TAIWAN Law and Practice Contributed by: Stephen Wu, Yvonne Hsieh, Wei-Han Wu and Erica Chiu, Lee and Li, Attorneys-at-Law
Lee and Li, Attorneys-at-Law 8F, No. 555, Sec. 4 Zhongxiao E. Rd. Taipei 11072 Taiwan Tel: +886 2 2763 8000 ext. 2388 Fax: +886 2 2766 5566 Email: stephenwu@leeandli.com Web: www.leeandli.com
1. Legislation and Enforcing Authorities 1.1 Merger Control Legislation The Taiwan Fair Trade Act (TFTA) is the relevant merg - er control legislation in Taiwan and was last amended on 14 June 2017, with the newly amended Enforce - ment Rules of the TFTA (“Enforcement Rules”) being announced on 7 April 2022. The supplementary rules on merger control include: • the Directions for Enterprises Filing for Mergers; • the Taiwan Fair Trade Commission Disposal Direc - tions (Guidelines) on Handling Merger Filings (“Merger Guidelines”); and • the Guidelines on the Provision of Pre-Filing Con - sultation Service. The Taiwan Fair Trade Commission (TFTC) promulgat - ed amendments to the “Combination Types to Which Paragraph 1, Article 11 of the Fair Trade Act Does Not Apply” on 28 June 2023 and the Merger Guidelines on 30 June 2023. The key amendments are as follows. Additional “Non-Notifiable/Exempted” Type of Combination The amendments introduced a combination involv - ing foreign enterprises that jointly establish or oper - ate a joint venture outside of Taiwan, where the joint venture is not engaging in economic activities within Taiwan. There is no substantial benefit to regulating such combinations, as the transaction has less con - nection with Taiwan’s domestic market and there is no direct, substantial and reasonably foreseeable impact on Taiwan’s relevant market. Therefore, the partici - pating parties are not required to notify the TFTC of
the combination. Pursuant to Article 12, Paragraph 1, Subparagraph 1 of the TFTA, this type of combi - nation is exempted from the merger filing obligation prescribed under Article 11, Paragraph 1 of the TFTA. Nevertheless, the TFTC notes that a joint venture that “is not engaging in economic activities within Taiwan” is not engaging in any economic activities that involve the supply and demand of goods or services in Tai - wan’s domestic market; for example, the products produced by the joint venture are sold only outside of Taiwan or are sold exclusively to its foreign parent company, without affecting supply and demand in the Taiwan market. Such “economic activities” include the sale of goods or services, the provision of quotations, bargaining, and the conclusion of sales, contracts or engagement with counterparties in connection with the sale. Simplified Procedure Applies to More Types of Combinations In addition to the five types of combination specified under Section 7 of the Merger Guidelines, the simpli - fied procedure also applies to the following four types of combination as they have a relatively lower impact on Taiwan’s domestic markets: • where the transaction value is below TWD2.5 bil - lion; • in a horizontal combination, where the combined Taiwan revenues of the participating parties’ rel - evant products or services do not reach TWD200 million; • in a vertical combination, where none of the par - ticipating parties has generated TWD200 million or
631 CHAMBERS.COM
Powered by FlippingBook