application principle: Priority will be given to the promotion of domestic labour employment, supplemented by foreign workers.

•    Providing Reemployment Subsidy, Employers’ Hiring Subsidy and Award, and Cross-area Employment Allowances to assist labour to find jobs and enterprises meet their needs for manpower.

•    In accordance with the existing mechanism, enterprises will be assisted to carry out internal transfers or recruitment of professional talent from China.

•    Foreign workers recruitment measures: When Taiwanese companies establish a new factory or expansion of an existing factory reach a certain scale, investment amount exceeds a certain level and the number of employees recruited  meets a certain threshold, they can apply prior-approval for the recruitment of foreign workers, which will be exempt from periodic inspections within one year; and the allocation rate for foreign workers can be increased a further 10%. However, the overall rate should not exceed 40%.

 

(3) Facilitating swift access to financing

•    Allocated amount: NT$20 billion provided from the funds of banks.

•    Lending scope: Construction of factory and related facilities, purchase of equipment, and medium-term operating capital.

•    Lending rate: No higher than the postal savings fund listed two-year time deposit interest rate plus 0.5% annual floating interest.

•    Lending period: No longer than a maximum of 10 years (including a maximum of three years ‘grace period.)

 

(4) Ensuring stable water and electricity supplies

•    Dedicated staff will assist in accelerating the application of water use plan to ensure that the water needed for industrial investment is flawless; management work for various aspects of water resources construction will be actively carried out at the same time.

•    Through a single window and project control, the obtaining of electricity supply will be speeded up; generator unit operation and maintenance will also be strengthened to maintain stable electricity supply. 

 

(5) Offering dedicated tax services

•    The Ministry of Finance’s taxation bureaus in each area will establish a contact window that will provide taxation regulation consultation for returning Taiwanese companies.

•    If the consultation cases involve the scope of individual case fact-finding, the National Taxation Bureaus will establish a dedicated task force for consultation with the companies and effectively clear up doubts about tax regulations.

At the start of the year, the government set a goal to attract NT$250 billion from such firms returning to the country. In a video released by the MOEA, President Tsai Ing-Wen announced the new target of NT$500 billion, after nearly NT$280 billion worth of investments were pledged as of yesterday, according to the Ministry of Economic Affairs. The five latest companies are expected to invest close to NT$40 billion and create more than 4,000 new jobs.

Among them, Univacco plans to expand its production scale in Taiwan with an initial investment of NT$800 million. That will create 35 domestic job opportunities. Sheen World Technology Corp. is also set to invest over NT$3.5 billion in Taiwan, despite being affected by the US-China trade dispute. The company will open new facilities in Tainan to create 469 new jobs and will actively invest in the development of environmentally friendly materials.

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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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